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 INTERIM REPORT 
 
 ON 
 
 5^ 
 
 Laws Relating to the 
 Liability of Employers 
 
 ' ■ ' ' 
 
 To Make Compensation to their Employees 
 for Injuries received in the course of their 
 employment which are in force in other 
 countries. 
 
 By 
 
 THE HON. SIR WILLIAM RALPH MEREDITH, C.J.,C.P., 
 
 COMMISSIONER. 
 
 With the Evidence taken and the Brief of Mr. Wegenast, 
 submitted on behalf of the Canadian Manufacturers' 
 
 Association. 
 
 PRINTED BY ORDER OF 
 
 THE LEGISLATIVE ASSEMBLY OF ONTARIO 
 
 TORONTO : 
 Printed and Published by L. K. CAMERON, Printer to the King's Most Excellent Majesty 
 
 19 12. 
 

 W 
 
 INTERIM REPORT 
 
 ON 
 
 Laws Relating to the 
 Liability of Employers 
 
 To Make Compensation to their Employees 
 for Injuries received in the course of their 
 employment which are in force in other 
 countries. 
 
 By 
 THE HON. SIR WILLIAM RALPH MEREDITH, C.J.,C.P., 
 
 COMMISSIONER. 
 
 With the Evidence taken and the Brief of Mr. Wegenast, 
 submitted on behalf of the Canadian Manufacturers' 
 
 Association. 
 
 PRINTED BY ORDER OF 
 
 THE LEGISLATIVE ASSEMBLY OF ONTARIO 
 
 TORONTO : 
 3 rinted and Published by L. K. CAMERON, Printer to the King's Most Excellent Majesty 
 
 19 12. 
 

 Printed by 
 
 WILLIAM BRIGGS, 
 
 29-37 Richmond Street West, 
 
 TORONTO. 
 
Contents. 
 
 Page 
 
 INTERIM REPORT 5 
 
 Schedule I. — Brief of Trades and Labour Congress of Canada 8 
 
 Schedule II. — Laws of European Countries and the Provinces of Canada . 12 
 
 Schedule III. — Acts Passed by State Legislatures in the United States 
 
 of America 46 
 
 BriefjOf Canadian Manufacturers' Association 54 
 
 Minutes of Evidence ] 34 
 
 Alphabetical List of Witnesses 468 
 
 Short Synopsis of Mr. J. H. Boyd's Brief 471 
 
 31 3 k.o<& 
 
Interim Report 
 
 ON 
 
 LAWS RELATING TO THE LIABILITY OF EMPLOYERS TO MAKE COMPENSA- 
 TION TO THEIR EMPLOYEES FOR INJURIES RECEIVED IN THE COURSE 
 OF THEIR EMPLOYMENT WHICH ARE IN FORCE IN OTHER 
 COUNTRIES, AND AS TO HOW FAR SUCH LAWS 
 ARE FOUND TO WORK SATISFACTORILY 
 
 By 
 
 THE HON. SIR WILLIAM RALPH MEREDITH, C.J.,C.P., Commissioner 
 
 To His Honour Sir John Morison Gibson, K.C.MG., K.C., LL.D., Lieutenant- 
 Governor of the Province of Ontario. 
 
 May it Please Your Honour: 
 
 I have the honour to report that although considerable progress has been made 
 in the prosecution of the inquiries which I was by Your Honour's Commission 
 bearing date the 30th day of June, 1910, appointed to make " as to the laws re- 
 lating to the liability of employers to make compensation to their employees for 
 injuries received in the course of their employment, which are in force in other 
 countries, and as to how far such laws are found to work satisfactorily," I am as 
 yet unable to make any recommendation for enacting in this Province any of the 
 provisions of these laws, or to report a bill embodying changes in the law which, 
 in my opinion, should be adopted. 
 
 A considerable volume of oral evidence has been taken, and with the aid of 
 the able and indefatigable Secretary of the Commission a large mass of document- 
 ary evidence has been obtained and collated, including copies of the laws which 
 have been enacted in the countries of Europe and of North America. 
 
 Sufficient progress has, however, been made to warrant the statement that 
 the law of Ontario is entirely inadequate to meet the conditions under which in- 
 dustries are now carried on or to provide just compensation for those employed 
 in them who meet with injuries or suffer from occupational diseases contracted in 
 the course of their employment. 
 
 It is satisfactory to be able to say that there is practical unanimity on this 
 point, and that those who speak for the employers concede the justice of the claim 
 made on behalf of the employees that the industries should bear the burden of 
 making compensation. 
 
 The employers, however, contend that the whole of this burden should not be 
 borne by them, but that the employees should share it, and suggest as a fair con- 
 tribution by the employees 10 per cent, of the amount required to provide for the 
 compensation. 
 
 [5] 
 
INTERIM REPORT OF COMMISSIONER: No. 65 
 
 This contention is strt-xuovisly opposed by the employees who take the position 
 that the whole burden should be borne by the employers. 
 
 The basic principle that the burden of providing compensation should be 
 borne by the industries being conceded, the question arises as to what form the 
 legislation necessary to give effect to it should take. 
 
 Those representing the employers who have appeared before me favour what 
 is practically a plan of mutual insurance, under the management of a Board ap- 
 pointed by the Crown, that the industries should be divided into groups or classes, 
 and that an annual assessment should be made by the Board to meet the claims 
 for the preceding year, each group or class being assessed only for the compensa- 
 tion for injuries happening in establishments within it, with a special additional 
 assessment in all cases to provide a reserve fund. 
 
 This plan seems to be favoured by the representatives of labour organizations, 
 as will be seen from their statement as to the form which, in their opinion, the 
 proposed legislation should take, which was submitted to me — Schedule 1. 
 
 There being practically unanimity on the part of the employers and the em- 
 ployed as to these two main principles, it would seem to follow that it is reason- 
 able that they should form the basis for provincial legislation, and as at present 
 advised I shall be prepared to recommend a plan such as is proposed, if, after care- 
 ful and thorough inquiry and examination I am satisfied that it is economically 
 sound and workable. 
 
 There are yet to be considered many subsidiary but very important questions, 
 and among them the following: 
 
 1. To what industries or employments the law should extend, and whether — 
 (a) As in most countries it should be limited to dangerous occupations; 
 
 (6) It should extend, as it does under the British Act, to the farming in- 
 dustry and to domestic servants; 
 
 (c) It should extend to establishments in which less than a stated number of 
 workmen are employed. 
 
 2. Whether there should be any and, if so, what " waiting period " — that is, a 
 period for which no compensation can be claimed if the disability resulting from 
 the injury does not last beyond it. 
 
 3. Whether in any and, if so, what cases the employee should not be entitled 
 to compensation, e.g., where the injury is the result of a serious and wilful mis- 
 conduct on his part, or drunkenness, or the violation of law, or of a rule of the 
 establishment. 
 
 4. Whether the compensation provided should be in lieu of the common law or 
 other statutory right of the employee against his employer. 
 
 5. How the Board should be constituted. 
 
 6. Whether the decisions of the Board should be final or subject to appeal, 
 and, if appealable, to what tribunal the appeal shall lie. 
 
 Careful inquiry must also be made as to the probable cost of administration 
 and machinery must be provided for collecting the assessments and for the investi- 
 gation and adjustment of claims, and this machinery must be made as simple and 
 inexpensive as possible. 
 
 Whether or not use should be made of the municipal bodies for some of these 
 purposes is, I think, worthy of serious consideration. 
 
 If the industries are to be divided into groups or classes, care will have to be 
 taken in the selection of those which are to form each group. 
 
 It will also be necessary that a scale be adopted according to which the indus- 
 tries are to be assessed, as this will, of course, vary according to the nature of the 
 
1912 WORKMEN'S COMPENSATION" COMMISSION. 7 
 
 industry, and the hazard to which the employees are exposed. The preparation of 
 this scale will require much consideration and must be entrusted to experts. 
 
 It will be necessary also, in order to provide for claims during the first year, 
 that a special contribution be made, and to enable an estimate to be formed of the 
 rate of this contribution an investigation as to the pay-rolls of the industries 
 within the scope of the act, and other inquiries requiring care and time will be 
 requisite. 
 
 I have thought it well to make these references to the work yet to be done 
 and the principal points to be considered in order that the attention of those in- 
 terested may be directed to them, and that they may be prepared to assist me by 
 such suggestions as occur to them in the solution of the questions yet to be dealt 
 with. 
 
 With the same object I annex Schedules containing a statement of the prin- 
 cipal features of the laws of other countries, Schedules 2 and 3. 
 
 All of which is respectfully submitted. 
 
 W. R. Meredith, 
 
 Commissioner. 
 
 Dated at Toronto this 27th day of March, 1912. 
 
8 TEADES AND LABOUR CONGRESS OF CANADA: No. 65 
 
 SCHEDULE I 
 BRIEF OF TRADES AND LABOUR CONGRESS OF CANADA. 
 
 Sir William Meredith, Commissioner of the Provincial Government, 
 
 Re Workmen's Compensation Legislation. 
 
 Sir, — Understanding that it is the desire of the Commission to make recom- 
 mendations for a Workmen's Compensation Act in harmony with modern indus- 
 trial conditions, we- have the honour to submit herewith recommendations for a 
 Workmen's Compensation Act for the Province of Ontario. 
 
 These recommendations have been discussed, and unanimously agreed to, by 
 representatives of the Dominion Trades and Labour Congress, Toronto Central 
 Labour Council, The Building Trades Council of Toronto, and the Metal Trades 
 Council, whose signatures are appended hereto. 
 
 We also understand that it is the expressed desire of the Commission to report 
 to the next session of His Majesty's Provincial Legislature, the conclusions and 
 recommendations for legislation, of this Commission, on this subject. We, there- 
 fore, have lost no time in taking the matter up, to suit the convenience of the Com- 
 mission. 
 
 We propose to give plainly; therefore, the fundamental principles which we 
 believe should be the basis for construction of a new Workmen's Compensation Act 
 in this Province. 
 
 It is unnecessary to refer to the present legislation in Ontario. Its uselessness 
 has been pointed out for years by representatives of labour, its obsoleteness indeed, 
 preventing almost anyone from even an attempt to defend it. 
 
 The ancient character of the present legislation may make it seem to many 
 that a new act in harmony with modern conditions, with modern legislation in 
 countries that have made serious attempts to solve the question, is in the nature 
 of radical legislation, but that is merely because the matter has been so long 
 neglected in Ontario. 
 
 We propose that the new act shall cover: — 
 
 1. All employments, the employees of the Province, Municipality, County, or 
 other administrative bodies in the Province to be covered the same as employees in 
 industries. 
 
 2. Compensation for all injuries arising out of, and in the course of employ- 
 ment. 
 
 3. Compensation for being disabled, or other injuries arising out of, or as the 
 result of a specified occupation, the said disablement and injuries being in the 
 nature of occupational diseases. 
 
 4. Entire cost of compensation to rest upon employer. 
 
 5. In the cose of in juries resulting in death, the dependants, as outlined in 
 the British Act and State of Washington Act, shall be the beneficiaries, ivith the 
 expenses of the funeral as outlined also. 
 
 H. The doctrine of negligence on the part of employee or employer, fellow- 
 servant or otherwise, shall hare no place in the new legislation. 
 
 7. State insurance in connection with Compensation Act. 
 
 8. The creation of a Provincial Deparlnirnl of Insurance with three Commis- 
 sioners for the purpose of administration of the act. 
 
1912 WOKKMEN'S COM PKXSATIOX COMMISSION. 9 
 
 9. Compulsory insurance of employers in the State Department by a yearly 
 tax levied upon the industry or occupation, covering the risk of the particular in- 
 dustry or occupation. 
 
 10. The tax shall he upon the yearly wage-roll. 
 
 11. No employer shall attempt to pay the lax by deduction of wages of em- 
 ployee, by agret ment or otherwise, such action to be regarded as a gross misde- 
 meanour as provided for in the stale of Washington legislation. 
 
 12. The schedules of payment under the act, to be based upon the payments 
 under the British Act, with the proportional increases due to the difference in the 
 wages in Ontario, reflecting the difference in the cost of living. 
 
 13. The Provincial Government shall provide revenue for the creation of the 
 Department of Insurance. 
 
 The following will give you some idea of the weight of opinion in favor of the 
 burden being borne by the employer, or industry alone: 
 
 Great Britain. — The employers alone bear the burden, and they insure volun- 
 tarily in state, -mutual, or private stock companies. 
 
 Norway. — Employers bear the burden, and State insurance is compulsory. 
 
 Sweden. — Employers bear the burden and insure as in Great Britain. 
 
 Holland. — Employers bear the burden by compulsory insurance in State, 
 mutual or private organization. 
 
 Den mark. — Employers bear the burden and insure as in Great Britain, but 
 insurance is compulsory. 
 
 Belgium. — Employers bear the burden by voluntary insurance as in Great 
 Britain. 
 
 France. — -Employers bear the burden by voluntary insurance as in Great 
 Britain. 
 
 Italy. — Employers bear the cost by compulsory insurance, but insure in State, 
 mutual, or otherwise as in Great Britain. 
 
 Germany. — Employers bear the cost of workmen's compensation. Insurance is 
 compulsory* in State, mutual, trade associations, or State Executive Boards. 
 
 Wage-earners covered by such compensation : 
 
 Great Britain 13,000,000 
 
 Norway 400,000 
 
 Sweden 1,000,000 
 
 Holland 1,000,000 
 
 Belgium 2,100,000 
 
 France 9,500,000 
 
 Italy 10,000,000 
 
 Germany 15,000,000 
 
 Total 52,000,000 
 
 Fifty-two million workers covered by compensation legislation, in which the 
 whole burden is on the employer or industry. 
 
 There are those who confuse the contributory schemes of sick insurance, in- 
 validity and old age, with compensation legislation, but tins Commission is not 
 dealing with social insurance, only so far as it affects compensation for accidents, 
 fatal or otherwise, arising out of or in the course of employment, and we, there- 
 fore, deal with it as such. 
 
10 TRADES AND LABOUR CONGRESS OF CANADA: No. 65 
 
 The doctrine of contributory negligence was the always fruitful source of 
 litigation, and as the position, " that the worker would injure himself to obtain 
 compensation " has become untenable, as well as the fact that if a workman takes 
 risks, it is generally because in the nature of his employment, conditions make him 
 do so, this doctrine has almost wholly passed away. It exists mostly in old legis- 
 lation on the matter. 
 
 The tendency of thought in Europe as well as North America is toward com- 
 pulsory State Insurance. 
 
 The British Act, an admirable one, is found to be in need of improvement in 
 this direction, as the British Trades Congress, the mouthpiece of organized labour, 
 is seeking to have established compulsory State Insurance in connection with the 
 act. 
 
 The Manitoba Act, modelled upon British legislation, is found to be wanting 
 improvement in this direction also, as the Central Labour Council in Winnipeg has 
 expressed itself a short time ago as intending to seek compulsory State Insurance 
 in connection with the legislation. 
 
 The splendid legislation of the State of Washington recently placed in opera- 
 tion with a State Department of Insurance, and a declaration of police power, is 
 worthy of your most serious attention, from which we quote the following : 
 
 " The common law system governing the remedy of workmen against em- 
 ployers for injuries received in hazardous work is inconsistent with modern indus- 
 trial conditions. In practice it proves to be economically unwise and unfair. 
 
 " Its administration has produced the result that little of the cost of the em- 
 ployer has reached the workmen, and that little only at large expense to the public. 
 " The remedy of the workman has been uncertain, slow and inadequate. 
 " Injuries in such works, formerly occasional, have become frequent and in- 
 evitable. 
 
 " The welfare of the State depends upon the industries, and even more upon 
 the welfare of its wage-worker. 
 
 " The State of Washington, therefore, exercising herein its police and sov- 
 ereign power, declares that all phases of the premises are withdrawn from private 
 controversy, and sure and certain relief for workmen, injured in extra hazardous 
 work and their families and dependants, is hereby provided, regardless of questions 
 of fault, and to the exclusion of every other remedy, proceeding or compensation, 
 except as otherwise provided in this act; and to that end all civil actions and civil 
 causes of actions for such personal injuries and all jurisdiction of the courts of 
 the State over such cases are hereby abolished, except as in this act provided." 
 
 Surely, Sir, this must commend itself as a guide for administration of com- 
 pensation, without litigation, such as anyone, having at heart the welfare of the 
 workers might follow. 
 
 Perhaps the best feature of the Washington legislation is the fact that it 
 makes for the prevention of accidents, which we regard as more important than 
 compensation. The taxing of industries, according to their respective risks, is an 
 incentive to the employers to reduce the risks, which means a reduction of the 
 yearly premium. 
 
 It is only by making risks expensive in industry to employers that we can hope 
 
 to reduce them to a minimum. 
 
 Contracting-out clauses, sub-contractors' liabilities, all the aggravating ques- 
 tions of controversy and litigation, could be obviated by provincial compulsory in- 
 surance, with a department of administration, in connection with which the Pro- 
 
1912 WORKMEN'S COMPENSATION COMMISSION. 11 
 
 vincial Health Department could on investigation among the workers of v Ontario, 
 tabulate what are occupational diseases in our own Province. 
 
 We believe that an act modelled upon the British Act in principle, with the 
 compulsory State Insurance of the Washington Act, with its police administration 
 and tax upon industry, as a preventative for accidents, would be the best for the 
 workers as well as for the employers. 
 
 With regard to the sum of compensation in the schedules, we will be willing 
 if you decide on the British Act altogether, to work out the payments for Ontario, 
 taking into consideration the different financial proportions of wages and cost of 
 living. 
 
 We would say, however, that if you follow the British Act completely, it should 
 cover all workers in Ontario getting less than Two Thousand Dollars a year. 
 
 If, on the other hand, you -should favour the act of the State of Washington, 
 we will endeavor to prove to you that some of the payments made by the month are 
 too low. 
 
 Anything less than either of these two acts will be inadequate to meet the 
 needs of the workers of Ontario, and as this Province is the manufacturing centre 
 of our Dominion, we claim that the legislation that should be adopted and which 
 we desire is that pointed out by the fundamental principles we have laid down for 
 your consideration. 
 
 Any further evidence you may need we will be only too pleased to procure, and 
 we ask yon to request our co-operation for this purpose at any time. 
 
 Signed by the following representatives, composing the combined committee: 
 
 Trades and Labour Congress of Canada: 
 
 Fred. Bancroft, Vice-President, 
 Joseph Gibbons, 
 J. W. Doggett. 
 
 Toronto District Trades and Labour Council: 
 Frank McCann, President, 
 Henry R. Barton, Secretary. 
 
 Metal Trades Council of Toronto: 
 James H. H. Ballantyne, 
 Joseph Helliker. 
 
 Building Trades Council of Toronto: 
 William Nettleship, President. 
 
 Andrew Miller, Business Agent, Brotherhood of Carpenters. 
 
 Joint Executive Board of the Carpenters' Organizations, Toronto 
 
 H. A. Ryder, 
 Gerald Baines, 
 A. J. TJdall, 
 
 George Thomson. 
 
12 EUROPEAN AND CANADIAN LAWS: No. 65 
 
 SCHEDULE II 
 
 LAWS OF EUROPEAN COUNTRIES AND THE PROVINCES OF 
 
 CANADA. 
 
 Albekta. 
 
 Date of enactment. March 5, 1908, in effect January 1, 1909. 
 
 Injuries compensated. Injuries by accident arising out of and in the course 
 of the employment which cause death or disable a workman for at least two weeks 
 from earning full wages at the work at which he was employed. Compensation is 
 not paid when injury is due to serious and wilful misconduct of the workman, 
 unless the injury results in death or permanent disablement. 
 
 Industries covered. Railways, factories, mines, quarries, engineering work, 
 construction, repair and demolition of buildings, either over 30 feet in height, or 
 with the use of mechanical power. 
 
 Persons compensated. Any person employed in manual labour, and other em- 
 ployees whose remuneration does not exceed $1,200 a year. 
 
 Government employees. Government employees are covered by this act if em- 
 ployed in establishments or undertakings to which the law applies. 
 
 Burden of payment. Entire cost of compensation rests upon employer. 
 
 Compensation for death: 
 
 (a) To those entirely dependent on earnings of deceased, a sum equal to 
 three years' earnings, but not less than $1,000, nor more than $1,800. 
 
 (&) To those partially dependent on earnings of deceased, a sum less than 
 above amount, to be agreed upon by the parties or fixed by arbitration. 
 
 (c) Temporary payments previously made to be deducted from the above 
 
 amounts. 
 
 (d) If the deceased leaves no dependants, reasonable expenses of medical 
 
 attendance and burial, but not to exceed $200. 
 
 Compensation for disability. (1) A weekly payment of not more than 50 per 
 cent, of employee's weekly earnings, but not exceeding $10 a week, for employees 
 21 years and over, or earning $10 a week and over; (2) 100 per cent, of employee's 
 earnings, but not exceeding $7.50 a week for employees under 21 years of age and 
 earning less than $10. 
 
 For partial disability, such weekly payment "as may appear proper " with re- 
 gard to the difference between employee's average weekly earnings before the acci- 
 dent and average weekly amount which he is earning or able to earn after the 
 injury, but not to exceed the amount of the difference. 
 
 A lump sum may be substituted for the weekly payments after six months, on 
 the application of the employer, the amount to be settled by agreement or by the 
 courts. 
 
 Revision of compensation. Weekly payments may be revised at request of 
 
 either party. 
 
 Insurance. Employers may make contracts with employees for substitution 
 of a scheme of compensation, benefit, or insurance in place of the provisions of the 
 act, if the Attorney-General certifies that the scheme is not less favourable to the 
 workmen and their dependants than the provisions of the act, and that a majority 
 of the workmen are favourable to the substitute. The employers are then liable 
 only in accordance with 1lie provisions of the scheme. 
 
1912 WORKMEN'S COMPENSATION COMMISSION. 13 
 
 Guarantee of Payment. In case of employer's bankruptcy the amount of com- 
 pensation due under this act, up to $500 in any individual case, is classed as a pre- 
 ferred claim, or when an employer has entered into a contract with insurers in 
 respect of any liability under the act to any workman, such rights of the em- 
 ployer, in case he becomes bankrupt, arc transferred to and vested in the workman. 
 
 Settlement of disputes. Disputes arising under the act are settled by 
 arbitration, either by an arbitration committee representing employer and em- 
 ployees, or by an arbitrator, or in absence of an agreement by the court. The 
 Attorney-General may confer upon such arbitration committee any or all of the 
 powers of courts in connection with the act. 
 
 Austria. 
 
 Date of enactment. December 28, 1887 ; in effect November 1, 1889. 
 Amendatory Acts, March 30, 1888; April 4 and July 28, 1889; January 17, 1890; 
 December 30, 1891; September 17, 1892; July 20, 1894, and July 12, 1902. 
 
 Injuries compensated. All injuries causing death or disability for more than 
 three days received in the course of employment, unless caused intentionally. 
 
 Industries covered. Mining, quarrying, stone-cutting, manufacturing, build- 
 ing trades, railways, transportation on inland waters, storage, theatres, chimney 
 sweeping, street cleaning, building, cleaning, sewer cleaning, dredging, well dig- 
 ging, structural iron working, etc. ; agricultural and forestry establishments using 
 machinery. 
 
 Persons compensated. All workmen and technical officials regularly employed, 
 but in agriculture and forestry only employees exposed to machinery. 
 
 Government employees: Act applies to government employees unless an equal 
 or more favourable compensation is provided by other laws. 
 
 Burden of payment. Medical and surgical treatment for twenty weeks and 
 compensation for four weeks of disability paid by sick funds, to which employers 
 contribute one-third and employees two-thirds. Compensation for disability after 
 fourth week, and for death, paid by territorial insurance associations, to which 
 employees contribute 10 per cent, and employers 90 per cent. 
 
 Compensation for death: 
 
 (a) Funeral expenses, not to exceed 25 florins ($10.15). 
 
 (b) Pensions to members of family, not to exceed 50 per cent, of earnings of 
 
 deceased. To widow, 20 per cent, until death or remarriage; in the 
 latter case a lump sum equal to three annual payments; to dependent 
 widower, 20 per cent, during disability. Each legitimate child, 15 years 
 of age or under, 15 per cent, when one parent survives and 20 per 
 cent, when neither survives ; to each illegitimate child, 15 years of age 
 or under, 10 per cent. ; pensions of widow (or widower) and children 
 reduced proportionately if they aggregate over 50 per cent. 
 
 (c) When pensions to above heirs do not reach 50 per cent., dependent heirs 
 
 in ascending line receive pensions, not to exceed 20 per cent of earn- 
 ings of deceased, parents taking precedence over grandparents. 
 
 (d) In computing pensions, the excess of the annual earnings over 1,200 
 
 florins ($487.20) is not considered. 
 Compensation for disability: 
 
 (a) Medical and surgical attendance for 20 weeks, paid by sick benefit fund. 
 
 (b) For total temporary or permanent disability, 60 per cent, of average daily 
 
 wages of insured workmen in the locality, paid by sick benefit funds, 
 
14 EUROPEAN AND CANADIAN LAWS: No. 65 
 
 from first to twenty-eighth day; and 60 per cent, of average annual 
 earnings of injured person, after twenty-eighth day, paid by territorial 
 accident insurance institutions. 
 
 (c) For partial temporary or permanent disability, benefits consist of a por- 
 
 tion of above allowance, but may not exceed 50 per cent, of average 
 annual earnings. 
 
 (d) In computing payments, the excess of annual earnings over 1,200 florins 
 
 ($487.20) is not considered. 
 
 Revision of compensation. Eeconsideration of the case may be undertaken by 
 the insurance association of its own will, or upon petition. 
 
 Insurance. Payments are met by mutual insurance associations of employers 
 in which all employees are required to be insured. The country is divided into 
 districts, with a separate association for each district. 
 
 Guarantee of payments. Operations of the insurance associations are con- 
 ducted under the supervision of the Minister of Interior, who may increase the 
 assessments. 
 
 Settlement of disputes. Disputes are settled by arbitration courts composed 
 of a judicial officer appointed by the Minister of Justice, two experts appointed by 
 the Minister of the Interior, and one representative each of the employers and the 
 employees. 
 
 Belgium. 
 
 Date of enactment. December 24, 1903, in effect July 1, 1905. 
 
 Injuries compensated. All injuries by accident to employees in the course 
 of and by reason of the execution of the labour contract, causing death or disability 
 for over one week, unless intentionally brought on by the person injured. 
 
 Industries covered. Practically all establishments in mining, quarrying, 
 forestry work, manufacturing, building and engineering work, transportation, and 
 telephone and telegraph services; establishments using mechanical motive power; 
 industrial establishments employing five or more persons; agricultural and com- 
 mercial establishments employing three or more persons; industries designated by 
 royal decree as dangerous. Other industries at option of employer. 
 
 Persons compensated. Workmen and apprentices, and salaried employees 
 exposed to the same risks as workmen whose annual salaries do not exceed 2,400 
 francs ($463.20). 
 
 Government employees. Act covers employees of any public establishment 
 engaged in industries enumerated above. 
 
 Burden of payment. Entire cost of compensation rests upon employer. 
 
 Compensation for death: 
 
 (a) Funeral benefit of 75 francs ($14.48). 
 
 (b) A sum representing value of an annuity of 30 per cent, of annual earn- 
 
 ings of deceased, calculated upon basis of bis age at death, to be dis- 
 tributed to: 
 
 Dependent widow or widower, whole amount if no other heirs, four-fifths if 
 one child under 16 years of age or one or more dependent heirs, three- 
 fifths if two or more children. 
 
 Children under 16 years of age, the residue. 
 
 Dependent heirs in ascending line and descending line under 16 years of 
 age, in absence of widow or widower or children under 16 years of age. 
 
 Dependent brothers and sisters under 16 years of age, in absence of heirs 
 - • above enumerated. 
 
1912 WORKMEN'S COMPENSATION COMMISSION. 15 
 
 (c) Allowances in case of annual wages of 2,400 francs ($463.20) or more, 
 
 or of 365 francs ($70.45) or less, are based upon these amounts, 
 respectively. 
 
 (d) Payments to widow and heirs in ascending line are converted into life 
 
 pensions, those to other heirs into pensions expiring at age of 16 years. 
 Heirs may require one-third of capital value of life pensions to be paid 
 in cash and pension reduced accordingly. 
 Compensation for disability: 
 
 (a) Expense of medical and surgical treatment for not over six months. 
 
 (b) If totally disabled, an allowance of 50 per cent, of daily wages, beginning 
 
 with the day after accident. 
 
 (c) If partially disabled, an allowance of 50 per cent, of loss of earning 
 
 power, beginning with day after accident. 
 
 (d) If, after three years, disability is permanent, temporary allowance is 
 
 replaced by life annuity. Victim may require one-third of capital 
 value of pension to be paid in cash and pension reduced accordingly. 
 
 (e) Allowances in case of annual wages of 2,400 francs ($463.20) or more, or 
 
 of 365 francs ($70.45) or less, are based upon these amounts respec- 
 tively. • 
 
 Revision of compensation. Eevision of compensation because of aggravation 
 or diminution of disability, or death of victim, may be made within three years. 
 
 Insurance. Employers may transfer burden of payment of compensation to 
 establishment funds, or to approved insurance companies, or to general savings and 
 retirement fund. They may also transfer burden of payment of temporary allow- 
 ances to mutual aid societies. 
 
 Guarantee of payment. Employers who have not relieved themselves of lia- 
 bility by insurance must make deposits of cash or securities or give real estate 
 mortgages to secure pension payments. To secure temporary disability payments 
 •of uninsured employers, a State guaranty fund is maintained by a tax levied upon 
 such employers. 
 
 Settlement of disputes. The local justice of the peace has sole jurisdiction 
 as a court of first resort over disputes arising under the Act, and his judgment is 
 final in all cases involving 300 francs ($57.90) or less. 
 
 British Columbia. 
 
 Date of enactment. June 21, 1902, in effect May 1, 1903; R. S. 1911, c. 244. 
 
 Injuries compensated. Injuries by accident arising out of and in the course 
 •of the employment which cause death or disable a workman for at least two weeks 
 from earning full wages at the work at which lie was employed, unless the injury 
 is "attributable solely to the serious and wilful misconduct or serious neglect' 1 
 of the injured workman. 
 
 Industries covered. Railways, factories, mines, quarries, engineering work, 
 and buildings which exceed 40 feet in height and arc being constructed or repaired 
 by means of a scaffolding or being demolished or on which machinery driven by 
 mechanical power is used for construction, repair or demolition. 
 
 Persons compensated. All persons engaged in manual labour or otherwise. 
 
 Government employees. Act applies to civilian employees in the service of the 
 Crown, to whom it would apply if the employer were a private person. 
 
 Burden of payment. Entire cost of compensation rests upon employer. 
 
16 EUKOPEAN AND CANADIAN LAWS: No. 65 
 
 Compensation for death: 
 
 (a) A sum equal to three years' earnings, but not less than $1,000 nor more 
 than $1,500, to those wholly dependent on earnings of deceased. 
 
 (&) A sum less than above amount if workman leaves persons partially depen- 
 dent on his earnings, the amount to be agreed upon by the parties or 
 to be fixed by arbitration. 
 
 (c) Eeasonable expenses of medical attendance and burial not exceeding $100, 
 if deceased leaves no dependants. 
 
 Compensation for disability: 
 
 (a) A weekly payment during disability after second week, not exceeding 50 
 
 per cent, of employee's average weekly earnings during the previous 
 twelve months, such weekly payments not to exceed $10, and total 
 liability not to exceed $1,500. 
 
 (b) A weekly payment during partial disability after second week to be fixed 
 
 with regard to the difference between employee's average weekly earn- 
 ings before the accident and average weekly amount he is earning or 
 able to earn after the injury. 
 
 (c) A lump sum may be substituted for the weekly payments, after six 
 
 months, on the application of the employer, the amount to be settled in 
 
 default of agreement, by arbitration under the act. 
 Revision of compensation. Weekly payments may be revised at request of 
 
 either party. 
 Insurance. Employers may contract with their employees for the substitu- 
 tion of a scheme of compensation, benefit, or insurance in place of the provisions 
 of the act if the Attorney-General certifies that the scheme is on the whole not less 
 favourable to the general body employees and their dependants than the provis- 
 ions of the act. In such case the employer is liable only in accordance with this 
 scheme. 
 
 Guarantee of payment. When an employer becomes liable under the act to pay 
 compensation and is entitled to any sum from insurers on account of the amount 
 due to a workman under such liability, then in the event of the employer becoming 
 bankrupt, such workman has a first claim upon the amount so due, and a judge of 
 the Supreme Court may direct the insurers to pay such sum into any chartered bank 
 of Canada to be invested or applied to payment of compensation. 
 
 Settlement of disputes. Disputes arising under the act are settled by arbi- 
 tration of existing committees representative of employers and employees, or if 
 either party objects, by a single arbitrator agreed upon by the parties, or, in the 
 absence of agreement, by an arbitrator appointed by a judge of the Supreme Court. 
 An arbitrator appointed by a judge of the Supreme Court has all the power of a 
 judge of the Supreme Court. Questions of law may be submitted by the arbitrator 
 for the decision of a judge of the Supreme Court. 
 
 Cape of Good Hope. 
 
 Date of enactment. June 6, 1905, in effect September 1, 1905. 
 
 Injuries compensated. All injuries to employees arising out of and in the 
 course of the employment causing death or necessitating absence from work for 
 more than three days and not being caused by or through the gross carelessness 
 of the injured employee. 
 
 Industries covered. Any trade, business, or public undertaking, on land or 
 upon or within the territorial waters of the colony, except domestic, messenger or 
 errand service, or employment in agriculture. 
 
1912 WORKMEN'S COMPENSATION COMMISSION. 17 
 
 Persons compensated. Employees, whether engaged in manual work or other- 
 wise. 
 
 Government employees. Act applies to civilian persons employed by or under 
 the Crown to whom it would apply* if employer were a private person. 
 
 Burden of payment. Employer and every principal are jointly and severally 
 liable for the compensations required under the act. 
 
 Compensation for death: 
 
 When death results from an injury for which a lump sum lias not already been 
 paid on account of permanent disability — 
 
 (a) A lump sum not exceeding three years' wages of deceased, nor more than 
 £400 ($1,946. GO), to those wholly dependent upon the workman's 
 earnings. 
 
 (6) A lump sum not exceeding £200 ($973.30) to those partially dependent 
 upon the workman's earnings ; in the absence of persons totally depen- 
 dent, the sum not to exceed the value of the support which they were 
 receiving from the deceased, calculated for two years. 
 
 (c) Temporary payments previously made not to be deducted from above 
 
 sums unless they have continued longer than three months. 
 
 (d) Reasonable expenses of medical attendance and burial not to exceed £40. 
 
 ($194.66) in case deceased leaves no dependants- 
 Compensation for disability: 
 
 (a) A sum not exceeding three years' wages, less any payments received under 
 
 a provisional order of court, but not exceeding £600 ($2,919.90) in case 
 of permanent total disability, and a smaller sum in proportion to loss 
 of earning power and not exceeding £300 ($1,459.95) in case of per- 
 manent partial disability. 
 
 (b) A payment made, by order of the local magistrate at the same intervals 
 
 as the customary wage payments, not exceeding 50 per cent of wages 
 received at time of the injury, nor £2 ($9.73) per week, if the injury 
 causes temporary disability lasting more than three days. 
 Revision of compensation. The provisional order may be set aside or altered 
 by the magistrate, upon request of either party, if justified by a further examina- 
 tion of the injured person or by production of additional evidence. 
 
 Insurance. Employers may insure in a company or association against per- 
 sonal injury to the workmen employed by them or in their behalf. If the employer 
 contributes toward a benefit society of which the injured or deceased person is a 
 member, allowance is made for such contribution by the court in its order or judg- 
 ment fixing amount of compensation to be paid. 
 
 Guarantee of payment. When an employee or principal is adjudged or admits 
 liability under the act and is entitled to any sum from any insurers on account 
 of such liability, then, in the event the employer becomes insolvent, the worker 
 or his; dependants have a first claim upon such sum. 
 
 .Settlement of disputes. Compensation in cases of disability is fixed provis- 
 ionally for not more than six months by the local magistrate after receiving a 
 physician's certificate of disability and holding an inquiry. No appeal can be 
 taken from this preliminary order except against a finding on the question of gro«s 
 carelessness, and then only upon leave granted by the Superior Court. In case the 
 injury results in death or permanent disability, the claimants have a right of 
 action in the local magistrate's court for the amounts due under the law. In 
 fixing the amount, the court is required in every case to have regard to the work- 
 man's or the dependant's necessities. 
 2 L. 
 
18 EUEOPEAN AND CANADIAN LAWS: No. 65 
 
 Denmark. 
 
 Date of enactment. January 7, 1898, in effect January 15, 1899; amended 
 May 15, 1903. 
 
 Injuries compensated. All injuries by accident occasioned by the trade or 
 its conditions, and causing either death or disability lasting over thirteen weeks, 
 unless brought on intentionally or through gross negligence of the victim. 
 
 Industries covered. Practically all establishments in mining, quarrying, man- 
 ufactures, building and engineering work, transportation, telephone and telegraph 
 service, diving and salvage; establishments using mechanical power which makes 
 them subject to factory inspection: other industrial establishments designated by 
 the minister of the interior. 
 
 Persons compensated. All workmen in mechanical and technical departments, 
 including those in a supervisory capacity whose annual earnings do not exceed 2,400 
 crowns ($643.20). 
 
 Government employees. Act applies to all employees of state and communal 
 governments in industries above indicated. 
 
 Burden of payment. Entire burden of payment rests upon employer. 
 
 Compensation for death: 
 
 (a) Funeral benefit of 50 crowns ($13.40). 
 
 (&) A lump sum equal to four times annual earnings of deceased, but not 
 over 3,200 crowns ($857.60) nor less than 1,200 crowns ($321.60), to 
 widow whole amount if she survives. Child, whole amount if it be the 
 only heir. Children, according to decision of insurance council, when 
 there is no widow. If neither widow nor children, insurance council 
 decides whether and how far other heirs receive compensation. 
 
 Compensation for disability: 
 
 (a) From end of thirteenth week after accident until end of treatment, or 
 
 until disability is declared permanent, a daily compensation of 60 per 
 cent of earnings, but not less than 1 crown (27 cents) nor over 
 2 crowns (54 cents) for total disability and a proportionate compensa- 
 tion for partial disability. 
 
 (b) In case of permanent disability and indemnity of six times annual earn- 
 
 ings, but not less than 1,800 crowns ($482.40^ nor over 4,800 crowns 
 ($1,286.40) for total permanent disability, and proportionate pay- 
 ments for partial permanent disability. 
 
 (c) If employee suffering from permanent disability is a male between 30 
 
 and 55 years of age, he may demand purchase of an annuity. For men 
 of otber ages, or of unsound mind, or women and children, the insur- 
 ance council may substitute an annuity. 
 
 Revisior) of compensation. Determination of degree of permanent disability 
 must be made as soon as possible after one year from date of injury. If this be 
 not possible, a temporary determination may be made, but a redetermination may 
 be demanded within two years following. 
 
 Insurance. Employers may transfer obligation imposed by the law, by insur- 
 ing their employees in authorized insurance companies or mutual employers' insur- 
 ance associations. 
 
1912 WOKKMEN'S COMPENSATION COMMISSION. 19 
 
 Guarantee of payment. Where liability under the law has not been transferred 
 by insurance, indemnity for disability is a preferred claim upon a<>ets of employer. 
 
 Settlement of disputes. Disputes concerning compensation, unless settled by 
 mutual consent, must be referred to insurance council. Appeals may be bad to the 
 Minister of the Interior. 
 
 Finland. 
 
 Date of enactment. December 5, 1895, in effect January 1, 1898. 
 
 Injuries compensated. All injuries by accident during work, causing death 
 or disability for more than six days, except when brought on intentionally or 
 through gross negligence of the workman, intentionally by any other person than 
 the one charged with supervision of the work, or caused by some other occurrence 
 utterly independent of the nature or conditions of work. 
 
 Industries covered. Pits, mines, quarries, metallurgical establishments, fac- 
 tories, sawmills, industrial establishments using mechanical power, breweries, dis- 
 tilleries, construction of churches and buildings over one story high; construction 
 and operation of water, gas, electric power plants, and operation of railroads. 
 
 Persons compensated. All persons actually employed at work, but not those 
 who merely supervise the work. 
 
 Government employees. Act applies to employment on the state and com- 
 munal construction works and state railways. 
 
 Burden of payment. Entire burden of payment rests upon employer. 
 
 Cornpensation for death. In addition to any prior payments on account of 
 disability, pensions to dependent heirs, from day of death, not exceeding 40 per 
 cent, of annual earnings of deceased, to — 
 
 (a) "Widow, 20 per cent., until death or remarriage; in latter case a final sum 
 
 equal to two annual payments. 
 
 (b) Each child until the age of 15 years, 10 per cent., if one parent survives, 
 
 and 20 per cent, if neither parent survives, 
 (r) In computing pension, earnings of workmen to be considered not over 
 700 marks ($138.96), nor under 300 marks ($57.90) ; but no adult em- 
 ployee to receive a pension greater than his actual earnings. 
 
 Compensation for disability: 
 
 (a) A pension equal to 60 per cent, of employee's earnings for total disabil- 
 ity, or a pension proportionate to the degree of incapacity for partial 
 disability, to be paid from day of recovery from illness due to injury, 
 or after 120 days have elapsed since injury. 
 
 (6) Pension may by mutual consent be replaced by single payment, if it does 
 not exceed 20 marks ($3.86) annually. 
 
 (c) In computing pension, earnings of workman to be considered not over 
 
 720 marks ($138.96) nor under 300 marks ($57.90) ; but no adult 
 employee to receive a pension greater than his actual earnings. 
 
 (d) In cases of temporary disability (including all cases of disability for 120 
 
 days after injury), daily compensation of 60 per cent, of earnings, be- 
 ginning with seventh day after accident, for complete temporary dis- 
 ability, and proportionate compensation for partial disability: but not 
 more than 2.50 marks (48 cents) per diem. 
 
20 EUROPEAN AND CANADIAN LAWS: No. 65 
 
 (e) Until recovery, injured employee may be given treatment in a hospital in 
 lieu of other compensation; during such treatment his wife and chil- 
 dren get a compensation equal to pension in case of death. 
 
 Revision of compensation. Demands for revision of compensation may be 
 made by either party before proper court. 
 
 Insurance. Employers are required to transfer the burden of payment of 
 compensation to a governmental insurance office, private insurance company, 
 mutual employers' insurance association, or approved foreign insurance company, 
 unless unable to obtain such insurance or released from this obligation on presenta- 
 tion of satisfactory guarantees. 
 
 Guarantee of payment. When exempted from the duty of insuring his em- 
 ployees, or unable to obtain insurance, the employer must guarantee payment of 
 pension to the injured workman or his family by arrangement with a private in- 
 surance company. 
 
 Settlement of disputes. In case of absence of insurance or dissatisfaction 
 with decision of insurance company, injured employee or his dependant may carry 
 the case into the inferior court of the locality. 
 
 France. 
 
 Date of enactment. April 9, 1898, in effect July 1, 1899 ; amendatory and 
 supplementary acts March 22, 1902, March 31, 1905, April 12, 1906, and July 17, 
 1907. 
 
 Injuries compensated. All injuries by accident to workmen or salaried 
 employees during or on account of labour causing death or disability for five or 
 more days, unless produced intentionally by the victim. If due fo inexcusable fault 
 of victim or of employer, compensation may by a court order be decreased or in- 
 creased, but not exceeding actual earnings of victim. 
 
 Industries covered. Building trades, factories, workshops, shipyards, trans- 
 portation by land and water, public warehouses, mining and quarrying, manufac- 
 ture or handling of explosives, agriculture and other work using mechanical power, 
 and mercantile establishments; other industries on request of both parties. 
 
 Persons compensated. All workmen and salaried employees. 
 
 Government employees. Law applies to state, departmental and communal 
 establishments when engaged in industries enumerated above. 
 
 Burden of payment. Entire cost of compensation falls upon employer. 
 
 Compensation for death: 
 
 (a) Funeral expenses not exceeding 100 francs ($19.30). 
 (&) Pensions to dependent heirs not exceeding 60 per cent of annual wages 
 of deceased, distributed to — 
 Widow or widower, 20 per cent, until death or remarriage, in which latter 
 
 case a final sum equal to three annual payments. 
 Children under 16 years of age, if one parent survives, 15 per «ent. if there 
 is but one child; 25 per cent, if there are two children; 35 per cent, 
 if there are three children ; 40 per cent, if there are four or more chil- 
 dren. 
 Each child under 16 years of age, if neither parent survives, 20 per cent. 
 
1912 WORKMEN'S COMPENSATION COMMISSION. 21 
 
 Each ascendant and each descendant under 16 years of age dependent upon 
 deceased, if no widow or children survive, 10 per cent., the aggregate 
 not to exceed 30 per cent. 
 (c) If annual wages exceed 2,400 francs ($463.20), only one-fourth of the 
 excess is considered in computing pensions. 
 
 Compensation for disability: 
 
 (a) Expenses of medical or surgical treatment. 
 
 (b) If permanently disabled, a pension of 66 2-3 per cent, of annual wages for 
 
 total disability, and of one-half loss of earning capacity for partial dis- 
 ability; or, if demanded, one-fourth the capital value of pension in 
 cash, the pension to be reduced accordingly. 
 
 (c) If temporarily disabled, an allowance of 50 per cent of daily wages, begin- 
 
 ning with fifth day, and including Sundays and holidays, unless dis- 
 ability lasts more than ten days, when payments become due from the 
 first day. 
 
 (d) If annual wages exceed 2,400 francs ($463.20), only one-fourth of the 
 
 excess is considered in computing pensions. 
 
 (e) Payments of pensions of not over 100 francs ($19.30) per annum, may, 
 
 by mutual consent when beneficiary is of age, be replaced by a cash 
 payment. 
 
 Revision of compensation. Revision of compensation because of aggravation 
 or diminution of disability of victim may be made within three years. 
 
 Insurance. Employers may transfer burden of payment of compensation to 
 approved mutual aid, accident insurance, or guaranty associations, or in case of 
 pensions, to national accident insurance or national old-age pension funds. 
 
 Guarantee of payment. ' The State guarantees against loss of pension payments 
 on account of insolvency of employers or insurance organizations, and is reim- 
 bursed by a special tax on employers within scope of the act. For temporary dis- 
 ability payments, medicines and medical or surgical attendance, and funeral 
 expenses the victim, his creditors, or representatives have a preferred claim on 
 property of employer. 
 
 Settlement of disputes. Disputes as to pensions involving more than 300 
 francs ($57.90) may be carried into higher civil courts, judgment of local justice 
 of the peace is final in other cases. 
 
 Germany. 
 
 Date of enactment. July 6, 1884, in effect October 1, 1885. Supplementary 
 Acts of May 28, 1885, May 5, 1886, July 11 and 13, 1887. A codification enacted 
 June, 30, 1900; July 19. 1911. 
 
 Injuries compensated. Injuries by accident in the course of the employment, 
 causing death or disability for more than three days, unless caused intentionally. 
 Compensation may be refused or reduced if injury was received while committing 
 an illegal act. 
 
 Industries covered. Mining, salt works, quarrying and allied industries, ship- 
 yards, factories, smelting works, building trades, chimney sweeping, window clean- 
 ing, butchering, transportation and handling agriculture, forestry, and fisheries. 
 
 Persons compensated. All workmen, and those technical officials whose annual 
 earnings are less than 3,000 marks ($714). With the approval of the Imperial 
 Insurance Office, the law may be extended to other classes. 
 
22 EUROPEAN AND CANADIAN LAWS: ■ No. 65 
 
 Government employees. Act covers government employees in postal, telegraph, 
 and railway services and in industrial enterprises of army and navy, unless other- 
 wise provided for. 
 
 Burden of payment. Medical and surgical treatment for ninety-one days and 
 benefit payments from third to ninety-first days are provided by sick-benefit funds 
 to which employers contribute one-third and employees two-thirds; from twenty- 
 eighth to ninety-first day payments are increased by one-third at expense of 
 employer in whose establishment accident occurred; after ninety- first day, and in 
 case of death from injuries, expense is borne by employers' associations supported 
 by contribution's of employers. 
 
 Compensation for death: 
 
 (a) Funeral benefits of one-fifteenth of annual earnings of deceased, but not 
 
 less than 50 marks ($11.90). 
 
 (b) Pensions to dependent heirs not exceeding 60 per cent, of annual earn- 
 
 ings of the deceased, as follows: widow, 20 per cent of annual earnings 
 until death or remarriage, in latter case a final sum equal to three 
 annual payments; dependent widower, 20 per cent of annual earnings; 
 each child 15 years of age or under, 20 per cent.; payments to consort 
 and children to be reduced proportionately if the total would exceed 
 60 per cent ; dependent heirs in ascending line, 20 per cent, or less, if 
 there is a residue after providing for above heirs; orphan grandchil- 
 dren, 20 per cent, or less, if there is a residue after providing for above 
 heirs. 
 
 (c) If annual earnings exceed 1,500 marks ($357) only one-third of excess 
 
 is considered in computing pensions. 
 Compensation for disability: 
 
 (a) Free medical and surgical treatment paid first thirteen weeks by sick- 
 
 benefit funds, and afterwards by employers' associations. 
 
 (b) For temporary or permanent total disability, 50 per cent, of daily wages 
 
 of persons similarly employed, but not exceeding 3 marks (71 cents), 
 paid by sick-benefit funds from third day to end of fourth week : from 
 fifth to end of thirteenth week, above allowance by sick-benefit funds, 
 plus 16 2-3 per cent, contributed by employer direct; after 13 weeks, 
 66 2-3 per cent, of average annual earnings of injured person paid by 
 employers' association. 
 
 (c) For complete helplessness, necessitating attendance, payments may be 
 
 increased to 100 per cent, of annual earnings. 
 
 (d) For partial disability, a corresponding reduction in payments. 
 
 (e) If annual earnings exceed 1,500 marks ($357), only one-third of excess 
 
 is considered in computing pensions. 
 
 Revision of compensation. Whenever a change in condition of injured person 
 occurs a revision of benefits may be made. 
 
 Insurance. Payments are met by mutual insurance associations of employers, 
 in which all employees are required to be insured at the expense of employers. 
 Separate associations have been organized for each industry. 
 
 Guarantee, of payment. Solvency of employers' associations is guaranteed 
 by the State. 
 
 Settlement of disputes. Disputes are settled by "arbitration courts for work- 
 men's insurance," composed of one government official, two representatives of 
 workmen, and two of employers- 
 
1912 WOKKMK.VS COMPENSATION COMMISSION. 23 
 
 Great Britain. 
 
 Date of enactment. December 21, 1906, in effect July 1, 1907, replacing Acts 
 of August 6, 1897, and July 30, 1900. 
 
 Injuries compensated. Injuries by accident arising out of and in the course 
 of the employment which cause or disable a workman for at least one week from 
 earning full wages at the work at which he was employed. Compensation is not 
 paid when injury was due to serious and wilful misconduct, unless it results in 
 death or serious and permanent disablement. 
 
 Industries covered. "Any employment." 
 
 Persons compensated. Any person regularly employed for the purposes of the 
 employers trade or business whose compensation is less than £250 ($1,216.63) per 
 annum; but persons engaged in manual labor only are not subject to this limitation. 
 
 Government employees. Act applies to civilian persons employed under the 
 Crown to whom it would apply if the employer were a private person. 
 
 Burden of payment. Entire cost of compensation rests upon employer. 
 
 Compensation for death: 
 
 (a) A sum equal to three years' earnings, but not less than £150 ($729.98) 
 nor more than £300 ($1,459.95), to those entirely dependent on earn- 
 ings of deceased. 
 
 (&) A sum less than above amount if deceased leaves persons partially 
 dependent on his earnings, amount to be agreed upon by the parties 
 fixed by arbitration. 
 
 (c) Reasonable expenses of medical attendance and burial, but not to exceed 
 £10 ($48.67) if deceased leaves no dependants. 
 
 Compensation for disability: 
 
 (a) A weekly payment during incapacity of not more than 50 per cent, of 
 
 workman's average weekly earnings during previous twelve months, 
 but not exceeding £1 ($4.87) per week; if incapacity lasts less than 
 two weeks no payment is required for the first week. 
 
 (b) A weekly payment during partial disability, not exceeding the difference 
 
 between workman's average weekly earnings lief ore injury and average 
 amount which he is earning or is able to earn after injury. 
 
 (c) Minor persons may be allowed full earnings during incapacity, but 
 
 weekly payments may not exceed 10 shillings ($2.43). 
 
 (d) A sum sufficient to purchase a life annuity through the Post Office Sav- 
 
 ings Bank of 75 per cent, of annual value of weekly payments may be 
 substituted, on application of the employer, for weekly payments after 
 six months; but other arrangements for redemption of weekly pay- 
 ments may be made by agreement between employer and workman. 
 Revision of compensation. Weekly payments may be revised at request of 
 either party, under regulations issued by the Secretary of State. 
 
 Insurance. Employers may make contracts with workmen for substitution of 
 a scheme of compensation, benefit, or insurance in place of the provisions of the 
 act, if the registrar of friendly societies certifies that the scheme is not less favor- 
 able to the workmen and their dependants than the provisions of the act, and that 
 a majority of the workmen are favourable to the substitute. The employer is then 
 liable only in accordance with the provisions of the scheme. 
 
 Guarantee of payment. In case of employer's bankruptcy, the amount of com- 
 pensation due under the act, up to £100 ($486.65) in any individual case, is 
 
24: EUROPEAN AND CANADIAN LAWS: No. 65 
 
 classed as a preferred claim; or where an employer lias entered into a contract 
 which insures in respect of any liability under the act to any workman, such rights 
 of the employer, in case he becomes bankrupt, are transferred to and vested in the 
 workman. 
 
 Settlement of disputes. Questions arising under the law are settled either by 
 a committee representative of the employer and his workmen, by an arbitrator 
 selected by the two parties, or if the parties can not agree, by the judge of the 
 county court, who may appoint an arbitrator to act in his place. 
 
 Greece. 
 
 Date of enactment. February 21, (March 6), 1901, in effect (retroactively) 
 December 20, 1900, (January 2, 1901). 
 
 Injuries compensated. All injuries by accident during or because of the 
 employment, and causing death or disability lasting more than four days, unless 
 brought on intentionally by the injured person. 
 
 Industries covered. Mines, quarries, and metallurgical establishments. 
 
 Persons compensated. All workmen and subordinate salaried persons. 
 
 Government employees. No mention of government employees is made in 
 the law. 
 
 Burden of payment. Employer carries full burden of payment of indemni- 
 ties during first three months; after three months half payments of pensions are 
 contributed by the miners' fund, which is mainly supported by a tax on the mines 
 and metallurgical establishments, but partly by contributions from the workmen's 
 mutual aid societies in these establishments and some minor sources. 
 
 Compensation for death: 
 
 (a) If death occurs immediately or within three months; (1) Euneral ex- 
 
 penses amounting to 60 drachmas ($11.58) ; (2) Pensions to heirs 
 aggregating pension paid for total disability. 
 
 (b) If death occurs three months after injury or later, pensions to heirs 
 
 aggregating 75 per cent, of pension paid during life of the injured. 
 
 (c) All pensions to heirs are distributed as follows: Equal share to widow 
 
 and children, or, in absence of widow and children equal share to 
 father and mother. 
 
 (d) Pension to widow ceases on her remarriage; to male children at 16 years 
 
 of age; to female children on their marriage, with payment of one 
 year's pension as a dowry. 
 
 (e) If only one heir survives he is entitled to only one-half of original pension. 
 
 Compensation for disability: 
 
 (a) Free medical and surgical treatment. 
 
 (&) An allowance of 50 per cent, of earnings of injured employee during first 
 three months. 
 
 (c) Tf permanently disabled, a pension of 50 per cent, of earnings in 'case of 
 
 total disability (including loss of a band or foot); in case of partial 
 disability, a pension of 33 1-3 per cent, of earnings, pension payments 
 to begin after end of third month. 
 
 (d) Tension may not exceed 100 drachmas ($19.30) per month, plus 25 per 
 
 cenl. of the excess of computed pension over 100 drachmas ($19.30). 
 
1912 WORKMEN'S COMPENSATION COMMISSION. 25 
 
 (e) In computing pension of apprentices and children, no wage is to be con- 
 sidered less than 2.50 drachmas (48 cents) per day. 
 
 Revision of compensation. Injured employees may present a new petition, or 
 the council of the miners' fund may order a new examination, whenever there is 
 reason to believe that changes have occurred in the degree of disability. 
 
 Insurance. No provision is made by the law for the transfer of the burden of 
 payment of compensation by insurance. 
 
 Gurantee of payment. The miners' fund guarantees payment of pensions and 
 other allowances, and has preferred claim upon employer's assets in cases of disso- 
 lution or forced sale of establishments, and also in case of voluntary transfer, unless 
 the new proprietor assumes the obligations under the law. 
 
 Settlement of disputes. Amount of pension is settled by the council of the 
 miners' fund, and appeals against its decisions may be carried into the ordinary 
 courts. 
 
 Holland. 
 
 Date of enactment. January 2, 1901, in effect June 1, 1901. Other acts Feb- 
 ruary 3, and December 8, 1902, and July 24, 1903. 
 
 Injuries compensated. All injuries caused by accident in the course of the 
 employment and causing death or disability for over two days, unless brought on 
 intentionally. If due to intoxication, compensation is reduced one-half; and if 
 death results no compensation is paid. 
 
 Industries covered. Practically all manufacturing, mining, quarrying, build- 
 ing, engineering construction, and transportation; fishing in internal waters, estab- 
 lishments using mechanical motive power, or explosive or inflammable materials, 
 and mercantile establishments handling such materials. 
 
 Persons compensated. All workmen, including apprentices. 
 
 Government employees. All State, provincial, and communal employees are 
 included when engaged in any of the industries enumerated. 
 
 Burden of payment. The entire expense rests upon the employer. 
 
 Compensation for death: 
 
 (a) Funeral benefit of thirty times average daily earnings of deceased. 
 
 (b) Pensions to heirs of not over 60 per cent, of earnings of deceased, dis- 
 
 tributed to — 
 
 "Widow, 30 per cent, of earnings, until death or remarriage, in latter 
 case two years' payments as a settlement ; or to dependent widower, 
 a pension equal to cost of support, but not over 30 per cent, of 
 earnings of deceased. 
 
 Each child under 16 years of age, 15 per cent, if one parent survives, 
 and 20 per cent, if both are dead. 
 
 Dependent parents, and in their absence to -rand parents, not over 30 
 per cent. 
 
 Orphan grandchildren, not over 20 per cent. 
 
 Dependent parents-in-law, not over 30 per cent. 
 
 Widow and children to be preferred over all other heirs, and their re- 
 spective shares to be reduced proportionately when aggregating 
 over 60 per cent. 
 
 (c) In computing pensions, wages higher than 4 florins ($1.61) per day are 
 
 to be considered as of that amount. 
 
26 EUROPEAN AND CANADIAN LAWS: No. 65 
 
 Compensation for disability: 
 
 (a) Free medical and surgical treatment, or its cost. 
 
 (b) From day after injury until forty-third day, an allowance of 70 per cent. 
 
 of daily earnings, excluding Sundays and holidays. 
 
 (c) From forty-third day a pension of above amount during total disability 
 
 and a smaller pension in proportion to loss of earning power if par- 
 tially disabled. 
 
 (d) In computing pensions, wages higher than 4 florins ($1.61) per day 
 
 are to be considered as of that amount. 
 
 Revision of compensation. An examination of condition of victim may be 
 made whenever the Eoyal Insurance Bank so desires. 
 
 Insurance. Employers may insure their employees in the Royal Insurance 
 Bank (a State institution), in a private, company or association operating under 
 State supervision, or they may carry the burden themselves. If not insured in the 
 Royal Insurance Bank a sufficient guarantee must be deposited with the latter. 
 Employers must bear a proportionate share of the expense of administration of 
 the Royal Insurance Bank, whether they insure in it or not. 
 
 Guarantee of payment. Compensation payments are guaranteed by the State. 
 
 Settlement of disputes. Appeals may be taken from decisions of the Royal 
 Insurance Bank to local arbitration councils, in which employers and emploj^ees are 
 equally represented, and from them to a central arbitration council whose decisions 
 are final. 
 
 Hungary. 
 
 Date of enactment. April 9, 1907, in effect July 1, 1907. 
 Injuries compensated. Injuries by accident in the course of the employment 
 causing death or disability for more than three days. Injuries caused intentionally 
 are not compensated unless fatal. 
 
 Industries covered. All factories subject to inspection, mines, quarries, metal- 
 lurgical establishments, building trades, lumbering, construction work, shipbuild- 
 ing, slaughter houses, pharmacies, sanatoria, theatres, institutes of art and science- 
 Persons compensated. All employees in industries enumerated. 
 Government employees. Act covers government employees in state, municipal, 
 and communal industries enumerated above. 
 
 Burden of payment. All benefits and cost of treatment for first ten weeks pro- 
 vided by sick funds to which employers and employees contribute equally. Begin- 
 ning with eleventh week, entire cost is defrayed by employers through the accident 
 fund. 
 
 Compensation for death: 
 
 (a) Funeral benefit of twenty times average daily wages. 
 
 (b) Pensions to heirs not exceeding 60 per cent of annual earnings of deceased, 
 
 as follows: Widow, 20 per cent, of annual earnings until death or 
 remarriage; in latter case a final sum equal to 60 per cent, of annual 
 earnings; or to dependent widower 20 per cent, during disability. 
 
 Each child 16 years of age or under, 15 per cent., if one parent survives, 30 
 per cent., if neither survives ; payments to consort and children reduced 
 proportionately if they aggregate more than 60 per cent. 
 
 Dependent parents and grandparents, if there is a residue after providing 
 for above heirs, 20 per cent, or less. 
 
1912 WORKMEN'S COMPENSATION COMMISSION. 27 
 
 Dependent orphan grandchildren 15 years of age or under, if there is a resi- 
 due after providing for above heirs, 20 per cent, or less. 
 (c) In computing pensions the excess of annual earnings above 2,400 crowns 
 ($487.20) is not considered. 
 
 Compensation for disability: 
 
 (a) Free medical and surgical treatment provided firsl ten weeks by sick fund, 
 
 and afterward by accident fund. 
 
 (b) For temporary or permanent total disability. 50 per cent, of average daily 
 
 wages, but not exceeding 4 crowns (81 cents) for first ten weeks, pro- 
 vided by sick fund; beginning with eleventh week. GO per cent of aver- 
 age annual earnings, provided by accident fund. 
 
 (c) For complete helplessness necessitating attendance payments may be 
 
 increased to 100 per cent, of annual earnings. 
 
 (d) For partial disability a corresponding portion of full pension. 
 
 (e) In computing pensions the excess of annual earnings above 2,400 crowns 
 
 ($487.20) is not considered. 
 
 Revision of compensation. Whenever a change in condition of injured per- 
 son occurs, the accident fund or the injured person may ask for a revision of the 
 benefits. 
 
 Insurance. Payments are met by a State insurance institution, in which all 
 employees are required to be insured at the expense of the employers. 
 
 Guarantee of payment. Guaranteed by the State. 
 
 Settlement of disputes. Disputes are settled by arbitration courts, consisting 
 of a presiding judge and an equal number of representatives of workmen and 
 employers. 
 
 Italy. 
 
 Date of enactment. March 17, 1898, in effect September 17, 1898. Amended 
 June 29, 1903. Promulgated in codified form January 31, 1904. 
 
 Injuries compensated. All injuries sustained by workmen or salaried 
 employees during or on account of labor. If due to wilful misconduct, employer 
 may be reimbursed through criminal action. 
 
 Industries covered. Mines, quarries, building trades; light, heat and power 
 plants, arsenals, maritime construction work, transportation, industries requiring 
 the use or handling of explosives, all industrial or agricultural work in proximity 
 to power machinery; where more than five persons are employed in engineering 
 construction work; operation for protection against landslides, floods, hailstorms; 
 logging and timber rafting, and shipbuilding. 
 
 Persons compensated. All workmen and apprentices and overseers receiving 
 not more than 7 lire ($1.35) per day and paid at intervals of one month or less. 
 
 Government employees. Act applies to employment in state, provincial, and 
 communal industries enumerated above unless specially provided for, and to work 
 performed for a government institution under contract or concession. 
 
 Burden of payment. Entire cost of compensation rests upon employer. 
 
 Compensation for death : 
 
 If within two years after the accident, five times annual wages of deceased 
 workman, with a maximum of 10,000 lire ($1,930), distributed to: 
 
 (a) Surviving consort two-fifths of indemnity if there are children; one-half 
 of indemnity if there are dependent ascendants : three-fifths of indem- 
 
28 EUROPEAN AND CANADIAN LAWS: No. 65 
 
 nity if only dependent brothers or sisters; entire indemnity in absence 
 of heirs enumerated. Children, amounts sufficient to purchase an an- 
 nuity of equal amount for each child under 12 years of age, and one- 
 half of such annuity for each child from 12 to 18 years of age. Each 
 dependent parent or grandparent, if there are no children, annuity of 
 equal amount for life. Dependent brothers or sisters less than 18 
 years of age, or incapable of performing labour by reason of a mental 
 or physical defect, if there are no children or dependent ascendants, 
 annuities distributed upon same principle as in case of children. 
 (b) In absence of heirs indemnity is turned into a special fund for immediate 
 aid to injured, payment of indemnities for insolvent employers and 
 prevention of accidents. 
 
 Compensation for disability: 
 
 (a) Cost of first medical and surgical treatment. 
 
 (b) An indemnity in case of permanent disability of six times annual earn- 
 
 ings, but not less than 3,000 lire ($579) if totally disabled, and six 
 times the loss of annual earning capacity if partially disabled, earnings 
 in latter case to be considered as not less than 500 lire ($96.50). 
 
 (c) A daily allowance in case of temporary disability of one-half the wages 
 
 of injured workman, payable for not more than three months, if totally 
 disabled, and equal to one-half the reduction in wages occasioned by the 
 injury, if partially disabled. 
 
 Revision of compensation. Both workman and insurer may ask for a revision 
 of compensation within two } T ears after accident. 
 
 Insurance. Employers must insure their employees in (a) The National Acci- 
 dent Insurance Fund, (b) an authorized insurance company, (c) an association 
 of employers for mutual insurance against accidents, or (d) a private employers' 
 insurance fund. 
 
 Guarantee of payment. Payments are guaranteed by the State. 
 
 Settlement of disputes. In cases of dispute concerning temporary disability 
 payments, the council of prudhommes or the pretor of the locality in which the 
 accident occurred has authority to sit in final judgment if amount involved does 
 not exceed 200 lire ($38.60). Disputes involving larger amounts are referred for 
 settlement to the local magistrates. 
 
 Luxemburg. 
 
 Date of enactment. April 5, 1902, in effect April 15, 1903. Sick insurance 
 law enacted July 31, 1901. 
 
 Injuries compensated. All injuries by accident during or because of the em- 
 ployment, resulting in death or disability for more than three days, unless caused 
 intentionally by the victim or during the commission of an illegal act. 
 
 Industries covered. Mines, quarries, manufactories, metallurgical establish- 
 ments; gas and electric works; transportation and handling; building and engi- 
 neering construction; and certain artisans' simps having at least five employees 
 regularly and using mechanical motive power. By administrative order other 
 establishments may become subject to the law if regarded dangerous. 
 
 "Persons compensated. Workmen and those supervising and technical officials 
 whoso annual earnings are Less than 3,000 francs ($579). Certain other classes of 
 person- may be voluntarily insured. 
 
1912 WORKMEN'S COMPENSATION COMMISSION. 29 
 
 Government employees. Act applies to government telegraph and telephone 
 services, public works conducted by public agencies, and other governmental indus- 
 trial establishments, unless other provisions are made for pensioning employees. 
 Penal institutions are not included. 
 
 Burden of payment Benefits and cost of treatment first thirteen weeks pro- 
 vided by sick benefit funds, to which employers contribute one-third and employees 
 two-thirds, if injured person is insured against sickness; if not, because employed 
 less than one week, by an accident insurance association, supported by contributions 
 of employers; if not insured for other reasons, by the employer direct; all benefits 
 and treatment after thirteen weeks paid by accident insurance association. 
 
 Compensation for death: 
 
 (a) Funeral expenses, one-fifteenth of the annual earnings, but not less than 
 
 40 francs ($7.72), nor more than 80 francs ($15.44). 
 
 (b) Pensions, not to exceed 60 per cent, of earnings of deceased, to — 
 
 Widow, 20 per cent, until death or remarriage; in the latter case a 
 
 lump sum equal to 60 per cent.; same payment to a dependent 
 
 widower. 
 Each child, 20 per cent, until 15 years of age, even if father survives, 
 
 provided he abandons them, or the mother who was killed was 
 
 their main support. 
 Dependent heirs in an ascending line, 20 per cent. 
 Dependent orphan grandchildren, 20 per cent until 15 years of age. 
 Widow and children have the preference over other heirs. 
 
 (c) In computing pensions only one-third of excess of annual earnings over 
 
 1,500 francs ($289.50). is considered. 
 
 Compensation for disability: 
 
 (a) Entire cost of medical and surgical treatment. 
 
 (b) For temporary or permanent total disability, from third day to end of 
 
 fourth week, 50 per cent., and from fifth to end of thirteenth week, 60 
 per cent, of wages of persons similarly employed; after thirteen weeks, 
 66 2-3 per cent, of annual earnings of injured person. 
 
 (c) For partial disability a portion of above (depending upon degree of dis- 
 
 ability), which may be increased to full amount, as long as injured 
 employee is without employment. 
 
 (d) Lump sum payments may be substituted for pensions when degree of dis- 
 
 ability is not greater than 20 per cent. 
 
 (e) In computing pensions only one-third of excess of annual earnings over 
 
 1,500 francs ($289.50) is considered. 
 
 Revision of compensation. Demands for change of amount of compensation 
 may be made within three years. 
 
 Insurance. Payments are met by mutual accident insurance association of 
 employers, in which all employees must be insured at expense of employers. 
 
 Guarantee of payment. Insurance association conducted under State super- 
 vision. 
 
 Settlement of disputes. Appeals from the decisions of the association may be 
 carried within forty days to a justice of the peace, who is required to invite two 
 delegates, representing employer and employee, to assist in an advisory capacity. 
 Further appeals may be taken to the higher courts. 
 
30 EUKOPEAN AND CANADIAN LAWS : No. 65 
 
 Manitoba. 
 
 Date of enactment. March 16, 1910, in effect January 1, 1911. 
 
 Injuries compensated. Injuries by accident arising out of and in the course 
 of the employment which caused death, or disabled workman for at least two weeks 
 from earning full wages at the work at which he was employed. Compensation is 
 not paid when the injury is attributable to the workman's drunkenness, nor if 
 attributable to his serious or wilful misconduct and only partial incapacity results. 
 Compensation is paid in every case where injuries result in permanent disability or 
 death. 
 
 Industries covered. Any employment in which five or more workmen are em- 
 ployed. 
 
 Persons compensated. Workmen and apprentices, and government or other 
 clerks whose remuneration is less" than $1,200 a year. 
 
 Compensation to dependants is limited to those residing within the province 
 at the time of the accident and during the period of payment. 
 
 Burden of payment. Is upon the employer. 
 
 Compensation for death: 
 
 (a) To those wholly dependent on earnings of deceased for the necessaries of 
 
 life, a sum not exceeding $1,500. 
 (&) To those in part dependent a sum not exceeding $1,500, to be agreed upon 
 
 or fixed by arbitration, 
 (c) If no dependants, the reasonable expenses of medical attendance and 
 
 burial, not to exceed $100. 
 
 Compensation for incapacity. A weekly payment not exceeding 50 per cent, 
 of adult workman's average weekly earnings with the same employer and not more 
 than $10 per week; to apprentices up to $6 per week, payable after the first two 
 weeks following the injury. There are two provisoes: (1) That if the injured 
 workman is not a journeyman working at his own trade, he shall be entitled only 
 to 25 per cent, diminution which the accident caused to his wage-earning capacity 
 for the first month, 40 per cent, for the second month, and thereafter 50 per cent.; 
 and (2) that the total amount payable shall not exceed $1,500. 
 
 Revision of compensation. An order of the court or an award as to the sums 
 payable to dependants may be varied, and weekly payments may be revised at the 
 request of either the employer or of the workman. 
 
 Insurance. Employers may make contracts with workmen for substitution 
 of a scheme of compensation, benefit or insurance in place of the provisions of the 
 act, if the Attorney-General certifies that the scheme is not less favourable to the 
 workmen and their dependants than the provisions of the act, and a majority of 
 the workmen to whom the scheme is applicable are in favour of the scheme. A cer- 
 tificate is given for a period of not less than five years, and under it employers are 
 liable only in accordance with the scheme. 
 
 Guarantee of payment. If the employer has entered into a contract with in- 
 surers in respect of liability under the act to any workman, the rights of the em- 
 ployer, in case he becomes bankrupt, are transferred to and vested in the workman. 
 In case of the employer's assignment, or of the winding up of a company, the com- 
 pensation due before the date of the assignment or of the commencement of the 
 winding-up, is, up to $500 in any individual case, classed as a preferred claim. 
 
 Settlement of disputes. Disputes are settled by arbitration; either by an arbi- 
 tration committee representing employer and workman, or by a single arbitrator, 
 
1912 WORKMEN'S COMPENSATION COMMISSION. 31 
 
 or, in the absence of agreement, by the court. The Attorney-General may confer 
 upon an arbitration committee any or all of the powers conferred by the act ex- 
 clusively on courts. 
 
 New Brunswick. 
 
 Is more a liability than a compensation act. 
 " Workman " is narrowly defined. 
 
 Dependants unless residents in Canada at the time of the death of the work- 
 man have no claim. 
 
 The act is of limited application. 
 
 Newfoundland. 
 
 Date of enactment. February 18, 1908, in effect July 1, 1908. 
 
 Injuries compensated. Injuries by accident arising out of and in the course 
 of the employment which disable a workman for at least one week from earning 
 full wages at the work at which he was employed, unless the injury is attributable 
 to the serious or wilful misconduct of the injured workman. 
 
 Industries covered. Railways, factories, mines, quarries, engineering work, 
 employment in or about any building which exceeds twenty feet in height and is 
 being constructed or repaired by means of a scaffolding, or being demolished, or 
 on which machinery driven by steam, water, or other mechanical power is being 
 used for the purpose of its construction, repair or demolition. 
 
 Persons compensated. Every person who is engaged in manual labor or other- 
 wise. 
 
 Government ivorhmen. The . act applies to workmen employed under the 
 Crown, to whom the act would apply if the employer were a private person. 
 
 Burden of payment. Entire cost of compensation rests upon the employer. 
 
 Compensation for death : 
 
 (a) To those dependants wholly dependent upon the workman's earnings a 
 
 sum equal to the workman's earnings in the employment, of the same 
 employer during the three years next preceding the injury, or the sum 
 of $750, whichever of those sums is the larger, but not exceeding 
 $1,500, or one hundred and fifty-six times the average weekly earnings 
 of the workman during the period of his actual employment. 
 
 (b) To dependants partially dependent upon the workman's earnings, a sum 
 
 equal to or less than the above sum, as may be agreed upon or as may 
 be determined to be reasonable and proportionate to the injury to the 
 said dependants. 
 
 (c) If no dependants, the reasonable expenses of his medical attendance and 
 
 burial, not exceeding $50. 
 
 Compensation for disability. Where total or partial incapacity for work re- 
 sults from the injury, a weekly payment during the incapacity not exceeding 50 
 per cent, of Jhe workman's average weekly earnings during the previous twelve 
 months, if he has been so 'long employed, but if not then for any less period during 
 which he has been in the employment of the same employer, such weekly payments 
 not to exceed $5. 
 
 If the incapacity lasts less than two weeks no compensation is payable in re- 
 spect of the first week. 
 
32 EUBOPEAN AND CANADIAN LAWS: No. 65 
 
 A lump sum may be substituted for the weekly payments, after six months, on 
 the application of the employer, the amount to be settled, in default of agreement, 
 by the court or a judge. 
 
 Revision of compensation. Weekly payments may be reviewed at the request 
 of either the employer or the workman, and the amount of payment shall, in de- 
 fault of agreement, be settled by the court or a judge. 
 
 Insurance. Insurance is not obligatory. Employers may contract with their 
 workmen for the substitution of a scheme of compensation, benefit, or insurance 
 in place of the provisions of the act, if the government engineer certifies that the 
 scheme . provides scales of compensation not less favourable to the workman and 
 their dependants than the corresponding scales in the act, and if the scheme pro- 
 vides for contributions by the workmen, that the scheme confers benefits at least 
 equivalent to those contributions in addition to the benefits to which workmen 
 would have been entitled under the act, and that a majority of the workmen are 
 in favour of the scheme. 
 
 Guarantee of payment. There is no guarantee of payment. When an em- 
 ployer becomes liable under the act to pay compensation, and is entitled to any 
 sum from insurers on account of the amount due to a workman under such liabil- 
 ity, then in the event of the employer becoming insolvent, or making an arrange- 
 ment or composition with his creditors, the workman shall be subrogated to the 
 rights of the employer against the ■ insurers. 
 
 The workman has also in respect of any compensation due a preferential claim 
 against an insolvent employer. 
 
 Settlement of disputes. All proceedings for the recovery of compensation lor 
 an injury are taken by action in the Supreme Court. 
 
 New South Wales. 
 
 Date of enactment. November 5, 1900, in effect January 1, 1901. Amended 
 on December 28, 1901. Scale of compensation increased by governor on July 28, 
 1905, in accordance with power given by the act. 
 
 Injuries compensated. Injuries caused primarily by accident while at work 
 and resulting in death or incapacity to attend to ordinary occupation. 
 
 Industries covered. Any mine/ or works adjoining such mine, in or about which 
 (including the works) 15 or more persons are employed. 
 
 Persons compensated. Persons employed in or about a mine, or works adjoin- 
 ing. 
 
 law. 
 
 Government employees. No mention of government employees is made in the 
 
 Burden of payments. Distributed equally between employees on one hand and 
 employers and State on the other. Workmen pay 4l/£ pence (9 cents) per week, 
 employers pay 50 per cent of workmen's contributions, and State grants subsidy 
 of an amount equal to employer's contribution. 
 
 Compensation for death: 
 
 (a) Funeral benefit of £12 ($58.40). 
 
 (6) Weekly pensions: To widow, 10 shillings ($2.43), until death or re- 
 marriage, and for each child under 14 years, additional 3 shillings (73 
 cents) : to motherless children, 10 shillings ($2.43) until no child is 
 below 14 years. 
 
1912 WORKMEN'S COMPENSATION COMMISSION. 33 
 
 (c) If deceased was unmarried, weekly pensions of LO shillings ($2.43) to 
 dependent father and mother, each, and additional 3 shillings (73 
 cents) for each child under 1 I years of dependent mother. 
 
 ((/) In absence of dependent parents, 10 shillings per week ($2.43) to depen- 
 dent sister or sisters (sharing equally) and additional 3 shillings (73 
 cents) for each child under 1 I years. 
 
 Compensation for disability: 
 
 (a) Weekly allowance of 13 shillings ($3.65) until able to resume work. 
 
 (6) In case of permanent total disability, additional 3 shillings (73 cents) 
 weekly for each child under 14. 
 
 Revision of Compensation. Made under rules promulgated bv a board con- 
 sisting of members representing workmen, employers, and State: 
 
 Insurance. Payments are met by miners' accident relief fund administered 
 by the board above mentioned. 
 
 Guarantee of payment. Governor must revise scale of benefits to correspond 
 with financial condition of fund. 
 
 Settlement of disputes. Controversies are settled by the board which admin- 
 isters the fund, except that fines and arrears of contributions may be collected 
 through regular courts. 
 
 New Zealand. 
 
 Date of enactment. October 18, 1900, to take effect at a date fixed by the 
 governor by order in council. Amended October 3, 1902; November 23, 1903; 
 November 8, 1904; October 31, 1905, October 29, 1906; Act 1908; No. 34, Oct. 
 28, 1911. 
 
 Injuries compensated. All injuries to workmen arising out of and in the 
 course of the employment causing death or disability for at least one week, except 
 when due to serious and wilful misconduct of the workman injured. 
 
 Industries covered. Industrial, commercial, manufacturing, building, agri- 
 cultural, pastoral, mining, quarrying, engineering, and hazardous work carried on 
 by or on behalf of the employer as a part of his trade or business. 
 
 Persons compensated. All persons under contract with an employer. 
 
 Government employees. Act applies to work carried on by or on behalf of the 
 government or any local authority if it would, in case of a private employer, be an 
 employment to which the act applies. 
 
 Burden of payment. Entire cost of compensation 'rests upon employer; but 
 if there are contractors, then on such contractors and the principal, jointly and 
 severally. 
 
 Compensation for death: 
 
 (a) A sum equal to three years' earnings, but not less than €200 ($973.30) 
 
 nor more than £400 ($1,946.60), to those wholly dependent upon earn- 
 ings of deceased. 
 
 (b) A sum less than above amount if dependants were partly dependent upon 
 
 deceased, to be agreed upon by the parties or fixed by a magistrate or by 
 the arbitration court. 
 
 (c) Eeasonable expenses of medical attendance and burial, not exceeding £30 
 
 ($146.00), in case deceased leaves no dependants. 
 3 l. 
 
34 EUKOPEAN AND CANADIAN LAWS: No. 65 
 
 Compensation for disability: 
 
 (a) A weekly payment during disability not exceeding 50 per cent of 
 employee's average weekly earnings during the previous twelve months, 
 but not to exceed £2 ($9.73) nor to fall below £1 ($4.87) where 
 employee's ordinary rate of pay at the time of the accident was not less 
 than 30 shillings ($7.30) per week. Total liability of employer is 
 limited to £300 ($1,459.95). No payment is made for first week if 
 disability does not continue for a longer period than two weeks. 
 (&) A lump sum may be substituted for weekly payments for permanent total 
 or partial disability, to be agreed on by the parties or, in default of 
 agreement, determined by the court of arbitration. 
 Revision of compensation- Weekly payments may be revised at request of 
 either party. 
 
 Insurance. Employers may contract with their employees for substitution of 
 a scheme of compensation, benefit, or insurance in place of the provisions of the Act 
 if the scheme is shown to be not less favourable to the general body of employees and 
 their dependants than the provisions of the act. In such case the employer is 
 liable only in accordance with the scheme. 
 
 Guarantee of payment. When an employer becomes liable under this act to 
 pay compensation, and is entitled to any sum from insurers on account of the 
 amount due to a workman under such liability, then in the event of his becoming 
 insolvent such workman has a first claim upon this sum. Compensation for injuries 
 sustained in the course of employment in or about a mine, factory, building, or 
 vessel is deemed a charge upon the employer's interest in such property and has 
 priority over all charges other than those lawfully existing at the time of the com- 
 mencement of the act. 
 
 Settlement of disputes. Disputes arising under the act are settled by the 
 Court of Arbitration under the Industrial Arbitration Act. Where claim for com- 
 pensation does not exceed £200 ($973.30) proceedings may be instituted before 
 a magistrate whose decision is final, except that in cases where amount involved 
 does not exceed £50 ($243.33) either party may, with the consent of the magistrate, 
 and in cases where the claim exceeds £50 ($243.33), without such consent, appeal 
 from his decision on any point of law. 
 
 Norway. 
 
 Date of enactment. July 23, 1894, in effect July 1, 1895. 
 
 Injuries compensated. All injuries by industrial accidents, causing death, or 
 disability for more than four weeks, or requiring treatment after that period, unless 
 intentionally brought about by the injured person. 
 
 Industries covered. Practically all factories and workshops using other than 
 hand power; mines and quarries; the handling of ice, explosives or inflammable 
 wares; building and engineering construction, electric work, transportation, sal- 
 vage and diving, chimney sweeping, and fire extinguishing. Employees in other 
 industries may avail themselves of this insurance system. 
 
 Persons compensated. All workmen and overseers. 
 
 Government employees. Act covers employees in government or communal ser- 
 vice, wben engaged in any of the industries enumerated above, unless at least equal 
 compensation is provided by special regulation. 
 
 Burden of payment. Cost of compensation rests upon employer. 
 
1912 WORKMEN'S COMPENSATION COMMISSION. 35 
 
 Compensation in case of death: 
 
 (a) Funeral benefit of 50 crowns ($13.40). 
 
 (b) Pensions to heirs not exceeding 50 per cent, of earnings to be distributed 
 
 tor- 
 Widow, 20 per cent, of earnings until death or remarriage; in the latter 
 case a lump sum equal to three annual payments; or dependent 
 widower, if incapable of work, 20 per cent, of annual earnings of 
 deceased while his disability lasts. 
 Each child, 15 per cent, of animal earnings till age of 15 years, if one parent 
 survives, or 20 per cent, if neither survives; 15 per cent, for each parent 
 to each child, when both parents have died as result of injuries. 
 Dependent relatives in ascending line, if there is a residue after providing 
 for above-mentioned heirs, a pension of 20 per cent, of earnings until 
 death or cessation of need, to be divided equally; but living parents 
 exclude grandparents from participation. 
 
 (c) In computing pensions, the excess of annual earnings over 1,200 crowns 
 
 ($321.60) is not considered. 
 
 (d) Pension payments are in addition to prior allowances granted for dis- 
 
 ability. 
 
 Compensation for disability: 
 
 (a) Free medical and surgical treatment, or cost of same, after four weeks. 
 
 (b) If employee is totally disabled for more than four weeks an allowance of 
 
 60 per cent, of the earnings, but not less than 0.50 crown (13 cents per 
 diem or 150 crowns ($40.20) per annum; and a proportionate allow- 
 ance in case of partial disability. 
 
 (c) If injured employee is forced to stay in a hospital, dependants receive 
 
 allowances during that time equal to the pensions granted in cases of 
 death. 
 
 (d) If injured employee is not a member of a sick insurance fund he is 
 
 entitled to receive from employer directly sick benefits and free medical 
 treatment from first day of injury. 
 
 (e) In computing allowances the excess of annual earnings over 1,200 crowns 
 
 ($321.60) is not considered. 
 
 Revision of compensation. Compensation is subject to revision upon demand 
 of either the beneficiary or the insurance office. 
 
 Insurance. A state central insurance office is established for the entire King- 
 dom, in which all employees subject to the law must be insured by employer, unless 
 he is, for special reasons, relieved by royal order from the obligation of insurance. 
 
 Guarantee of payment. Insurance office is guaranteed by the State. 
 
 Settlement of disputes. Appeals from decisions of insurance office may be 
 entered within six weeks with the special insurance commission. 
 
 Nova Scotia. 
 
 Date of enactment. April 22, 1910, in effect February 1, 1911. 
 
 Injuries compensated. All injuries by accident to workmen arising out of and 
 in the course of employment causing disability for over two weeks, unless attribu- 
 table to the serious and wilful misconduct of drunkenness of the workman. 
 
36 EUROPEAN AND CANADIAN LAWS: No. 65 
 
 Industries covered. Railways, factories, mines, quarries, engineering work, 
 loading and unloading vessels, building using scaffolding or mechanical motive 
 power, employing not less than ten workmen. 
 
 Persons compensated. Workmen and clerks regularly employed whose remun- 
 eration does not exceed $1,000 a year. Named companies which have relief socie- 
 ties are exempted from the operation of the act. Employees in agriculture, the 
 fisheries, shipbuilding, lumbering and sawmills are excluded. 
 
 Government employees. Are within the act, if the employment itself is cov- 
 ered by the Act. 
 
 Burden of payment. Is upon emplo} r er. 
 
 Compenastion for death: 
 
 (a) To dependants residing in Canada wholly dependent upon workman's 
 
 earnings at the time of his death, a sum equal to three years' earnings, 
 not less than $1,000, nor more than $1,500. 
 
 (b) To partial dependants, not more than above amount to be agreed upon or 
 
 fixed by arbitration. 
 
 (c) If no dependants reasonable expenses of medical attendance and burial 
 
 not exceeding $200. 
 
 Compensation for disability: 
 
 A weekly payment after second week not exceeding 50 per cent, of average 
 weekly earnings ; not more than $7 a week, nor in all than $1,500. 
 
 A lump sum to be settled by arbitration may, on application of employer, 
 be substituted for weekly payments. 
 
 Revision of compensation. May be had at request of either employer or work- 
 man. 
 
 Insurance. Employers may make contracts with workmen for substitution of 
 a scheme of compensation, benefit, or insurance in place of the provisions of the 
 act, if the Lieutenant-Governor-in-Council certifies that the scheme is not less 
 favourable to the general body of workmen and dependants than the provisions 
 of the act. The employers are then liable only in accordance with the scheme. 
 
 Guarantee of payment. If employer is entitled to any sum from insurers in 
 respect of any liability under the act to any workman, in case employer becomes 
 bankrupt, or makes a compromise or arrangement with creditors, the workman 
 shall be subrogated to the rights of the employer against the insurers. (S. 10.) 
 
 Settlement of disputes. Disputes are settled, (a) by an arbitration committee 
 representatives of employer and workman; or, (b) by a single arbitrator agreed 
 upon; or (c) by an arbitrator appointed by the 'County Court judge. 
 
 Quebec. 
 
 Dale of enactment. May 29th, 1909, in effect January 1, 1910. 
 
 Injuries compensated. All injuries happening to workmen by reason of or in 
 the course of their work causing death or disability lasting over seven days. 
 Injuries intentionally caused by the person injured are not compensated. 
 
 Industries covered. Building, manufacturing, transportation, engineering 
 mill construction work, mining, quarrying stone; wood and coal yards; any indus- 
 trial enterprise using machinery operated by power. Agriculture and sailing ves- 
 ! are excluded. 
 
1912 WOKK.MK.VS COMPENSATION COMMISSION. ;)7 
 
 Persons compensated. Workmen, apprentices, and employees earning not 
 more than $1,000 per annum. Foreign workmen or their representatives are com- 
 pensated only if and so long as they reside in Canada. 
 
 Government employees. Governmenl employees are not mentioned in the act. 
 
 Burden of payment. The entire expense rests upon the employer. 
 
 Compensation for death: 
 
 (a) Medical and funeral expenses not in excess of $25, unless same are pro 
 
 vided by an association of which the deceased was a member. 
 
 (b) Four times average yearly wages, but not less than $1,000 nor more than 
 
 $2,000, payable to surviving consort, to children under 1(5 years of age, 
 and dependent ascendants; shares to be agreed upon or determined by 
 court. 
 
 All amounts may be decreased or increased by court on account of inexcus- 
 able fault of employee or employer. 
 
 Payments made for disability before death are deducted. 
 
 Compensation for disability : 
 
 (a) For permanent total disability, a pension equal to 50 per cent, of the 
 
 yearly wages (including the maximum and minimum amounts). 
 
 (b) For permanent partial incapacity, a pension equal to 50 per cent, of the 
 
 amount by which the wages have been reduced because of the injury. 
 
 (c) For temporary incapacity lasting over seven days, compensation equal to 
 
 one-half the daily earnings received at the time of the accident, 
 beginning with the eighth day. 
 
 (d) In computing pensions only one-fourth the excess of the annual earnings 
 
 between $600 and $1,000 is considered. The capital of any pension 
 shall not exceed $2,000, unless higher, because of accidents due to inex- 
 cusable fault of the employer. 
 Revision of compensation. Demands for change of amount of compensation 
 may be made within four years. 
 
 Insurance. No reference concerning the insurance of risks under the law is 
 contained in the act, except as to the payment of pensions due, which may be 
 transferred to insurance companies. No release from liability is obtained by the 
 employer by such transfer. 
 
 Guarantee of payment. Claims for compensation or pensions form a lien on 
 the real and personal property of the employer so long as they remain unpaid. 
 
 Settlement of disputes. Superior and Circuit Courts have jurisdiction over all 
 disputes arising under this act. All proceedings are summary, no trial by jury 
 being allowed. 
 
 Queensland. 
 
 Date of enactment. December 20, 1905, in effect March 31, 1906. 
 
 Injuries compensated. All injuries by accident, arising out of and in the 
 course of the employment, which cause death or disable a workman for at least 
 two weeks from earning full wages at the work at which he was employed, except 
 when the injury is directly attributable to his serious and wilful misconduct or 
 when it occurs while proceeding to or from his place of work. 
 
 Industries covered. Industrial, commercial, manufacturing, building, agri- 
 cultural, pastoral, mining, quarrying, engineering, or hazardous work carried on 
 by or on behalf of the employer as a part of his trade or business. 
 
 Persons compensated. All persons under contract with an employer. 
 
38 EUBOPEAN AND CANADIAN LAWS: No. 65 
 
 Government employees. Act applies to any work carried on by or on behalf 
 of the government or any local authority if it would, in case of a private employer, 
 be an employment to which the act applies. 
 
 Burden of payment. Entire cost of compensation rests upon employer. 
 Condensation for death: 
 
 (a) A sum equal to three years' earnings, but not less than £200 ($973.30) 
 nor more than £400 ($1,946.60), to those wholly dependent upon 
 earnings of deceased; but aged and infirm employees may agree in 
 advance to accept a reduced amount. 
 (6) A sum less than above if heirs are only partly dependent. 
 (c) Reasonable expenses of medical attendance and burial, not exceeding £30 
 ($146), if deceased leaves no dependants. 
 
 Compensation for disability: 
 
 (a) A weekly payment during disability after second week, not exceeding 50 
 
 per cent, of employee's average weekly earnings during the previous 
 twelve months, such weekly payments not to exceed £1 ($4.87), and 
 total liability not to exceed £400 ($1,946.60) ; except that aged and 
 infirm employees may agree in advance to accept a reduced amount. 
 
 (b) A weekly payment during partial disability after second week, not exceed- 
 
 ing one-half of difference between the employee's average weekly earn- 
 ings before the accident and the average weekly amount which he is 
 earning or able to earn after injury. 
 
 (c) Minors may be allowed full earnings during incapacity, not exceeding 
 
 10 shillings ($2.43) weekly. 
 
 (d) A lump sum may be substituted for weekly payments after three months, 
 
 on application of employer, the amount to be agreed upon or, in default 
 of agreement, to be determined by a police magistrate. 
 
 Revision of compensation. Weekly payments may be revised by a police magis- 
 trate at request of either party. 
 
 Insurance. Employers may contract with their employees for substitution of 
 a scheme of compensation, benefit, or insurance in place of the provisions of the 
 act if the scheme is officially certified to be not less favourable to the employees 
 and their dependants than the provisions of the act. In such case the employer 
 is liable only in accordance with the scheme, 
 
 Guarantee of payment. AVhen an employer becomes liable under the act to 
 pay compensation, and is entitled to any sum from insurers on account of the 
 amount due to a worker under such liability, then in the event of his becoming 
 insolvent, such workman has a first claim upon this sum for the amount so due. 
 
 Settlement of disputes. Disputes arising under the act are heard and deter- 
 mined by a police magistrate, whose decision is final, except that either party may 
 appeal from this decision on any point of law with the latter's leave if the claim 
 does not exceed £50 ($243.33), or without his leave if it exceeds that amount. 
 
 Eussia. 
 
 Date of enactment. June 2, (15), 1903, in effect January 1 (14), 1904. 
 
 Injuries compensated. All injuries by accidents occasioned by or on account 
 of the work and causing death or disability for more than three days, unless brought 
 on intentionally by the victim or due to gross imprudence. 
 
1912 WORKMEN'S COMPENSATION COMMISSION. 39 
 
 Industries covered. Metallurgical and mining establishments and factories 
 and workshops using other than hand power, but exclusive of shops of private rail- 
 roads and steamship companies and certain rural industrial establishments. 
 
 Persons compensated. Workmen and those technical officials whose annual 
 earnings do not exceed 1,500 rubles ($772.50). 
 
 Government employees. Act applies to mining, metallurgical and manufac- 
 turing establishments of municipal and Zemstvo governments, but not to national 
 government employees, for whom special regulations exist. 
 
 Burden of payment. Entire burden of payment rests upon employer. 
 
 Compensation for death: 
 
 (a) Funeral expenses not exceeding 30 rubles ($15.45) for an adult and 15 
 
 rubles ($7.73) for a child under 15 years of age. 
 
 (b) Pensions to dependent heirs not exceeding 66 2-3 per cent, of annual 
 
 earnings of victim, distributed to : 
 Widow, 33 1-3 per cent- until death or remarriage; in the latter case a lump 
 
 sum equal to three annual payments. 
 Each child until age of 15 years 16 2-3 per cent, if one parent survives and 
 
 25 per cent, if neither parent survives. 
 Dependent heirs in ascending line, 16 2-3 per cent. Each dependent orphan 
 
 brother and sister until 15 years of age, 16 2-3 per cent. 
 Widow and children take precedence over other dependent heirs, who share 
 
 the remainder in equal parts. 
 
 (c) Pension may, by mutual consent of employer and beneficiary, be replaced 
 
 by single payment of ten times amount of annual pension and, in case 
 of children, pension multiplied by the number of years remaining for 
 pension payments, but not exceeding ten. 
 
 Compensation for disability: 
 
 (a) Free medical and surgical treatment or reimbursement of expense of 
 same. 
 
 (&) If permanently disabled, a pension of 66 2-3 per cent, of annual earnings 
 of victim in case of total disability, and a pension proportionate to 
 degree of incapacity in case of partial disability, to be paid from time 
 when degree of permanent disability was determined; if amount of 
 pension exceeds that of previous allowance for temporary disability, 
 difference between the two during the period of disability is paid to 
 permanently injured employee. 
 
 (c) Pension may, by mutual consent of employer and beneficiary, be replaced 
 
 by a single payment of ten times amount of annual pension. 
 
 (d) If temporarily disabled, an. allowance of 50 per cent, of actual wages of 
 
 victim from day of accident until complete recovery from disability or 
 the determining of degree of permanent disability. 
 
 Revision of compensation. Demands for revision of payments or to secure a 
 pension previously refused may be made by either party within three years. 
 
 Insurance. Employers may transfer burden of payment of compensation by 
 insuring their employees in authorized insurance companies, or societies. 
 
 Guarantee of payment. On retiring from business employer must guarantee 
 payments by insurance or by deposit with a State bank. In case of insolvency, pay- 
 ments constitute a preferred claim. 
 
40 EUROPEAN AND CANADIAN LAWS: No. 65 
 
 Settlement of disputes. Disputes may be carried into courts as other civil cases. 
 Such cases are exempt from court fees, the documents are free from stamp tax, 
 and attorney's fees are fixed by law. 
 
 Saskatchewan. 
 
 Date of enactment. March 23, 1911; in effect November 1, 1911. 
 
 Injuries compensated. Personal injuries by accident arising out of and in the 
 course of the employment 'Unless the injury does not disable the workman for at 
 least one week from earning wages at the work at which he was employed. 
 
 Industries covered. Railways, factories, mines, quarries, engineering work 
 and building work, with a special exception excluding emjdoyments in agriculture. 
 
 Persons compensated. Persons emplo - yed in the industry. 
 
 Government employees. Are not mentioned in the act. 
 
 Burden of payment. Entire cost of compensation rests upon the employer. 
 
 Compensation. Not to exceed estimated earnings during preceding three 
 years of person in same grade as the injured emplo}^ee or $1,800, whichever is 
 the larger, but not to exceed in any case $2,000. 
 
 Insurance: There is no provision as to insurance. 
 
 G no ran tee of payment. No security except that in case of insolvency the em- 
 ployee is subrogated to the right of the employer against the insurer and the 
 compensation in the case of an assignment or winding up is to the extent of $500 
 given priority over other debts. 
 
 Settlement of disputes. Compensation is recoverable by action in district 
 court. 
 
 South Austealia 
 
 Date of enactment. December 5, 1900, in effect not earlier than June 1, 1901. 
 
 Injuries compensated. All injuries to workmen arising out of and in the 
 course of the employment causing death or disability for at least one week, except 
 when due to the serious and wilful misconduct of the workman injured. 
 
 Industries covered. Eailways, waterworks, tramways, electric lighting works, 
 factories, mines, quarries, engineering and building work, employments declared by 
 a proclamation of the governor upon addresses from both houses of parliament 
 to be dangerous or injurious to health or dangerous to life or limb, and agricul- 
 tural pursuits where mechanical motive power is used. 
 
 Persons compensated. All persons engaged in manual labour or otherwise. 
 
 Government employees. Act applies to civilian persons employed under the 
 Crown to whom it would apply if the employer were a private person. 
 
 Burden of payment. Entire cost of compensation rests upon employer. 
 
 Compensation for death: 
 
 (a) A sum equal to three years' earnings, but not less than £150 ($729.98) 
 nor more than £300 ($1,459.95), to those wholly dependent upon earn- 
 ings of deceased. 
 
 (I>) A sum less than above amount if dependants were partly dependent upon 
 deceased, to be agreed upon by the parlies or fixed by arbitration. 
 
 (c) Reasonable expenses of medical attendance and burial not exceeding £50 
 ($243-33), if deceased leaves no dependants. 
 
1912 WORKMEN'S COMPENSATION COMMISSION. 41 
 
 Compensation for disability: 
 
 (a) A weekly payment during disability after first week, not exceeding 50 
 
 per cent, of employee's average weekly earnings during the previous 
 twelve months, such weekly payments Dot to exceed CI ($1.87) nor, in 
 case of total incapacity, to he less than 7s. 6d. ($1.83) per week, ami 
 total liability m>t to exceed 6300 ($1,459.95). 
 
 (b) A weekly payment during partial disability after first week to he fixed 
 
 with regard to difference between employee's average weekly earnings 
 before the accident and average weekly amount which he is earning or 
 able to earn after injury. 
 
 (c) A lump sum not exceeding £300 ($1,459.95) may be substituted for 
 
 weekly payments, after six months, on application of either part} r , the 
 amount to be settled by arbitration under the act in default of aarree- 
 ment. 
 
 Revision of compensation. Weekly payments may he revised at request of 
 either party.- 
 
 Insurance. Employers may contract with their employees for substitution of a 
 scheme of compensation, benefit, or insurance in place of the provisions of the act, 
 if the public actuary certifies that the scheme is on the whole not less favourable to 
 general body of employees and their dependants than the provisions of the act. In 
 such case employer is liable only in accordance with the scheme. 
 
 Guarantee of payment. When an employer become liable under the act to 
 pay compensation, and is entitled to any sum from insurers on account of the amount 
 due to a workman under such liability, that in the event of his becoming insolvent 
 such workman has a first claim upon this sum, and any special magistrate may 
 direct its payment into the savings bank to be applied to payment of compensations 
 due. 
 
 Settlement of disputes. Disputes arising under the act are settled by the 
 arbitration of existing committees representative of employers and employees, or, 
 if either party objects, by a single arbitrator agreed on by the parties, or, in 
 absence of agreement, by special magistrate. An arbitrator appointed by the magis- 
 trate has all the powers of a local court. 
 
 Spain. 
 
 Date of enactment. January 30, 1900, in effect July 28, 1900. 
 
 Injuries compensated. All injuries by accidents to employees in the course of 
 and by reason of the employment causing death or disability. Compensation may 
 be reduced if injured person was engaged in an illegal act. 
 
 Industries covered. Manufacturing, mines, quarries, metallurgical establish- 
 ments, construction work, industries injurious to health, transportation, gas and 
 electric works, street cleaning, theatres, and agricultural and forestry establish- 
 ments using power machinery. 
 
 Persons compensated. Workmen performing manual labour, including helpers 
 and apprentices. 
 
 Government employees. Act applies to employees of state factories and other 
 government establishments, to labor accidents in war and naval departments, and 
 to establishments of provincial and communal governments. 
 
42 EUROPEAN AND CANADIAN LAWS: No. 65 
 
 Burden of payment. Entire cost of compensation rests upon employer. 
 
 Compensation for death: 
 
 In addition to any prior benefits paid for disability : — 
 
 (a) Funeral expenses not 'exceeding 100 pesetas ($19.30). 
 
 (b) A lump sum equal to two years' earnings, if widow and children or 
 
 dependent orphan grandchildren under 16 years survive; eighteen 
 months' earnings if only children or orphan grandchildren survive; 
 one year's earnings if only widow survives; ten months' earnings to 
 dependent parents or grandparents over 60 years of age, in absence of 
 widow or children; if two or more survive; seven months' earnings if 
 only one parent or grandparent survives. 
 
 (c) For these lump sum payments, by mutual consent, the following pen- 
 
 sions may be substituted: 40 per cent, of annual earnings when widow 
 and children or grandchildren survive; 20 per cent, of annual earnings 
 when only widow survives; 10 per cent, to each dependent parent or 
 grandparent over 60 years of age, when no widow or children survive, 
 but not over 30 per cent, in the aggregate; compensation to widow 
 ceases on her remarriage, and to children on the attaining the age of 
 16 years. 
 
 (d) In these cases, the daily earnings to be considered as not less than 150 
 
 pesetas (29 cents). 
 
 (e) All of these compensations are increased by 50 per cent, if the establish- 
 
 ment is lacking in the required safety provisions. 
 
 Compensation for disability: 
 
 (a) Free medical and surgical treatment during disability. 
 
 (&) Fifty per cent, of daily earnings, including Sundays and holidays, from 
 day of injury to day of recovery from disability, but not over one 
 year, after which case is treated as one of permanent disability. 
 
 (c) In case of permanent disability, in addition to the foregoing, a sum equal 
 
 to two years' earnings for total disability. 
 
 Eighteen months' earnings, if total disability extends only to former trade. 
 
 One year's earnings in cases of partial permanent disability for usual employ- 
 ment, unless the employer agrees to employ injured workman at some 
 other work at old rate of wages. 
 
 (d) In these cases, the daily earnings to be considered as not less than 150 
 
 pesetas (29 cents). 
 
 (e) Compensations are increased by 50 per cent, if the establishment is lack- 
 
 ing in the required safety provisions. 
 
 Revision of compensation. No special provision is made in the law- 
 
 Insurance. Employers may contract with authorized insurance companies to 
 assume obligations imposed by law. 
 
 Guarantee of payment. No special provision is made in the law. 
 
 Settlement of disputes. Disputes concerning compensation under the law may 
 be carried to special permanent labour tribunals consisting of representatives of 
 the State, employers, and employees. 
 
1912 WOR KM FA'S COMPENSATION COMMISSION. 43 
 
 Sweden. 
 
 Date of enactment. Approved July 5, 1901, in effect January 1, 1903 ; amended 
 June 3, 1904. 
 
 Injuries compensated. Injuries by accidents to workmen resulting from the 
 employment, and causing death or disability for more than sixty days, unless due 
 to the wilful act or gross negligence of the victim or to the wilful act of a third 
 person who has neither the supervision nor the direction of the work. 
 
 Industries covered. Practically all establishments engaged in forestry work, 
 mining, quarrying, turf and ice cutting and handling, manufacturing, chimney 
 sweeping, rafting, railway and tramway service, handling goods, building trades, 
 conduit, road and other construction work, and electricity, and gas, and water dis- 
 tribution. Employers in other industries may insure their employees in the State 
 Insurance Institute and thereby be placed under provisions of the act. Employees 
 in other industries may secure the protection of the act by insuring themselves in 
 the State Insurance Institute. 
 
 Persons compensated. Workmen and foremen. 
 
 Government employees. Act applies to employees in the state and communal 
 services when engaged in any of the industries enumerated above. 
 
 Burden of payment. Entire cost of compensation rests upon employer. 
 
 Compensation for death: 
 
 When death results from the injury within two years. 
 
 (a) Funeral benefit of GO crowns ($16.08). 
 
 (b) Annual pensions not exceeding in the aggregate 300 crowns ($80.40), to 
 
 be distributed to widow, until remarriage 120 crowns ($32.16) ; each 
 child under 15 years of age 60 crowns ($16.08). 
 Compensation for disability: 
 
 (a) If permanently disabled, annual pension of 300 crowns ($80.40) ; in case 
 
 of total disability, and a smaller sum corresponding to loss of earning 
 power in case of partial disability, pension to begin with sixty-first 
 day of disability, or later if permanent character of the disability was 
 not then established. 
 
 (b) If temporarily disabled for more than sixty days, 1 crown (27 cents) per 
 
 day beginning with sixty-first day. 
 
 Revision of compensation. Suit may be brought in a court of first instance 
 by injured employee for a revision of compensation w T ithin two years from the 
 date of the fixing of the same. 
 
 Insurance. If an injured person receives an allowance or pension from an 
 organization which is supported entirely or in greater part by the employer, or if 
 the victim is insured in a private organization by his employer, the amounts received 
 from such a source may be deducted from payments required of employer under 
 the act. Employers may transfer burden of payment of compensation by insuring 
 in the State Insurance Institute, created for this purpose by the act, or in 
 individual cases purchase annuities for pensioners from this institution. Other 
 arrangements may be made between employers and employees if the State Insur- 
 ance Institute finds upon examination that they are not unfavourable to the 
 employees. 
 
 Guarantee of payment. An employer may be required to furnish adequate 
 security for the payment of the pension to cover the contingency of his neglecting 
 
11 EUKOPEAN.AND CANADIAN LAWS: No. 65 
 
 to pay the same, of his retiring from business or leaving the country, or of his 
 becoming insolvent. If he fails to furnish security he may be required to pay a 
 lump sum equal to the capital value of the pension plus the payments and interest 
 due, which amount, in the case of an injured employee, must be invested in the 
 purchase of an annuity from the State Insurance Institute. 
 
 Settlement of disputes. Disputes may be settled either by arbitration or by 
 bringing suit in a court of first instance. The demand for arbitration must be 
 made or the suit brought within two years after the accident or in case of fatal 
 accidents within two years after the death of the victim. If the action is against 
 the State Insurance Institute, one year more is allowed. 
 
 Transvaal. 
 
 Date of enactment. August 20, 1907, in effect April 1, 1908. 
 
 Injuries compensated. Injuries by accident arising out of and in the course 
 of the employment which cause the workman's death or necessitate his absence 
 from work for over one week. Compensation is not paid when injury is due to 
 serious and wilful misconduct. 
 
 Industries covered. Employment at or about any trade, industry, business, or 
 public undertaking, including agriculture, but excluding domestic service. 
 
 Persons compensated. Any white person regularly employed for the purposes 
 of the employer's trade or business whose annual earnings do not exceed £500 
 ($2,433.25), but exclusive of home workers and subcontractors. 
 
 Government employees. All civil government employees are covered by this 
 act if employed in establishments or undertakings to which the law applies, pro- 
 vided that when other pension provisions have been made the injured employee or 
 his surviving dependants have the right to choose between the two methods of 
 compensation. 
 
 Burden of payment. Entire cost of compensation rests upon employer. 
 
 Compensation for death : 
 
 (a) A sum equal to two years' wages, but not more than £500 ($2,133.25), 
 
 to those dependent upon earnings of the deceased, to be distributed 
 among the dependants, either by agreement or by order of the local 
 courts. 
 
 (b) Temporary payments previously made for over three months shall be 
 
 deducted from the above amounts. 
 
 (c) If deceased left no dependants, reasonable expenses of medical attendance 
 
 and burial, not exceeding £60 ($291.99). 
 Compensation for disability: 
 
 (a) A weekly payment during disability of 50 per cent, of the wages at the 
 
 time of the injury. 
 
 (b) In case of total permanent disability, an amount equal to three years' 
 
 wages, minus the amount paid in weekly compensation, but not over 
 £750 ($3,619.88). 
 
 (c) In case of partial disability, an amount equal to probable loss of earning 
 
 power for three years, minus the amount paid out in weekly compensa- 
 tion, but not over £375 ($1,824.94). 
 
 (d) In case of minors suffering total permanent disability the court may in- 
 
 crease the compensation to £300 ($1,459.95) if three years' wages 
 are less than this amount, and if suffering from partial permanent 
 disability the court may increase the compensation to £150 ($729.98). 
 
1912 WOEKMEN'S COMPENSATION COMMISSION. i;, 
 
 Revision of compensation. Employer may apply for revision or -citing aside of 
 order to pay weekly compensation on the ground of recovery of the employee or his 
 wilful retardation of recovery, or refusal to undergo medical examinations, or of 
 lack of notice of accident, or subsequent proof of serious and wilful misconduct. 
 Injured employee has a right to make a new application if compensation is denied 
 and injury subsequently proves more serious than expected. 
 
 Insurance. Eight of insurance against the obligations of this act is not 
 regulated. No release from liability is effected by such insurance. 
 
 Settlement of disputes. Orders for granting benefits are given by local magis- 
 trates, after holding an inquiry. Appeals may be had to the magistrate himself 
 and from him to the supreme court. 
 
 Western Australia. 
 
 Date of enactment. February 19, 1902, in effect on a date fixed by the governor 
 by order in council. 
 
 Injuries compensated. All injuries caused to a workman arising out of and in 
 the course of the employment causing death or disability for at least two weeks, 
 except when due to serious and wilful misconduct of the workman injured. 
 
 Industries covered. Railways, waterworks, tramways, electric light plants, fac- 
 tories, mines, quarries, engineering and building work, and employments declared 
 by a proclamation of the governor, issued pursuant to addresses from both houses 
 of parliament, to be dangerous or injurious to health or dangerous to life or limb. 
 
 Persons compensated. All persons engaged under contract in any employ- 
 ment. 
 
 Government employees. Act applies to all persons employed under the Crown 
 to whom it would apply if employer were a private person. 
 
 Burden of payment. Entire cost of compensation rests upon employer. 
 
 Compensation for death: 
 
 (a) A sum equal to three years' earnings, but not less than £200 ($973.30) 
 
 nor more than £400 ($1,946.60), to those wholly dependent upon earn- 
 ings of deceased. 
 
 (b) A sum less than above amount if dependants were partly dependent upon 
 
 deceased, to be agreed upon by the parties or fixed by local court. 
 
 (c) Eeasonable expenses of medical attendance and burial not to exceed £100 
 
 ($486.65), if deceased leaves no dependants. 
 
 Compensation for disability: 
 
 (a) A weekly payment during disability after second week, not exceeding 50 
 
 per cent, of injured person's average Aveekly earnings during the previ- 
 ous twelve months, such weekly payment not to exceed £2 ($9.73) and 
 total liability not to exceed £300 ($1,459.95). 
 
 (b) In case of partial disability, regard is to be had to the difference between 
 
 average weekly earnings before and after the accident, and to any pay- 
 ment other than wages made by employer on account of the injury. 
 
 (c) A lump sum may be substituted for weekly payments, after six months, 
 
 on the application of the employer, the amount to be determined by 
 the court in default of agreement. 
 
46 ACTS BY STATE LEGISLATURES: No. 65 
 
 Revision of compensation. Weekly payments may be revised by the court at 
 request of either party. 
 
 Insurance. Employers may contract with their employees for substitution of 
 a scheme of compensation, benefit, or insurance in place of the provisions of the 
 act, if the registrar of friendly societies certifies that the scheme is on the whole 
 not less favourable to the general body of employees and their dependants than the 
 provisions of the act. In such case employer is liable only in accordance with this 
 scheme. 
 
 Guarantee of payment. When an employer becomes "liable under the act to 
 pay compensation, and is entitled to any sum from insurers on account of the 
 amount due to a workman under such liability, then in the event of his becoming 
 insolvent, such workman has a first charge upon this sum for the amount so due. 
 Compensation for injuries sustained in the course of employment in or about 
 a mine, factory, building, or vessel is deemed a charge on the employer's interest 
 in such property. 
 
 Settlement of disputes. Disputes arising under the act are settled by the 
 local court of the district in which the injury is received. 
 
 SCHEDULE III 
 
 ACTS PASSED BY STATE LEGISLATURES IN THE UNITED STATES OF 
 
 AMERICA.* 
 
 In CALIFOKNTA the common law defences of assumption of risk and feillow- 
 servant rule are abolished in all actions to recover damages for personal injury 
 where recovery is sought on the ground of want of ordinary or reasonable care 
 on the part of the employer. Neither is contributory negligence of the employee a 
 bar to recovery when it was slight compared to the negligence of the employer, 
 but damages may be diminished in proportion to the amount of negligence attri- 
 butable to the employee. In place of recovery through the courts, the act pro- 
 vides a schedule of compensation payable to injured employees regardless of the 
 question of negligence. The law applies to all employers, including the state itself 
 and each county, city, town, village and school district. Employees of the state 
 and its political divisions are subject to the compensation plan without choice. 
 All other employers and employees have the right to elect to become subject or 
 not subject. Such election is made by employers by filing a statement with the 
 industrial accident board, which binds him to the compensation plan for one year, 
 and thereafter renews automatically unless the employer files a notice at least 
 sixty days before the expiration of any year to the effect that he withdraws his 
 election to be subject to the act. Employees are deemed to be bound by the act 
 unless they give notice to the contrary in writing. 
 
 The compensation paid to injured employees includes necessary medical ex- 
 penses for ninety days after the injury, but not to exceed $100, and in addition an 
 indemnity based upon the earning power of the employee. In case the injury 
 results in death, if the deceased leaves persons wholly dependent upon him. the 
 maximum amount of indemnity to be paid to such dependants shall equal three 
 
 ♦This table is taken from the Corporation Trust Company Journal, No. 27, 1911, 
 and is substantially acccurate. 
 
1912 WORKMEN'S COMPENSATION COMMISSION. 47 
 
 times the average annual earnings of the employee, but not less than $1,000 nor 
 more than $5,000. In case the deceased employee leaves only partly dependent 
 persons or no dependants, the indemnity is reduced accordingly. In case of total 
 disability, 65 per. cent, of the average weekly earnings of the employee are paid 
 during t he period of such disability, which amount is increased to 100 per cent, 
 of his earnings during such period, if any, in which his injury renders him so 
 helpless as to require the assistance of a nurse. The total sum of payments, how- 
 ever, is not to exceed three times the average annual earnings of the employee. 
 Other rates of compensation or indemnity are prescribed for partial disability. No 
 indemnity is paid for disability not lasting more than one week. 
 
 Any dispute or controversy concerning compensation is referred to the indus- 
 trial accident board, consisting of three members appointed by the governor and 
 confirmed by the senate. Either party may present a certified copy of any award 
 of the board to the superior court, which shall thereupon without notice render 
 judgment accordingly. Awards may be reviewed by the superior court and appeals 
 taken from the superior court to the supreme court. 
 
 In effect September 1, 1911. 
 
 In ILLINOIS the law applies to especially dangerous employments, which are 
 described in the act, and include construction or electrical work, transportation 
 by land or water and allied employments, mining and employments in which ex- 
 plosive materials, molten metal or inflammable fluids are handled in dangerous 
 quantities or regarding which statutory regulations are imposed for the placing 
 and using of machinery. Any employer covered by the act may elect to be bound 
 by the compensation plan. If he does not so elect, the defence of assumed risk and 
 the fellow-servant rule are denied him, and contributory negligence shall be 
 considered by the jury only to the extent of reducing damages. Every 
 employer is presumed to have accepted the compensation plan unless notice 
 to the contrary is filed with the State Bureau of Labour Statistics, but he 
 may renounce the act at the expiration of any year by filing proper notice. Every 
 employee or employers accepting the act is deemed to be bound by it unless 
 notice to the contrary is filed. An employee bound by the act has no common 
 law or statutory right to recover damages other than the compensation provided in 
 the law, except in certain cases. 
 
 The amount of compensation to be paid under the act is based on the earning 
 power of the employee. In case of death, if the deceased leaves lineal heirs to whose 
 support he had contributed within five years previous to the time of his death, 
 the compensation shall equal four times the average annual earnings of the 
 employee, but not less than $1,500 nor more than $3,500. Other amounts are 
 prescribed if the deceased leaves collateral heirs or no heirs. In case of complete 
 disability, the compensation shall equal one-half of the earnings, but not less than 
 $5 nor more than $12 per week, for a maximum period of eight years or until the 
 compensation so paid equals the amount payable as a death benefit. Thereafter 
 the compensation shall be for life at a rate equal to 8 per cent, of the amount which 
 would have been payable if the accident had resulted in death, but not less than $10 
 per month. No compensation is to be paid for the first week of disability except 
 for necessary first aid, medical and hospital services, not to exceed $200. Neces- 
 sary services of a physician or surgeon shall be paid for during the entire period of 
 disability. Compensation for partial disability or disfigurement is to be paid at 
 lesser specified rates. 
 
4S ACTS BY STATE LEGISLATURES': No. 65 
 
 Disputes regarding compensation shall be determined either by agreement or 
 arbitration. In case of arbitration each party selects an arbitrator and the judge 
 of the proper court selects the third. Appeal may be taken from the decision of 
 the arbitrators to the circuit court of the court that appointed the third arbitrator. 
 
 In effect May 1, 1912. 
 
 In KANSAS the law applies only to railways, factories, mines and employments 
 in which risk to life and limb of the workman are inherent, necessary or sub- 
 stantially unavoidable. In such employments, all employers by whom fifteen or 
 more workmen are employed may elect to pay the stated scale of compensation 
 prescribed by the law by filing a notice with the Secretary of State. Such election 
 is presumed to renew automatically each year, unless terminated by sixty days' 
 notice prior to the expiration of any year. Every employee is deemed to have 
 accepted the act unless he gives notice to the contrary. If an employer elects not 
 to accept the act he is deprived of the common law defences of assumed risk, 
 fellow-servant rule, and contributory negligence, except that the latter shall be 
 considered by the jury in assessing the amount of recovery. Any employer accept- 
 ing the act is not deprived of these defences should he be sued by an employee who 
 has not accepted the act, unless the injury was caused by the wilful or gross 
 negligence of the employer. 
 
 The rate of compensation is based upon the employee's earnings. In case of 
 death, if the deceased leaves persons wholly dependent, residing in the United States 
 or Canada, the indemnity is three times his earnings for the preceding year, but 
 not less than $1,200 nor more than $3,600. In case of total incapacity, the com- 
 pensation is 50 per cent, of his earnings payable periodically for a maximum period 
 of ten years during such incapacity, but not less than $6 nor more than $15 per 
 week. Other rates of compensation are prescribed if there are no dependants in 
 case of- death or if the incapacity for work is only partial in case of injury. No 
 compensation is allowed for injuries which do not disable the workman for more 
 than two weeks. An injured employee's right to compensation may be terminated 
 if he removes beyond the boundaries of the United States or Canada. 
 
 Disputes regarding compensation may be settled by arbitration if mutually 
 agreeable to employer and workman, and the arbitrator's award with the consent to 
 arbitration attached, shall be filed in the office of the clerk of the proper district 
 court. In default of agreement or arbitration, a workman may enforce his right 
 to compensation in any court of competent jurisdiction. 
 
 In effect January 1, 1912. 
 
 In MASSACHUSETTS the law creates The Massachusetts Employees' Insur- 
 ance Association governed by a board of fifteen directors appointed by the governor 
 in the first instance, and therafter elected by the subscribers. Any employer 
 in the Commonwealth may become a subscriber. Subscribers shall be divided 
 into groups according to the nature of the business and the degree of 
 risk of injury. Subscribers in each group will pay annually such premiums as 
 may be required to pay compensation tor injuries which may occur in that year. 
 The association thereupon pays all claims to which any subscriber may become 
 liable, either under the slated schedule of compensation provided for in the act 
 or as a result of any action at law for injuries sustained by an employee. If any 
 i mployer fails to become a subscriber to the association, he is deprived of the 
 defence of contributory negligence, the fellow-servant rule and the doctrine of 
 
1912 WORKMEN'S COMPENSATION COMMISSION. 49 
 
 assumed risk, but these defences are available to a subscriber if the injured employee 
 chooses to claim his common law right of ad ion rather than receive the stated 
 compensation of the act. 
 
 The schedule of compensation is based on a percentage of the average weekly 
 wages of the employee, being 50 per cent, for a period of three hundred weeks, but 
 not less than four nor more than ten dollars a week, in case of death, when the 
 deceased leaves persons wholly dependent on him. In case of total incapacity the 
 rate is the same, the maximum period of payment is five hundred weeks, the 
 maximum total payment, three thousand dollars. No compensation is paid for an 
 injury which does not incapacitate the employee tor at Leasi two weeks. 
 
 An industrial accident hoard is created to administer the law. When an 
 agreement is reached between the association and an injured employee in regard 
 to compensation under the act, a memorandum of the same is filed with the board 
 for approval, and if approved becomes enforcihle as a degree of the superior court. 
 In case of disagreement as to compensation, the industrial accident board calls for 
 the formation of a committee of arbitration of three members, one of whom shall 
 be a member of the board, the other two named respectively by the two parties. 
 The decision of the arbitration committee becomes enforcible as a decree of the 
 superior court, unless a claim for review is filed by either party within seven days. 
 In case of review, the industrial board shall decide and from its decision there 
 shall be a right of appeal to the supreme judicial court. 
 
 That part of the act creating the Massachusetts Employees' Insurance Asso- 
 ciation in effect January 1st, 1912 ; the remainder of the act in effect July 1st. 
 1912. 
 
 In NEVADA the act applies to workmen engaged in manual or mechanical 
 labour in or on the erection of buildings or bridges requiring steel construction, tlie 
 operation of elevators, construction and operation of electrical apparatus, the opera- 
 tion of railroad locomotives, trains or cars, the construction and repair of railroad 
 tracks, the construction and operation of mills, smelters, mines or tunnels and all 
 work necessitating dangerous proximity to explosives. In all employments enumer- 
 ated in the law the employer is bound to pay compensation for injuries or death 
 according to the scale set forth in the act, although the workmen may pursue 
 any other remedy at law and disregard the provisions of the act. 
 
 The common law defence of assumption of risk and the fellow-servant rule 
 are abolished and contributory negligence shall not bar recovery under the act 
 where the employee's negligence was slight compared with that of the employer. 
 
 The rate of compensation is based upon the employee's earnings. In case of 
 death, if the deceased leaves persons wholly dependent, the amount payable i< a 
 sum equal to three years' earnings, but not less than $2,000, nor more than 
 $3,000. In case of total disability, the payment is 60 per cent, of the average 
 weekly earnings, each week during the period of disability, but not exceeding in 
 all $3,000. Other compensation prescribed by the act varies according to the 
 nature of the injury, and, in case of death, if the deceased left partly-dependent 
 persons or none. Xo compensation is paid for disability lasting less than ten days. 
 
 In case of disputes over compensation the question shall be submitted to a 
 board of arbitration, the employer and the workman each choosing one arbitrator, 
 and the two arbitrators choosing a third. Their decision, if unanimous, is bind- 
 ing on both parties. On failure of the arbitrators to agree, either party may apply 
 to a court of competent jurisdiction. 
 
 In effect July 1, 1911. 
 1 L. 
 
50 ACTS BY STATE LEGISLATIVES: No. 65 
 
 In NEW HAMPSHIEE the act applies only to workmen engaged in manual 
 or mechanical labour in or on railroads, mills, factories, and other employments 
 enumerated as dangerous because in them the risk of employment and the danger 
 of injury caused by fellow-servants are great and difficult to avoid. Any employer 
 of workmen in the occupations enumerated in the act may elect to be subject to 
 the payment of compensation to injured employees according to a stated scale. 
 If he does not elect to accept the compensation feature of the law, the fellow- 
 servant rule and the doctrine of assumed risk are denied him as defences and the 
 plea of contributory negligence shall avail only when the fact of such contributory 
 negligence is made to appear by a preponderance of evidence. 
 
 An employer signifies his intention to accept the compensation plan by filing 
 a declaration Math the Commissioner of Labour, and must thereupon satisfy the 
 Commissioner of his financial ability to comply with the law or file a bond con- 
 ditioned upon his discharge of all liability incurred under the act. An employer 
 may at any time revoke his acceptance of the compensation plan by filing a declara- 
 tion to that effect. Even though an employer has accepted the compensation plan, 
 his employees may choose between accepting the stated compensation and com- 
 mencing an action for damages. In the latter event, the common law defences are 
 not denied the employer. 
 
 The rate of compensation is based upon the earnings of the employee, being, in 
 case of death, when the deceased leaves relatives wholly dependent, a sum equal 
 to one hundred and fifty times the average weekly earnings. In case of total 
 incapacity the maximum rate is fifty per cent, of the average weekly earnings, but 
 not exceeding $10 a week, for three hundred weeks. No compensation shall be 
 received for incapacity lasting not more than two weeks. 
 
 Any question as to compensation arising under the act shall be determined 
 by agreement or in equity. The injured workman or his representative may 
 recover compensation in any court having jurisdiction, and any employer, who has 
 declared his intention to act under the compensation feature of the law, may apply 
 to the superior court for a determination of the amount to be paid an injured 
 workman. 
 
 In effect January 1, 1912. 
 
 In NEW JERSEY the law applies to all kinds of employments and to all em- 
 ployers. The law is divided into two sections. Section two contains the stated 
 scale of compensation to be received by employees for injuries sustained by them, 
 provided both the employer and employee have elected to accept this scale in lieu 
 of any other method, form or amount of compensation. Every contract of hiring 
 is presumed to have been made under section two, unless the contract expressly 
 provides that section two shall not apply, or unless either party gives written 
 notice to the other, prior to any accident, that the said section shall not apply. 
 Any contract for the operation of section two may be terminated on sixty days' 
 notice by either party. In all cases where either party renounces the stated scale 
 of compensation under section two, action for damages may be tried before a jury. 
 Where personal injury is caused by the actual or lawfully imputed negligence of 
 I lie employer, the doctrine of assumed risk, and the fellow-servani rule, may not 
 be pleaded as grounds of defence. Neither is contributory negligence to be a 
 defence, except wilful negligence, which shall be a question of fact to be submitted 
 to the jury, and the burden of proof to establish wilful negligence shall be upon the 
 employer. 
 
1912 WORKMEN'S COMPENSATION COMMISSION. ol 
 
 The- rate of compensation to be paid under the act is based upon the wages 
 of the employee received at the time of the accident. In case of death, if the 
 deceased leaves actual dependants, the maximum rate is 60 per cent., which is paid 
 to a widow with five or more children. Children over sixteen are not considered as 
 dependants, and aliens residing outside of the United State- cannot receive compensa- 
 tion. For total disability 50 per cent, of the wages may be received for a period 
 not exceeding 400 weeks, but in no case shall the compensation be less than $5 nor 
 more than $10 per week. For partial disability or loss of limbs other rates of 
 compensation are provided. 
 
 In case of disputes over compensation, either party may submit the claim 
 to the judge of the court of common pleas of such county as would have jurisdic- 
 tion in a civil case, who hears and disposes of such suits in a summary manner. 
 
 In effect July 4, 1911. 
 
 In OHIO a non-partisan state liability board of awards is created to administer 
 a state insurance fund from premiums paid jointly by employers and employees. 
 Any employer of five or more workmen who shall pay the premiums to such fund 
 is relieved from liability to respond in damages at common law or by statute for 
 injury or death to his employees, during the period covered by such premiums. 
 Any employee of such employer who after due notice continues in service is deemed 
 to have accepted the act. The amount of premium shall be determined by the 
 board according to the risk in the classes of employments. Ninety per cent, of the 
 premium shall be paid by the employer, ten per cent, by his employees, the latter 
 amount to be paid through the employer and deducted Toy him from the pay-roll 
 of his employees. 
 
 Employers who fail to pay the premiums are deprived of the defences of 
 the fellow-servant rule, the assumption of risk and contributory negligence. Choice 
 may be made between accepting the award of the board and instituting action at 
 law in case injury or death is due to wilful negligence or failure on the part of 
 the employer, and in such cases nothing in the act shall affect the civil liability 
 of such employer. 
 
 The State Liability Board of Awards is required to disburse the insurance fund 
 to injured employees of insured employers, to pay for medical, nurse and hospital 
 services, and, in case of death, reasonable funeral expenses, in addition to the 
 awards provided for in the act. These awards are based on the average weekly 
 wage of the employee, being 66 2-3 per cent, in case of permanent total disability 
 until death, but not more than $12 nor less than $5 a week. In case of death, 
 when the deceased leaves dependent persons, the payment of 66 2-3 per cent, 
 of the average weekly wage continues for a period of six years after the date of 
 the injury, not to exceed a maximum amount of $3,400 nor a minimum amount 
 of $1,500. Other awards are specified when the deceased leaves partly dependent 
 persons or when the injury results in temporary or partial disability. No award 
 is made when the disability does not last more than one week. The Board is 
 given full power and authority to hear and determine all questions within its 
 jurisdiction, except that the claimant for award may appeal to the common pleas 
 court on any ground going to the basis of his right to an award, and neither party 
 shall have the right to prosecute error as in ordinary civil cases. 
 
 In effect June 15, 1911. 
 
52 ACTS BY STATE LEGISLATURES: No. 65 
 
 In WASHINGTON the law applies particularly to extra hazardous works, 
 although employers and employees engaged in works not extra hazardous may by 
 their joint election accept the provisions of the act. This right of voluntary ac- 
 ceptance of the act extends even to employers and workmen engaged in interstate 
 or foreign commerce, so far as not forbidden by act of Congress. Extra hazardous 
 employments are enumerated in the law, and include factories, mills, workshops and 
 plants where machinery is used, foundries, mines, logging, lumbering and ship-build- 
 ing operations, railroading and allied employments- Other occupations not enumer- 
 ated by the law may be declared extra-hazardous by the Industrial Insurance 
 Department and brought under the act. In all classes of extra-hazardous employ- 
 ments the remedies of workmen against employers for injuries received are with- 
 drawn from private controversy and a relief provided regardless of questions of 
 fault and to the exclusion of every other remedy. This relief is in the form of an 
 " accident fund " to which each employer is required to contribute a sum equal 
 to a percentage of his total pay-roll according to a schedule of rates set forth in 
 the law which varies according to the relative hazard of each industry. If any 
 employer defaults in any payment to the accident fund, the amount due shall be 
 collected by action at law in the name of the State as plaintiff. In cases of such 
 default, the injured employee may choose between receiving compensation under 
 the act or proceeding against the employer by suit. If suit is brought, the defence 
 of fellow-servant and the assumption to risk shall be inadmissable, and the doctrine 
 of comparative negligence shall obtain. No contribution to the accident fund is 
 made by the workmen. Each class of employment is liable for the accidents occur- 
 ring in such class, but is not liable for accidents happening in any other class. The 
 amounts contributed to the " accident fund " are intended to be no more nor less 
 than enough to meet current liabilities. The custody of the fund is placed in the 
 hands of the State Treasurer. 
 
 The scale of compensation is not based on the employee's earning power. In 
 case of death a payment of $20 a month is made to the widow (or widower, if 
 invalid) during life or until remarriage, and additional $5 per month for each child 
 under sixteen, the total payment not to exceed $35 per month. In case of per- 
 manent total disability resulting from injury, the employee receives, during the 
 period of such disability, $20 per month if unmarried, and if married a maximum 
 of $35 per month, depending upon the number of children under sixteen years of 
 age. In no case shall the total sum paid for injury or death exceed $4,000. Other 
 amounts are prescribed for temporary or partial disability or in case of death, when 
 the deceased leaves orphans or partly dependent persons only. 
 
 The administration of the act is imposed upon an Industrial Insurance De- 
 partment, consisting of three commissioners appointed by the governor. It ascer- 
 tains and establishes the amounts to be paid out of the accident fund. Any 
 employer, workman, beneficiary or person aggrieved at any decision of the depart- 
 ment may appeal to the superior court of the county of his residence, in so far as 
 such decision rests upon questions of fact, but matters resting in the discretion of 
 the departmeni shall not be subject to review. 
 
 In effect October 1. 1911. 
 
 In WISCONSIN the common law defences of assumption of risk and the fellow- 
 servnnt ride are abolished in all actions againsl employers on account of negligence, 
 hut employers accepting the compensation feature of the law are not deprived of 
 these defences if the employee choose- to recover by action at law. Employers 
 having less than four employees, however, do not come within the scope of the law. 
 
1912 WORKMEN'S COMPENSATION COMMISSION. 
 
 neither do railroad employees who are included in the Comparative Negligence Act 
 of l'JOT. The compensation feature odE the law is compulsory as to the state and 
 its subdivisions, and elective as to all other employers. Such election on the part 
 of the employer is made by filing a statement with the Industrial Accident Board, 
 and may be terminated by filing notice to that effect at least si\t\ days prior to the 
 expiration of the first or any succeeding year. When an employer has accepted 
 the compensation plan his employees are presumed to have accepted it unless con- 
 trary notice is given. 
 
 The compensation provided by the act includes all medical expenses reason- 
 ably required for ninety days, and in addition a payment based upon the earnings 
 of the employee. In case of death, when the deceased leaves one or more persons 
 wholly dependent on him for support, the maximum is four times the average 
 annual earnings, but not more than $3,000. In case of total disability the compen- 
 sation shall be sixty-five per cent, of the average weekly earnings during the period 
 of such total disability. If the injured employee becomes so helpless as to require 
 the assistance of a nurse, the amount is increased to one hundred per cent, of the 
 average weekly earnings. No compensation is paid for the first seven days after 
 the injured employee leaves work. 
 
 An Industrial Accident Board is created by the law to which disputes and con- 
 troversies concerning compensation shall be submitted. Awards of the Board may 
 be filed with the Circuit Court for any county, whereupon the court shall render a 
 judgment in accordance therewith. Parties aggrieved by any award may com- 
 mence in the Circuit Court for Dane County an action against the board for re- 
 view of such award, but the award may be set aside only on the grounds that the 
 Board exceeded its powers, or that the award was procured by fraud or that the 
 findings of fact do not support the award. 
 
 In effect September 1, 1911. 
 
54 CANADIAN MANUFACTURERS' ASSOCIATION: No. 65 
 
 BRIEF OF F. W. WEGENAST, REPRESENTING THE CANADIAN 
 MANUFACTURERS' ASSOCIATION. 
 
 Abbreviations and References. 
 
 Beven, Thomas, on Workmen's Compensation, Fourth Edition. 
 
 Brandeis, Louis, "The Road to Social Efficiency" Article in a The Outlook" 10th 
 June, 1911. 
 
 Bulletin des Assurance Sociales, viii Congress, The Hague, 1910. 
 
 Bulletin 74 U. S. Bur. Lab.— Bulletin 74 United States Bureau of Labor, 1908. 
 
 Bulletin 78 U. S. Bur. Lab.— Bulletin 78 United States Bureau of Labor, 1908. 
 
 Cd. 2458, Memorandum of Chairman, Report Departmental Committee, 1904. 
 
 Cd. 2208, Report Departmental Committee, 1904. 
 
 Can. L. T. — Canadian Law Times. 
 
 Fourth Special Report of the U. S. Bureau of Labor, Compulsory Insurance in 
 Germany, Washington, 1893. 
 
 F. & D. — Frankel & Dawson, " Workingmen's Insurance in Europe," New York, 
 1911. 
 
 Friedensburg, Dr. Ferd., "Die Praxis der deutschen Arbeiterversicherung," 1911. 
 
 Gray, Louis H., " Practical Results of Workingmen's Insurance in Germany," by 
 Dr. Friedensburg. (Translated.) 
 
 Henderson, Prof. Ch. R., " Industrial Insurance in the United States," Second 
 Edition, Chicago, 1911. 
 
 Abstract of Statements of Insurance Companies of Canada, for the year 1911, 
 
 Interim Rep. Ont. Com. — Interim Report of the Ontario Commission on Work- 
 men's Compensation, 1912. 
 
 Journal of the Royal Society of Arts, Vol. 60. 
 
 Journal of Insurance Institute of London, 1909-10. 
 
 Laband, " Droit Public de l'Empire Allemand IV." 
 
 La France Judiciare, March 12th, 1910, p. 35. 
 
 Lass, Ludwig, Dr., " The German Workmen's Insurance as a Social Institution," 
 St. Louis, 1904. 
 
 Mayor, Prof. James, "Report on Workmen's Compensation for Injuries," Toronto, 
 ' 1900. 
 
 McGilliveray, "Insurance Law," London, 1912. 
 
 Rep. Atlantic City Conf. — Report of the Atlantic City Conference on Workmen's 
 Compensation Acts, July, 1908. 
 
 Rep. Conf. Com. — Compensation for Industrial Accidents, Conference of 
 Commissions, Chicago, 1910. 
 
 Rep. Fed. Com. U. S. — Report of the Employers' Liability and Workmen's Com- 
 pensation Commission United States Congress, 1912. 
 
 Rep. 111. Com. — Report of the Employers' Liability Commission, State of Ill- 
 inois, 1910. 
 
 Rep. Mich. Com. — Report of the Employers' Liability and Workmen's Com- 
 pensation Commission of the State of Michigan, 1911. 
 
 Rep. Minn. Com. — Report to Legislature of Minnesota Employees' Compensation 
 Commission, 1911. 
 
1912 WORKMEN'S COMPENSATION COMMISSION. 55 
 
 h— 
 
 Rep. N. J. Com. — Report of Commission on Employers' Liability of the State 
 of New Jersey, 1911. 
 
 24 Rep. Bur. of Statistics, N. J.- — Twenty-fourth Annual Report of The Bureau 
 of Statistics of Labor and Industries, New Jersey, 1911. 
 
 Rep. N. Y. Com. — Report to the Legislature of the State of New York of the 
 Employers' Liability Commission, 1910. 
 
 Rep. Ohio Com. — Report of the Ohio Commission on Employers' Liability, Pts. 
 I, II, and III, Columbus, 1911. 
 
 Rep. Ohio State Bar Ass'n. — Report of the Ohio State Bar Association, Vol. 
 xxxii, 1911. 
 
 Rep. Queb. Com. — Report of the Quebec Commission on Labor Accidents, Mon- 
 treal, 1908. 
 
 Rep. Wash. Com. — Report of the Washington Commission appointed to investi- 
 gate the Problems of Industrial Accidents, Olympia, 1910. 
 
 Rep. Wis. Com. — Workmen's Compensation Bill and Report, Wisconsin, 1911. 
 
 Ruegg, "Employers' Liability and Workmen's Compensation." Canadian Edition, 
 1910. 
 
 S. & E. — •Schwedtman and Emery, "Accident Prevention and Relief." An in- 
 vestigation of the Subject in Europe, with Special Attention to England and 
 Germany; for the National Association of Manufacturers, New York, 1911. 
 
 Scots, L. T.- Scott's Law Times. 
 
 24 Rep. IT. S. Bur. Lab.— Twenty-fourth Report of the U. S. Bureau of Labor, 
 Workmen's Insurance and Compensation Systems in Europe, Vols. I, and II, 
 1909. 
 
 Walton, F. P., " Workmen's, Compensation Act of 1909 of the Province of Quebec." 
 
 Zacher, Dr., Article on " Accident Insurance " in Handworterbuch der Staats- 
 
 wissenschaften, Vol. VIII, Jena, 1911. 
 
56 CANADIAN MANUFACTURERS-' ASSOCIATION: No. 65 
 
 INTRODUCTORY. 
 
 This brief is submitted as representing the official views of the Canadian 
 Manufacturers' Association — a body representing some twenty-eight hundred 
 manufacturing concerns and embracing in its membership between eighty and 
 ninety per cent, of the manufacturing interests of the Dominion of Canada. The 
 outlines of the Association's position were laid down in a report submitted by a 
 special committee and unanimously adopted by the Executive Council of the 
 Association on the 14th December, 1911. This brief is an amplification of the 
 report with citations and quotations in support. 
 
 The literature upon the subject of workmen's compensation which has during 
 the last few years reached an immense bulk, is rapidly increasing, and it is 
 characteristic of the subject that the older literature rapidly loses value as 
 experience in the different jurisdictions accumulates. While in this brief no 
 attempt is made at exhaustiveness, an effort has been made to incorporate at 
 least by reference the most important and recent of the productions. 
 
 It goes without saying that it has been sought to embody in the presentation 
 the best that can be gathered from the systems of the various countries and 
 jurisdictions. There is very little need, in fact very little excuse, for original 
 thought in dealing with the subject. Every form of solution that could be 
 suggested has been subjected to experiment in some or other jurisdiction and 
 there is available a mass of information and experience which renders further 
 experiment along many lines not only useless but indefensible. No proposition 
 and no view upon the subject can be of any great value which is not founded 
 upon an investigation of the different systems and which does not reckon with 
 their results. 
 
 No effort has been made to prove that conditions under the existing law 
 are unsatisfactory or that a change in the law is necessary. 1 This has been 
 assumed. Even the assumption, however, is more or less superfluous, because, 
 whatever view may be taken of existing conditions, the history of the subject in 
 every other country leaves no room for doubt that some change will be made in the 
 law of Ontario. This brief' is, therefore, addressed entirely to the question of 
 the form which such legislation should take. The brief has been prepared with 
 specific reference to the Province of Ontario, but it has been kept in mind that 
 the legislation adopted in recent years in seven of the other provinces of Canada, 
 must, in the light of uniform experience in other jurisdictions, be regarded as 
 of a temporary character only, and that the course of legislation in the other 
 provinces will in all probability be influenced by whatever action is taken in 
 Ontario. In fact the possibility has been kept in view of a homogeneous, if not 
 a uni fieri, scheme for the whole Dominion. This is a consummation theoretically 
 attainable perhaps by Dominion legislation, but practically attainable probably 
 in no other way than that indicated, namely, uniform provincial legislation. 
 
 1 As to this see Rep. Atlantic City Conference; Rep. Ohio Com., Pt. I., pp. i-cxiii, 
 and appendices I and II; Rep. Que. Com.; Rep. 111. Com.; Rep. N. J. Com.; Rep. Wash. 
 Com.; Rep. Fed. Com. U. S.; Rep. Mich. Com. 
 
1912 WORKMEN'S COMPENSATION COMMISSION. 57 
 
 CONDENSED SUMMARY OF BRIEF. 
 Statement of Principles. 
 
 In framing a system of workmen's compensation, the following principles 
 
 should, it is submitted, be kept in view and so far as possible observed. 
 
 First: For reasons both humanitarian and economic the prevention of acci- 
 dents should be a prime consideration in any scheme of workmen's compensation, 
 and no system can be satisfactory which will not tend to produce the maximum of 
 effort and result in conserving the life, health, and industrial efficiency of the 
 workman. 
 
 Second : Relief should be provided in every case of injury arising out of in- 
 dustrial accident. Such relief should not be contingent upon proof of fault on 
 the part of the employer, but gross carelessness, drunkenness, or intentional wrong 
 on the part of the workman should be penalized in some way. 
 
 Third: The system of relief should be adapted to cover wage-workers in every 
 industry or calling involving any occupational risk, and should not be confined to 
 such industries as railroading, manufacturing, building, etc. 
 
 Fourth : The relief should be as far as practicable by way of substitution for 
 the wages of which the injured workman and his dependants are deprived by the 
 injury. It should, as a rule, be periodical and not in a lump sum. 
 
 Fifth : The relief should be certain. It should not depend upon the continued 
 solvency of the employer in whose service the injury was sustained. 
 
 Sixth : The amount of compensation should be definite and ascertainable both 
 to the workman and to the employer. The system should entirely displace the pre- 
 sent method of compensation by an action for damages, and the employer should 
 not be subjected to any further or other liability except in cases of gross careless- 
 ness or intentional wrong on the part of the employer. 
 
 Seven tli : The funds for relief should be provided by joint contributions from 
 employers, workmen, and the province. Emplo} r ers and workmen should pay in 
 such proportions as represent the number of accidents occurring by reason of the 
 hazard of the industry and the fault of the employer on the one hand and the 
 fault of the workman on the other. The province should contribute an amount 
 representing approximately the cost of administration. 
 
 Eighth : The system of relief should be such as to secure in its administration 
 a maximum of efficiency and economy, and as large a proportion as possible of the 
 money contributed should be actually paid out in compensation. 
 
 Ninth : The procedure for the adjustment of claims should be as far as pos- 
 sible dissociated from the regular courts of law. It should be simple and calcu- 
 lated to involve in its operation a minimum of friction between employer and em- 
 ployee. 
 
 Tenth: The system of compensation should be directly associated with a 
 system of inspection with a view to the prevention of accidents and a system of 
 prompt and expert medical attendance to mitigate the effect of the injuries. 
 
 Eleventh : The system should be such as to secure as liberal a measure of relief 
 as possible without undue strain upon industry. 
 
 Twelfth : The system should be such as to afford some promise of permanency. 
 
58 CANADIAN MANUFACTURERS' ASSOCIATION: No. 65 
 
 Analysis of Different Systems of Workmen's Compensation. 
 
 Practically all workmen's compensation legislation is an effort to embody in 
 some form and in some degree the second of the principles above laid down, namely, 
 that a wage-worker should receive compensation or relief in case of injury occurring 
 in the course of his employment, regardless of questions of fault on the part of his 
 employer or contributory fault on the part of the workman. This has been called 
 the principle of "professional risk." 1 It is based upon the theory that the cost 
 of human wear and tear should be thrown largely, if not wholly, upon the industry 
 and included in the price charged to the consumer for the product of the industry. 
 To what extent this theory is equitable and economically sound, and to what extent 
 it conflicts with the legal doctrine that no man should be responsible for something 
 not his fault need not be discussed here. The theory is the basis of all workmen's 
 compensation legislation. 
 
 The different compensation systems of the world exhibit three distinct methods 
 of applying the theory of professional risk. These methods may respectively be 
 termed the individual liability method, the collective liability method, and the state 
 liability or state insurance method. Every system in the world can be classified 
 under one or other of these heads. 
 
 (a) Individual Liability: Under an individual liability system the obliga- 
 tion to compensate workmen is thrown upon the individual employer as an element 
 of the relationship of employer and employee. The law includes a term in every 
 contract of employment by which the employer assumes an obligation more or less 
 extensive, to indemnify the workman for injuries received in the course of, or in 
 connection with, the employment. The injured employee looks for his relief to the 
 employer, who thus becomes an individual insurer of the workman against accidents. 
 The principle of individual liability is illustrated in the English Workmen's Com- 
 pensation Act and in the Acts in force in some of the provinces of Canada. Under 
 these Acts employers are required, regardless to a large extent of questions of fault, 
 to compensate their workmen for injuries arising out of, or in the course of, the 
 employment. Employers are of course permitted and encouraged to insure them- 
 selves against the liability by some form of insurance, but the initial liability rests 
 upon the individual employer and the insurance effected is uniformly for the 
 purpose of protecting the employer against this liability and not for the purpose of 
 insuring the workman against accidents. 2 
 
 (b) Collective Liability: Under this method the liability to compensate the 
 workman is thrown upon employers collectively in groups, according to the hazard 
 of the industry. Employers are encouraged or compelled to combine in associations 
 for the purpose of insuring their workmen against accidents and providing the 
 necessary funds. The injured workman looks for his compensation, not to the in- 
 dividual employer, but to the association or the fund. The principle of collective 
 liability is illustrated in the German system, under which employers are grouped 
 by industries under state compulsion and supervision, and are required to provide 
 funds for compensation or relief for the injuries occurring in their respective 
 '/roups. The collective liability system has been adopted in some form by the 
 
 'See Walton, p. 22; and see post, p. 89, for further discussion. 
 
 2 See further, post, p. 103, for distinction between accident insurance and employers' 
 liability insurance. 
 
 
1912 WORKMEN'S COMPENSATION COMMISSION. 59 
 
 majority of the countries of Europe and some of the States of the American Union, 
 but the German system being the oldest and the most elaborately and scientifically 
 developed is usually cited as the type. 
 
 (c) State Liability: Under this method the state itself assumes the obliga- 
 tion to pay compensation, the cost being levied upon employers, or employers and 
 workmen, through the agency of a state insurance department. The workman 
 looks for his compensation directly to the state department and the compensation 
 is provided out of a fund levied in the form of insurance premiums upon the pay 
 roll of industries. This method is illustrated in the Act recently adopted by the 
 State of Washington. 1 
 
 The method of individual liability has been pronounced with singular unani- 
 mity by those who have investigated the operation of the different systems as 
 a failure. 2 It involves the violation of almost all of the twelve principles above 
 laid down as representing the chief elements of a satisfactory compensation 
 system. The individual liability systems have not tended to any appreciable 
 degree to reduce the number of industrial accidents or to conserve the life, health 
 and efficiency of the workman. They operate with particular hardship upon 
 small employers and older and partially disabled workmen. They cannot be well 
 operated so as to secure periodical payments as opposed to lump sum payments 
 of compensation. They do not afford any assurance that the compensation pay- 
 ments will lie made, or continue to be made, there being no guarantee of solvency 
 on the part of those charged with payment. They have proven wasteful in the 
 extreme, a large percentage of the money paid out in contributions by way of 
 employers' liability insurance premiums being taken up by commissions, expenses 
 of litigations, profits, etc. The workman is obliged to resort to legal or quasi- 
 legal process to enforce his claim against the employer. The settlement of each 
 claim involves a direct contest between workman and employer, the latter being 
 supported by the employers' liability insurance company with its superior facili- 
 ties for contesting claims. The individual liability systems represent the greatest 
 and most direct strain upon industry. They are admitted by nearly all 
 observers to represent merely a stage in the development of a satisfactory com- 
 pensation system and involve in the meantime unsatisfactory relations between 
 employers and workmen and unsatisfactory economic conditions to the community 
 at large. 
 
 The collective liability method as applied in Germany and other countries 
 of Europe, as well as some of the American States, is generally regarded as a 
 success in its practical working out. The systems of these jurisdictions are 
 found to embody in a large measure the elements above outlined as constituting a 
 satisfactory compensation system. The type system, that of Germany, is the out- 
 standing example of a successful solution of the problem : and criticisms upon it are 
 directed almost solely to defects in the details and administrations of the system." 
 
 The state insurance system as applied in the State of Washington and other 
 states as well as a number of other European countries, has the approval of a 
 large majority of the investigators and writers upon the subject. Constitutional 
 
 1 It has been pointed out that the Washington system is more corr^tly described 
 as a system of collective insurance under state administration, post, p. 122. 
 
 2 See P. & D., 14; S. & E., 250; Rep. Fed. Com. U.S., 281; Rep. Ohio Com. Pt. 1, p. 16; 
 and post, p. 93, for full discussion. 
 
 'See post, p. 129. 
 
60 CANADIAN MANUEACTUREES' ASSOCIATION: No. 65 
 
 and other practical difficulties have interfered with the introduction of such a 
 system in many jurisdictions where it was otherwise regarded as desirable. 1 The 
 experience of those jurisdictions which have adopted the system has called forth 
 enthusiastic commendation from employers and workmen as well as the general 
 public, and has given every reason to believe that such a system affords a satis- 
 factory solution of the problem. 2 
 
 The greatest difficulty in the way of the introduction of an Act like that of 
 the State of Washington is the immediate additional expense to the employer 
 represented by a probable rise of from 100 to 1,000 per cent, over the cost under 
 existing conditions. Most large employers cover their risk under the present 
 laws by employers' liability insurance. While the rates for this insurance are 
 very high relatively to the benefits conferred by it upon injured employees, the 
 introduction of a system like that of Washington would involve an additio' a! 
 expense to employers representing a considerable disturbance of economic conditions 
 to the prejudice of both employers and workmen. The same result would of course 
 follow the introduction of an individual liability system such as that of England. 
 in which latter case the expense of conferring corresponding benefits would be 
 much larger owing to the large percentage of waste. 3 
 
 There is a plan under which a collective or state insurance system could be 
 established at an immediate annual cost not greater than, and in fact in many 
 industries considerably less than, that of the present liability insurance rates. 
 This plan may be called the current cost plan. 4 Under it instead of capitalizing 
 the periodical payments due to the injured workman or his dependants and setting 
 aside at the time of the accident a lump sum to provide for all future payments, 
 only the current cost of meeting the annual payments would be assessed each 
 year with a small margin for an emergency reserve fund. The annual assessments 
 would increase as the number of dependants increased, and the annual rate would 
 reach its maximum only after a period of twenty-five or thirty years. This was 
 the actuarial plan adopted in Germany. 5 It represents a minimum strain upon 
 present industry and does not involve the shock to the economic system which 
 would be incidental to the adoption of an extensive scheme of immediate capitaliza- 
 tion. 
 
 Recommendations. 
 
 We recommend the establishment of either a collective liability or a state 
 insurance system. An individual liability system will not he acceptable to the 
 manufacturing interests of the province. 
 
 We are prepared to lend every assistance to the organization of an indepeiuh nt, 
 non-state, collective system, but we believe that under all the circumstances the 
 must economical and satisfactory plan for the Province of Ontario is a collective 
 system under provincial administration and control. 
 
 We recommend the creation of an independent, non-political, provincial insur- 
 ance department administered by a Board of three commissioners. This "Board 
 should provide for the payment of all claims for compensation out of a fund to 
 
 ' See Rep. Minn. Com., 154. 
 
 2 See post, p. 94. 
 
 3 See post, p. 105. 
 
 4 See post, p. 108. 
 
 '• See article by Dr. Zacher, in "Handworterbuch der Staatswissenscbaften,' 
 
 Vol. VIII. p. 65. 
 
1912 WORKMEN'S COMPENSATION COMMISSION. 61 
 
 be raised by premiums Levied upon the pay-roll oi" industries classilied according to 
 hazard. The Board should be vested with full jurisdiction to adjust all claims 
 for compensation upon sworn reports of the different parties interested. It should 
 have power to take evidence, to make independent investigations, and to re-hear 
 and re-adjust, its decisions being final upon questions of fact and subject to 
 appeal only in questions of law. 
 
 The Board should also have power to enforce preventive regulations, and 
 provision should be made for the advisory co-operation of representatives of dif- 
 ferent classes of industries in the framing of such regulations. The Board should 
 also have charge of the adjustment of insurance rates and the classification of 
 industries. 
 
 The annual assessments of insurance premiums should be levied upon the 
 basis of the current cost of compensation payments with a margin for an emergency 
 fund. A percentage of the premium rates representing the proportion of the 
 accidents due to the fault of the workman should be chargeable at the option of 
 employers, and upon due notice, to the workmen, and deducted by employer- from 
 the wasres of the workmen. 
 
 DISCUSSION OF PEINCIPLES. 
 
 In the following pages the principles and recommendations given in outline 
 above are briefly discussed. The views presented and the conclusions drawn are 
 in every case supported by evidence and expert opinion representing the experience 
 of other jurisdictions. It is considered of the utmost importance that any legisla- 
 tion adopted should avoid a repetition of the mistakes and weaknesses of other 
 systems. Fortunately the legislatures of Canada are not subject to constitutional 
 lestrictions corresponding to those which hamper some jurisdictions in dealing 
 with the subject. There is therefore every reason why the system adopted by the 
 Province of Ontario should represent the accumulated experience of other juris- 
 dictions as well as the wisdom and ingenuity of our own. 
 
62 CANADIAN MANUFACTURERS' ASSOCIATION: No. 65 
 
 DISCUSSION OF PRINCIPLES. 1 
 
 First: For reasons both humanitarian and economic the prevention of acci- 
 dents should be a prime consideration in any scheme of workmen's compensation, 
 and no system can be satisfactory which will not tend to produce the maximum 
 of effort and result in conserving the life, health and industrial efficiency of the 
 workman. 
 
 This principle involves an immediate departure from the older legal theories 
 of employers' liability for injuries to workmen. The question of accident pre- 
 vention must be considered one of paramount importance in relation to a work- 
 men's compensation system because of the fact that the different systems of c >m- 
 pensation vastly differ in their effect in inducing preventive activity and care 
 on the part of the employer and employee. In its older legal aspect workmen's 
 compensation was largely, if not wholly, a matter of making good by a money 
 payment of damages, for injuries sustained by the workman 2 . In its modern 
 economic aspect the question of conserving industrial efficiency by preventing 
 accidents and mitigating their effect is a vital, if not the most vital consideration 3 . 
 
 Of the possibility of a reduction in the industrial accident rate there is not 
 the slightest doubt. Estimates and statistics point to a possible saving of as high 
 as fifty per cent, in the industrial accident rate by systematic and scientific 
 methods 4 . The theory of those who who advocate an individual liability system 
 is that by throwing the burden of accidents directly and heavily upon the individual 
 employer he will be induced to adopt means of prevention. 5 But there 
 can no longer be any doubt as to the futility of a system of individual liability 
 as a means of inducing efficient preventive activity. While it may have 
 been one of the objects in the minds of the framers of liabililty systems such as 
 that of the Chamberlain Act of 1880 in England to reduce the number of accidents 
 by penalizing the employer with the increased liability, experience under these 
 systems has not justified any such expectation, and later observers have in fact 
 failed to give these systems credit for even the purpose of reducing the number 
 of accidents. Thus the Commissioners of the National Association of Manu- 
 facturers say, 8 " the British policy bears no relation to accident prevention," and 
 of the Act of 1897 the Parliamentary Committee reporting in 1904 said, 7 " no 
 evidence has been brought before us which enables us to find that any great im- 
 provement in the direction of safety is to be placed to the credit of this Act. 
 Indeed some of the evidence points in the opposite direction." While there appears 
 to have been on the whole, since the introduction of the English Workmen's Com- 
 
 1 Compare enunciation of principles, S. & E., 28; and Rep. Mich. Com., 33. 
 
 2 See statement of J. A. Emery, Rep. Fed. Com. U.S., 1088. 
 
 8 F. & D., 140; S. & E., 11, 20, 128, 277. Art., by Louis Brandeis, "Outlook," June 
 10th, 1911, post, p. 123; Bulletin 78, U.S. Bur. Lab., 458; Rep. Fed. Com. U.S., 764. 
 
 4 See also art, by Fredk L. Hoffman, Bulletin 78 U.S., Bur. Lab., p. 458; S. & E„ 
 pp. 66, 99, 314; also Rep. Fed. Com. U.S., 668, also statement of M. M. Dawson, Rep. 
 Fed. Com. U.S., 104-5. 
 
 B This theory was pushed to its logical conclusion in a statement before the Federal 
 Commission of the United States as remarkable for cogency of facts and quotations, as 
 for confusion of logic and terminology. The witness in question advocated a system 
 of drastic employers' liability, with prohibition of liability insurance, claiming that to 
 allow the employer to insure was to ward off the incentive of preventive care. 
 
 'S. & E., 11. 
 
 'Cd. 2208, 22, 23. 
 
1912 WORKMEN'S COMPENSATION COMMISSION. 63 
 
 pensation Act, some diminution in the number of industrial accidents, the writers 
 and investigators concur in refusing to credit this to the system of compensation 
 established by the Act. 1 
 
 On the other hand the collective liability systems have to their credit a 
 marked success in inducing systematic effort in the matter of accident prevention. 
 The German system with its elaborate statistics exhibits perhaps the most striking 
 results but a corresponding measure of success has attended the operation of other 
 collective systems. There is absolute unanimity amongst the writers and inves- 
 tigators in ascribing to the German system an immense superiority over the English 
 system in reducing the industrial accident rate; 2 and the success of the German 
 system is due very largely to the co-operative effort evoked by the classified 
 organization of employers. 
 
 There is every reason to anticipate for the Act of the State of Washington 
 a similar measure of success in preventing the occurrence of accidents." The 
 explosion in the Chehalis Powder works 4 soon after the Washington Act was 
 brought into force serves to illustrate the probable effect of the Washington system. 
 The accident had occurred in one of the explosives works of the State and was 
 due largely to the use of an ingredient in the manufacture of powder which 
 increased the hazard and which the other powder plants for this reason did not 
 employ. The accident resulted in compensation claims amounting to over $10,000, 
 which amount is of course to be borne by the manufacturers of explosives collect- 
 ively. It needs no argument to demonstrate the probability that the influence 
 of those manufacturers of explosives who do not employ the dangerous ingredient 
 will be exerted to have its use discontinued. 
 
 There is every reason to believe that results similar to those in Germany 
 would be attained in this province under the proposed system of assessing employers 
 in groups. If, as proposed, facilities are afforded for the formation of employers' 
 associations, these will beyond doubt have a large influence in reducing the accident 
 rate by making rules, standardizing machinery and otherwise promoting safety; 5 
 but even were 'Such facilities omitted employers would probably find means, 
 within the different groups, of combining for co-operative effort in accident 
 prevention. 
 
 Another factor in the matter of accident prevention, one which does not 
 appear on a casual examination to have any bearing upon it, but which has been 
 found to be in fact of the greatest importance, is the question of the actuarial 
 plan adopted in compensation insurance. The subject is discussed in succeeding 
 page?. 6 but it should be observed here that one of the greatest means of inducing 
 preventive activity is the rapid rise in insurance rates involved in the current 
 cost plan of insurance. 
 
 It is submitted that the greatest possible care should be given to the selection 
 of those features of other systems which have been found to exercise any influence 
 in promoting the prevention of accidents, and that other considerations must 
 wherever necessary give way to this feature. 
 
 1 Rep. Fed. Com. U.S., 116. 
 
 2 S. & E., 99; Rep. Fed. Com. U.S., 104, 1,432; F. & D., 138; Cd. 2,458, p. 33. 
 
 8 See Interim Rep. Ont. Com., 175, and post, p. 128. 
 
 4 See account of accident, post, p. 134; see also correspondence, with reference to 
 Chehalis explosion, post, p. 124. 
 
 5 S. & E., 285. See Interim Rep. Ont. Com. 328, 344. 
 " See post, p. 108. 
 
64 CANADIAN MAXUEACTUEEES' ASSOCIATION: Xo. 65 
 
 Second: Relief should be provided in every case of injury arising out of 
 industrial accident. Such relief should not be contingent upon proof of fault on 
 the part of the employer, but gross carelessness, drunkenness or intentional wrong 
 on the part of the workman should be penalized in some way. 
 
 Under the older legal systems, continental as well as English, the ability 
 of a workman to recover damages for injury depended upon his ability to prove the 
 injury to have been caused by the fault, or, to use the technical term of English 
 law, the negligence of the employer. The rule as to the liability of the employer 1 
 was no different from the general rule applicable to all persons, namely, that a 
 man should not be held answerable in damages for something not his fault. 
 Attempts have been male to reconcile the modern doctrines of workmen's compensa- 
 tion with this older principle. It has been implied, if not expressly urged, that the 
 employer, having brought into existence and operation modern industrial appliances 
 and methods, has created conditions which should be imputed to his fault, and 
 that he should therefore be held responsible for the results of these conditions. 1 
 This view assumes two untenable propositions, namely, that modern indust'ial con- 
 ditions are created by, and for the exclusive benefit of, employers, and that 
 industrial accidents are due entirely to these conditions. 
 
 The fact is that the modern theories of workmen's compensation are based 
 upon grounds of practical expediency and not upon notions of ab -tract justice. 
 The principal grounds are : In the first place, the employer is considered to be in 
 a position to do for the workman what the workman cannot, or will not, do for 
 himself, namely, insure the workman against accidents; for even with an increase 
 in wages corresponding to the insurance premium neces c ary to insure himself, 
 tbe improvidence of the workman would preclude any hope of his voluntarily 
 assuming the burden. In the second place, the employer being in the position of 
 entrepreneur is considered to have facilities for throwing the cost of compensa- 
 tion upon the product and to collect it from the consumer. 2 To these two con- 
 siderations there may be added a third, namely, that the money wasted in disputes 
 over questions of fault in individual cases would go a long way towards providing 
 for compen=ation where no fault lay against the employer. 
 
 Without detracting from the weight of these considerations it may b.> pointed 
 out that they do not stand. alone or unqualified and that the considerations of 
 justice which formerly governed are not abrogated. It is no more just now than 
 formerly that an individual employer should be held responsible for something 
 not his fault, nor that a workman should receive damages for injuries due to his 
 own fault. It is neither just nor expedient that a workman should not have his 
 owl] carelessness brought home to him. And there is a further consideration of 
 expediency requiring the enlistment of the workmen's pecuniary interest in pre- 
 venting the occurrence of injuries. In addition to this, practical expediency, as 
 well as justice, demand that the burden thrown upon the employer should he 
 home by employers collectively and not individually. With regard also to the 
 
 1 Under a rule analogous to that in the old case of Rylands v. Fletcher, so, e.g.. 
 Mr. Asquith, as Home Secretary, in 1893, used the following words: "When a person, 
 on his own responsibility, and for his own profit, sets in motion agencies which create 
 risks for otlhers, he ought to be civilly responsible, for the consequences of what he 
 does." And see similar argument, Rep. Fed. Com. U.S., 197. This theory was the basis 
 of some of the earlier legislation of Germany (e.g.. The Prussian Railway Law, 1838), 
 but was soon abandoned. 
 
 2 See F. & D., 8; Rep. Fed. Com. U.S., 1088. 
 
1912 WORKMEN'S COMPENSATION COMMISSION. 65 
 
 theory that, as in the case of hroken down and worn out machinery, so in the case 
 of the injury or death of workmen, the loss should be borne by the employer and 
 added to the cost of production as incidental to modern industrial methods, it may 
 be observed that the analogy may be easily overdrawn. The workman, is not a 
 machine. An injured or worn out machine may be replaced or repaired at a cost 
 that can in most cases be estimated with precision and the machine in its injured 
 state is still the property of the employer and may be sold and replaced by another, 
 for the purchase of which the markets of the world are open. The freedom of 
 contract and volition on the part of the workman constitutes a vital difference 
 between him and the inanimate agencies of production. 
 
 The "professional risk" theory imputes, in reality, to the relationship ot 
 employer and employee obligations and rights for which the common law affords 
 no real analogy. These rights and obligations are social in their nature and 
 involve considerations in which the community at large is vitally interested. A 
 workmen's compensati n system involves the merging of the woikmen's private 
 right of action against the employer in the larger right of the general public io 
 have the injured workman taken care of; or, in another aspect, it merges the 
 private obligation of ithe employer to compensate the workman in the larger obliga- 
 tion to the public of keeping the workman from dependence on charity. 1 
 
 The socialistic element in workmen's compensation legislation is, of course, 
 freely recognized. 2 It was recognized by Bismarck in introducing the German 
 Act of 1880 3 and Joseph Chamberlain referring to the English Act of 1884, said: 
 "The Poor-law is socialism. The Education Aot is socialism. The greater pait 
 of municipal work is socialism, and every kindly act of legislation by which the 
 community has sought to discharge its responsibilities and its obligations to the 
 poor is socialism, but it is none the worse for that." 4 The great defect m the 
 individual liability system is that it seeks to operate a socialistic doctrine with 
 inadequate individualistic machinery. 
 
 Whatever economic arguments may be advanced for a system of individual 
 liability it is and will forever remain unjust that an individual employer should 
 be responsible for injuries occasioned to a workman by the workman's own negli- 
 gence, or the negligence of another than the employer. The rule of contributory 
 negligence and the fellow servant rule as embodied in the common law of Eng- 
 land are not unjust. If B., an employee of A., is injured by his own negligence 
 or by the negligence of C, a fellow employee, there is no shadow of a foundation 
 in justice for a claim against A. for damages. In order to see the elementary 
 relationship A., B. and C. respectively should be considered as persons of co- 
 ordinate rank, say three journeymen carpenters, but the relationship of the parties 
 cannot and ought not to be considered different if A. is a wealthy corporation. 
 The disease aimed at by compensation laws is an economic condition, not a legal 
 wrong, and an individual liability law is an attempt to do an economic right by 
 doing a legal wrong, an attempt which experience in many countries has proven 
 unwise even as a temporary expedient. 
 
 The present English Act represents the logical evolution of the principle. 
 
 1 See statement of R. J. Cary, Rep. Fed. Com. U.S., 139; see also Laband, Droit Public 
 de L Empire Allemand, IV. 
 
 2 See Brief of Carman P. Randolph, Rep. Fed. Com. U.S., 1428. 
 
 3 See Rep. Fed. Com. U.S., 952. 
 
 4 Speech at Warrington on Sept. 8, 1885. See F. & D., 140, for answers to criticisms 
 against German system as socialistic. 
 
 5 L. 
 
66 CANADIAN MANUFACTURERS' ASSOCIATION: No. 65 
 
 adopted in the Act of 1880, of securing compensation for workmen) by an exten- 
 sion of the personal liability of the employer. The present English Workmen's 
 Compensation Act is still in essence an employers' liability act and is in \im with 
 the older legislation of many other countries, including Germany. 
 
 These older laws were directed towards the wiping out of the so-called 
 defences of contributory negligence, common employment and assumed risk which 
 stood in the way of the workman's recovering compensation under the common 
 law, and thus extending the liability of the employer. Experience soon showed 
 that with these defences abrogated a large percentage of industrial accidents still 
 remained uncompensated as being purely accidental and not attributable to fault 
 on the part of anyone. 1 Speaking of the earlier German law of 1871, Dr. Zacher 
 says: "The law did not have the desired effect; it left the vast majority of the 
 accidents (those occurring through the hazard of the employment, or fault of the 
 workman or fellow- workman) uncompensated as before." 2 The Ohio Commission 
 also found that "statistical investigations show that less than twenty per cent, 
 of the workingmen injured and killed have a cause of action at law; that is, in less 
 than twenty per cent, of the cases is the course of injury attributable to the negli- 
 gence of the employer " 3 and that in more than 80 per cent, of all accidents to 
 workingmen there is no remedy at all. In many jurisdictions there still remains 
 a nominal reservation against the workman in cases of gross carelessness or wilful 
 misconduct — a reservation which amounts to little or nothing in practice 4 but 
 is the last vestige of the older common law theory. 
 
 Another form of legislation in vogue in some jurisdictions, involving a 
 further violation of principles of natural justice, was directed towards shifting 
 the burden of proof from employee to employer, leaving it to the latter to disprove 
 fault. There is, however, a marked tendency to disregard entirely any contribu- 
 tory cause on the part of the workman where the effect of such a reservation would 
 be to deprive innocent dependants of compensation, 1 the pervading thought in thus 
 sweeping into the net of compensation cases both deserving and undeserving being 
 that the money which would be consumed in litigation and otherwise, over the 
 determination whether in particular capes the compensation should or should not 
 be paid, would suffice to meet the undeserving cases. 
 
 With the qualifications above mentioned, therefore, it is submitted that the 
 principle of compensating regardless of fault should be recognized as the basis 
 of the system. Having laid down the general principle, however, it is necessary 
 to consider what means are open to prevent an abuse of the system by carelessness 
 or self-inflicted injury. Most systems withhold or reduce the compensation in 
 cases of injury arising out of intentional wrong-doing or other serious misconduct. 
 There is no doubt that misconduct on the part of a workman endangering his own 
 or other workmen's safety should be brought home to him individually, and this, 
 perhaps, whether an injury has been occasioned to the workman or not. Whether, 
 if the workman is injured in such a case, the compensation should be wholly or 
 partially withheld mighl be left by the Act for the proposed Commission to decide 
 in individual cases. Attention may he called to the provision of the. Act of the 
 State of Washington under which for removing guards on machinery, etc, the 
 compensation is reduced by ten per cent. 
 
 1 Interim Rep. Out. Com., 335. 
 
 2 Art. of Dr. Zachor, in "Handworterbuch der Staatswissenschaften, Jena. 1911, 
 Vol. VIII. 
 
 8 Rep. Ohio Com., Pt. 1, p. lxxxiii. 
 
 4 S. & R.. 203; Cd. 2.20S, p. 65; F. & D., 11. 
 
1912 WORKMEN'S COMPENSATION COMMISSION. 67 
 
 Third: The system of relief should be adapted to cover wage workers in 
 every industry or calling involving any occupational risk, and should not be 
 confined to such industries as railroading, manufacturing, building, etc. 
 
 The experience of other countries gives every reason to anticipate that any 
 system of workmen's compensation that may be adopted will be ultimately and 
 inevitably extended to include all classes of wage-workers. The English Act of 
 1897, which originally applied only to seven groups of industries considered to be 
 particularly hazardous, has been gradually extended until practically all occupa- 
 tions are now covered; although the system established by the Act was very ill- 
 adapted for such extension. A similar development marked the history of the 
 German law, which now covers all occupations. No reason can, of course, be 
 
 adduced except that of temporary inexpediency, for excluding wage-Workers in 
 such industries as agriculture and horticulture. The wage- worker who loses an 
 arm in a farm machine is as much entitled, equitably and economically, to com- 
 pensation as the workman who loses an arm in a machine in a factory. Statistics 
 also show that farming is one of the most hazardous of all industries. In Germany, 
 where general conditions differ very little from those of this country either in the 
 relative hazard or in the proportion of persons respectively engaged in the different 
 occupations, between 40 and 45 per cent, of the total number of accidents occur in 
 the agricultural and horticultural industries. In the schedules of accident insur- 
 ance companies in this country and in the United States, farmers are classed as 
 extra-hazardous risks. Similar observations might be made with respect to such 
 industries as lumbering and fishing, although these occupations do not engage 
 anything like a similar proportion of workmen. It is a matter for careful con- 
 sideration that any system that may be adopted shall be one that will fairly lend 
 itself for ultimate extension to all classes of industries. 
 
 At the outset, and in order to obviate too great complexity in the inception 
 of the system, it might be well to include in the system only certain classesof 
 employers and only employers of a certain stated number of persons, say three 
 or five; but the system should be so framed as to permit readily of extension to 
 the smaller employers and to all occupations. 
 
 Fourth : The relief should be as far as practicable by way of substitution for 
 the wages of which the injured workman and his dependants are deprived by the 
 injury. It should as a rule be periodical and not in a lump sum. 
 
 The consensus of opinion amongst authorities on workmen's compensation is 
 in favor of this principle. 1 Wagc-workcs are, as a class, unaccustomed to the 
 handling of large sums of money and where compensation is paid in lump sums 
 it is liable to be dissipated through extravagance or improvident investment.' 
 Experience in the United States and under the present English Act has shown 
 also that where compensation is paid in lump sums a much larger proportion is 
 'consumed in legal expenses than would be under a system of periodical pay- 
 ments. 3 The prospect of a lump sum payment as the probable result of an acci- 
 
 •See F. & D., 23; 24th Rep. U.S. Bur. Lab., 40; Rep. Fed. Com. U.S., 887, 943; Cd. 
 2208, pp. 68, 86; Cd. 2458, p. 25. 
 
 2 The Fabian Society suggests that Compensation should always be in the form of 
 pensions; because of the risk of investment by workmen. Prof. Mavor's Rep. (1900), 
 p. 25: see also Rep. Conf. Com., 64; Cd. 2208, p. 87; Rep. Fed. Com. U.S., Ill, 279. 
 
 8 Rep. Conf. Com., 65. Bulletin des Assurances Sociales (1910), Pt. I., p. 136. 
 
68 CANADIAN MANUFACTUEEES' ASSOCIATION: No. 65 
 
 dent is also a larger inducement to self-inflicted injury than the periodical pay- 
 ment of a proportion of wages. Experience has, in fact, shown that most of the 
 proven cases of self-injury have been occasioned by the need or desire for an 
 immediate sum not available by way of wages. It has been urged also that the 
 payment of the lump sum creates an inducement for the workman to live in idle- 
 ness while his funds last instead of going back to work and earning what he can. 1 
 Finally, except in the case of the death of an injured workman it is impossible 
 to estimate accurately the extent of the injury. The fixing of compensation by 
 arbitral y assessment on the basis of an anticipate;! peiicd of incapacity leaves room 
 for the danger that the period has been under-estimated, and the danger, equally 
 to be guarded against, that it has been over-estimated. Both these difficulties are 
 obviated by a system of periodical payments. Even the English Act provides for 
 periodical payments in certain cases. Where injuries result in disablement the 
 compensation is in the form of weekly payments on the basis of half the impair- 
 ment of the earning capacity. Provision is made, however, for the commutation 
 of these weekly payments and as a matter of fact they are in most cases com- 
 muted. 2 This, of course, nullifies to a large extent the intention of the Act, but 
 some provision for commutation is almost indispensable in an individual liability 
 system since the obligation of paying pensions for a period of years should create 
 an intolerable burden for most employers 3 and add to the insecurity of the work- 
 man. This latter feature was recognized in England by making provision for the pur- 
 chase of Government annuities in commutation of periodical compensation payments, 
 which piovision in itself constitutes the embryo of a state insuiance system, and 
 the inclusion of the principle of periodical payments even in its attenuated form 
 in the English Act shows how far the English Act has departed from the 
 "wergeld" theory under which the damages payable for injuries were regard: d 
 as commutation of the retribution which tne injured person or his family was 
 considered entitled to mete out to the injurer. 
 
 Of the 'German system Messrs. Schwedtman & Emery say : " The advantage 
 of weekly pensions for injured workers or dependants as compared with lump 
 sum payments is so thoroughly fixed in the minds of German theoretical and prac- 
 tical experts that it is impossible to find a single advocate of lump sum pay- 
 ments.'' 3 Speaking for the American Federation of Labor before the Federal 
 Commission Mr. Samuel Gompers said : " I can see that there may possibly come 
 a time during the life of a totally incapacitated workman, his condition being 
 due to an accident, when a lump sum might be of some advantage to him, but I 
 think it is of much greater advantage to him and his dependants and to society to 
 avoid risks of a failure resulting from the investment of a lump sum. It wou'd 
 be better and safer for him and his dependants and for society if he were for his 
 entire life time saved from charity or pauperism. While it is true that one might 
 occasionally achieve a financial competence by reason of a timely investment of a 
 lump sum of money, the chances are the other way. I believe that the purpose 
 of compensation is not necessarily to afford the opportunity even for successful 
 entrance into business, but it is primarily to secure for the injured or the work- 
 man killed, either for himself in the first instance or his family in every instance, 
 
 'Rep. Conf. Com., 65; Bulletin des Assurances Sociales (1910), Pt. III., p. 685. 
 
 2 See Rep. Fed. Com. U.S., Ill, 112, 676. 
 
 3 See Rep. 111. Com., 29. 
 4 S. & E., 49, 206. 
 
1912 WORKMEN'S COMPENSATION COMMISSION. 69 
 
 the oppoitunity of being saved against charity or pauperis;!). Once the lump sum 
 is paid and invested in a small business, or otherwise, and it is dissipated by a 
 failure to secure success, the maimed man or las family or dependants are no 
 longer entitled — and justly so — to payments on the part of the employer in whose 
 service the injury or the death occurred." 1 
 
 There may doubtless be instances where a lump sum payment wholly or 
 partially commuting the periodical payment would be advisable. One instance 
 of this would be where an artificial limb or other device was required. But ex- 
 perience seems to show that once precedents of commutation are established it is 
 difficult to control their extension, and while there should prob/.b'y be provision 
 for commutation at the discretion of the administering bjard, such a provision 
 should be surrounded by safeguards adequate to prevent its abuse. 
 
 As to the basis of compensation payment, it is being submitted below, 2 subject to 
 certain considerations, that this should be a fixed proportion of the impahment of 
 earning capacity with a certain fixed maximum. 
 
 Fifth: The relief should be certain. It sliould not depend upon the con- 
 tinued solvency of the employer in whose service the injury was sustained. 
 
 The correctness and importance of this principle is so obvious that it re- 
 quires no supporting argument. Its absence is the most manifest defect of an 
 individual liability system. The Departmental Committee of 1901 frankly 
 recognized this defect of the English Act, and forecast the trend of future legisla- 
 tion in a rather remarkable paragraph quoted elsewhere. 3 As stated elsewhere, 4 
 insurance under an individual liability system fails where and when it is most 
 needed. In the case of the small employer, where the danger of insolvency is 
 greatest, insurance is, under a voluntary system, usually omitted, and in the case 
 of the larger employer it fails where the accident is of a magnitude beyond the scope 
 of the limited liability assumed by insurance companies at normal premium 
 rates. 5 
 
 It need hardly be pointed out that in the matter of solvency a collective 
 system offers a vast superiority over an individual liability system. The basic 
 principle of insurance is the spreading of loss over a wide area, and the proposed 
 system would act automatically as an insurance system under which each emph yer 
 would be supported by the whole class into which for assessment purposes he was 
 placed. The only danger to be guarded against in such a system would be t' at 
 of having the classes too small. 
 
 The highest degree of solvency is, of course, attained in a state system of 
 insurance backed by the guarantee of the state. The recent criticisms o p Dr. 
 Friedensburg upon the German system point to the possibility of the ultimate 
 assumption by the Government of full control of and responsibility for the com- 
 pensation now administered by the trade associations of Germany. The present 
 system of Germany is not a state system. The state merely lends its compulsive 
 power for purposes of organization. Having compelled employers to organize, the 
 state steps aside, leaving the management of the funds to the mutual associations 
 
 1 Rep. Fed. Com. U.S., 869, and see further discussion of subject, p. 869 et seq. 
 - See post, p. 85. 
 
 3 See post, p. 96. 
 
 4 See post, p. 91. 
 
 5 See post, p. 105. 
 
70 CANADIAN MANUFACTUEEES' ASSOCIATION: No. 65 
 
 and exercising only a regulative supervision. The size of the mutual associations., 
 however, affords a guarantee of solvency sufficient for all practical purposes, but 
 as Dr. Friedensburg suggests, the possibility exists that a period of industrial 
 depression might render the trade associations incapable of fulfilling their obliga- 
 tions. Against such a contingency the Government of Germany has compelled 
 the setting up of a reserve, which has now reached a very large amount, by adding 
 a small margin to the yearly insurance rate. 
 
 With the machinery for the collection of insurance premiums in the hands of 
 the state there is not the same necessity for the setting up of a contingency leservo, 
 and the state being in a position to levy the necessary funds, need have no com- 
 punction in assuming a responsibility which affords the strongest possible guar- 
 antee to the workman. 
 
 Eixth : The amount of compensation should he definite and ascertainable 
 hotii to the workman and the employer. The system should entirely displace the 
 present method of compensation by an action for damages, and the employer 
 should not be subjected to any further or other liability except in caves of gross 
 carelessness or intentional wrong on the part of the employer. 
 
 On pure economic grounds it is important that the obligation cast upon 
 employers should be as definitely ascertained as possible. If the burden is to be 
 transferred to the consumer it must be more closely calculable than the amount 
 of a jury verdict. The employer should be in a position to place in his estimates 
 a definite amount against accident compensation without being subjected to tbe 
 contingency of expensive actions at law in addition. 
 
 On grounds of economy also and for the protection of the workman himself 
 it is important that the glamour of a common law verdict with its speculative 
 possibilities should be removed. So long as there is left open to the workman 
 the opportunity of an individual right of action, with or without the option of a 
 subsequent claim upon the compensation fund, there will remain the possibility 
 and probability that the workman, under the advice of interested persons, will 
 resort to this speculative remedy. 1 "Compensatory legislation is intended to exclude 
 or purposely endeavors to discourage, save in exceptional cases, the use of pre-exist- 
 ing remedies at law. The creation of a single liability or a single obligation to 
 contribute to a compensation fund, is the purpose and evident tendency of all 
 foreign legislation. A single liability is essential to the satisfactory operation of 
 the compensatory principle and its adoption should therefore be accompanied by 
 the repeal, as far as possible, of all other remedies." 2 This accords with the 
 opinion of the writers and authorities upon the subject. 3 
 
 It is very important also in a system of compulsory state insurance that there 
 should not be left outstanding any uncovered liability. Where such a liability 
 remains, employers will naturally have recourse to insurance to protect them- 
 selves and the very condition of things which the state insurance system is intended 
 to prevent is again called forth. From the standpoint of the employer the 
 advantage of a compensation system such as that proposed would be largely lost 
 if the older legal remedies were still left available to the workman. It may be 
 
 *■ 
 
 'Rep. Conf. Com., 214; Rep. Mich. Com., 33. 
 
 'S. & E., 264. 
 
 J Rep. Conf. Com., 227; see also S. & E., 79; Rep. Fed. Com. U.S., 16. 
 
1912 WORKMEN'S COMPENSATION COMMISSION. 71 
 
 that the other remedies would be rarely resorted to, and this is sometimes used as 
 an argument against their abolition. But so long as the possibility of an action 
 at law remains so long will the workmen be tempted to resort to it and so long will 
 the employer be subject to an insecurity against which he will find it necessary 
 to insure himself and will be solicited to do so by insurance companies. Such a 
 system would not be satisfactory to the employers of the province. 
 
 A difficult situation appears to have arisen in the State of Ohio by reason of 
 the provision of the Act of that State which gives to the employee the option, in 
 eases where the injury was due to the wilful act of the employer or his officers or 
 agents, or their failure to comply with any statute or municipal regulation or the 
 orders of government or municipal officers, either to apply for compensation to the 
 Insurance Boad or to bring an action at law. Representatives of liability insur- 
 ance companies are urging, and with reason, that under the state insurance 
 system a very substantial portion of the risk is left uncovered while under the 
 policies of the private companies this risk is assumed. The result has been a 
 general indisposition on the part of employers to enter the state scheme, to the 
 prejudice of the state system in competing with private companies. 
 
 In the State of Washington there was, it appears, at first some hesitation on the 
 part of employers as to dropping all liability insurance, but it was largely due to 
 the doubt as to the constitutionality of the Act, and has now almost entirely 
 disappeared. 
 
 There would, of course, be no objection to strict penalties upon the careless 
 employer, but these should not be in the form of an action against the employer 
 by, and for the benefit of, the workman. The regulations of the Board or of the 
 voluntary associations would doubtless provide penalties for negligence on the part 
 of the employer for breaches of statutory enactments or disobedience to duly 
 authorized inspectors. Provision might also be made for proceedings by the 
 Board against an individual employer in the case of an injury due to the wilful 
 act of the employer. But such proceedings should not accrue to the benefit of the 
 individual workman and any amount recovered should go into the general fund. 
 On the whole it is submitted that very little improvement can be made upon the 
 provision of the Washington Act dealing with this feature. 1 
 
 Seventh : The funds for relief should be provided by joint contributiofis from 
 employers, workmen, and the Province. Employers and workmen should pay in 
 such proportions as represent the number of accidents occurring by reason of the 
 hazard of the industry and the fault of the employer on the one hand and the fault 
 of the workman on the other. The province should contribute an amount repre- 
 senting approximately the cost of administration. 
 
 The only phase of the subject of workmen's compensation upon which any 
 considerable difference of opinion exists is that of contribution by the workman to 
 the cost of the insurance. 2 So long as compensation was a matter of recovery of 
 damages for fault, direct or indirect, on the part of the employer, there was no 
 logical reason for contribution, but the modern systems of compensation in which 
 all cases are covered practically regardless of fault raise the question whether the 
 workman should not contribute out of his wages a proportion of the insurance 
 premium representing the proportion of accidents due to the fault of the work- 
 man. 
 
 1 Section 9. 
 
 2 See Rep. Ohio Com., 316. 
 
72 CANADIAN MANUFACTUBEBS' ASSOCIATION: No. 65 
 
 h— 
 
 The difference of opinion amongst expert authorities ma}- be attiibuted very 
 largely to the strenuous opposition of the rank and file of the labor interests to any 
 deduction of wages. 1 Some of the writers and authorities upon the subject have 
 been or are official representatives of labor organizations, and are naturally in- 
 fluenced by the general attitude of these bodies. Other investigators who are not 
 directly subject to this influence are nevertheless actuated by a spirit of compromise 
 to the hostility of labor organizations and by the notion that any economic in- 
 justice will find its adjustment in the amount of wages. As the question of con- 
 tribution is the only feature of the subject upon which the interests of employers 
 and workmen seriously diverge, it is only natural that this spirit of compromise 
 lias found expression in some of the established systems. But notwithstanding the 
 disposition of workmen to avoid the burden, the principle of joint contribution has 
 been recognized and embodied in a majority of the systems 2 and workingmen 
 themselves are becoming gradually educated to a broader view of the whole subject. 
 
 The attitude of trades unions upon the question of contribution is commented 
 upon by Professor Henderson in the following passage: " Obligatory workingmsn's 
 insurance has been in the past in this country connected with attempts to compel 
 the workman to pay an excessive share of the premiums, to break the power of the 
 union and alienate its members, and to retain the equitable share of the funds to 
 which the men have contributed if they leave the service or are discharged. In 
 conventions the propositions for collective insurance have been championed by the 
 socialist faction and have gone down in the defeat of this party. Insurance in the 
 European sense has never yet been offered to our workmen in any state. 3 - When it 
 is shown that obligatory insurance does not mean absolute control of employers, 
 but union of effort in which both sides are fairly represented in local management; 
 that the interest in collective bargaining remains untouched ; that voluntary 
 organizations are recognized and made secure by suitable state supervision and 
 control and that taxpayers, so far from being asked to increase burdens, will be 
 substantially relieved from many charity demands, it seems likely that indifference 
 and antagonism will change to approval. Mr. John Mitchell has expressed a 
 favorable opinion which already has won the attention and approval of many 
 trade-unionists/' 4 
 
 The point of view upon this phase of workmen's compensation varies with the 
 basic conception of the whole subject. "Great Britain clinging to the spirit of 
 the poor laws, exacts no contribution from the beneficiaries of her old-age pensions 
 and compensation laws. On the continent, however, workmen contribute to 
 
 social insurance generally and in some cases to accident compensation 
 
 Insisting that differentiation from poor relief must be conspicuous in fact if 
 social insurance is not to encourage pauperism, we make no difficulty about its 
 accuracy in point of law and shall, therefore, assume that compensation acts are 
 
 1 But see Rep. Mich. Com., 134, 141. 
 
 2 The contributory principle is recognized in the following European countries: 
 
 Norway 4 weeks waiting period. 
 
 Sweden 60 days waiting period. 
 
 Denmark 13 weeks waiting period. 
 
 Holland 13 weeks waiting period. 
 
 Germany 13 weeks waiting period. 
 
 Austria 4 weeks waiting period and 10% of premiums 
 
 Switzerland 25% of premiums . 
 
 8 This is of course not true since the Acts of Washington, Ohio and Massachusetts. 
 4 Henderson, Industrial Insurance, 2d edition, 61. 
 
1912 WORKMEN'S COMPENSATION COMMISSI OX. 73 
 
 not to be classed with pauper legislation.'" 1 In other words : " The British legis- 
 lature intervenes to relieve dependency; the German to confer a right to assistance 
 in return tor contribution.'" 2 
 
 As a matter of fact, indeed, the original intention in introducing the English 
 Act was that workmen should contribute to the compensation for injuries by them- 
 selves bearing the burden for the first three weeks. Mr. Joseph Chamberlain stated 
 in introducing the Act of 1897, that the only ground which justified the proposal 
 of the Government to make provision for work injuries was the fact that there 
 were a large number of injuries that might be presumed to incapacitate the work- 
 men more than three weeks and said: "If it could be presumed that all work- 
 injuries would last three weeks or less, I can see no reason for the interference of 
 the Government because those are injuries for which the workman might be 
 expected to provide against himself/' 3 
 
 The German system has steadily adhered to the principle of a long " waiting 
 period," thirteen weeks. In other systems the workman pays directly a portion 
 of the insurance premium by way of deduction from his wages, and the latest and 
 one of the most thoroughly considered acts of the United States, namely, that of 
 Ohio, recognizes the contributory principles by authorizing the employer to deduct 
 10 per cent, of the insurance premium from the wages of the workman. 
 
 While the general tendency is for workmen to oppose and employers to favour 
 contribution from the workman, this is not uniformly the ease. In Germany 
 where the relations arising out of the workman's contribution are best understood 
 the tendency is to some extent in the other direction. During the last session of the 
 Reichstag an amendment proposed by employers and bitterly opposed by workmen 
 was passed increasing the contributions of employers to the sickness fund from one 
 third to one-half. 4 The motive of the workmen in opposing the change was to 
 maintain their representation on the management of the association. There is 
 therefore, this further consideration in connection with the question of contribu- 
 tion that the extent to which workmen participate in the administration of the 
 system will naturally depend upon whether, and to what extent, workmen contribute 
 to the insurance fund. 
 
 Leaders of labour organizations are in fact quite free to admit that their chief 
 objection to contribution is based not upon principle but upon the unwillingness 
 of the workman to pay for insurance ; and that education is likely to make a great 
 difference in this attitude. It is believed that the workmen of Canada and par- 
 ticularly of the Province of Ontario will be quicker than the workmen of most 
 other countries to appreciate the immense benefits of the proposed scheme and to 
 take their proper part in its maintenance. 
 
 Apart from experience and logic, however, it should be borne in mind that 
 the great mass of employers in the Province regard it as of paramount importance 
 that workmen should contribute to the accident insurance funds. A system 
 throwing the burden entirely upon employers would be received with hostile feel- 
 ings which would very naturally affect the administration of the Act. It will 
 undoubtedly make a great difference throughout the Province in the enforcement 
 of the Act and in the establishment and development of the proposed voluntary 
 associations for accident prevention, if the Act, instead of bein? looker! upon as 
 an imposition, can lie launched with the favour and even enthusiasm of employers. 
 
 1 Rripf of Carman F. Randolph, Rep. Fed. Com. U.S., 1428. 
 2 S. & E., 10. 
 
 3 See Rep. Fed. Con. U.S . 1092; S. & E., 10. 
 
 4 See Rep. Conf. Com., 165. 
 
74 CANADIAN MANUFACTURERS' ASSOCIATION: No. 65 
 
 t — — . 
 
 The principal reason for covering all accidents, regardless of questions of 
 fault, is that the expense of determination of these questions in specific cases is 
 eliminated. But to throw the entire cost of insurance upon the employer not only 
 shocks the sense of justice but places the workman in a humiliating position. It is 
 no doubt true that on its economic side any money contribution on the part of the 
 workman could be worked out as a matter of adjustment of wages. It may be 
 observed by the way, that this is true in a sense converse to that in the argument 
 against contribution, for if the workman's contribution were inequitably large 
 it would result in an increase of wages. There is, however, a point at which the 
 self respect of the workman becomes involved. Even the most advanced form of 
 socialism would not seek to free the workman from all sense of responsibility for 
 his own actions, or to throw upon the employer or the community at large the 
 responsibility of making provision for his every want. So long as it is recognized 
 that there are certain things which the workman is expected to provide for himself 
 out of his wages, there must be a point at which the obligations of the employer 
 end. This principle is so elementary that its mere statement almost calls for 
 apology; yet this very principle would be violated by throwing on employers the 
 burden of compensating workmen for injuries due to their own fault. So long as any 
 injuries are due in whole or in part to the fault of the workman elementary prin- 
 ciples of justice demand that he should bear a share of the pecuniary responsibility. 
 
 If the pecuniary consideration were the only one it might be partially 
 counterbalanced by the inconvenience of collecting the workman's portion and the 
 irritation attendant thereupon. But there are other and weightier reasons for a 
 recognition of the principle of contribution. It will not be seriously disputed 
 that the highest degree of co-operative effort on the part of the workman to the end 
 of preventing accidents cannot be secured without throwing upon him some direct 
 pecuniary responsibility. 1 If there should be irritation attendant upon the practice 
 of deducting from wages a portion of the insurance premium, or if there should be 
 dissatisfaction with the " waiting period," these will serve to keep before the mind 
 of workmen not only individually but through their organizations to a degree not 
 otherwise possible, the interest of the workman in systematic and scientific methods 
 of accident prevention ; and collective effort on the part of workmen is in fact as 
 necessary as collective effort on the part of employers in order to attain a full 
 measure of success in prevention of accidents. 2 
 
 If there were not to be some form of contribution from workmen it would 
 be necessary, upon principles of elementary justice, to withhold compensation in 
 cases where the injury was due to the fault of the workman. The proposition 
 to compensate in all cases regardless of fault is logically contingent upon the 
 workman paying his share. The employer's share represents those injuries which 
 are the result of the fault of the employer or his agents or of the inherent hazard 
 of the occupation. The workman's share represents those injuries which are 
 due to the fault of the workman. 
 
 There is of course no question that a very large number of accidents are 
 attributable to neither the fault of the employer nor the intrinsic hazard of the 
 industry. The only question that can arise is as to the relative proportions. 
 The following figures arc given from the statistics of Germany: 8 
 
 Employers' fault 17% per cent. 
 
 Workers' fault 29^ per cent. 
 
 Employers' and Workers' fault 10 per cent. 
 
 Hazard of industry 43 per cent. 
 
 'Rep. Ohio Com., Part II, 13; Interim Rep. Ont. Com., 440. 
 
 2 For further argument, see Rep. Ohio Com., Pt. II, 319; S. & E., 55. 
 
 •S. & E., 55. 
 
1912 WORKMEN'S COMPENSATION COMMISSION. 75 
 
 Accident statistics of industries for the three years, 1887, 1897, and 1907 under 
 German law 1 give the following figures : 
 
 1887. 
 % 
 
 By fault of employer 20.47 
 
 By fault of employee 26.56 
 
 By fault of both parties 8.01 
 
 Due to negligence of the parties 55.04 
 
 Due to inevitable risks of the industries 
 
 and other causes 44.96 
 
 
 1907. 
 
 
 (46,000 
 
 1897. 
 
 Accidents) - 
 
 % 
 
 % 
 
 17.30 
 
 16.81 
 
 29.74 
 
 28.89 
 
 10.14 
 
 9.94 
 
 57.18 
 
 55.64 
 
 42.82 
 
 44.36 
 
 100.0ft 100.00 10(1.00 
 
 "An investigation by Crystal Eastman, a trained student of this problem, 
 of 377 fatal accidents in the Pittsburg, Pennsylvania district, classified the respon- 
 sibility as follows : Causes attributable solely to employers or those who represented 
 them, 29.97 per cent.; causes attributed solely to those killed, or their fellow 
 workmen, 27.85 per cent.; causes attributed to both the above classe-s 16.91 per 
 cent., causes attributed to neither of the above classes 26.27 per cent. 2 
 
 The principle of contribution may as above indicated be embodied in a number 
 of ways. The most direct method is that of collecting from the workman a 
 proportion of the insurance premium. This is practicable only by having the 
 employer pay the whole premium and deduct the proper amount from the wages 
 of the workman. Another method is to interpose a considerable "waiting period" 
 between the occurence of the injury and the beginning of compensation payments, 
 thus leaving workmen to bear minor injuries either individually or through col- 
 lective first aid or sickness funds. A third method is by reduction of the scale 
 of compensation, leaving workmen to bear individually a greater portion of the 
 burden of all injuries. 
 
 It is submitted that the last of these three methods is the least satisfactory.' 
 It has been urged that so long as the workman is not compensated up to the full 
 amount of the loss of earning capacity he does in fact contribute to the extent 
 of the difference between the full earning capacity and the basis of compensation. 
 But the reasons for fixing the basis of compensation at one-half and two-thirds 
 the lost earning power are not connected with the question of contribution. For 
 obvious reasons it would not be expedient to hold out to a workman an undiminished 
 income as the result of disablement. If contribution were the only consideration it 
 is submitted that it would be better to pay full compensation with contribution 
 than partial compensation without contribution. 
 
 There are three answers to the argument that the difference between the 
 basis of compensation and full earnings constitutes a sufficient contribution from the 
 workman. In the first place the 100 per cent, "earning capacity" of the work- 
 man is usually based arbitrarily upon the wages which the workman was receiving 
 at the time of the injury. But if the workman had not been injured there is 
 no human probability that he would have earned full wages to the time of his 
 
 J Rep. Fed. Com. U.S., 732. See also Rep. Ohio State Bar. Ass'n. Vol. XXXII. , p. 100; 
 Rep. Ohio Com., Pt. I., p. xxix. 
 
 2 For further reference to questions of fault, see Interim Rep. Ont. Com., 314 et seq., 
 353, et seq.; Rep. 111. Com., 36, 79; Bulletin 74 U.S. Bur. Lab., 120; Bulletin U.S. 
 Bur. Lab., No. 92, pp. 2, 3, 60, 65. 
 
 "See S. & E., 56. 
 
76 CANADIAN MANUFACTUEEES' ASSOCIATION: No. 65 
 
 death, so that the workman's actual loss cannot be leckoned upon a 100 per cent, 
 basis. In the second place the compensation would place the workman beyond 
 further contingency of loss of earning capacity by reason of injury from other 
 causes or of sickness. The compensation would constitute an assured income not 
 subject to contingencies of sickness, old age, or unemployment and would render 
 insurance against these unnecessary. 1 In the third place the workman is being 
 paid while not producing. Compensation cannot be put on the same basis as 
 wages. Wages are the price paid for service actually rendered. A system which 
 would place the non-productive individual by the accident of incapacity on the 
 same plane as the productive workman would be an economic anomaly. As to 
 this phase of the subject Dr. Zacher has said: ''The limitations of the pension 
 for complete industrial incapacity to two-thirds of the annual earnings, as in 
 the case of most government pensions, is justified by the fact that the time which 
 every workman unavoidably loses through unemployment and the cost of working 
 clothes, tools, etc., must be deducted and that injuries caused by the workman's 
 own fault are compensated with the rest." 2 
 
 A much more equitable and at the same time more salutary method of con- 
 tribution is through a "waiting period" immediately following the occurrence of the 
 injury, during which period no compensation is paid. One purpose of a waiting 
 period is the prevention of simulation and malingering. These evils doubtless 
 exist in every system of workmen's compensation, 3 and one of the great problems 
 is to reduce them to a minimum. The elimination of simulation is important, not 
 only in the interest of economy but because of the demoralizing effect produced 
 upon the working class and the stigma thrown upon the whole system by successful 
 imposition. Accordingly every system of workmen's compensation withholds com- 
 pensation for trifling injuries whose effects do not last beyond a week or two. By 
 this means a considerable saving of administrative work is effected and simulation 
 prevented in the form most readily practicable. 4 
 
 The danger in fixing a waiting period as a form of contribution is that its 
 function as such is liable to be disregarded or forgotten in favor of its function 
 as a preventive of simulation. And arguments are very likely to be advanced against 
 the "injustice" of withholding compensation from workmen for so long a period. 
 So in England, even before Mr. Chamberlain's Bill passed the House the period 
 of three weeks was reduced to two weeks. In 1906, in spite of the recommendations 
 of the Special Parliamentary Committee against it, the period was further reduced 
 to one week with provision that where the injury incapacitated the workman for 
 more than two weeks, compensation should commence from the beginning. In 
 the discussion of the amendments the propriety of the workman's bearing some 
 share of the accidents was apparently entirely lost sight of and the only considera- 
 tion was the influence of the provision upon malingering and simulation. 
 
 A very satisfactory solution of the problem of a waiting period which would 
 3upply at the same time an avenue of contribution, a check upon simulation, prompt 
 and adequate surgical and medical aid and an inducement to co-operation 
 between employer and workman was suggested in the draft Act submitted by the 
 investigating commission of the State of Washington. This was a first aid fund 
 
 1 Interim Rep. Out. Com., 327. 
 
 2 Handworterbuch der Staatswissenschaften, Vol. VIII., p. 65, Jena, 1911. 
 
 a Bulletin des Assurances Sociales, 1908, No. 5, 201; Rep. Fed. Com. U.S., 1432; La 
 France Judiciare, Mar. 12, p. 35; VIII, Congress des Assurances Sociales, 138, 790. 
 
 * S. & E., 290; Rep. Fed. Com. U.S., 84; Journal of Insurance, Institute of London, 
 1909-10, p. 59; F. & D., 143, Cd. 2208, p. 75. 
 
1912 WORKMEN'S COMPENSATION COMMISSION. 7? 
 
 which would fill up the gap left by the waiting period and provide a "buffer'' 
 fund out of which hospital and surgicail expenses would be paid where necessary, 
 as well as compensation. The principle of this fund was in a measure that of 
 the German sickness fund, but instead of thirteen it was to cover only three 
 weeks. The fund was to have been raised by equal contributions from employers 
 and employees, the employees' portion to be deducted from wages. The scheme 
 was supported by the labour interests but some opposition was encountered from 
 employers in less hazardous occupations who objected to paying at the same rate 
 as that of the more hazardous industries. In the haste of the legislative session 
 it was found impossible to reform the scheme and it was dropped from the Act 
 with a view to its later incorporation by way of amendment. In a report issued 
 by the Industrial Insurance Commission which is in charge of the administration 
 of the Act, covering the first few months of operation, the immediate creation of 
 such a fund is strongly urged upon the legislature. 1 
 
 The equitable proportion of the cost of insurance to be borne by workmen 
 would, according to the statistics above shown, be from 25 to 30 per cent. If it 
 is decided that the contribution shall be direct it is submitted that the Act should 
 name a definite proportion with a direction to the employer to deduct the proper 
 amount at stated periods from the wages of the workman. If the first aid 
 fund plan is adopted the contributions should be so arranged that the workman 
 would bear his proper share of the total cost both of first-aid and compensation 
 proper. If sickness insurance or other benefits were to be included in the scope of 
 the society, the proportion of contributions could be fixed accordingly. 
 
 With reference to the portion to be borne by the State it is submitted that 
 this should cover the cost of administering the system so that practically the 
 whole of the contributions to the fund should go to the relief of the injured work- 
 men and their dependents. 2 The withdrawal from the courts of the work of 
 adjudication will mean^ a considerable saving in the expense of administration of 
 justice already borne by the province. The provision for the needs of injured work- 
 men and their dependents will also relieve to a very large extent the burden now 
 borne by the general public by way of poor relief and charity. 3 In most modern 
 compensation systems these features of workmen's compensation are recognized 
 and the state itself bears a portion of the expense of the system. In some systems, 
 as for instance, that of Switzerland, the state in fact contributes a definite pro- 
 portion of the insurance premiums. 
 
 Eighth : The system of relief should he such as to secure in its administration 
 a maximum of efficiency and economy, and as large a proportion as possible of 
 the money contributed should be actually paid out in compensation. 
 
 This principle which is of the most obvious importance is in many juris- 
 dictions the most consistently ignored. There are now available abundant statistics 
 to demonstrate the relative efficiency of the different systems of compensation in 
 performing their intended functions. The German collective system represents an 
 efficiency of 87.2 per cent., only 12.08 per cent, being taken up in expenses of 
 administration. 4 Other European systems range from 80 to 90 per cent. In the 
 
 1 See post, p. 81. 
 
 2 Rep. Mich. Com., 134; Rep. Ohio Com., Pt. II., p. 316. 
 
 3 Rep. Ohio State Bar. Ass'n. XXXII., p. 123; Rep. N.Y. Com., 31; Rep. Ohio Com., 
 Pt. II., p. 208. 
 
 4 S. & E., 47. 
 
78 CANADIAN MANUFACTURERS' ASSOCIATION: No. 65 
 
 ■ — ■ ■ 
 
 State of Washington the cost of administration for the first six months, which 
 is naturally heavier than it will be for the future, has been well within 15 peT 
 cent, of the compensation payments. 
 
 The individual liability systems on the other hand show a very large proportion 
 of waste in conveying the money contributed by the employer to injured workmen 
 and their dependents. 1 Recent statistics of the Board of Trade in England giving 
 figures of the business of liability insurance companies indicate the administrative 
 waste of the English system and show that while these companies have been 
 operating at a net loss, a very large proportion of the money paid in by the liability 
 insurance premiums has been consumed in expenses of litigation and commissions 
 on business. 2 Because of circuity of liability under the English systems and the 
 method of adjustment of claims, there is a further waste which, it is calculated, 
 brings the efficiency of the English Act down to the neighborhood of 50 per cent. 
 
 Statistics gathered by various commissions in the United States show that in 
 that country less than twenty- five per cent, of the money paid in 'liability insurance 
 premiums actually reaches the injured workman or his dependents, the rest being 
 consumed in expenses of litigation, soliciting business, profits and expenses of 
 administration.' It is fair to assume that liability insurance in this province would 
 show much the same percentage of waste as in the United States, and no 
 system of individual liability could probably be expected to produce much better 
 results than those shown under the English Act." 
 
 The aggregate pay-roll represented by the Canadian Manufacturers' Associa- 
 tion in Ontario is about $150,000,000. On the basis of two per cent, the insurance 
 premiums of the members of the Association would amount to $3,000,000. There 
 is every reason to believe that under an individual liability system one-half of this 
 amount or $1,500,000 would be wasted for members of the Association alone, 
 without accounting for manufacturers who are not members of the Association 
 or for employers in other occupations. The greater part of this money can 
 be saved either for employers or for workmen by the elimination of the circuitous 
 liability involved in the individual liability system. 
 
 Ninth : The procedure for the adjustment of claims should be as far as 
 possible dissociated from the regular courts of law. It should be simple, and 
 calculated to involve in its operation a minimum of friction between employer 
 and employee. 
 
 The largest item in the expense of the present system, and a very consider- 
 able item in all individual liability systems, is the expense connected with the 
 adjustment of claims. The larger portion of this expense consists of course of 
 legal fees. In a system where compensation depends upon the determination of 
 private rights as between employer and employee, — and + his is indispensible where 
 the right of the employee depends upon proof of fault — a resort to the courts, if 
 not inevitable, is avoidable only with great difficulty. But in a system where the 
 
 1 See post, p. 106. 
 
 2 See P. & D., 46; "Up to the present time expenses of management, including litiga- 
 tion and adjustment, have absorbed one-half the premiums. The industries of Great 
 Britain are thus paying in premiums, if adjustments are fair, about twice the net cost, 
 and, if not fair, they are paying in expenses — which, under the German system, have 
 been made unnecessary — many times what would enable all adjustments to be fair, and 
 even liberal." 
 
 3 Rep. 111. Com., 37; Rep. Fed. Com. U.S., 43; See post, p. 105. 
 
 4 See post, p. 106. 
 
1912 WORKMEN'S COMPENSATION COMMISSION. 79 
 
 right to recover depends largely or entirely upon the establishment of a claim 
 to a fund there is no necessity for the formalities, and no excuse for the expense, 
 of an ordinary legal action. 
 
 In some jurisdictions the method of arbitration has been resorted to. This 
 method, however, maintains the notion of a contest between the employer and 
 the employee with all the disadvantages attendant upon such a notion. In addi- 
 tion to this, the court, being an amateur one, has not the experience or facilities 
 which a regular body would have of dealing with the various phases that arise. 1 
 
 Another important consideration in determining the method of adjustment is 
 the desirability of uniformity. Under a method of arbitration, and even under a 
 system of judges or other legal tribunals, there is certain to be a great diversity 
 of treatment, even though an effort be made to adhere to lines of precedent. In 
 the 'light of the criticisms of Dr. Friedensburg 2 it is apparent also that a syst m 
 of local judges governed by precedent may give rise to very grave abuses. 
 
 The method pointed to by all careful observers and adopted by many juris- 
 dictions is that of a special board or tribunal. Such a board should of course be 
 vested with full jurisdiction over questions of fact, and the procedure should be 
 rendered as simple and direct as possible. It is submitted that in the large 
 majority of cases a full and satisfactory adjustment could be made upon written 
 reports supported by affidavit. A competent board of officials could, upon reports 
 of the physicians in charge, the employer and the injured person, adjust most cases 
 in a manner vastly more satisfactory than would be possible through the ordinary 
 machinery of the courts. This is the method adopted by the Washington Board 
 and it is said to work very satisfactorily. It may be added that a wrong decision 
 would, under such a system as that proposed, not be a very serious matter as it 
 could be reviewed at any time and set right. It would not be a matter of settling 
 once and for all a contest over legal rights as between two parties. 
 
 Tenth: The system of compensation should he directly associated ivith a 
 system of inspection with a view to the prevention of accidents and a system of 
 prompt and expert medical attendance to mitigate the effect of the injuries. 
 
 This principle is really a corollary of the first principle, which embodies the 
 conservation phase of the subject of workmen's compensation. The colle tive 
 insurance systems tend almost automatically to produce a system of expert inspec- 
 tion. This is of course the principal reason for the advanced position of Ger- 
 many in the matter of accident prevention. 3 Each insurance association being 
 confined to some particular line of industry there is not only the incentive to, 
 but the facility for, a system of highly developed factory inspection and the 
 management of the associations is in the hands of those best qualified to superin- 
 tend and direct preventive activities. 
 
 The individual liability systems provide no corresponding incentive or facil- 
 ities. Each insurance company bids for all classes of business. Such inspection as 
 these companies conduct cannot in the nature of things be as thorough as in the 
 specialized systems of collective insurance, nor has the insurance company the 
 same intimate interest in the welfare of the workman nor the same appreciation of 
 
 'As to litigation under English Act, see 24th Rep. U.S. Bur. Lab., 1512; see Rep. 111. 
 Com. 38. 
 
 * See post, p. 129. 
 3 S. & E., 100, 128. 
 
80 CANADIAN MANUFACTUREKS' ASSOCIATION: Xo. 65 
 
 conditions under which he works as an association of employers would have. The 
 insurance company has no direct facilities for standardizing machinery nor any 
 means of enforcing regulations except by a threat to decline or cancel the policy, 
 the coercive effect of which would be very slight. There is every reason in fact why 
 the factory inspection system should be closely co-ordinated with, if not merged 
 in, the industrial insurance system. The inspection would then be induced from 
 within instead of imposed from without. It would be sanctioned by all the weight 
 of co-operative endeavor as well as of substantive law. 
 
 Another large field of conservation is open in the direction of expert medical 
 attendance for the purpose of preserving as far as possible the industrial useful- 
 ness of the workman. Excellent results in this line of activity are found in Ger- 
 many. "Authorities all agree and are very emphatic on the point, that immediate 
 attention to all injuries saves much suffering, many lives and limbs and a great 
 deal of money. This principle has been recognized by progressive employers and 
 insurance companies in the United States, but prompt relief is still lacking in many 
 instances. Under the German law every injured worker and his dependants are 
 taken care of automatically and immediately after the occurrence of the accident, 
 on the theory that from a human as well as an economic point of view it is 
 most important to bring back every worker from the position of a consuming 
 member of society to that of a producing member." 1 "The Bavarian Building 
 Industries Employers' Association established to its own satisfaction that the 
 expenditure of approximately $8,000 in prompt and expert medical attention to 
 it injured workmen, saved approximately $160,000 in compensation expenses. 
 A Vienna insurance institution figured the net savings in compensation due to the 
 establishment of an ambulance and first aid medical station to be $27,000 in nine 
 months. An engine driver 35 years old was scalded during a wreck. The attend- 
 ing general physician thought the amputation of the left arm necessary. The 
 employers' association succeeded through specialists' treatment at its own hospital 
 in saving the arm and bringing it back to normal strength. At the time of 
 accident the driver earned $330 per annum — a few years later $425 per annum, 
 which proves that his earning capacity was unimpaired. The amputation of the 
 arm would have meant a cripple with less than half earning capacity, and a life 
 compensation of $150 annually, equal to $8,000 or $10,000 total expenses to the 
 Employers' Mutual Insurance Association. We might quote fifty similar cases 
 showing the wonderful results of conserving the best resources of the nation, the 
 self-respect and earning capacity of her workers, by means of prompt and proper 
 medical attention." 2 
 
 For providing facilities and organization for this latter class of conservation 
 work no better avenue appears to be open than the proposal made by the commission 
 which drafted the Washington Act, namely of a separate " first aid fund." 
 Of this proposal of the drafting commission, the report issued by the work- 
 men's compensation commission of the State of Washington in February, 1912, 
 speaks as follows: "The burning issue of the industrial situation to-day is the 
 need of a first-aid fund. When the Act was discussed in the legislature it 
 already bore a provision for first-aid, which was stricken mil a1 the urgent request 
 of the manufacturers, who declared that they desired to establish their own first 
 aid funds; it was also felt that the law, revolutionary as it was in a great many 
 respects, would prove to be of sufficient burden without the addition of a first- 
 
 ' See Rep. Fed. Com. U.S., 686. 
 2 See S. & E., 51. 
 s See post, p. 117. 
 
1912 WOKKMEJSTS COMPENSATION COMMISSION. 81 
 
 aid provision. The whole matter was therefore stricken out and the schedules 
 
 designed to accompany that provision were allowed to remain as they are 
 
 It will be seen that the law provides simply for the bare necessities of life 
 
 during disability or after the death of a workman, and the expense of doctor's 
 bills, hospital dues, etc., is absolutely unprovided for. It is clearly up to the 
 employers and employees of the State to give this question of first-aid careful 
 and serious consideration in as much as it constitutes, in the opinion of the com- 
 mission, the most imminent problem in connection with the administration of 
 industrial insurance in this State to-day." 1 
 
 It is suhmitted that in the administration of first-aid funds a different principle 
 might be adopted from that in the administration of the compensation fund proper. 
 It might be well to afford facilities for placing the administration of first aid funds, 
 under proper supervision, in the hands of such benefit societies as now exist or others 
 which might be created. It is submitted that it would be advisable to localize as 
 far as possible the administration of these funds and that possibly a system might 
 be worked out whereby benefit societies would be created covering either single 
 industries or groups of related industries in a particular geographic district. 2 Such 
 variations might be allowed in their constitutions as conditions warranted and 
 where no such society existed the central administrative body would have very little 
 trouble in handling the funds. 
 
 Eleventh: The system should be such as to secure the most liberal measure 
 of relief possible without undue strain upon industry. 
 
 This principle is enunciated as a basis for a discussion of the cost of compensa- 
 tion under the various types of compensation systems and of the different actuarial 
 methods in fixing rates. 
 
 The immediate increase in the expense to employers consequent upon the in- 
 troduction of a compensation system is, of course, the most serious economic factor 
 from the employers' standpoint. In an industry running on a small margin of 
 profit an increase of even two per cent, on the pay-roll may make the difference 
 between success and failure. In addition to the immediate advantage to the work- 
 man in having provision made for loss of earning capacity and in addition to the 
 immediate disadvantage to the employer in having his profits reduced, it is neces- 
 sary to consider a number of consequences flowing from the imposition of an 
 undue burden of compensation. 
 
 If the burden placed upon employers in any one Province exceeds that upon 
 employers in other Provinces or other countries whose products compete in the 
 market with the products of that Province, the employers of that Province are to 
 the extent of the excess at a disadvantage which will necessarily be reflected either 
 upon the price of the product or upon the demand for the product. In either case 
 the result is a loss which falls directly upon the employer and which is shared more 
 or less directly by the employee. Apart, therefore, from the immediate advantage 
 to the workman and disadvantage to the employer it is important that the schedule 
 of compensation sJhould not be substantially greater than that of other provinces 
 of Canada and other jurisdictions whose products compete with those of our 
 industries. 3 
 
 1 See also statement of Mr. M. M. Dawson, Interim Rep. Ont. Com., 442. 
 
 2 See Interim Rep. Ont. Com., 195. 
 
 3 See Rep. Fed. Com. U.S., 29, 89. 
 
 6 L. 
 
82 
 
 i — 
 
 CANADIAN MANUFACTURERS' ASSOCIATION 
 
 No. 65 
 
 The increase in expense incident to the introduction of a workmen's com- 
 pensation Act is indicated by the following tables of figures showing the increase in 
 liability insurance rates after the introduction of the Acts in England, the Prov- 
 inces of British Columbia and Quebec, and the States of New York and Pennsyl- 
 
 vania. 
 
 ENGLAND. 
 
 1907, 
 
 Under Employers' 
 
 Liability Law. 
 
 1908. 
 
 Under Workmen's 
 
 Compensation Law.* 
 
 Bakeries 
 
 Brickmaking . . 
 
 Carpentry 
 
 Blast Furnaces 
 Glass Factories 
 Nail Factories. 
 
 Quarries 
 
 Rolling Mills . . 
 Tanneries 
 
 $ c. 
 07* 
 10" 
 10 
 10 
 
 10 
 15 
 10 
 
 $ c. 
 12* 
 12* 
 15" 
 20 
 10 
 20 
 20 
 20 
 10 
 
 $ c. 
 
 1 00 
 
 1 50 
 
 $ c. 
 1 12* 
 1 50" 
 
 1 62£ 
 1 50 
 
 85 
 
 1 25 
 
 2 25 
 1 87J 
 1 25 
 
 * it should be remembered that these rates have been several times raised since, and it is 
 now absolutely necessary to make another general advance. 
 
 PROVINCE OF BRITISH COLUMBIA. 
 
 Under 
 
 Liability 
 
 Law. 
 
 Under Workmen's 
 
 Compensation 
 (English system). 
 
 Bakeries 
 
 Brickmaking . . . 
 
 Carpentry 
 
 Blast Furnaces . 
 Glass Factories. 
 Nail Factories . . 
 Quarries (stone) 
 Rolling Mills . . . 
 Tanneries 
 
 $ c. 
 
 15 
 
 $ c. 
 17 
 
 42 
 
 1 50 
 49 
 42 
 42 
 
 2 10 
 52 
 23 
 
 $ c. 
 
 88 
 
 $ c. 
 89 
 
 1 
 2 
 
 1 
 
 26 
 00 
 36 
 1 26 
 
 1 44 
 4 06 
 
 2 17 
 1 13 
 
 PROVINCE OF QUEBEC. 
 
 Under 
 
 Liability 
 
 Law. 
 
 Under Workmen's 
 
 Compensation 
 (English system). 
 
 Bakeries 
 
 Brickmaking . . . 
 
 Carpentry 
 
 Blast Furnaces . 
 Glass Factories. 
 Nail Factories . . 
 Quarries (stone) 
 Rolling Mills . .. 
 Tanneries 
 
 $ c. 
 
 15 
 
 $ c. 
 17 
 
 42 
 
 1 50 
 49 
 42 
 42 
 
 2 10 
 52 
 23 
 
 $ c. 
 
 1 47 
 
 c. 
 37 
 10 
 00 
 90 
 10 
 
 2 40 
 6 25 
 
 3 61 
 1 73 
 
 1 Taken from brief of Miles M. Dawson, Rep. Fed. Com. U.S., 282. 
 
1912 
 
 WORKMEN'S COMPENSATION COMMISSION. 
 
 STATE OF NEW YORK. 
 
 The following comparison shows the rates of employers' liability insurance 
 before and after the Workmen's Compensation Act of 1909, since declared uncon- 
 stitutional : 
 
 Employers' 
 
 Workmen's 
 
 Liability Law. 1 
 
 Compensation 
 
 $ c. 
 
 $ c. 
 
 1 75 
 
 5 00 
 
 4 50 
 
 12 50 
 
 2 00 
 
 7 50 
 
 2 50 
 
 10 00 
 
 4 50 
 
 12 50 
 
 2 00 
 
 6 25 
 
 Carpentry 
 
 Bridge Building (iron) 
 
 Quarries (stone) 
 
 Railways (steam) 
 
 Tunnelling 
 
 House-smithing 
 
 The following rates are taken from the schedule recently quoted by insurance 
 companies under the New Jersey Act : 
 
 $ c. $ C. 
 
 Bakeries 1 25 to 1 50 
 
 Brickmaking 2 00 to 3 00 
 
 Carpentry 2 00 to 3 75 
 
 Blast Furnaces 4 00 to 5 00 
 
 Glass Factories 1 25 to 2 00 
 
 Nail Factories 2 00 to 00 
 
 Quarries 5 00 to 6 50 
 
 Rolling Mills 3 00 to 5 25 
 
 In comparing these rates consideration must, of course, be given to the rela- 
 tive benefits under the respective systems. Thus a recent report has shown that in 
 England the average compensation in fatal accidents has 'been about $750. What 
 would the rate have been to give a benefit corresponding to that in the State of 
 Washington I 1 
 
 The probable increase in employers' liability rates which would result upon the 
 introduction in Ontario of an Act giving benefits equivalent to those under the 
 English Act has been conservatively estimated at 400 per cent. 2 and the rate of 
 increase which would follow the introduction of a scale of benefits like that of the 
 State of Washington would be much larger. It must be noted also that recent 
 statistics show the absolute necessity of an increase in the rates in England. 3 An 
 increase in expense to the employer such as that indicated above would involve a 
 very serious shcck to the industries of the Province; and the proposition of in- 
 troducing a system involving this expense would meet with great opposition. 
 
 Under the current cost plan of insurance outlined below 4 a collective or state 
 insurance system could be established at an immediate annual cost not greater than 
 that of the present liability insurance rates. 6 Under this plan instead of capital- 
 izing the peiiodical payments due to the injured workman or his dependents and 
 setting aside a lump sum to provide for these payments, only the current cost of 
 meeting the yearly payment would be assessed each year with a small margin for an 
 
 1 See post, p. 99. 
 
 2 See statement of Chas. H. Neely, Interim Rep. Ont. Com., 233. 
 
 3 See post, p. 106. 
 
 4 See post, p. 108. 
 
 5 See Rep. Fed. Com. U.S., 102. 
 
84 CANADIAN MANUFACTURERS' ASSOCIATION: No. 65 
 
 f . 
 
 smergency reserve fund. The animal assessments would increase as the number of 
 dependants increased and the annual rate would only, reach its maximum after a 
 period of twenty-five or thirty years. This was the actuarial plan adopted in the 
 German system. It represents a minimum strain upon present industry and does 
 not involve the shock to the economic system which is incidental to a system where 
 the cost of compensation is capitalized at the time of the injury. 1 
 
 Under a system of individual liability with its attendant system of employers' 
 liability insurance it is, of course, necessary also to capitalize the compensation, and 
 one of the defects of the English system is that it produces a 'maximum strain upon 
 the industry by withholding from active industrial operations an' immense amount 
 of capital which is held by insurance and trust companies to meet future compensa- 
 tion payments or is deposited in trust accounts of judges to meet future com- 
 pensation payments. 2 In fact one of the complaints against the present German 
 system is that the margin of approximately 9% per cent, of the premium rate 
 regularly set aside for a reserve fund is too large and that the capital should be left 
 in active use in the industry/ but under a system of trade associations, such as that 
 of Germany, the accumulation of a reserve fund is, of course, more of a necessity 
 than it would be under a system controlled and administered by the state itself. 
 
 The individual liability system also on account of its wastefulness necessitates 
 the payment of insurance premiums approximately double those required to confer 
 corresponding benefits under a collective system. The question of the amount of 
 benefit to be allowed by a compensation Act will, therefore, depend directly and very 
 largely upon the nature of the system adopted. 
 
 Thus the amount of compensation to be paid under a compensation Act will be 
 influenced largely by three considerations : First, whether an individual liability 
 or a collective or state liability system is adopted; second, whether the capitalized 
 or the current cost plan of insurance is adopted, and third, whether the workmen 
 contribute toward the insurance fund or not. Subject to these contingencies and 
 within the limits imposed by the ability of the business to bear the expenses of com- 
 pensation payments it ought, of course, to afford as large a measure of relief as 
 possible to the workman without offering inducements to fraud. 
 
 The usual basis for computing the amount of compensation is upon the diminu- 
 tion of earning capacity. Where the result of the injury is total incapacity a per- 
 centage of the weekly, monthly or yearly wage is paid ; and where the incapacity is 
 partial a similar percentage is allowed upon the impairment. This basis appears 
 most just as well as convenient and presents the least temptation for malingering 
 end fraud. Some systems have adopted arbitrary schedules of values for the loss 
 of different portions or functions of the body, allowing the payment of so much for 
 a finger, so much for an eye and the like. 4 But the generally accepted basis of 
 compensation is incompatible with such a practice. The pervading idea of modern 
 systems is to supply or supplement the income destroyed or impaired by reason of 
 the injury. The compensation is given by way of making up for lost earning power 
 rather than by way of satisfaction or retribution. 5 Two important consequences 
 follow upon this view of compensation. It follows in the first place that the com- 
 pensation should cease with the necessity for it. If, for instance, a workman is 
 
 1 See statement of Miles M. Dawson, Rep. Fed. Com. U.S., 100 et seq., and brief 
 ib, pp. 270, 276. 
 
 2 See F. & D., 23; S. & E., 206; Rep. Fed. Com. U.S., 676. 
 Sco S. & E., 115. 
 
 4 See Rep. Fed. Com. U.S., 783. 
 
 5 See ante, p. 65; see also F. & D., 9, and statement of J. A. Emery, Rep. Fed. Com. 
 U.S., 1088. 
 
1912 WORKMEN'S COMPENSATION COMMISSION'. 85 
 
 found after an injury to be in a position to earn an income equal to that enjoyed 
 before the injury he would not be entitled under this view to a continuance of his 
 compensation. In many cases an injury may be the occasion of a change of occu- 
 pation by which earning power is increased, and in such cases payment should 
 entirely cease. If a young man by reason of the loss of an arm should abandon an 
 occupation involving manual labour and enter a professional occupation, earning 
 a higher remuneration than he enjoyed before, there is no reason why he should 
 remain any longer a pensioner upon the insurance fund. In some systems indeed 
 the recipient is in such cases required, when he is in a position to do so. to refund 
 a portion of the payments made to him during incapacity. 1 It is quite possible 
 that in many cases it would be more convenient and less expensive to settle for 
 minor injuries on a lump sum basis; but consideration of occasional convenience 
 may well give way to the expediency of maintaining the general principle. 2 Another 
 result of this view is that in case of death by injury, compensation is paid only to 
 actual dependents. Where no dependency exists there is no reason for making the 
 system a source of profit because of the existence of family relationship more or less 
 remote. The occurrence of an injury should not be the occasion for the enrichment 
 of persons not dependent upon the earnings of the injured workman. This prin- 
 ciple is in accord with the common law rule and with the statutes of the Province. 
 The above observations are, of course, applicable only to cases of deprivation of in- 
 come and do not apply to such items as medical or funeral expenses. 
 
 It is submitted, therefore, that the basis of compensation ought to be a fixed 
 proportion of the impairment of earning capacity, with a certain fixed minimum. 
 Under the Act of the State of Washington the payment in cases of total disability is 
 a pension of from $20 to $35 per month according to the number of dependants. 
 Such a fixed sum involves the anomaly that a workman or his dependents may 
 receive as compensation an income equal to or greater than that enjoyed before the 
 injury. At the same time it must be remembered that this rate of compensation 
 represents in the case of each capital injury, i.e., total incapacity or death, a capital 
 sum of $4,000 which is on a higher scale than has probably been contemplated by 
 anj'one in this Province. It may be found that a scale of 50 per cent, of wages 
 would bring the capital amount even higher than $t,000. 
 
 It is submitted, therefore, that while compensation based upon a percentage 
 of wages appears most reasonable and desirable careful consideration should be 
 given to the question of the capital amount represented by the scale of compensation, 
 and the fixing of a reasonable maximum capital sum. 
 
 It is submitted, also, that in the case of permanent partial disability the com- 
 pensation should be a periodical payment on the basis of impairment of earning 
 capacity. This payment should be adjusted from time to time and should be 
 entirely withdrawn when it is found that the workman is in a position to earn 
 as much as he did before the injury. Where there are no real dependents no 
 compensation should be allowed beyond medical and funeral expenses. 
 
 Twelfth : The system should be such as to afford some promise of permanency. 
 
 If the experience of other jurisdictions proves anything, it is that no system 
 of individual employers' liability affords a permanent solution of the problem of 
 workmen's compensation. 3 The English Act is regarded by all observers as repre- 
 
 1 See 24th Rep. U.S., Bur. Lab., 2022. 
 
 - See 24th Rep. U.S., Bur. Lab.. 40. 
 
 3 For historical sketch, see Rep. Fed. Com. U.S., pp. 110, 111; see also F. & D., 18. 
 
86 CANADIAN MANUFACTURERS' ASSOCIATION : No.. 65 
 
 senting merely a stage in the development of a satisfactory compensation system. 1 
 The present demand in England for a compulsory insurance system 2 was anticipated 
 in the report of the Departmental Committee of 1904. 3 In the Province of 
 Manitoba, where an Act along the lines of the English Act was adopted in 1909, 
 there is already a demand for a compulsory insurance system. Similar conditions 
 exist in other jurisdictions where individual liability systems have been introduced. 
 
 It may be pointed out further that the collective system of Germany promises 
 to develop into something more nearly approaching a state insurance system. The 
 most cogent of the few constructive criticisms of Dr. Friedensburg points strongly 
 to an ultimate assimilation of the various mutual associations of Germany under 
 closer state control. 4 In Sweden, likewise, where there is a system of state insur- 
 ance with the option of insuring in private companies, the state scheme has been 
 gradually absorbing the business of its competitors owing to their inability to com- 
 pete with it, 5 
 
 Speaking generally of the systems of Europe Messrs. Frankel & Dawson say: 
 "There is now observable a strong disposition to compel employers to insure and 
 either to foster the establishment of a state insurance department as a monoply or 
 else to create other obligatory insurance institutions conducted under the super- 
 vision of the state." 6 
 
 It may be argued that as a collective or state insurance system appears to be 
 the ultimate solution there should be no objection to the development of such a 
 system through the stage of an employers' liability system. The answer to this 
 is that an employers' liability system involves two large economic disturbances, 
 while the introduction of a collective or state insurance system need involve only one 
 lesser disturbance. The introduction of an individual liability system which must 
 necessarily be upon a capitalized plan would be in itself, as has been pointed out, 
 a very direct and severe strain upon present industry. In addition to this it would 
 involve the creation of an immense employers' liability insurance interest which 
 must be wiped out upon the introduction of a collective or state system, and which, 
 in the meantime would stand in the way of the introduction of a collective or state 
 system. 1 Liability insurance companies recognizing the instability of their busi- 
 ness must necessarily provide against it, and this provision can be made only by 
 way of an increase of the burden upon industry. In the meantime, also, while the 
 individual liability system is in operation, it entails a continuous waste which is in 
 itself a serious drain upon industry. A state or collective system on the other 
 hand could, as has been pointed out, be introduced with a minimum shock to 
 economic conditions, and there is every reason to anticipate for such a system a per- 
 manency which an individual liability system fails to promise. 
 
 'See 31 Can. L. T., 858; Cd. 2208, p. 123; extract post, p. 96; 24th Rep. U.S. Bur. 
 Lab., 1498; Rep. Fed. Com. U.S., 943. 
 
 2 Rep. Fed. Com. U.S., 113, 117, also Interim Rep. Out. Com., 174; F. & D., 46. 
 
 " See Cd. 2208, pp. 117, 121. 
 
 4 Praxis der deutschen Arbeiterversicherung, 48; Friedensburg (Gray), 62. Work- 
 ingmen's insurance can be truly beneficial in its operation only when, free from all 
 exaggeration and excess, and especially from conscious or unconscious subservience to 
 thie lower classes, it works -as an institution of the State, as impartial as every other 
 kindred institution." 
 
 »F. & D., 38. 
 
 •See F. & D., 138. 
 
 7 See Rep. Fed. Com. U.S., 113. 
 
1912 WORKMEN'S COMPENSATION COMMISSION. 87 
 
 ANALYSIS OF COMPENSATION SYSTEMS. 
 Classification of Compensation Systems. 
 
 It has been the practice with writers upon the subject of workmen's compensa- 
 tion to classify the systems of the different jurisdictions with reference to the type 
 of insurance established under, or evoked by, the system. 1 Thus the systems have 
 been classified under such heads as voluntary insurance, compulsory insurance, com- 
 pulsory mutual insurance, compulsory state insurance, state adjustment with free 
 insurance, five insurance with state competition, free insurance with state guarantee, 
 and the like. These designations are, no doubt, descriptive and they are certainly 
 less disingenuous than the very ingenious nomenclature recently employed by repre- 
 sentatives of the liability insurance interests in discussing the subject, 2 but they do 
 not involve a recognition of the vital distinctions which form the real basis of 
 classification. The real distinction is not between the classes of insurance but in 
 the incidence of the initial liability. Where the liability to compensate the work- 
 man is thrown directly upon the individual employer the obligations and relations 
 created are of a nature radically different from those which arise where the liability 
 is thrown upon employers collectively, or where the liability is assumed by the state 
 itself. And the essential character of every system, in theory and in practice, is 
 determined by the question which of the three principles is adopted, individual 
 liability, collective liability or state liability. Of the three the two last are the 
 most nearly akin and there would be some reasons for classifying the different 
 systems under two heads only, namely, individual liability and collective liability, 
 the state liability system being considered merely a more widely diffused form of 
 collective liability. There is, however, an important distinction between a system 
 such as that of Germany where the state uses its compulsive power merely for the 
 purpose of organization and a system such as that of the State of Washington 
 where the state itself assumes the burden as well as the administration of the com- 
 pensation. In practice it is, of course, possible to operate a state insurance system 
 in such a manner as to render it to all intents and purposes a collective liability 
 system. And on the other hand there is no doubt that a collective liability system 
 under state compulsion secures by reason of the participation of the state, a stability 
 which places it in many respects on a par with a state liability system. 3 
 
 It should be observed also that the mere creation of state insurance facilities 
 does not fix the character of the system as a state liability system. Thus in some 
 jurisdictions the state competes on more or less equal terms with private insurance 
 schemes for the patronage of employers insuring their individual liability. 4 
 
 Such a system might be described as a state insurance system, but it is not a 
 state liability system in the sense here employed. 
 
 It may be well to define further and distinguish the three classes of compensa- 
 tion systems, and to enumerate their respective advantages and disadvantages. 
 
 'See Cd. 2458, p. 3; Bulletin 90, U.S. Bur. Lab., 720. 
 
 2 In a memorandum submitted before the Federal Commission, U.S., by "Certain 
 law members of the Committee of the Official Civic Federation," the individual liability- 
 system, of which the English Act is a type, was spoken of as "simple compulsory com- 
 pensation," and other systems are referred to as more or less elaborate and complex 
 developments of this type, while the fact is, as has been shown, that individual liability 
 plan is most indirect in its operation and complex in its relations and results. See 
 Rep. Fed. Com. U.S., 433. 
 
 3 See, however, letter of Mr. Harold Preston, post, p. 122. 
 *E.g., Sweden; see F. & D., 38. 
 
88 CANADIAN MANUFACTURERS' ASSOCIATION: No. 65 
 
 Individual Liability. • 
 
 Under an individual liability system the obligation to compensate the work- 
 man is, as has been pointed out, thrown directly upon the individual employer as 
 an element of the relationship of employer and employee. The law implies a term 
 in every contract by which the employer assumes an obligation more or less extensive 
 to indemnify the workman for injuries received in the course of, or in connection 
 with, the employment. The injured employee looks for relief to his employer, the 
 latter being thus constituted an individual insurer of the workman against accident. 
 Employers under such a system are, of course, permitted, and in fact encouraged, 
 to insure themselves against their liability by some form of insurance. The con- 
 tract of insurance in such cases, however, assumes the form of an undertaking on 
 the part of the insurance company to indemnify, not the workman against loss by 
 injury, but the employer against loss through the enforcement of the workman's 
 claim against him as employer. The circuity of liability thus established involves 
 many important consequences which will be presently noted. 
 
 The chief exponent and type of the individual liability system is the English 
 "Workmen's Compensation Act. There can be little doubt that the character of this 
 Act was determined largely by the absence in England of facilities in the form of 
 trade associations corresponding to those which were taken advantage of by 
 Bismarck in the German legislation of 1884. And it may be assumed also, that the 
 individualistic genius of the British nation and the reluctance to accept Socialistic 
 doctrines and bureaucratic methods had their influence. While the English Act was 
 confessedly intended to embody the principles of the German system it was hoped 
 to render the principles more palatable by avoiding the use of compulsion. It was 
 expected that the self-interest of the employer would supply the necessary incentive 
 to take out insurance. 1 The essential character of the insurance thus induced, and 
 the essential departure from the German collective liability principle, were, per- 
 haps, not appreciated. It is needless to say that the results anticipated of the 
 English Act have not been realized and that a large proportion of employers in 
 England, and chiefly among those who need it most carry no insurance whatever. 2 
 There is little doubt, also, that it was hoped under the English Act to induce the 
 establishment of associations similar to those of Germany but on a voluntary instead 
 of a compulsory basis. 3 This hope has been entirely dispelled and the tendency 
 is rather towards the extinction of those schemes which existed before the passing of 
 the Act. 4 
 
 The English Act is in essence an employers' liability act, and not a work- 
 men's compensation act in the modern sense of the term. 5 By throwing upon the 
 individual employer a liability for damage not due to his fault it violates elemen- 
 tary principles of justice. It is not an accidental misfortune that the American 
 constitutions render it difficult, if not impossible, to enact an Act of the English 
 type. The constitutional provisions which create the difficulty are in reality 
 expressive of principles of natural justice A burden which may with justice be 
 placed upon a group or class may be entirely unjust when placed upon an in- 
 dividual/' 
 
 1 See Rep. Fed. Com. U. S., 111. 
 
 2 See Cd. 2208, p. 43. 
 
 3 See Rep. Fed. Com. U. S., 112. 
 
 4 See Cd. 22'08, p. 23; Rep. Fed. Com. U. S.. 112; F. & D., 27, 28, 46; 24th Rep. IT. S. 
 Bur. Lab., 1531, 1579. 
 
 "See Rep. Fed. Com. U. S., 110, 111, 270; St. Louis Pamphlet, 11. 
 • See Rep. Fed. Com. TJ. S., 69. 
 
1912 WOKKMEN'S COMPENSATION COMMISSION. 89 
 
 — — ■ — ■ — i 
 
 The report of the Commission of the State of Washington speaks of the 
 individual liability scheme as follows : "Other Commissions have seemed to favor 
 the placing of the liability directly upon the employer, that is to say they favor 
 fixing a fchedule of compensation to injured workmen and their families, and 
 providing l. at in each ease each employer shall pay the stated sum to the injured 
 employee, or in case of his death, to his family, and it is expected (in fact, it is 
 the ease in New York, where an optional statute was this year enacted) that 
 employers will then write employers' liability insurance to protect them in such 
 cases, and thereby distribute the burden. This plan has not met with the favor 
 of your Commission for the reason that it still retains the elements of waste and 
 litigation. It seems to us better, for both employer and employee, that all the 
 money that employers pay out on account of such cases shall, every cent of it, go to 
 the injured workman. 1 
 
 One very serious difficulty in connection with a system of individual employers' 
 liability is as already pointed out, the danger of the employer's becoming insolvent 
 after a period of years and after the business has acquired a list of compensation 
 pensioners who are being supported out of its pay-roll. In order to meet this condi- 
 tion the English Act of 1897 gave the workman a first charge on any sum due from 
 the insurance company. The Act of 1906 provides that in case of the bankruptcy 
 of an employer his rights as against the insurance company shall rest in the work- 
 man. It needs only a moment's reflection to realize the immense complexity which 
 such provision may give rise to. Take for example the case of a commercial com- 
 pany which has accumulated a number of pensioners. In case of bankruptcy or 
 winding up the pensions could doubtless be in some way capitalized and assured to 
 the workmen. But what is there to prevent the company from disposing of its 
 whole assets and undeitaking without going into bankruptcy? Tn order to prevent 
 this it would be necessary to give the workman a preferential lien upon the assets 
 of the company, which would follow the assets into the hands of an innocent pur- 
 chaser. This again would tie up the assets of the company and prevent them 
 from being sold, unless some scheme could be formulated for placing a reserve fund 
 in the hands of trustees or the Government against the claims of pensioners. If 
 such a system of liens were adopted a railway, for instance, would be unable to 
 sell any of its rolling stock without satisfying the lien of injured workmen and 
 their dependents. This is the fatal defect of such systems as that just adopted 
 by the Congress of the United States. It involves one of three alternatives: 
 either the compensation payments are subject to the danger of being cut off by 
 a sale of the railway's assets, or the assets must be subjected to a lien, or the 
 capitalized value of the assets must be set aside in a fund. 
 
 The defects of the individual liability system have already been indicated. 
 They may be summarized as follows : 2 
 
 1. An individual liability system affords no assurance of solvency. 3 It fails 
 where and when it is most needed, namely, in the case of the smaller and more 
 improvident classes of employers 4 and in the case of larger accidents to the larger 
 employers. 5 
 
 1 See Rep. Wash. Com., 8. 
 
 -See Rep. Ohio Com., Pt. I, p. 16; Rep. Mich. Com., 132, 133; Rep. Fed. Corn., 
 pp. 283, 650-5; F. & D., 17. 
 a S. & E., 2-7. 
 
 4 See Cd. 2208, p. 112. 
 
 5 In the ordinary policy in this country companies limit their liability on a single 
 accident to $15,000. For additional protection higher rates are charged. 
 
90 CANADIAN MANUFACTUEEKS' ASSOCIATION: No. 65 
 
 2. The individual liability system handicaps the smaller employer by throwing 
 upon him the risk of being rendered insolvent by an accident. 1 It is on this account 
 not adapted for extension to such occupations as farming, which is in this country 
 usually conducted with only one or two employees. 
 
 3. An individual liability system affords very little direct incentive to preven- 
 tion. The competition for business renders it impracticable to classify, and dis- 
 criminate amongst, risks on the basis of relative hazard, the result being that the 
 business is bulked and tbe more careful employer made to bear the insurance of the 
 less careful. 2 
 
 4. Because of the circuity of obligation involved in employers' liability insur- 
 ance the individual liability system is extremely wasteful. 3 
 
 5. The individual liability systems do not afford proper facilities for the 
 administration of periodical payments. The responsibility of making these pay- 
 ment cannot well be assumed by the smaller individual employer, and the constant 
 tendency of employers and insurance companies is to commute the payments for a 
 lump sum and thus impair the efficiency of the system. 4 
 
 6. The individual liability system creates a hardship for certain cla=ses of 
 workmen by militating against the employment of older and partially incapacitated 
 workmen. 5 
 
 7. The workmen's recourse being in each case against the individual employer 
 Bvery claim for compensation involves a direct contest inimical to harmonious 
 relations. 6 
 
 8. The individual liability system involves a violation of natural justice in 
 throwing upon the individual employer liability for something which may not have 
 been occasioned by his fault, but which on the contrary may have bean occasioned by 
 the person making the claim. 7 
 
 9. Experience shows that an individual liability system cannot be permanent 
 but must apparently sooner or later give way to a system of collective liability. 8 
 
 10. The individual liability system gives rise to an anomalous form of insur- 
 ance prejudicial in many respects to the interest of both employers and employees. 9 
 
 11. An individual liability system cannot be conducted on the current cost or 
 assessment plan, but requires a setting up of reserves against future periodical pay- 
 ments. 10 
 
 12. The individual liability system even under simplified legal process involves 
 an excess and unnecessary amount of litigation. 11 
 
 Collective Liability. 
 
 Under a collective liability system the obligation to compensate the workman 
 is thrown upon employers collectively in groups. The method of grouping varies 
 under different systems. In Germany employers are divided into some 114 groups 
 according to industries. In Austria the primary division of geographical, but in 
 
 1 See Rep. Conf. Com., 19; Interim Rep. Ont. Com., 165. 
 -See F. & D., 136, 138. 
 
 ; See Cd. 2208, 68, 86; Rep. Fed. Com. U.S., 112; F. & D., 15, 17. 
 4 S. & E. 231; Cd. 2208, 39, 40; F. & D., 16. 
 
 'S. & E., 179, 180, 253, 254; Cd. 2208, 1904, 39; F. & D., 15, 16, 48; Mackenzie vs. 
 Iron Trades Emp. Ass'n., 1909, Scots L. T., 505. 
 
 "See F. & D., 16, 17, 46; Rep. Fed. Com. U.S., 727. 
 
 ' See ante, p. 65. 
 
 " See ante, p. 86. 
 
 ' See post, p. 102. 
 
 ,u See post, p. 108. 
 
 " Sep S. & E., 207; Bevan on Workmen's Comp., 4th ed., pref., 13. 
 
1912 WORKMEN'S COMPENSATION COMMISSION. 91 
 
 each geographical district employers are subdivided by industries. Under the Act 
 ot the State of Washington the grouping is by estimated hazards of risk. Provision 
 is made in all these systems for levying upon employers insurance premiums accord- 
 ing to the hazard of the employment, and out of the fund thus raised compensation 
 is paid directly. The injured workman looks for compensation not to the individual 
 employer but to the association or group of employers. Adjudication is in these 
 systems merely a matter of establishing a claim upon the fund and does not involve 
 a legal contest between the employer and the workmen. 
 
 The principle of collective liability has been embodied in a number of Euro- 
 pean systems and in some of the States of the United States. The Act recently 
 adopted in the State of Massachusetts is evidently intended to embody the principles 
 of the German Act and similar Acts have been introduced in Michigan and New 
 York. The German system being the oldest and most elaborately and scientifically 
 developed is usually cited as the type 1 but there are many variations in the applica- 
 tion in different jurisdictions, of the basic principles of the German system. Jt 
 should be observed that the German system is not a state insurance system, 2 the 
 state participates only to the extent of compelling employers to organize. It also 
 assists in defraying the expense of compensation. Having compelled the employers 
 to organize the State stands aside and acts only in a supervisory capacity. 8 
 
 It has been pointed out 4 that the Act of the State of Washington while in form 
 a State liability Act is in reality based upon the same principles as the German 
 system, with this variation, that instead of merely organizing the employers the 
 State provides the machinery for administration and does not leave this to auto- 
 nomous action on the part of the various groups of employers. The State does 
 not guarantee the payment of the compensation though doubtless a practical 
 guarantee exists in virtue of the existence of machinery for levying the cost 
 upon employers collectively. 
 
 The collective liability systems are uniformly conceded to be the most satis- 
 factory both in theory and in practical results. The type system, that of Ger- 
 many, is the outstanding example of a successful solution of the problem of 
 accident compensation. Representatives of the liability insurance business in 
 the United States frankly admit the excellence of the German system, and Dr. 
 Friedensburg, whose criticisms of certain details of the German system have I een 
 given wide circulation by the liability insurance companies has declared that 
 he would be a " blind fool " who would " fail to recognize that the blessings of 
 the insurance system cannot be fully described even by the use of unqualified 
 laudation.'* 6 The advantages of the collective liability system of compensation 
 will readily appear by a reference to the disadvantages of the individual liability 
 system. 
 
 1. The collective liability systems even without State support, afford a prac- 
 tical guarantee of solvency because of the wide incidence of the liability, the 
 only danger being that of having the classes too small. 
 
 1 See analysis of German system, post, p. 97. 
 " See F. & D., 30. 
 
 3 There is, however, an element of a State guarantee in the German system, arising 
 out of the provision for the taking over by the State of the obligations of insolvent 
 trade associations. 
 
 4 See post, p. 122. 
 
 5 S. & E., 22, 148, 149, 251, 282; F. & D., 139; Rep. Fed. Com. U. S\, 104, 118, 279, 1425; 
 Cd. 2458, p. 41; Rep. Mich. Com., 33; Rep. Conf. Com., 21; Rep. Ohio Com., Pt. II, 
 p. 312; Cd. 2208, p. 23; 24th Rep. Bureau of Statistics, New Jersey, 165; 4th Special 
 Rep. U. S. Bur. Lab., 285, et seq. 
 
 * Friedensburg, "Praxis der Deutschen Arbeiterversicherung, 46, see post, p. 145. 
 
92 CANADIAN MANUFACTURERS' ASSOCIATION: Xo. 65 
 
 2. Under a collective liability system large and small employers stand oh 
 an equal basis, both in the matter of rate and of risk. The system would not 
 be unduly onerous on small employers such as farmeis. 
 
 3. The collective system has shown the best results in inducing accident 
 prevention. The classification of employers in industry-groups, creates a strong 
 incentive to co-operative action in the direction of prevention, the less careful 
 employers being compelled or induced to measure up to the standard of the most 
 careful on pain of paying a higher rate or other penalty. 1 
 
 4. The collective system is simple, direct and economical in its operation. 
 By eliminating the element of contest between the employee on the one hand, 
 and the employer and the insurance company on the other, practically the whole 
 of the waste is eliminated and the expenses of administration reduced to a 
 minimum. 
 
 5. The collective system affords the very best facilities for administration of 
 payments by the week or by the month and discourage lump sum payments. 
 
 6. The collective system does not afford the same incentive for discriminating 
 against older or practically disabled workmen. No rule supporting such a dis- 
 crimination could be justified in the face of public sentiment. 2 
 
 7. The elimination of a direct contest between employer and employee removes 
 a source of friction and tends to more harmonious relations. 
 
 8. The collective liability system gives real and effective recognition to the 
 doctrine of professional risk by placing the burden of compensation literally upon 
 the industry; and no undue amount of unjust obligation or liability is placed 
 upon the individual employer. 
 
 9. The only systems which have been placed upon any sound basis, and which 
 promise any degree of permanency are the collective or State systems s and expert 
 opinion strongly favors the collective principle as the only satisfactory solution. 
 
 10. The collective liability system constitutes the purest form of insurance, 
 the risk being spread over the widest possible area and the payments of premiums 
 and benefits being absolutely direct and the participants being as consistent as 
 humanly possible. 
 
 11. The collective liability system can be operated on a current cost plan 
 with its attendant advantages — simplicity and economy of operation and tendency 
 to reduce hazards. 
 
 12. As the employee's resource is simply against a fund it does not involve 
 the determination of any serious private rights or liability, and elaborate and 
 expensive legal process is unnecessary. 
 
 Siaie Liability. ' 
 
 Under a state liability system the obligation of compensating the workmen 
 for injuries is assumed by the State itself, and the cost is levied upon employers 
 or employers and workmen jointly by the exercise of the taxing power of the 
 State. The workman looks for his compensation directly to the State, and this 
 marks the essential character of a state liability system. 
 
 2 See F. & D., 138, 139. 
 
 -' Interim Rep. Ont. Com., 407. 
 
1912 WOEKMEN'S COMPENSATION COMMISSION. 93 
 
 Attention should be called to the distinction between a State Liability system 
 and a State insurance system. A state insurance system is not necessarily a 
 state liability system. The law may, as it does for instance in Sweden, cast upon 
 the individual employer the liability to compensate, the state at the same time 
 providing an insurance institution in which he may insure himself against that 
 liability. Such a system is an individual liability system. The employer himself 
 is individually Liable tor the payment of the compensation whether the insurance 
 is compulsory or optional. Again the law may throw the liability primarily 
 upon the employer, and provide that upon payment of the insurance premium, 
 but not sooner, the obligation to compensate shall be assumed by the state. 
 Such a system might be classed as a state liability system; but the purest form 
 of state liability is where the state itself assumes the whole obligation and 
 undertakes responsibility of providing the necessary funds by compulsory collec- 
 tion of the insurance premiums. Such a system is exemplified in the Act 
 of the State of Washington which provides for the payment of compensation 
 out of a fund administered by a State Department and collected by imposing 
 the necessary rates upon the pay roll of industries. The State of Ohio, on the 
 other hand, is a State liability system of the optional type, and throws upon the 
 employer a liability of which even the payment of his premiums to the state 
 department does not wholly relieve him. 
 
 In some jurisdictions the plan has been adopted of leaving it optional with 
 the employer whether he will insure in the institution provided by the state or 
 insure in some private institution. This plan also involves the placing of the 
 primary liability to concentrate upon the individual employer, though the pay- 
 ment of the premium may transfer the obligation to the institution, state or 
 private, undertaking the insurance, and relieve the employer from further individual 
 liability. 1 The State system thus operates in competition with the private 
 systems, with the natural result that the private companies in many cases offer 
 lower premium rates than the State system. This is possible only in two ways, 
 by selecting the better risks and leave the poorer to the State system, or by 
 running at a loss. In liability insurance it is much easier to run for a period of 
 years at an undetected loss than in most other classes of insurance. This is par- 
 ticularly the case in a system where compensation is paid periodically and spread 
 over a length of time. The inevitable result of allowing private companies so to 
 carry on business would be insolvency with the loss falling upon the very persons 
 whom a compensation system is designed to protect. The great and insuperable 
 difficulty of leaving compensation insurance of whatever type in private hands is 
 that it involves the assumption by the State of an obligation more onerous than 
 that of establishing a State insurance system, namely, that of supervising the 
 private insurance institutions, the form of their policies and the adequacy of their 
 reserves. The task of compelling such institutions to set up adequate reserves 
 present much greater difficulty than the direct administration of the insurance 
 funds by the State itself. The difficulty of State supervision of private companies 
 is increased by the lack of experience in this class of insurance and the lack of any 
 scientific basis for rates; 2 under a plan of compulsory assessment upon the 
 current cost plan experience is entirely unnecessary and the speculative element is 
 entirely eliminated. 
 
 It must also be remembered that one of the chief advantages of a State or 
 collective liability system arises out of its size and the breadth of the basis of 
 
 1 E.g., Ohio, Massachusetts. 
 
 2 See post, p. 55. 
 
94 CANADIAN MANUFACTUKERS' ASSOCIATION: No. 65 
 
 insurance thus rendered possible. Where this basis is divided with a number of 
 other systems and organizations are multiplied the advantage is correspondingly 
 minimized and in addition the State system is subjected to the competition of 
 the private company who can afford to take larger risks of failure. In the State 
 Df Ohio at the present time liability insurance companies are in competition with 
 the state system, carrying risks at a rate in many cases not more than one-fifth 
 that charged by the same companies in other S';ates where the compensation laws 
 are less drastic, but where there is no compensation from the state system. This 
 naturally prejudices the operation of the state department and very probably means 
 for the liability companies a loss which must be made up by increased rates in the 
 other states. But notwithstanding the difficulties and disadvantages under which 
 the state insurance systems of this class have to contend, the experience has been 
 that they drive the private schemes out of business. 1 This is the result which may 
 fairly be anticipated for such systems as that of Massachusetts, Michigan, and New 
 York; but in the meantime they involve a condition of immense confusion, waste, 
 and general dissatisfaction for the community in general, and inevitable financial 
 loss to the company or the compensation pensioners. 
 
 The advantages of a collective system are largely if not wholly attained in a 
 state system, the difference between the two forms of systems being theoretical 
 rather than practical. 2 If a state system were to be administered on the same lines 
 as many other departments of state activity there would of course be grave danger 
 of abuses by reason of political and other undue influences. It is uniformly re- 
 cognized that the administration of a compensation should be as far as possible 
 removed from such influences. Accordingly the approved form of administration 
 is by commission, independent, as far as possible, of direct political influenca 
 Some jurisdictions have gone so far as to provide tFat the members of the commission 
 must not all be of the same political party. 3 In so far as the state system can be 
 made thus independent it becomes practically equivalent to a collective system. In 
 fact, it has been said of the Washington system that it is not so much a state liability 
 system as a system of collective liability administered by the state. 4 
 
 The absolute guarantee of the state is unnecessary because the state has always 
 the means of collecting the necessary funds by assessing employers. 
 
 Analysis of Some Systems. 
 
 While the different systems of the world can and should be classified under the 
 heads above suggested there is infinite variety in the details and form of their 
 operation. Below is given an outline of the chief feature of a number of systems 
 which may be regarded as types. 
 
 The English System. 
 
 The English workmen's compensation Act is an individual liability act; every 
 workman within the scope of the act is entitled to be compensated by his employer 
 for personal injury, for accident "arising out of and in the course of the employ- 
 ment," provided the injury is not attributable to " serious and wilful mis- 
 conduct," and provided the injury disables the workman for a period of at least 
 
 1 See F. & D., 38; Rep. Atlantic City Conf., 296. 
 
 2 See Rep. Atlantic City Conf.. 300. 
 
 3 E.g.. Ohio. 
 'See post. p. 122. 
 
1912 WORKMEN'S COMPENSATION COMMISSION. 95 
 
 one week from earning full wages at the work at which lie was engaged. 1 The work- 
 man looks directly to his employer for his compensation. Provision is made for 
 employers relieving themselves of their individual liability by organizing insurance 
 or benefit " schemes," but the conditions surrounding the organization and approval 
 of these schemes are so onerous that practically no advantage has been taken of the 
 provision; instead many employers insure themselves against their liability by 
 " employers' liability insurance," the insurance companies engaging for a specific 
 rate based upon the pay roll, to indemnify the employer against liability in respect 
 of accidents that occur, and to assume the defence of any proceedings that may be 
 brought against the employer to enforce compensation. 
 
 All occupations are covered by the Act, but an exception is made of (a) persons 
 not employed in manual labor whose remuneration exceeds £250 per year; (&) 
 persons whose employment is of a casual nature; (c) members of the employers' 
 family dwelling in his house. 
 
 In case of injury resulting in death the compensation under the English Act 
 consists of reasonable expenses for medical attendance and burial to a maximum 
 of £10 ($48.67) and a lump sum payment equal to £150 ($729.98) or three years' 
 earnings, whichever is larger, up to a maximum of £300 (1,459.95) apportioned 
 amongst the dependents of the deceased. Where the injuries result in disablement 
 the compensation is a weekly payment on the basis of one half the impairment of 
 earning capacity but not exceeding £1 ($4.86) per week. 
 
 By agreement between the parties and with the consent of the court weekly 
 payments may be commuted for a lump sum and this appears to be the practice in 
 the majority of cases ; in case of dispute over a claim for compensation the workman 
 has recourse to proceedings in the county court or to arbitration, and from the 
 decision of these bodies and with their consent an appeal lies in questions of law to 
 the Court of Appeal. 
 
 Many of the features of the English Act were introduced by way of ill-digested 
 amendments passed in the teeth of the recommendations of investigating committees 
 of Parliament. The whole system represents a series of compromises in attempting 
 to operate a principle which is now generally recognized as inadequate. The follow- 
 ing passage from the report of the Departmental Committee of 1904 speaks for 
 itself : 
 
 " But even if legislation in the direction indicated in the . last paragraph is 
 adopted the difficulty and danger arising from the insolvency of the employer will 
 not be completely met. For there is no obligation upon him other than that of 
 enlightened self-interest compelling him to insure, and, as has been pointed out, 
 there are many employers, and there are likely to be more, if the Act is extended, 
 who through ignorance or recklessness or inability will not insure, or if they insure 
 at first will not keep up their insurance; this difficulty, and indeed, many other 
 difficulties to which the present system gives rise, could only be solved by the sub- 
 stituting for the personal liability of the individual employer the security of a fund 
 the solvency of which was for all practical purposes assured. The problems how 
 such a fund is to be provided, how employers are to be induced or compelled to 
 insure their workmen, and how the workmen are to be given direct recourse to such 
 a fund may have to be faced in the future, but in strictness, the attempt at their 
 solution lies beyond the scope of this reference. We have considered it to be our 
 duty to accept the principle of the Act of 1897, imperfect as we believe it to be. As 
 has been often pointed out the scheme of that Act was to cast upon the employer 
 the duty of providing the compensation, leaving him to protect himself if not 
 wealthy enough to bear his own burden by the ordinary methods of insurance. We 
 
96 CANADIAN MANUFACTURERS' ASSOCIATION: No. 65 
 
 t 
 
 have recommended changes in the law which we think may advantageously be made 
 in carrying out this principle. At the same time we have indicated from time to 
 time the inherent difficulties involved in its application. It is not improbable that 
 in the future the state will have to take upon itself more extensive functions in 
 relation to accident insurance. We have indicated in the preceding paragraphs 
 that there is a strong case for legislation so as to give greater security for the sol- 
 vency of commercial insurance companies. Many witnesses have suggested that 
 some system of national insurance should be established which should relieve em- 
 ployers from all personal liability except that of providing the necessary funds. 
 Any such proposal would require and will doubtless hereafter receive the fullest con- 
 sideration from the Legislature. It may be that the state should establish or 
 regulate a system of insurance which would provide an opportunity for every em- 
 ployer and for every workman to obtain complete security- It may be that a state 
 policy might protect the employer from all personal liability except the payment of 
 the premium. It may even be that ultimately some form of compulsion might be 
 adopted requiring all employers to insure their workmen in some association under 
 state regulations. It may be that under such a system larger benefits than those 
 given by the present act might be provided for, but in that case it would seem to 
 follow that some contribution, proportionate to the increase of benefits, should be 
 made by the workmen to the insurance fund. Tbese and similar questions are 
 probably in prospect, but it would be premature and beyond our commission to 
 discuss them. We can only indicate that, beneficial as we believe the legislation of 
 1897 to have been on the whole, we do not think it can be regarded otherwise +han 
 as a step in the direction of a more comprehensive system." 1 
 
 The German System. 
 
 The accident compensation system of Germany is a collective liability system, 
 liability to compensate being imposed, not upon employers individually, but upon 
 associations of employers, formed under state compulsion and supervision. The 
 accident compensation system is a part of a larger insurance system, embracing 
 sickness insurance, old age insurance and unemployed insurance, as well as accident 
 insurance. 
 
 For the first thirteen weeks after the occurrence of an accident compensation 
 is paid out of the sickness insurance fund, which is raised by joint contribution in 
 equal portions from employers and_ workmen. After the first thirteen weeks com- 
 pensation is paid out of the accident insurance funds which are raised by contribu- 
 tion from employers only. 
 
 Employers are grouped according to industries into mutual trade associations, 
 (Berufsgenossenschaften) which are practically mutual insurance companies; the 
 insurance funds are raised by assessments upon the members of these associations 
 according to the pay-roll. The actual payment of compensation is made through 
 the Post Office and the money for compensation payments is advanced by the Post 
 Office on the order of the Directors of the Trades Associations. These advances are 
 liquidated at the end of the year by the trade associations and the amount of the 
 advances, together with the cost of administration and the amount required to be 
 set aside for the reserve fund, is assessed upon the members of the trade associations, 
 so that not the capital value of the pensions but only the actual payments out dur- 
 ing the previous year are collected. 
 
 , 
 
 1 Cd. 2208, p. 123. 
 
1912 WORKMEN'S COMPENSATION COMMISSION. 97 
 
 • 
 
 The associations have, in addition to the power of fixing rates and making 
 assessments, the power to make and enforce preventive regulations and to employ 
 expert inspectors and specialists in accident prevention and to provide medical and 
 surgical aid. Each trade association elects its own board of directors to manage 
 its insurance fund, but is subject to the general supervision by the Imperial Insur- 
 ance Department. 
 
 Injured employees or their dependents apply for their compensation directly 
 to the directors of the trade association. In case of dispute as to the right to, or 
 the amount of, compensation an appeal lies to a court of arbitration with a final 
 appeal to the Senate of the Imperial Insurance Office. 
 
 The German system covers all occupations, including shipping, agriculture 
 and domestic service. It covers employees in receipt of a yearly wage of 3,000 
 marks, ($714) or less; but provision is made for the voluntary insurance of em- 
 ployees in receipt of a higher wage and also for small employers who desire to 
 insure themselves. 
 
 Compensation is granted for all injuries occurring in the course of employment, 
 unless the accident has been intentionally brought on by the injured person or his 
 dependants, or unless it is the result of an act which has been judicially pronounced 
 a crime or offence. 
 
 The benefits under the German system are: (A) In case of disability from the 
 fourteenth week after the accident (1) free medical and surgical treatment as well 
 as necessary appliances such as crutches, artificial limbs, etc; (2) an allowance 
 during disability of 66 2-3 per cent, of the impairment of earning capacity; (3) if 
 the workman is not only disabled from working but helpless and requiring attend- 
 ance an allowance of 100 per cent, of the former annual earnings. 
 
 (B.) In case of death (1) a funeral benefit equal to one-fifteenth of the annual 
 earnings, but not less than 50 marks ($11.90) ; (2) an allowance to dependants of 
 not more than 60 per cent of the annual earnings as follows : 
 
 (a) To the widow until death or re-marriage, or to the dependent widower or 
 to each child up to the completion of the fifteenth year, 20 per cent, of 
 annual earnings ; on re-marriage the widow receives a settlement equivalent 
 to three years' allowance. 
 
 (b) Where the 60 per cent, is not exhausted by the widow and children, parents 
 or grandparents wholly or partially dependent are entitled to an allow- 
 ance not exceeding 20 per cent. 
 
 (c) And where the 60 per cent, is not wholly exhausted by widow, children, 
 parents, grandparents, grandchildren, wholly or partially dependent, are 
 entitled to an allowance not exceeding 20 per cent, each to the completion 
 of the fifteenth year. 
 
 The Washington System. 
 
 The system of the State of Washington is a state insurance system. The 
 obligation to compensate workmen for injuries is assumed by the state itself, 
 through an Industrial Insurance Board. Compensation on a scale laid down in the 
 Act is paid out of a fund created by contributions levied upon employers as a tax. 
 Contributions to the fund are levied in accordance with a schedule fixed by the Act 
 in which different classes of occupations are graded according to hazard and the 
 rates fixed as a percentage on the pay roll. 
 
 The Act applies only to " extra-hazardous " employments, this limitation 
 being considered necessary owing to the constitutional restrictions upon the State 
 7 L. 
 
98 CANADIAN" MANUFACTURERS' ASSOCIATION: No. 65 
 
 power of legislation, but provision is made for voluntary insurance by the employers 
 not included in the compulsory operation of the Act. Within the class of industries 
 enumerated the Act applies to all employers, large and small. 
 
 The compensation schedule provides for (a) Expenses of burial not exceeding 
 $75; (b) a payment of $20 per month for life to the widow or invalid widower with 
 an addition of $5 per month for each child under the age of 16 years, the total not 
 to exceed $35 per month. The estimated capital amount of this payment is $1,000, 
 which sum is set apart out of the general fund in each individual case as a special 
 fund to meet the payments, any surplus or deficit being adjusted with the general 
 fund. The capital amount of $4,000 may. in some cases be paid out in a lump sum; 
 (c) Permanent partial disability is compensated by a lump sum, payment cor- 
 responding to the extent of the injury but not exceeding $1,500. Instead of a 
 waiting period the Washington Act provides that no compensation shall be payable 
 unless the loss of earning power exceeds 5 per cent, and there is no provision for 
 temporary partial disability. Claims for compensation are adjusted by the state 
 insurance department, subject to appeal to the Superior Court of the county. 
 
 The State Department consists of three commissioners, appointed by the 
 Governor, with a staff of auditors, assistants, etc. The Department lias power to 
 employ- one or more physicians in each county for the purpose of efficient medical 
 examinations. 
 
 Safety regulations are enforced by the imposition of penalties payable to the 
 insurance fund. 
 
 The common law remedies of the workmen are entirely merged in the remedy 
 under the Act; but where an employer refuses or neglects to pay his insurance 
 assessments the workman may bring an action against the employer, the latter being 
 in such cases deprived of the defence of common employment and assumption of 
 risk. 
 
 The Nonvegian System. 
 
 The Norwegian system is a state insurance system. Employees are insured in 
 a state institution and apply to it for their compensation. 
 
 The insurance scheme covers practically every hazardous industrial and com- 
 mercial enterprise except farming and fishing. The various industries are class- 
 ified into groups according to the risk of the employment and employers pay 
 premium into the State Insurance Institution commensurate with the risk and 
 based upon the number of the employees and size of the payroll. 
 
 For the first four weeks of incapacity, unless the injured employee has made 
 special provision for himself, the employer is individually liable to make provision. 
 The State Insurance Institution compensates the employees for the injuries result- 
 ing in total disability for a period of not more than four weeks, by weekly payments 
 equal to 60 per cent, of the basic wage but in no case less than 150 crowns ($40.20) 
 per year. If the annual earnings of a workman are more than 1,200 crowns a year 
 the compensation payments are based on that amount. Tn the case of disability 
 more or less permanent i lie weekly payments may be commuted under certain cir- 
 cumstances for a lump sum representing not more than five years' payments. 
 
 Where the injury to the workman results in death the State Insurance Institu- 
 tion pays the cost of burial to the amount of 50 crowns ($13.40) and allows the 
 following pensions to the survivors, (a) To a widow an amount equivalent to 29 
 per cent, of the injured person's wages; (h) to each child an allowance of not more 
 than 15 per cent, of the workman's wages up to the completion of the 15th year, the 
 
1912 WORKMEN'S COMPENSATION COMMISSION. 99 
 
 total paid to the widow and children in no case to exceed 50 per cent; (c) where the 
 50 per cent, is not exhausted by widow and children, to dependent ancestors an 
 allowance of not more than 20 per cent. each. 
 
 The State Insurance Institution is controlled by a Board of three members — a 
 Managing Director and two Associate Directors appointed by the King. The 
 latter retire one at a time, every three years, after six years' service, but retiring 
 members may be re-appointed. 
 
 Cases in dispute are settled by the Directors of the State Insurance Institution. 
 An appeal lies from the Institution to a special commission consisting of seven 
 members, three appointed by the King, and two each representing employers and 
 employees appointed by Parliament, (Storthing). This commission constitutes a 
 final court for all matters of assessment but a further appeal may be made to the 
 regular courts for questions of law. 
 
 The pension payments are made largely through the agency of the Post Office. 
 
 The adjustments of claims as well as the investigation of industrial establish- 
 ments and a large share of the general administration of the Act is in the hands of 
 " Inspectors " appointed by the authority of the Communes but directly respons- 
 ible to the State Insurance Institution. 
 
 The rates of insurance are based upon the capitalized value of the pensions 
 accruing by the accidents of each year and not, as under the German system, upon 
 the actual payments made during the year. A reserve fund is therefore set up 
 which is intended to provide for the liquidation of all claims for injuries accruing 
 in the past. 
 
 The Ohio System. 
 
 The Ohio system is an individual liability system with optional state insurance. 
 Employers are liable to an action at law without the protection of the defence of 
 contributory negligence, common employment, and assumed risk. Upon payment 
 of an appropriate insurance premium this liability is assumed by the state and the 
 employer is freed from liability save for the wilful acts of himself or his agents, or 
 the breach of any statutory regulations, in which the employee has the option, 
 instead of applying to the Board for his compensation to bring an action at law. 
 The State Insurance Department is controlled by a Board known as the " State 
 Liability Board of Awards " consisting of three members, not more than two of 
 whom may belong to the same political party. The members are appointed by the 
 Governor for six years, one member retiring every two years. 
 
 The Act extends to all establishments in which five or more workmen or 
 operators are regularly employed and where the employer has elected to come under 
 the scheme. Such establishments are insured by the Board at rates estimated by 
 the Department as being adequate to carry the risk. 
 
 Of the premiums paid to the department the employer is authorized to deduct 
 ten per cent, from the wages of the workmen. 
 
 Employees coming under the Act are entitled to compensation for all injuries 
 sustained in the course of their employment provided the injury has not been self- 
 inflicted. 
 
 The schedule of compensation is as follows : 
 (a) Medical and hospital expenses not exceeding $200. 
 (h) In case of death funeral expenses not exceeding $150. 
 (c) A compensation allowance as follows: 
 
 (A) in case of death. 1. To wholly dependent persons an allowance 
 
100 CANADIAN MANUFACTUKEKS' ASSOCIATION: No. 65 
 
 (after the first week) of 66 2-3 per cent, of the average weekly wages, for 
 a period of six years after the death, the whole to he not more than $3,400 
 and not less than $1,500. 2. To partly dependent persons an allowance 
 (after the first week) of 66 2-3 per cent, of the average weekly wages for 
 all or such portion of six years as the Board may determine, the whole not 
 to be more than $3,100 and not less than $1,500. 
 
 (B) In case of temporary or partial disability an allowance to the 
 employee (after the first week) of 66 2-3 per cent, of the impairment of 
 earning capacity, not more than $12 per week and not less than $5 per 
 week for six years from the date of the injury. 
 
 (C) In ease of permanent total disability an allowance to the em- 
 ployee (after the first week) of 66 2-3 per cent, of the average weekly 
 wages, not more than $12 per week, and not less than $5 per week until 
 death. 
 
 The Board has power to commute periodical payments into one or more lump 
 sums. 
 
 The Board has full jurisdiction to adjust and re-adjust all claims for compen- 
 sation, and its decision is final except where compensation is entirely denied on the 
 ground that the injury was self-inflicted or did not arise in the course of the employ- 
 ment or the like, in which case the applicant has the right to bring an action against 
 the Board itself. 
 
 An employee who exercises his option to institute proceedings in the court as 
 above, thereby waives his right to compensation from the Board; and conversely by 
 ■applying to the Board a workman waives his right to institute proceedings. 
 
 The Massachusetts System. 
 
 The Workmen's Compensation Act of the State of Massachusetts establishes 
 a collective liability system under the supervision of a department of the State. 
 The Act abrogates the Common Law defences, contributory negligence, common 
 employment and assumption of risk. If the employer elects to insure in the Mas- 
 sachusetts Employers' Insurance Association which is managed by representatives 
 of the employers, the injured workman has to apply directly to the Association for 
 compensation and the individual employer is under no liability. 
 
 All employees of employers who have elected to come under the jurisdiction of 
 
 ibis Act are entitled to the benefits of this Act unless they have given due notice to 
 
 the contrary and provided that the industrial accident has (1) arisen out of and in 
 
 the course of employment, (2) leads to incapacity for a period of less than 2 weeks. 
 
 ■(3) was not due to the serious and wilful misconduct of the workman. 
 
 The Act furnishes the following benefits : 
 
 ■ 
 
 (A) In Case of Death. 
 
 (1) Where the injured workman leaves no dependants payment for last sick- 
 ness and burial not to exceed $200. 
 
 (2) Relatives wholly dependent, a weekly payment equal to one-half the work- 
 man's average, but not less than $1 and not more than $10 per week, for a period 
 of 300 weeks from the date of the injury. 
 
 (3) To relatives partly dependent a weekly payment proportionate to the 
 degree of dependency with due regard to (lie pension allowed to relatives wholly 
 dependent. 
 
1912 WORKMEN'S COMPENSATION COM.M ISS'OX. 101 
 
 (B) In Case of Incapacity. 
 
 (1) If total incapacity results from the injury the workman snail be allowed 
 a pension equal to one-half his wage, to he not less than $1 and not more than $10 
 for a period of 500 weeks, the total amount of such pension not to exceed $3,000. 
 
 (2) Where partial incapacity results to the workman from his injury he shall 
 be allowed a pension equal to one half his impaired earning power, such pension not 
 to be more than $10 per week for a period of 300 weeks, and total amount of such 
 pension not to exceed $3,000. 
 
 (3) In case of specific injuries such as loss of feet, hands, eye, etc., pension 
 for stipulated periods according to schedule are to be allowed. 
 
 Weekly payments may be commuted after six months into a lump sum by the 
 agreement of the parties but subject to the approval of the Industrial Accident 
 Board. 
 
 The Industrial Accident Board consists of three members, appointed by the 
 Governor of the State for a period of six years, one member of the Board to retire 
 every second year. It is the duty of this Board to supervise the work of the em- 
 ployers' Insurance Associations. Where the injured workman and the Industrial 
 Insurance Association fail to arrive at a settlement as to the amount of the benefit 
 to be allowed, the Industrial Accident Board calls for the formation of a committee 
 of arbitration. This committee consists of one member of the Board and a repre- 
 sentative of each party interested. An appeal lies from the arbitration committee 
 to the Industrial Accident Board and a further appeal to the Supreme Judicial 
 Court, the latter on questions of law only. 
 
 If an employee is injured by reason of the serious and wilful misconduct of the 
 employer, or persons regularly entrusted with exercising the power of superintend- 
 ence, the amount of compensation is doubled. In such case the employer who has 
 subscribed to the employee's Insurance Association repays the Association the extra 
 compensation paid to the employee. 
 
 Employers' Liability Insurance. 
 
 Where the obligation to compensate workmen for injuries is thrown directly 
 upon individual employers it is customary, and it is in fact assumed to be neces- 
 sary, for the employer to insure himself against his liability in an insurance com- 
 pany or institution. Eeference has been made to a theory which has been advanced 
 that employers should not be allowed thus to insure their liability lest the incentive 
 to prevention of accidents be minimized. 1 This theory is of course entirely contrary 
 to the whole genius of workmen's compensation as generally understood. If applied 
 in practice it would not only result in depriving workmen in a large percentage 
 of cases of all compensation, but would have a tendency opposite to that -ascribed, 
 for the greatest preventive effort can be induced only by the invocation of co- 
 operation and specially directed effort. In any practical conception of an individual 
 liability scheme insurance is a necessary adjunct. 
 
 Employers' liability insurance first arose in England after the Employers* 
 Liability Act of 1880. While there were isolated instances of such insurance before 
 that time there had not been in England or elsewhere any general practice amongst 
 employers of insuring themselves against possible liability in respect of personal 
 injuries to their employees. Upon the passing of the Act the well-known "Lloyds" 
 at once began to do a considerable business in liability insurance and other com- 
 
 1 See ante, p. 63. 
 
102 CANADIAN MANUFACTURERS' ASSOCIATION: No. 65 
 
 panies sprang up throughout Great Britain. The Act of 1897 brought with it a 
 great extension of this class of insurance. Reports of the Board of Trade show 
 that there are now fifty-six British companies engaged in employers' liability 
 insurance. A corresponding development has taken place in the United States 
 and in Canada. The Report of the Superintendent of Insurance for the Dominion 
 shows that there are twenty companies engaged in employers' liability insurance 
 business in this country. Eleven of these are foreign companies and of the 
 remainder some are subsidiary to foreign companies. 1 During the year 1911 
 there were in force in Canada employers' liability policies aggregating $86,641,045, 
 of which $28,687,400 was held by Canadian companies. None of the Canadian 
 companies are engaged exclusively in employers' liability insurance but carry 
 on other branches of insurance as well. 
 
 Employers' liability insurance has been denned as "the undertaking of liability 
 under policies insuring employers against liability to pay compensation or damages 
 to workmen in their employment." 2 Such insurance is in its nature entirely 
 different from accident insurance though the two classes of insurance are fre- 
 quently carried on by the same company, and in fact sometimes combined in the 
 same policy. The essential difference between the two types of insurance is so 
 important in considering workmen's compensation systems and is so commonly 
 misunderstood or ignored that it should be the subject of careful observation. 
 Accident insurance would insure the workman against loss resulting from accident. 
 Employers' liability insurance insures the employer against loss from being com- 
 pelled to pay compensation or damages to his workman. Accident insurance is 
 for the protection of the workmen; employers' liability insurance is for the pro- 
 tection of the employer. Where a workman is insured against accident his recourse, 
 in case of loss, is directly against the insurance company. Where an employer 
 has insured in an employers' liability company the workman's recourse in case 
 of injury remains directly against the employer. The liability policy affords the 
 workman no protection, but on the contrary enlists on the side of the employer the 
 experience and superior facilities of the insurance company in contesting claims. 
 For the practice is for the insurance company to assume and conduct the defence 
 of any action that may be brought by the workman to enforce his rights against the 
 employer. The employer on the other hand is not in a position to deal unrestric- 
 tedly with his employees in settling claims which may appear to him deserving, 
 lest the case should not commend itself to the insurance company as one involving 
 a legal liability on the part of the employer. So far as the workman is concerned, 
 therefore, workmen's compensation is either negative in its operation or positively 
 detrimental. 
 
 In other and less direct ways liability insurance is also positively detrimental 
 to the employee and this fact is generally recognized. Employers are often pre- 
 vented by the terms of their policies from engaging older or partially incapacitated 
 men for the reason that they increase the hazard. 3 Again, insurance companies 
 are accused of exerting undue pressure in making settlements. The representative 
 of the company as a matter of business siezes the psychological moment when the 
 injured man or his dependents are most in need to offer a settlement for ready 
 cash, which is almost as certain to be disadvantageous to the beneficiaries as it 
 is advantageous to the company. 4 
 
 'See Rep. Supt Ins. 1911, p. 57. 
 
 MVFcGilliveray, Insurance Law, 28; F. & D. 8. 
 
 "See Conf. of Com., 64; P. & D., 16; Rep. Atlantic City Conf., 38. 
 
 4 See S. & E., 231; Cd. 2208, 39, 40; F. & D., 16. 
 
1912 WORKMEN'S COMPENSATION" COMMISSION. 103 
 
 It follows from the nature of the insurance that the risk is subject to infinite 
 variations. In life insurance there is always a firm basis in the mortality tables 
 which though subject to some fluctuation, do not substantially vary in different 
 localities or at different times. Employers' liability on the other hand is subject 
 to a variety of factors and conditions many of which are not susceptible of any- 
 thing like accurate calculation. First and foremost is the question of the opera- 
 tion of the laws under which the liability is imposed; whether and to what extent 
 the Liability rests upon fault on the part of the employer; whether and to what 
 extent it is affected by fault on the part of the employee; what defences are 
 available to the employer in an action by the workman; whether the remedy of 
 the workman is a single one or whether he has a choice of two or more remedies; 
 to what extent the method of adjustment involves expense in litigation or other- 
 wise ; whether the method of adjudication permits of punitive or exemplary damages. 
 Another factor is of course the hazard or probability of the occurence of an injury. 
 This depends primarily upon the nature of the occupation and is subject also to 
 other influences such as the degree of care exercised in guarding machinery, etc.; 
 the degree of strictness in enforcing rules of safety, the speed of operation, the 
 nationality, age, sex and general character of employees, as well as a variety of 
 circumstances constituting what is generally known as the "moral hazard." In 
 the third place the character of the risk is dependent upon the schedule of pecuniary 
 benefits which the workman is entitled to receive, or the customary scale of damages 
 allowed by court or jury. Of the three large classes of factors mentioned this 
 might appear to be the most readily calculable; but where the compensation system 
 involves periodical payments extending over a considerable period, further con- 
 siderations are introduced such as the probability of the duration of life of incapaci- 
 tated persons, the probability of the workman's being married, the probable number 
 of children or other dependants, the probable duration of widowhood, with a 
 variety of other factors which may influence the duration of the compensation 
 period. Absence of reliable statistics or experience in any one factor involves an 
 element of speculation beyond the legitimate risk which it is the province of insur- 
 ance to equalize. But in liability insurance many of the prime factors have not 
 been, nor in fact do they perhaps admit of being, subjected to scientific treatment. 
 The ephemeral nature of the laws covering employers' liability, the wide extent of 
 the territory covered by most liability insurance companies, and the diffusion of the 
 business in a given territory amongst a large number of insurance institutions has 
 thus far stood in the way of any attempt at uniformity such as has been attained 
 through the underwriters' associations in other lines of insurance. The speculative 
 and unscientific character of the employers' liability insurance rates is generally 
 recognized x and is acknowledged by the insurance companies themselves. 2 It is 
 understood indeed that a movement has just been begun with the object of forming 
 an association of employers' liability companies for the purpose of dealing with 
 rates, 3 but the plans of this movement as outlined in the insurance journals reveal 
 not only how absolutely inadequate and unscientific has been the treatment of rates 
 up to the present, but also how difficult it 'is to place them upon a more satisfactory 
 basis. 
 
 The primary effect of unscientific rating is to penalize the less hazardous in- 
 dustry and the less careful employer, as against the more hazardous industry and 
 
 *See S. & E., 227, 242; Rep. Wis. Com., 40; Rep. 1111. Com., 169. 
 
 2 See 24th Rep. U.S. Bur. Lab., 1544, 1548. 
 
 3 See " The Iron Age," 2nd May, 1912, p. 1,094. 
 
104 CANADIAN MANUFACTURERS' ASSOCIATION: No. 65 
 
 the less careful employer. This weakness of the liability insurance system has led 
 many progressive employers to abandon it altogether and carry their own risk. With 
 the larger employers this is, of course, quite practicable, but the smaller employer 
 must either submit to the unjust rate or carry an undue risk. 
 
 One difficulty that stands in the way not only of establishing a scientific basis 
 of rates, but in fact of any plan of uniform action, is the variation amongst different 
 insurance companies in their conception of the function of the insurance which they 
 undertake. Some companies, construing their relations to the employer in a literal 
 sense, make it a policy to pay only in case where the employer is strictly liable in 
 law, and of defending doubtful cases as far as possible. Other companies adopt a 
 broader view of their functions and recognize to some degree the natural desire of 
 the employer on humanitarian grounds to see the workman compensated in doubt- 
 ful cases. The latter conception involves of course an element of accident insurance, 
 and as already noted, accident insurance, more or less limited, is frequently com- 
 bined with policies of employers' liability insurance. The practice of companies, 
 however, varies not only with the form of policy but with the general attitude 
 towards employers' liability insurance. In some insurance companies the question 
 of the merits of a claim for compensation is left almost wholly to the employer, the 
 company promptly settling such claims as are recommended by the employer. In 
 other companies every claim is carefully considered with the view to the possibility 
 of a defence. Again, the attitude of employers towards insurance companies varies 
 greatly. Some employers expect the insurance companies to stand behind them in 
 every case, small or large; other employers carry their insurance only for the purpose 
 of protecting themselves against very serious and large claims, and pay the smaller 
 claims without having recourse to the insurance company. These variations in 
 attitude on the part of the company and of the employer are necessarily reflected 
 in the insurance rates, and constitute another factor standing in the way of any- 
 thing like uniformity of hazard or rate, not only as amongst different companies but 
 also as between different insurers in the same company. 
 
 In this connection it may also be observed that the rate of insurance usually 
 varies with the amount of the policy. Rates are generally fixed with reference to 
 policies for a limited sum, usually $5,000, which is fixed as the limit of the com- 
 pany's liability for any one accident. For insurance beyond this amount a higher 
 rate is exacted. 
 
 Viewed as an agency for the administration of workmen's compensation the 
 defects of employers' liability insurance become still more apparent. From this 
 standpoint the efficiency of the insurance must be largely regarded as a matter of 
 economy, in transferring the money paid by the employer in premiums with a 
 minimum of loss to its proper destination, the injured workman or his dependents, 
 in this aspect employers' liability insurance appears in no better light than in the 
 matter of rating. Figures gathered by the Commission of the State of New York 
 show that of $23,523,585 gross premiums collected by ten firms during the years 
 1906, 1907 and 1908 only $8,559,795 was paid out in claims to injured workmen, 1 
 It is commonly estimated in the United States that of every dollar paid out by 
 the employer in liability insurance premiums only from 20 to 30 per cent, even- 
 tually reach the pocket of the injured workman. 2 
 
 The Report of the Superintendent of Insurance for lite Dominion for the year 
 1911, shows that the twenty insurance companies engaged in the employers' liability 
 
 'Sec Rep. Ohio Com., Pt. T, p. 38. 
 
 2 See S. & E., 242; F. & D., 16; Rep. Fed. Com. U.S., 840; Rep. Wash. Com., 5; Rep. 
 111. Com., 11. 
 
1912 WOKKMEN'S COMPENSATION COMMISSION. 105 
 
 business in Canada collected a total of $2,103,275 in premiums, of which .$1,0:5:5,1)96 
 was written off as "loss" and $927,774 was paid out in claims. In other 
 words, of the money paid in by way of insurance premiums, only 44 per cent. 
 was actually paid out in compensation, and only 4!) per cent, of loss is charge- 
 able according to the calculations of the company against the year's business. Of 
 this another considerable portion will go towards expenses and fees of the plaintiff's 
 solicitor, leaving the ratio of actual benefit to the workman about the same as in the 
 United States. 
 
 Of the expenses a very large percentage, between 20 and 25 per cent., repre- 
 sents the commissions of agents. Being a yearly business, liability insurance passes 
 easily from one company to another and each change involves a commission to the 
 agent for " new business." An effort on the part of the United States companies 
 has resulted in a scaling down of this item of expense to 173/2 P er cent., but further 
 reduction will be very difficult owing to the competitive nature of the business and 
 the instability of policies due to constant changes in the laws. Another large item 
 of expense is, of course, that of litigation. The balance is made up of general office 
 expenses, salaries of officials, etc., though an increasing amount is being spent upon 
 inspection of risks with a view to reducing the hazard. Owing to the diffusion of 
 the business amongst a large number of companies, many of them small, and the 
 consequent duplication of work, the ratio of expense is of course much larger than 
 it would be if the business were in the hands of a smaller number of companies. 
 
 Notwithstanding the large percentage of premium money applied by companies 
 in expenses the business of employers' liability insurance, as a business, has not 
 been successful. Both the English and the American companies have since the 
 inception of this type of insurance been running at an aggregate loss.- The returns 
 of the British Board of Trade for 1910 shows that the thirty-four tariff companies 
 in that country incurred an aggregate loss on the year's business of 4.77 per cent, 
 of the premiums, while twenty-two non-tariff companies netted a loss of 34.28 per 
 cent. 
 
 With the introduction of systems of periodical compensation new problems are 
 being introduced into the business of emplo3 r ers' liability insurance. It becomes 
 necessary, under these systems to calculate the present worth of the periodical pay- 
 ments, the probable duration of the life of the recipient or the period of incapacity. 
 In England the practice has grown up of commuting the periodical payments by 
 turning them into an annuity, and sometimes by purchasing a government annuity. 
 The natural tendency is of course to liquidate the loss as soon as possible and write 
 it off. "Where the commutation assumes the form of a government annuity it 
 doubtless affords some advantage in the way of assuring solvency. Whe*§g payment 
 of the annuity is assumed by the company itself the question of reserves at once 
 arises. In view of the uncertainty as to the duration of periodical payments con- 
 sequent upon lack of experience and statistics, there is room for considerable differ- 
 ence of opinion as to the necessary amount of reserve and the inevitable danger of 
 inadequacy is of course increased with the keenness of competition for business. 
 There is grave reason to fear that the position of many of the English companies 
 leaves much to he desired on the score of ability to meet their future obligations. 8 
 A movement is now on foot to bring these companies under closer government 
 supervision. 
 
 But where the periodical payments are converted into a government annuity 
 1 
 
 1 Abstract of Statements of Insurance Companies of Canada for the year 1911, pp. 
 57, 58. 
 
 2 See P. & D., 23. 
 8 See P. & D., 23. 
 
106 CANADIAN MANUFACTURERS' ASSOCIATION: No. 65 
 
 further difficulties arise. A workman supposed to have been permanently incap- 
 acitated may partially or wholly recover his earning power, in which case his allow- 
 ance is supposed to cease. The government annuity, however, would run on, unless, 
 indeed a form of annuity were devised which should be subject to the contingencies 
 of physical capacity, which would be the administrative side of the government 
 accident insurance system. A corresponding difficulty would arise where the injury 
 to a workman was after settlement of the annuity found to be more serious than 
 supposed at the time of the settlement. 
 
 If any further argument is needed to show the difficulties of a system of liability 
 insurance, it is furnished by a consideration of the highly anomalous and complex 
 situations that may arise, for instance, in the case of a workman who has been 
 totally or partially incapacitated for twenty years. His employer may be insolvent 
 or dead. The insurance company may be insolvent. The employee's recourse is of 
 course against the employer. If the employer is insolvent the employee cannot re- 
 cover against him. The employer not having suffered any loss cannot recover 
 against the company. If the employer is solvent and alive the company may be 
 defunct and on the other hand if the company is in a position to carry out its obli- 
 gations, the employer may not be alive or in a position to enforce them. The 
 workman's claim is no stronger than the weakest link in the chain of liability and 
 solvency, and the attempt to strengthen the position of the workman by a series of 
 preferences and subrogations, merely adds to the complexity and the possibilities 
 for litigation. In fact it cannot be too emphatically asserted that an employers' 
 liability insurance system, unless under government control so rigid as to amount 
 practically to government insurance, is entirely incompatible with a compensation 
 system of periodical payments. From the employer's standpoint the danger of tills 
 condition of the liability insurance business is that his insurance may fail him just 
 when he needs it most. A period of financial depression impairing the value of the 
 insurance company's securities and curtailing its premium income may cause it to 
 go into liquidation, leaving upon the employer not only his risk but under a per- 
 iodical payment system the payment of compensation for which he has already paid 
 the company. 
 
 Nor are the defects of employers' liability counterbalanced by any considerable 
 accompanying advantages. Apart from amplitude of premium rates and success 
 in contesting claims for compensation, the only factor which can have any consider- 
 able effect upon the profits of the insurance company and which affords any con- 
 siderable field for its activities is that of accident prevention. In this branch the 
 success of liability insurance companies has been no more marked, and their treat- 
 ment no more scientific than in other departments. 1 While some effort has been 
 made by inspection to select and grade risks these efforts have been thus far per- 
 functory and desultory. It is in fact very difficult for the average insurance 
 company to work out any system of efficient inspection. In Canada, for instance, 
 the insurance in each branch of industry is scattered amongst a score of companies. 
 Many of the largest and best members of each class do not insure at all, and amongst 
 the smaller employers non-insurance is the rule. Under these circumstances it is 
 impossible for an insurance company to give to even the main branches of industries 
 that specialized inspection which is necessary to secure adequate results. If the 
 insurance were divided amongst the different companies on special lines according 
 to the nature of the industry, there would be some possibility of specialized and 
 scientific preventive work, but under existing conditions or under any system of 
 voluntary insurance this is impracticable. 
 ' See Rep. 111. Com., 169. 
 
1912 WORKMEN'S COMPENSATION" COMMISSION. 107 
 
 The Actuarial Phase. 
 
 One of the most important of the many phases of the complex subject of work- 
 men's compensation is the question of the proper actuarial basis for computing 
 premium rates. This phase in itself is not so complex as it at first sight appears. 
 It resolves itself into the question which of two plans shall be adopted; but the 
 effects and consequences of the respective plans render the question one of the most 
 direct concern in the establishment of a system. 
 
 In a system where a lump sum is paid at the time of the accident to liquidate 
 the entire claim in respect of an injury, the actuarial problem presents a different 
 aspect from that which appears where the payments assume a periodical form spread 
 over a number of years. In the former case the actuarial problem is merely a 
 matter of striking such rates as shall bring a total premium income sufficient to 
 meet the year's claims, or the claims in respect of injuries occurring during the 
 year. An inadequate rate would involve nothing worse than a loss on the year's 
 business. The failure of an insurance company would not mean anything more 
 than the loss of the insurance of one year. 
 
 Where, however, the compensation is payable in instalments spread over a 
 period of years, terminable upon a variety of contingencies and subject to increase 
 or decreases, different, or rather additional, considerations arise. It becomes 
 necessary then to reckon with such factors as probable duration of life or of widow- 
 hood, probable number of dependants and probable extent and duration of disabil- 
 ities. An error in the calculation of a rate under such a system is much more 
 serious in its consequences than in a system where payments are regularly liquidated 
 at the time of the accident. Inadequacy of rate under such a system involves 
 insufficiency of reserves to meet future compensation payments; and the failure of 
 an insurance company would>mean not only the loss of a year's insurance but the 
 loss of a series of pensions reaching forward a generation. 
 
 Where compensation insurance assumes the form of an insurance, in a private 
 company, of the liability of the individual empolyer, there can be no question as to 
 the necessity of maintaining adequate reserves to meet future payments. Any 
 attempt to make up deficiencies in the reserves out of future premiums would bring 
 the inevitable fate of similar practices in life insurance, — and the more readily as 
 there is not the same difficulty in getting new employer's liability insurance as there 
 is in getting new life insurance. The result would be bankruptcy for the company, 
 but the more serious result would be the failure of the payments of compensation. 
 But an entirely different set of circumstances arises where the compensation takes 
 the form of an assumption by the state, or by a collective body exhaustive of its 
 olass; of the obligation to compensate directly the workman and not merely to 
 indemnify the emplo} r er. In such a system there is in the first place no shifting or 
 fluctuation of the class of insurers, except where an occasional business change 
 occurs by reason of death, bankruptcy, etc. The class remains comparatively fixed. 
 There is no danger of members leaving and joining another scheme, and consequently 
 no danger of rates rising above normal even where no reserves are set up. It is 
 possible, therefore, under such a system to merely assess the proper amount to meet 
 each year's current payments without setting up any reserve to provide for future 
 payments. If no attempt is made to set up a reserve fund there can never be any 
 rate above the normal rate based upon the actual current requirement. Under such 
 a plan, which may be called the " current cost " plan, the initial rate would be com- 
 paratively low, the first year's rate being based on the sum required to pay the first 
 year's pensions. The annual rate would increase from year to year under normal 
 
108 CANADIAN MANUFACTUKEES' ASSOCIATION: ^ No. 65 
 
 conditions, for a period of thirty or forty years, that is until such times as the 
 number of persons dropping off the pension list by death or otherwise equalled the 
 number coming on by reason of accident. 1 
 
 There are, therefore, available two plans of rating, one, which may be called the 
 " capitalized " plan, of charging against the year's premiums a capital sum sufficient 
 to provide for future payments of compensation for all accidents of the year, and 
 the other, which may be called the " current cost " plan of merely levying each year 
 the amount necessary to pay the year's pensions. Under the capitalized plan the 
 rates are fixed upon the assumption that when an injury occurs an estimate should 
 be made of the amount necessary to provide for all payments, immediate and future. 
 The present worth, so to speak, of the compensation payments is found and this 
 amount is collected and set aside in the year in which the injury occurs, or in the 
 case of a private company, is written off as a loss against the year's premiums. Under 
 the current cost plan no such estimate is made and no amount is set aside or 
 written off. Each year there is collected only enough to meet the payments due 
 that year. 
 
 For further illustration of the two methods reference may be had to the 
 Washington Act under which, in case of death, an allowance of $20 per month is 
 given to the widow or invalid widower. The compensation payments for one year 
 would amount to $240. It is estimated that to supply the necessary fund to pay 
 $240 per year for life in the average case $4,000 would have to be set aside. The 
 question as between the current cost plan and the capitalized plan is whether there 
 should be collected each year the $240 to be paid out that year, or whether the 
 whole amount of $4,000 should be collected for the year in which the accident took 
 place. 
 
 It is obvious that no such actuarial qustion would arise where the compensation 
 was paid in a lump sum. In this country up to recent times and indeed in most 
 countries the rule has been either a lump sum compensation or permission to com- 
 mute the periodical payments for a lump sum. Accordingly insurance companies 
 in this country and in other countries such as England have not been called upon 
 to deal with any other actuarial plan than one involving immediate capital sums. 
 The recent Act of the Province of Quebec, however, with its non-commutable "rents" 
 has introduced a new phase in compensation insurance in this country. There can 
 be no doubt that in the compensation systems of the future periodical payments will 
 be the rule and lump sum payments will be abandoned. 2 This introduces an 
 entirely new feature in insurance. It is necessary in fixing insurance rates on the 
 capitalized plan to deal not only with questions of the hazard of different occupations 
 and industries but such questions as the probable length of life, the probable age of 
 workmen, the probability of being married, the probable number and age of chil- 
 dren, and the probability of re-marriage of widows. Upon these will depend the 
 amount and the period of the pension allowances, and the amount of reserve neces- 
 sary to set up. 3 
 
 Where compensation insurance is carried by private companies with a shifting 
 clientele it is essential that the insurance rates shall be strictly adequate to provide 
 a sufficient reserve for carrying the pensions, otherwise when the inevitable rise in 
 rates was brought on the insurers would abandon their policies and the pension 
 obligations would ruin the company. The tendency of the rise in rates would also 
 be to attract the poorer class of .business not wanted by better companies, which 
 
 1 See Rep. Fed. Com. U.S., 103, 276; P. & D. 
 * See ante, p. 68. 
 s See ante, p. 104. 
 
1912 WOEKMEN'S COMPENSATION COMMISSION. L09 
 
 i 
 with its higher lass ratio would still further handicap the company. 3 The current 
 cost plan of insurance is, therefore, possible only in a state insurance system or in a 
 collective system with permanent classes. 
 
 The most obvious advantage of the current cost plan is the saving in immediate 
 cost in insurance premiums. The immediate imposition of a capitalized rate would 
 involve a very serious shock to many industries. It has been pointed out that the 
 rate would run from 2 to 10 per cent, on the pay-roll according to the scale of 
 benefits conferred by the Act. Under the current cost plan the rates would in most 
 industries start at about one-fifth the capitalized- rate. 2 Reference has been made 
 to the want of adequate stati>ii<s and experience as a basis of rates. 3 In view of 
 this it would be necessary, in order to insure adequacy in the reserve, to capitalize 
 at an outside estimate, with the possibility, of course, that this would he much above 
 actual cost, but with the possibility also that it might still be inadequate, in which 
 case the whole intention would fail. Experience of other jurisdictions has shown 
 the practical difficulty of assessing an adequate capitalization rate. In Norway 
 the state insurance institution found itself after some years of operation face to 
 face with a deficit of approximately $100,000 in its reserves. This amount was 
 made up by the government out of the general funds. 4 It is easilv -ecu that in 
 a larger system such as that of Germany or Austria the deficit would have been 
 much more serious. In fact the Austrian system which thoretically operates on 
 the capitalized plan has been facing for some years a deficiency which in spite of 
 constant advances in the rates is still increasing. 5 
 
 There is a temptation to urge at first blush, against the current cost plan of 
 compensation insurance, the objection against assessment life insurance, but a 
 moment's reflection will show that the two classes of insurance are not on the 
 same footing. In the first place in life insurance both the taking out of the policy 
 and the continuation of the payments are voluntary. It is open to an insurer after 
 he has made a number of payments to drop his policy, and subject to the difficulty 
 of increased age, to take out a new policy in another company. No corresponding 
 course is open under a system of compulsory compensation insurance. 
 
 The only serious objection which can be urged against a system of current cost 
 assessment is that it involves the throwing on future industry of some of the burdens 
 accruing in the present. This objection is entirely outweighted by the considera- 
 tion that the rate will not, when it reaches its maximum, be any larger than the 
 capitalized rate, but as experience in Germany shows will be much lower, and the 
 further consideration that the immense sums of money which it would be necessary 
 to lay aside as a reserve fund are left in active circulation in the employer's business. 
 But the theoretical objection itself vanishes when it is remembered that employers 
 and the community generally are now bearing, and will continue for a generation 
 to bear the burden of the accidents of the past. Those persons who have suffered 
 injuries in past industrial accidents are of course being provided for. and will con- 
 tinue to be provided for by various means including poor relief and charity. As 
 this burden gradually decreases it is just and equitable that the burden of the new 
 compensation system should gradually increase. 
 
 One important phase of the capitalized plan of insurance, which is apt to escape 
 notice on a casual consideration of the subject, is the aggregate size of the reserves 
 
 1 See Den. Atlantic City Conf., 296. 
 
 2 See Rep. Fed. Com. U.S., 102. 
 
 3 See arte, p. 104. 
 
 4 See 24th Rep. U.S. Bur. Lab., pp. 2.032, 2,041; see also Bulletin 90, U.S. Bur. Lab., 
 pp. 798, 799. 
 
 "See F. & D., 130, 131; Bulletin 90, U.S. Bur. Lab., 753. 
 
110 CANADIAN MANUFACTURERS' ASSOCIATION: No. 65 
 
 necessary in a capitalized system of state insurance. In any large system, these 
 reserves would reach immense proportions. In the State of Washington the reserve 
 investments for the first six months of operation were over $111,000. It is easily 
 seen even in that State with the natural increase in business and the extension of 
 the system a very large fund will be built up. 
 
 In Germany, where the current cost plan was adopted from the beginning there 
 is regularly assessed upon employers a margin of from 9 to 10 per cent, above the 
 actual cost of the insurance, and this amount is being set aside as a reserve fund to 
 provide for such contingencies as the entire wiping out of the industry or its in- 
 ability to meet its payments in a period of financial depression. In the accident 
 funds this reserve fund had in 1910, reached over $76,000,000. Strenuous objec- 
 tions are constantly being made on the part of employers against the piling up of 
 this reserve. " On this subject the sentiment among employers is almost universal. 
 They claim that even with its acknowledged faults this feature of their system is 
 much superior to the methods used elsewhere in attempting to cover such deferred 
 payments. They say that neither twenty-five years ago, when Germany started, nor 
 now, are there statistics available upon which to base, with reasonable certainty, 
 the future cost of accident compensation. They feel that it would be a most serious 
 mistake to tie up the billions of dollars required to cover any reasonable estimate of 
 deferred payments, and think that the withdrawal of such sums would do much 
 more harm to German industrial development, which now needs all the available 
 cash in the country, than any harm that can possibly come to future industries 
 which necessarily will have to start under a heavier financial burden due to con- 
 stantly increasing insurance premiums. They feel that such heavier burden is more 
 than outweighed by the strenuous pioneer work which had to be done by the German 
 industries at the beginning, and which must be done even now." 1 It is urged, also, 
 in Germany that the maintenance of the reserve funds tends to extravagance and 
 constant agitation. The existence of the funds is an invitation for greater and 
 greater demands on the part of workmen, and a tendency on the part of the judges 
 administering the law to allow claims not strictly justified. It may be argued that 
 the money thus laid up in reserves is not lost, that it finds its way back into channels 
 of commerce. This is in part true. But it is also true that funds so set aside have 
 lost most of their fluidity and consequently much of their commercial efficacy. 
 
 The quotation above indicates also that even in Germany after many years of 
 painstaking gathering of statistics, it is not possible to calculate accurately the 
 capitalized cost of an injury. In a system just beginning such a calculation would 
 be many times more difficult, and it has already been urged as one of the difficulties 
 of employers' liability insurance, that in the absence of statistics and experience it 
 is impracticable to make even an approximate guess as to the capitalized value of 
 periodical compensation allowances. One of the great advantages of the current 
 cost actuarial plan is that the necessity for actuarial experience is entirely obviated. 
 
 The direct economic advantages of the current cost plan of compensation insur- 
 ance are outweighed in importance, however, by the more indirect effort of the plan 
 in inducing preventive activity. The operation of the plan to this end as illustrated 
 in the Herman system is discussed in a most interesting passage of the statement 
 made before the Federal Commission by Mr. Miles M. Dawson. 2 It is there shown 
 that the rapid rise in the insurance rate for the first few years is a marked factor 
 in concentrating the attention of the employers upon the importance of accident 
 
 1 S. & E., 41. 
 
 *See Rep. Fed. Com. U.S., 102, 106, and see Interim Rep. Ont. Com., 403. 
 
1912 WORKMEN'S COMPENSATION COMMISSION. Ill 
 
 prevention. The tables on the following page will show the course of the premiu m 
 rates in some industries in 'Germany. 1 
 
 It should be observed that these rates unaffected by preventive activity, would 
 under actuarial calculation have continued to advance for a period varying in differ- 
 ent industries from twenty to fifty years. And this advance would be accelerated 
 by the tendency to increase the speed of production and other modern factors tending 
 to increase hazard. 
 
 But the tables show that the rise in rates was very early interrupted and this 
 was undoubtedly by reason of accident prevention. Thus in the agricultural im- 
 plement machinery class, the rate, starting at 0.32 per cent., reached in seventeen 
 years 2.07 per cent., and has since fluctuated very little, though in 1908 it reached 
 2.11 per cent. 
 
 In the carpentry class the maximum of 2.80 per cent, was reached in eight 
 years and since that time the rate has been materially lower. Railways, starting at 
 .39 per cent., in seven years reached 1.80 per cent, and thereafter declined for some 
 years, the present rate being about 1.85 per cent. A similar course is shown in most 
 of the other classes. It is not difficult to see how the rapid increase in rates during 
 the earlier period of the system would call increasing attention to the necessity of 
 prevention, and the great success of the German system of accident prevention is 
 largely ascribed to this factor. If there were nothing to commend the current cost 
 plan of insurance except its influence in the direction of accident prevention, there 
 would be in this aspect alone a sufficient warrant for its adoption and for the re- 
 jection of any plan of compensation incompatible with it. 
 
 "Taken from brief of M. M. Dawson, Rep. Fed. Com. U.S., 277. See also Bulletin 90, 
 U.S. Bur. Lab., 749. 
 
11-i 
 
 CANADIAN MANUFACTURERS' ASSOCIATION 
 
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1912 WORKMEN'S COMPENSATION COMMISSION. 113 
 
 RECOMMENDATIONS. 
 Nature of System. 
 
 The one outstanding and inevitable result of the analysis of principles and 
 comparison of systems in the foregoing pages, is the negative conclusion that no 
 system of individual employers' Liability, however broadly that Liability may be 
 extended, will afford a solution, permanently or even temporarily satisfactory, for 
 the problem of workmen's compensation. Only two other alternatives are open — 
 either a collective liability or a state liability system. It has been pointed out that 
 these systems are not essentially dissimilar, the differences being theoretical rather 
 than practical. It is submitted that the system most likely to be satisfactory, under 
 all the circumstances, for the Province of Ontario is a collective system under state 
 administration and control. It is proposed that the funds for compensation should 
 be collected by grouping the various industries and occupations of the province, and 
 assessing upon each group its proper insurance premium. As an illustration, the 
 wood-working industries of the province should be placed in one group and should 
 bear the cost of all injuries occurring in connection with that industry. It would 
 not be necessary or advisable that all employers in wood-working industries should 
 bear the same rate of insurance, but such variations as were found from experience 
 or otherwise to be necessary or advisable should be made by way of sub-classification. 
 
 Administrative Body. 
 
 It is submitted that the system of compensation should be administered by a 
 Government Commission, a form of administration well understood in this country 
 and well adapted for dealing with a subject involving so many complex and technical 
 considerations. It is suggested that the Commission be called the Industrial 
 Insurance Commission or Board, and that it consist of three Commissioners ap- 
 pointed by the Government. The Commission should be, as far as possible, removed 
 from the influence of party politics. Neither in the adjudication of claims nor in 
 the fixing of rates of insurance should the Commission be under the direct control 
 of, or directly responsible to, the Government on its judicial side. The Commission 
 should be as independent of the executive as judicial bodies usually are in this and 
 other Anglo-Saxon countries, and the business side of the system should be con- 
 ducted upon strict business lines. It is urged that in personnel, salary and other- 
 wise the Commission should rank at least with the High Court judgeship. 
 
 Powers of Commission. 
 
 The working out of the details of the system should, it is submitted, be left a> 
 largely as possible to the Commission, the act defining clearly the scope of its powers 
 and the scale of compensation, and generally outlining the procedure and operation. 
 
 Methods of Collecting Funds. 
 
 As to the method of collecting funds it is submitted that this could be done 
 either through the banks or through the agency of the municipal officials or through 
 both. Forms could be sent out to employers upon which to report as to the amount 
 or estimated amount of the pay-roll. In case of default in reporting and in the 
 case of all smaller employers, the municipal assessor might he required to make the 
 necessary report. All employers within the scope of the system might be required 
 8 L. 
 
114 CANADIAN" MANUEACTUBEBS' ASSOCIATION: No. 65 
 
 to report directly to the Department, with appropriate penalties if it were left over 
 for the assessor. The Commissioners should have a certain number of auditors for 
 the purpose of auditing the pay-rolls of employers and cheeking over the reports of 
 assessors. 
 
 Actuarial Method. 
 
 It is submitted, as already indicated, that the insurance rates should be based 
 upon the current cost plan as distinguished from the capitalized plan. In other 
 words it is proposed that the annual assessments upon employers shall represent 
 only the cost of the current year's compensation payments with merely a small 
 margin for an emergency reserve fund. This is an essential feature of the pro- 
 position embodied in the brief, and any other plan would be unacceptable to the 
 employers represented herein. 
 
 It is believed that there may be instances where it would be advisable to collect 
 the full estimated capital fee. An example would be the case of a foreign contractor, 
 temporarily engaged in building operations in the province. But the general rule 
 should be the assessment of the current year's requirements for compensation outlay. 
 
 It is submitted that it might be wise to place the fund for each class of industry 
 at an early stage, on a footing which would render it unnecessary to assess premiums 
 in advance. The rates in each class could be made high enough for the first few 
 years to provide a reserve sufficient to tide over one year. The assessments could 
 then be made at the end of the year and the double work incidental to assessments 
 on estimates and their readjustment would be obviated. 
 
 It is submitted that it would be inconvenient to include the schedule of rates 
 in the statute establishing the system. The schedule will be a subject for a techni- 
 cal actuarial treatment in the first instance, and merely a matter* of adjusting and 
 collecting the amount required for the year. 
 
 The grouping of industries for assessment purposes is a matter also for expert 
 actuarial treatment, but it has also practical phases which might make it advisable 
 to provide a preliminary classification in the Act itself. But the commission should 
 have power to combine and sub-classify as experience may demand. 
 
 Control of Rates. 
 
 Subject to some provision insuring that the rates of insurance shall in general 
 be based on the current cost plan, the rates should be entirely under the control of 
 the Commission. Facilities should be afforded, however, for the hearing of appli- 
 cations, complaints, and representations on behalf of individual employers or assoc- 
 iations, representing groups of employers with respect to rates, classifications and 
 other matters connected with the administration of the system. 
 
 Adjustment of Claims. 
 
 Claims for compensation should be adjusted by the Commission. It might be 
 found possible eventually to delegate tbe adjustment of ordinary claims to subordin- 
 ate adjusters; or to adjust claims pro forma upon the report of a secretary or other 
 subordinate official, who would examine the application and report to the commis- 
 sion thereon. Bui in tbe formative stages of tbe system when precedents and policies 
 are being establisbed it is submitted that every claim should come before the 
 Commission itself for decision. 
 
1912 WORKMEN'S COMPENSATION COMMISSION. ^ 115 
 
 As already suggested the Commission could adjust claims in most cases upon 
 duly verified reports from the injured workman or his representative, from the 
 employer or his foreman or superintendent and from the attending physician. If 
 any dispute of fact were disclosed by these reports evidence could he taken by the 
 Commission, or a special officer could be sent to investigate and report upon the 
 case. 
 
 Appeals. 
 
 In adjudicating upon claims the decision of the Commission should it is sub- 
 mitted, be final upon questions of fact. It is suggested that an appeal might lie in 
 questions of law (which would be rare) to the Court of Appeal for Ontario. It is 
 further suggested that for the purpose of deciding upon such questions of law there 
 should be facilities for the submission of stated cases by the Commission itself and 
 that appeals should, where possible, be brought in this form. 
 
 Method of paying compensation. 
 
 As to the payment of periodical compensation allowances it is submitted that 
 this could be effected through the agency of the banks. Warrants could be sent out 
 to those entitled to compensation, payable upon presentation to any bank. It would 
 be very convenient, if it were possible to make an arrangement with the Dominion 
 Government, to utilize the Post Office for the payment of compensation claims. If 
 the banks were used as above suggested the funds of the Department might be 
 apportioned amongst the various banks in deposits proportionate to the service 
 rendered. 
 
 Employers' Associations. 
 
 The difference between such a system as that here recommended and the 
 German system is that the collection of premiums and the adjudication of claims, 
 which in Germany are functions primarily exercised by the employers' associations, 
 would under the proposed system be assumed by the state. The balance of the 
 functions of the German employers' associations could, and doubtless would, be 
 assumed by associations voluntarily formed and corresponding generally to the 
 groups into which employers were divided for assessment purposes. The state 
 having assumed the functions of collection and dispersion of funds, the formation 
 of the associations would not be a vital necessity and the compensation system would 
 operate notwithstanding the absence of the associations ; but there can be no doubt 
 that there would be strong inducements upon employers to organize for the purpose 
 of co-operative effort in preventing accidents, and otherwise promoting efficiency 
 and economy in the administration of the system. It is submitted that the Act 
 should afford practical facilities for the organization of such voluntary associations 
 and for their participation and assistance in the operation of the system. 
 
 Provision might be made for the approval by the Commission of the constitution 
 of such associations and their official recognition. Such associations might be 
 given power, under the supervision of the Commission, to engage experts in accident 
 prevention payable out of the accident insurance fund. They might also be given 
 the power to make and enforce rules approved by the Commission for the prevention 
 of accidents, and to act in other ways calculated to promote the success of the system. 
 
116 CANADIAN MANUFACTURERS' ASSOCIATION: No. 65 
 
 First Aid Funds. 
 
 i 
 
 It is submitted that the benefit societies which are now in operation in many 
 industries should be, as far as possible, preserved. In order to secure a suitable 
 scope for these societies and in order to provide facilities for prompt medical and 
 hospital attention, and generally for the co-operation of employees with employers 
 in promoting safety, a separate fund should be established to cover the first few 
 weeks. Out of this fund should be paid medical and hospital expenses and com- 
 pensation for the earlier weeks after an injury. The suggestion is made that this 
 period should cover, as in Germany and in most other countries, the first thirteen 
 weeks. 
 
 It is submitted that the premiums for the first aid fund should be collected in 
 the same way and at the same time as the premiums for the larger fund. But it is 
 suggested that after being collected the money might be handed over to local benefit 
 societies working under constitutions approved by the Commission, for administra- 
 tion. Where such benefit societies did not exist the money could be handled by the 
 central department. 
 
 Of the premiums for the first aid fund it is submitted that workmen should 
 pay a substantial proportion, and that each workman's portion should be deducted 
 monthly or quarterly from his wages. 
 
 F W. Wegenast. 
 Solicitor, Canadian Manufacturers' Association, 
 
1912 
 
 WO U K M K X 'S CO M P !•: X SATTOX COMMISSION'. 
 
 117 
 
 No. 
 
 Appendices 
 
 APPENDIX I. 
 COMPARISON OF UNITED STATES AND GERMAN STATISTK - 
 
 Occupations. 
 
 Population. 
 
 Germany, 
 1907. 
 
 United States, 
 1900. 
 
 Agriculture. Horticulture, Stock Raising, Forestry, etc.. 
 
 Industry 
 
 Trade and Transportation 
 
 Domestic and Personal Service 
 
 Professional and Public Service 
 
 Totals . 
 
 9,883,257 
 
 11,256,254 
 
 3,477,626 
 
 471,695 
 
 1,738,530 
 
 26,827,362 
 
 10,381 765 
 7,085,309 
 4,766,964 
 5,580,657 
 1,258,538 
 
 29,073,233 
 
 Public Officials and Soldiers in the United States are covered under No. 4, 
 in Germany under No. 5. 
 
 APPENDIX II, 
 
 STATISTICAL EXPERIENCE OF WORKINGMEN UNDER THE OPER- 
 ATION OF COMPULSORY STATE INSURANCE IN GERMANY. 
 
 Brief of J. Harrington Boyd, before Federal Commission on 
 Workmen's Compensation — P. 73. 
 
 In 1887 there were insured against sickness and accidents in Germany 3,861,- 
 560 workingmen among 319,453 establishments, 2 and the number of notices of 
 accidents was 106,101. A special analysis of the different elements of the causes 
 of these accidents will be found below: 
 
 In 1907, insured in Germany against accidents; 3 
 
 Persons 
 Injured. 
 Industrial, building, and marine trade associations (Associa- 
 tions, 66; establishments, 637,118) 9,018,367 
 
 Agriculture and forestry trade associations (Associations, 48; 
 
 establishments, 4.710,401) 11,189,071 
 
 State executive boards (boards, 535) 964,589 
 
 21,172,027 
 
 In 1897 there were insured in Germany against accidents in the same associa- 
 tions and 409 State executive boards, in round numbers 2 18,500,000. 
 
 1 S. & E., 25. 
 
 'Fourth Special Report of the Commission of Labor, 1893. 
 
 »F. & D., 101. 
 
118 CANADIAN" MANUFACTURERS' ASSOCIATION: No. 65 
 
 APPENDIX III. 
 
 Excerpts from article on " The Eoad to Social Efficiency/'' by Louis A. 
 Brandeis, in New York Outlook, June 10th, 1911. Showing Possi- 
 bilities in The Eield of Accident Prevention. 
 
 Possibilities of lengthening lives and of avoiding sickness and invalidity, like 
 the possibilities of preventing accidents, will be availed of when business as well as 
 humanity demands that this be done. 
 
 William Hard quoted Edward T. Davies, the Factory Inspector of Illinois, as 
 saying that in the year 1906 one 'hundred men were killed or crippled in the 
 factories of Illinois by the set-screw, and that for thirty-five cents in each instance 
 this danger device could have been recast into a safety device. The set-screw 
 stands up from the surface of the rapidly revolving shaft, and as it turns catches 
 dangerously hands and clothes. For thirty-five cents the projecting top of the set- 
 screw could be sunk flush with the rest of the whirling surface of the shaft, and 
 then no sleeve could be entangled by it, and no human body could be swung and 
 thrown by it. 
 
 The South Metropolitan Gas Company, which established, in connection with 
 its system of compensation for accidents, a system of inquiry into all accidents with 
 a view to their prevention, reduced the number of accidents per thousand in seven 
 years from sixty-nine to forty. 
 
 Jack Calder, of Ilion, New York, tells of the reduction of accidents in an 
 American plant of a yearly average of two hundred to sixty-four. 
 
 Can there be any doubt that if every accident had to be investigated carefully 
 and adequately compensated for, the number of accidents would be reduced to a 
 half or a third. 
 
 The social and industrial engineers will find much of inspiration and en- 
 couragement in the achievement of their fellow-engineers of the factory mutual 
 fire insurance companies of New England. 
 
 The huge fire waste in America is a matter of common knowledge. The loss 
 in 1910 was estimated at $234,000,000; and yet there is one class of property, in 
 its nature peculiarly subject to fire risks, which was practically immune. Some 
 2,600 factories and their contents valued together at about $2,220,000,000 and 
 scattered throughout twenty-four States and the Dominion of Canada, suffered in 
 the aggregate fire losses of about one-fortieth of one per cent, of the value insured. 
 The factories so immune were those owned by members of the so-called " factory 
 mutuals " of New England. The cost of these factories for fire insurance and fire 
 prevention in the year 1910 was only forty-three cents for each one thousand dollars 
 of property insurance. Half a century before the cost of insurance to the New 
 England factories was $4.30, or ten times as great. The record of the "factory 
 mutuals " of Rhode Island and of some other States is similar. 
 
 Now, how has this reduction of fire insurance cost been accomplished ? It was 
 done by recognizing that the purpose of these so-called fire insurance companies is 
 not to pay losses but to prevent fires. These mutual companies might more ap- 
 propriately have been called Fire Prevention Companies; for the losses paid repre- 
 sent merely instances of failure in their main purpose. In these corporations the 
 important officials are not the financiers but the engineers — men who rank among 
 the leaders in the engineering profession of America — and aiding them is a most 
 efficient corps of inspectors. 
 
 The achievement of these factory mutuals — the elimination of ninety per cent, 
 of the risks— is iho result of sixty years of unremitting effort in ascertaining and 
 
1912 
 
 WORKMEN'S COMPENSATION COMMISSION. 
 
 119 
 
 removing causes of fires and incidentally educating factory-owners and their em- 
 ployees in the importance of providing against these causes. The premiums paid 
 represent the cost of this advice, inspection and education as much as the cost of 
 what is ordinarily termed insurance. 
 
 The progress of the factory mutuals in reducing fire losses was relatively slow, 
 but it has been steady, as is shown in the following table of net cost of fire insurance 
 per $1,000 per year in two representative companies: 
 
 Years. 
 
 Boston Manufacturers 
 
 Mutual Fire 
 Insurance Company. 
 
 Arkwright Mutual 
 
 Fire Insurance 
 
 Company. 
 
 1850-60 
 
 $4 37 
 2 79 
 2 54 
 2 27 
 1 44 
 68 
 44 
 
 
 1861-70 
 
 $3 37 
 
 1871-80 
 
 3 00 
 
 1881-90 
 
 2 16 
 
 1891-1900 
 
 1 54 
 
 1901-1910 
 
 69 
 
 Year 1910 
 
 43 
 
 
 
 Possibilities no less alluring are open to the social and industrial engineer. 
 Will the community support their efforts? 
 
 APPENDIX IV. 
 
 ANALYSIS OF DRAFT BILL OF STATE OF WASHINGTON. 
 
 By Harold Preston, Solicitor for Investigating Commission and Draftsman 
 
 of the Act. 
 
 The proposed Washington Act abrogates the doctrine of negligence as between 
 employer and workman; removes the subject from the domain of private contro- 
 versy; asserts and assumes the subject to be within the police power of the state; 
 and deprives the courts of jurisdiction in the premises, except in the administration 
 of the act. There are certain exceptions: (1) Where the injury was caused by the 
 intent of the employer to produce it; (2) Where the injury is caused by the intent 
 of the workman to produce it; and (3) Where the employer upon demand refuses 
 to contribute to the fund for the creation of which provision is made in the act. In 
 the case of (1) the workman takes under the act and may sue the employer for any 
 excess of damage over the amount received under the act. In the case of (?) the 
 workman receives nothing under the act; and in the case of (3) the employer is 
 suable at law. the defences of fellow workman and assumption of risk abolished and 
 the doctrine of comparative negligence established. 
 
 The act applies only to occupations defined in the act as "extra hazardous." 
 There are two funds provided for by the act: the first-aid fund, and the accident 
 fund. The first aid fund is created by the monthly payment into the state treasury 
 by each employer of four cents per day for each day's work done for him during the 
 preceding month. Of this he deducts two cents from the wages of the workmen. 
 Out of this fund all injured workmen receive the necessary medical, surgical and 
 hospital attendance so long as required, and also for the first three weeks of in- 
 capacity $5.00 per week. The accident fund is created by the payment into the 
 
120 CANADIAN MANUFACTURERS' ASSOCIATION: No. 65 
 
 state treasury by such employer of a certain' percentage of his annual pay-roll, the 
 percentage varying with the degree of hazard inherent in the occupatioa. It is 
 paid annually in advance, calculated upon the past year's pay-roll; if there is none 
 such, upon an estimated pay-roll. The department may permit the payment to be 
 made in quarterly instalments. At the end of the year an adjustment is to be 
 made. Undue carelessness upon the part of any employer may result in the in- 
 crease (for future application) of his rate of contribution. At the end of each year 
 an accounting is had with each class of industries, and if it proves to have paid in 
 too much the excess is refunded; but, on the other hand, it too little, the deficiency 
 is made good upon the same basis as the original contribution. 
 
 Out of the accident fund cases of death or incapacity over three weeks are cared 
 for. Permanent partial injuries are compensated in lump sum payments, $1,500 
 being the maximum amount, and the loss of a major arm at or above the elbow, the 
 maximum injury. Lesser permanent partial injuries are compensated in proportion. 
 All other cases are compensated in monthly payments. These may be converted, 
 in whole, or in part, into lump sum payments in the discretion of the department, 
 the previous application of the beneficiary being necessary, except where the ben- 
 eficiary removes from the state. The amount of lump sum payments may be 
 settled by agreement between the beneficiary and the department within a certain 
 limitation, to-wit : that a payment of $20 per month to a person 30 years of age is 
 worth $1,000, each settlement being based upon the expectancy of life under the 
 American Mortality Tables. The monthly compensation is all at flat amounts. 
 The earning power is not taken into consideration (except in one case hereinafter 
 referred to). In death cases funeral expenses not to exceed $75 are paid. If the 
 decedent was unmarried and had no dependent, no further payment is made. A 
 dependent is a relative (among an enumerated list) who was receiving actual 
 pecuniary assistance from the decedent, prior to his death (he having been un- 
 married at the time of his death). Such a dependent receives monthly one-half of 
 one-twelfth of the amount of pecuniary assistance actually rendered the dependent 
 by the decedent during the year preceding the accident. If the decedent left a 
 widow she receives $20 a month as long as she shall live unmarried. Upon re- 
 marriage she receives twelve monthly payments and no more. The widow receives 
 $5 extra per month for each child, not to exceed $15 per month. If orphan chil- 
 dren survive they receive $10 per month each, not to exceed $35 for all of them. 
 Payments to or on account of a child cease when the child becomes 16 years of age. 
 If the workman survives the acident and is permanently totally incapacitated he 
 receives, if unmarried, $20 per month so long as the total incapacity continues. If 
 married, he receives $5 per month extra and $5 per month extra for each child, the 
 total not to exceed $35 per month (and the payment on account of any child ceasing 
 at the sixteenth birthday). If the incapacity is only temporary, the same monthly 
 payments are made increased for the first six months 50 per cent., provided that 
 the increase shall not operate to make the monthly payment exceed 60 per cent, of 
 the monthly wage. As long as the injured workman is able to make earnings in 
 any way the monthly paymenl is scaled down accordingly. 
 
 If the accident is brought about because of the absence of any safeguard or 
 protective device required by statute or ordinance or by public regulation under any 
 statute, the employer is required to pay into the fund 50 per cent, of the payment 
 made oul of the fund on account of the injury, if he is responsible for the absence 
 of the safeguard. Whereas, if the workman is responsible for its absence, his com- 
 pensation is reduced 10 per cent. 
 
 A State Department is created to administer the act, composed of three com- 
 
1912 WORKMEN'S COMPENSATION" COMMISSION. 121 
 
 missioners appointed by the Governor. The legislature appropriated $150,000 out 
 of the general fund to pay the operating 1 expenses of the department until the next 
 legislative session. Except as to a few matters left discretionary with the depart- 
 ment, appeal lies to the courts from the decision of the department at the instance 
 of any person feeling aggrieved, such appeal to be only upon questions of fact or 
 proper construction of the act. The proceeding is informal and summary; jury 
 trials being provided only in cases arising under the penalizing provisions of the act. 
 If the department ruling is reversed or modified the proper fund must bear the 
 expense of the litigation, including the attorney's fee to be fixed by the court. 
 
 The intent is declared that the fund shall be no more and no less than self 
 supporting. Every dollar paid in by employers must go to injured workmen, 
 except in case the expense appropriation should run out between sessions, in which 
 case the deficit is made good, 85 per cent., out of the first aid fund and 15 per cent, 
 out of the accident fund. The State Treasurer is required to keep the funds in- 
 vested at interest in the class of securities provided by law for the investment of 
 the permanent school fund, and any uninvested funds to be kept on deposit at 
 interest on daily balances in such banks as have been approved by the State Board 
 of Finance. 
 
 In order that each year may provide for its own expenses the State Treasurer 
 is required, as soon as the liability of the fund is determined in any individual case, 
 to segregate from the fund the amount necessary (subject to the $1,000 maximum) 
 to take care of that case and keep it invested, as above stated, being privileged to 
 borrow from the general fund for that case moneys necessary to meet monthly 
 payments, pending a conversion into cash of a security belonging to the case. 
 
 APPENDIX V. 
 
 December 27, 1911. 
 F. W. Wegenast, Esq.., 
 
 General Counsel, Canadian Manufacturers Association, Toronto, Canada. 
 
 Dear Sir: Your favour of the 21st instant received. I have read with much 
 interest the report of your Special Committee, with the preparation of which I have 
 no doubt you personally took considerable part. I think the report is splendid and 
 hope it will have good results in connection with the framing of your proposed 
 legislation. 
 
 There are two points in it where I am in disagreement. The first is in speak- 
 ing of the Washington plan as a plan of state insurance. I think it would be more 
 correctly described as a system of collective liability administered by the State. At 
 the same time, your recommendation of the State being back of the fund is a good 
 one. In some of the earlier drafts of the bill I had it provided that if an injured 
 workman found a deficit in the fund applicable to his case, the State should make it 
 good out of its general fund and then recoup itself later out of the industry involved. 
 We have the constitutional provision forbidding the State to loan its credit to any 
 other than a public use, and we had decisions in other States passing upon like 
 constitutional provisions which rendered the provision, as I had it so incorporated, 
 of doubtful constitutionality. The line of argument pursued by these decisions 
 referred to was that the contribution of the state was not confined to cases of 
 pauperism ; in other words, the injured workman might have money in the bank and 
 
122 CANADIAN MANUFACTURERS' ASSOCIATION: No. 65 
 
 . . — . ( 
 
 other property and still receive the same aid as the indigent injured workman. 
 You have no such constitutional clause to contend with and, therefore, you are in a 
 position to improve upon our work in that respect. 
 
 The other point is the non-provision by the present for the liabilities of the 
 present, although I acknowledge that your plan has much in its favour because it is 
 the first step to be taken. The first step being so taken, in the course of a few 
 years statistics will be gathered, the plan better understood, and it might then 
 become possible and advisable to make the present care for its own cases. 
 
 Yours truly, 
 Harold Preston. 
 
 APPFNDIX VI. 
 
 Extract from the New York Journal oe Commerce, November 11th, 
 
 1911, PER. 
 
 BAD LIABILITY LOSS. 
 In State of Washington under the New Law. 
 
 The news comes from Seattle, Wash, that George A. Lee, Chairman of the 
 Industrial Insurance Commission, has announced that the claims for the death of 
 eight girls in the powder mill horror at Chehalis, Wash., must under the law be paid 
 by assessments levied on the powder manufacturers of the State. There are only 
 three concerns engaged in this industry and it is likely that the assessments will be 
 heavy. At present there is about $270 in this branch of the insurance fund to pay 
 the claims. The maximum which can be allowed the claimants is $32,000, or 
 $4,000 for each death, but it is the opinion of the Attorney-G-eneral that the law 
 does not require the payment of $1,000 for the death of a minor. 
 
 Just exactly what is the economic value of a minor is a question which the 
 Attorney-General and the Industrial Insurance Commission will be called upon to 
 decide shortly. The section of the Workmen's Compensation Act which will likely 
 apply to the Chehalis case is as follows : 
 
 " If the workman is under the age of twenty-one years and unmarried at the time 
 of his death, the parents shall receive $20 per month for each month after his death 
 until the time at which he would have arrived at the age of twenty-one years." 
 
 Whether sub-section (e) of Section 5 applies to minors is a point which must 
 be passed upon by the Attorney-General. The question has never been raised 
 beforo the Commission. The division referred to reads as follows: 
 
 " For every case of injury resulting in death or permanent total disability, it shall 
 be the duty of the department to forthwith notify the State Treasurer, and he shall set 
 apart, out of the accident fund, a sum of money for the case, to be known as the esti- 
 mated lump sum value of the monthly payments provided for it, to be calculated upon 
 the theory that a monthly payment of $20 to a person thirty years of age is equal to a 
 lump-sum payment, according to the expectancy of life, as fixed by the American mor- 
 tality table, of $4,000, but the total is in no case to exceed the sum of $4,000." 
 
 In no case will any other industry in the state but the powder mills be affected 
 by the Chehalis tragedy. The law makes no provision for borrowing from any 
 
1912 WORKMEN'S COMPENSATION COMMISSION. 123 
 
 other branch of the accident fund. The powder mills must bear the burden of the 
 accidents in their own class without reference to any other industry. In the event 
 that the Commission allows the claim on the basis that the parents or dependents 
 of the girls shall receive $20 a month until such a time as they would have arrived 
 at the age of twenty-one years, the total expense of the claims will be approximately 
 as follows: 
 
 Vera Mulford, aged 14 $1,680 
 
 Bertha Crowne, aged 16 1,200 
 
 Tillie Rosbach, aged 18 720 
 
 Sadie Westfall, aged 16 1,200 
 
 Eva Giknore, aged 17 960 
 
 Bertha Nagle, aged 17 960 
 
 Ethel Tharp, aged 20 200 
 
 Mrs. Ethel Henry (who leaves seven-month-old baby) 3,700 
 
 Total $10,660 
 
 The $270 in the powder company fund was paid in by the Imperial Company 
 and the Puget Sound Alaska Company, on the basis of ten per cent, of the pay-roll. 
 
 The DuPont Company has not paid in its first assessment. It objected to 
 being assessed at the same rate as the other companies, and wanted a lower rate. 
 Commissioner C. A. Pratt and J. H. Wallace inspected the plant, and say that 
 the company has done everything possible to protect its workers, but the law fixes 
 the schedule of rates. However, the law fixes the minimum and now the Imperial 
 Company may be assessed a higher rate than any other company. It will probably 
 be some time before the matter is straightened out by the officials. The law has 
 been held constitutional by the Supreme Court, but its various sections have not 
 been interpreted up to this time. The point as to whether $4,000 has to be set aside 
 for the death of each minor is the most important of these raised up to the present 
 time. 
 
 APPENDIX VII. 
 
 Olympia, Wash., Dec. 20th, 1911 
 
 F. W. Weghenast, Esq., 
 
 General Counsel, Canadian Manufacturers' Association, Toronto, Ont. 
 
 Your communication of recent date to hand. We were very much surprised 
 
 indeed to observe the statement made by ; it is an absolute 
 
 mis-statement of the facts. Attached hereto you will find a tabulation of the pay- 
 ments into, and disbursements out of the 47 funds listed in our law, and No. 4§, 
 which is the " Non-hazardous elective." You will observe that we have taken in 
 nearly $400,000.00 and paid out to date less than $14,000.00. 
 
 The only important fact which the powder class, No. 46 teaches is the undesir- 
 ability of small classes. It does not give sufficient opportunity for distribution 
 of risk. In our State, the situation is aggravated in this one small class by the 
 fact that the big DuPont Powder Company have so far refused to pay, proposing 
 to contest the constitutionality of our law in the Federal Courts. 
 
 I attach hereto a communication issued by the State Federation of Labour 
 which is eloquent of the appreciation of this State. 
 
124 CANADIAN" MANUFACTURERS' ASSOCIATION: No. 65 
 
 Our objection in Washington to the English Act and the New York Act 
 are discussed in that paper. They are principally: 
 
 1. Dependants cast off on to charity after a brief term of years. 
 
 2. The slow and costly court machinery retained. 
 
 3. Economic waste in payment of unnecessary lawyers and casualty companies. 
 
 4. Employers' funds drained out of the State. 
 
 5. State activity and public education for accident prevention not emphasized. 
 
 6. Rates governed by competition and conditions in other states rather than 
 our own. 
 
 7. Statistical work by the state important to public welfare not performed. 
 
 With due seasonal greetings, I am 
 
 Very cordially yours, 
 
 The Industrial Insurance Commission. 
 
 By Hamilton Higday, 
 
 Commissioner. 
 
 APPENDIX VIII. 
 COPY OF CIRCULAR. 
 Washington State Federation of Labour. 
 To the Trade Unions of the State, Greeting : 
 
 The Workmen's Compensation Act which became effective October first, 
 is daily demonstrating its value to the injured workmen. Under its provisions 
 many victims of industrial accidents are receiving compensation, who, under the 
 old system, would have become a burden upon friends or subjects of charity. Two 
 months of experience has, however, demonstrated the necessity of every organiza- 
 tion, whether labour, fraternal, or social, that has the welfare of its membership 
 at heart, participating more actively in the securing of prompt attention in behalf 
 of its membership. 
 
 Employers who have hitherto felt called upon to guard against the possibility 
 of recovery of damages are slow to awake to a realization of the changes effected 
 by the new law. 
 
 Casualty Companies that have derived immense profits under past conditions, 
 are opponents of a system that takes away their source of revenue. Ambulance- 
 chasing lawyers, who have lived off damage suits, which they were able to promote 
 under the old liability system, are joining hands with agents of Casualty companies 
 and opposing employers in an endeavour to discredit the new law. 
 
 It is the duty of our organizations to rally to its support, and gain for our 
 membership full and prompt returns for injured workmen. To that end each 
 organization should instruct its officers or the proper committees: 
 
 First : To secure from the Industrial Insurance Commission, Olympia, Wn. 
 copies of the law and necessary blanks to be filled out in case of injuries to em- 
 ployees received in the course of their employment. 
 
 Second: To thoroughly familiarize themselves with the law. 
 
1912 WOKKMEN'S COMPENSATION" COMMISSION". 125 
 
 Third: To look after injured members, or in case of death, their heirs, and 
 see that necessary blanks are promptly tilled out and forwarded to the Commission. 
 
 Fourth : To report to your organization and the State Federation of Labour 
 any defects found in the law, its operation, enforcement, and other difficulty 
 encountered to the end that we may look to a future adjustment of same. 
 
 Bear in mind that every injury should be reported whether serious or not; 
 that all injured workmen in hazardous employments are entitled to compensation 
 from the day of injury. Aid them in getting it, and you will not only aid the 
 needy but lessen the drain upon your local treasuries. 
 
 For your convenience we enclose card properly addressed upon which you 
 can designate your needs as to copies of law and blank forms which should be 
 kept on tile by the organization in order to make prompt reports. 
 
 Trusting that you will co-operate fully with us in making a success of this 
 important legislation, we remain. 
 
 Yours fraternally, 
 Charles Perby Taylor, Chas. E. Case, 
 
 Secy-Treas. President. 
 
 APPENDIX IX. 
 
 Olympia, Wash, Dec. 20th, 1911. 
 The Governor, 
 
 Lansing, Michigan. 
 
 My dear Sir : 
 
 The attention of this Commission has been called to a report to the effect 
 that one of the members of your Compensation Commission "has just returned 
 from Washington and found there a most lamentable condition of affairs. The 
 liabilities already accrued against the State exceed by an enormous amount the 
 amount of money on hand. There was an explosion there where I understand 
 nine lives were lost, making an aggregate liability of $27,000, and there was only 
 $177.00 in the State treasury. Then, too, the State is being deluged with all 
 sorts of petty claims; every man who has a finger hurt seems to think the State 
 treasurer must recompense him." 
 
 This Commission has no interest in the particular system of legislation your 
 Commission approves, but it is unfair to this State and to Michigan that such an 
 absolute misrepresentation of the true facts stand uncorrected. 
 
 The compulsory State Insurance fund now amounts to about $400,000.00 con- 
 tributed by approximately 5,000 establishments grouped by the law into 47 classes 
 of "compulsory associations" according to similar trades and hazards. Out of 
 this fund there has been disbursed to date less than $15,000.00. That the law 
 and the policy and practices of this commission are approved by the beneficiaries 
 is best evidenced by a circular letter issued to all locals by the Washington State 
 Federation of Labor urging the closest co-operation on all working people. 
 
 The sole basis for the untrue statement above quoted is that our class 46, 
 Powder Works, embraces only four establishments in this State, all small except 
 that of the DuPont Company commonly known as the Powder Trust. The small 
 plants contributed to the accident fund, the large plant proposes to test in the 
 
126 CANADIAN" MANUFACTURERS' ASSOCIATION": No. 65 
 
 Federal Courts the constitutionality of out law which was unanimously sustained 
 by our State Supreme Court, Sept. 27th, 1911. An explosion in one of the 
 small plants resulted in the loss of eight young girls who had been permitted to 
 work in the same room in close proximity to large stores of powder. The fund 
 is sufficient for the payment of the pension provided by law to the parents of these 
 girls for a considerable period, but until the very large powder company con- 
 tributes its quota, the setting aside of the reserve to the parents of those children 
 required by law must be deferred. 
 
 Eespecting the filing of numerous trivial reports, that statement is correct 
 since our law requires the employer to report "any accident," and with the begin- 
 ning of its operation, October 1st, the employers were endeavouring to comply 
 heartily in every detail. However, notwithstanding the unfortunate fact that 
 there is no "first aid fund" (same having been stricken out in the legislature), the 
 Commission does not compensate for any injury unless actually compelling the 
 workingman to abandon his job for a period which results in the loss of more thaD 
 5 per cent, of his monthly wage. 
 
 The employers of the State are almost unanimously in hearty accord with this 
 law and its present administration. They have learned that while the rates fixed 
 by the legislature are unquestionably higher than casualty companies have insured 
 them for heretofore, yet those rates were contributed only a three month's payroll, 
 and no more payments are to be made to any of the 47 funds except such fund be 
 first reasonably drained by the accidents of that class; in other words, they are 
 assessed on the pay-rolls at the rate named only occasionally as necessary. 
 
 Furthermore, they appreciate that while casualty companies insured them 
 against legal liability which applied to about fifteen per cent, of the accidents, 
 this law compensates the workmen in about 100 per cent, of work accidents with- 
 out regard to fault. In the face of this, we believe it will be demonstrated that 
 the actual rates which can only be determined after a year or two, will in fact, be 
 less than their outlay heretofore, without considering their loss of time and inci- 
 dental expenses incident to the litigation system. 
 
 Yours respectfully, 
 
 The Industrial Insurance Commission, per. 
 
 APPENDIX X. 
 LETTER FROM LARSON LUMBER CO. 
 
 Seattle, Wash., Nov. 17th, 1911. 
 
 Mi:. R. TT. If. Alexander, 
 
 Secretary, British Columbia Branch Canadian Manufacturers' Association. 
 441 Seymour Street, Van6ouver, B.C. 
 
 Dear Sir, 
 
 In response to yours of Nov. 13th, I desire to say that the workings of the 
 Workmen's Compensation Act in this State during the six weeks of its trial so 
 far have been eminently satisfactory. Of course, this is altogether too short a 
 
1912 WORKMEN'S COMPENSATION COMMISSION. 127 
 
 time to form a comprehensive conclusion. From the viewpoint of the employer, 
 however, I have preferred to carry my individual risk in the past. Our company 
 did not carry liability insurance for some time, but we set aside one per cent, 
 of the pay rolls to cover sums paid to injured workmen. We endeavoured to pay 
 all employees some compensation, whether we were liable or not and I have found 
 in the course of several years' experience, that one per cent, of the pay rolls cover- 
 ing the mills and camps was sufficient to pay ordinary losses. There is a feature 
 of extraordinary losses staring one in the face, however. The compensation Act 
 protects the individual against any extraordinary heavy loss such as might arise 
 from the bursting of a boiler for example. 
 
 On account of my previous experience, as outlined above, I was somewhat 
 opposed to the State's Compensation Act, as their charge contemplated a cost 
 of two and one-half per cent, on the payroll. However, we were able to get an 
 amendment, which made the two and a half per cent, an advance and made the 
 subsequent assessment cover only actual losses paid. 
 
 Answering Mr. Wegenast's question as to whether the system is preferable 
 from an employer's standpoint to the common law system of the alternate of the in- 
 dividual liability ; I am inclined to the belief that it is vastly superior to the old com- 
 mon law, especially as it has been practised in the Western States, and I believe 
 on account of the liability of extra hazard it is preferable to the individual liability 
 of employers. Of course, as I said, all is in the nature of an experiment, being 
 somewhat more advanced and socialistic than any other in existence. I opposed 
 it in the beginning as stated above, but am now convinced that law can generally 
 be administered to the satisfaction of employers and to the relief of employees, 
 whereas before very little of the actual money paid reached the injured party. 
 I trust that this answers your questions. With personal regards, I remain, 
 
 Very truly yours, 
 
 J. W. Bloedel. 
 
 APPENDIX XI. 
 INDUSTRIAL INSURANCE COMMISSION. 
 
 Statement of Funds in Classes 7, 10, and 29, on January 15th, 1912, per. 
 
 The three classes created by the Industrial Insurance Commission under the 
 Workmen's Compensation Act in which we are particularly interested are classes 
 7, 10, and 29. Through the courtesy of the Commission we have secured the 
 figures showing the status of the fund in these classes at the 'close of business on 
 January 15 th. 
 
 We have been promised these same figures every month in time for publication 
 in the bulletin and we would advise members to file copies and compare the 
 figures from month to month. It is of great importance that we watch this 
 matter carefully. If it is found that the fund is decreasing and that the receipts 
 on the present rate are not going to be enough to meet the claims decided by the 
 commission to be justified, then one of two things must happen — either the rate 
 will have to be raised or the number of accidents must be cut down. Needless to 
 say we will strive for the latter. 
 
128 CANADIAN MANUFACTURERS' ASSOCIATION: No. 65 
 
 It is also true that with reduction in the number of accidents the rate will 
 be reduced and to that end we should bend every effort. 
 
 Class 7. Including Construction and Operation of Steam 
 
 and Logging Eailroads. 
 
 Number of contributions, 147 ; amount paid in $26,308 42 
 
 Number of claims paid, 24; amount paid on claims 2,888 00 
 
 Balance in Fund $23,420 42 
 
 Class 10. Including Lumbering and Milling. 
 
 Number of contributions, 728; total amount paid in $148,017 53 
 
 Number of claims paid, 349 ; amount paid on claims 17,030 33 
 
 Balance in Fund $130,987 20 
 
 Class 29. Including Planing .Mills, Sash and Doors, etc. 
 
 Number of contributions, 242; total amount paid in $15,596 77 
 
 Number of claims paid, 23; amount paid on claims 1,907 85 
 
 Balance in Fund $13,688' 92 
 
 A number of claims are now being investigated and others are in process of 
 entry, which will considerably increase the payment on account of accidents which 
 have occurred during October, November and December. 
 
 APPENDIX XII. 
 DE. FKIEDENSBURG'S PAMPHLET. 
 
 Some newspaper attention has recently been attracted by a pamphlet 1 in 
 which certain features of the German system of workman's insurance are adversely 
 criticised. The pamphlet is the work of Dr. Ferdinand Friedensburg, a retired 
 member of the governing body of the Imperial Insurance Department of Germany. 
 
 The pamphlet is remarkable if for no other reason, because it is the one 
 dissenting voice in the chorus of the sometimes extravagant praise of the German 
 insurance system. Dr. Friedensburg was originally appointed on the Senate of 
 the Insurance Office as representative of the ultra-conservative element who were 
 opposed on principle to the social insurance schemes; and he has, it appears, 
 throughout his tenure of office maintained an attitude of critical dubiousness. 
 The whole tone of the pamphlet though it undoubtedly contains much that is 
 cogent and valuable, is one of caustic sarcasm not indicative of an unbiased dis- 
 position. It is in places marked by exaggeration and distortion of facts, bordering 
 upon disingenuousness and appears to carry much less weight in the country of 
 its origin than has been attributed to it by foreign reviewers. 
 
 The criticisms arc of course not confined to the accident compensation system 
 but apply to the whole German system of social insurance against accident, sickness 
 
 'Praxis der deutschen Arbeiterversicherung (Berlin, 1911). Translation by Louis 
 H. Gray, Workmen's Compensation and Information Bureau, New York. 
 
1912 WORKMK.VS COMPENSATION COMMISSION. 129 
 
 and old age, with particular reference to the first two. Some of the criticisms 
 referred to will therefore be found wholly or partially inapplicable to the accident 
 compensation phase of the subject. 
 
 It is difficult to analyse Dr. Friedensburg's strictures into specific counts, 
 but at the risk of imputing a definiteness which is wanting in the article itself, 
 the following items may be extracted. It is said that the original object and 
 intention of the system as expressed in the Imperial message establishing it, namely: 
 to "Consolidate the economic forces of the nation by means of industrial associa- 
 tion under state supervision'' has not been realized in result. 1 On the contrary, 
 it is intimated that the economic burdens imposed by the system tend to handicap 
 German industry and commerce in its competition in the markets of the world. 2 
 The fear is expressed that in time of war or depression the burden of insurance 
 may become ruinous. 8 The trade associations are said in some cases to be in a 
 precarious financial footing not maintaining adequate reserves. The administration 
 of the system is said to engage an unduly large official staff and to involve an 
 undue amount of clerical labour. The system is said to encourage litigation and 
 to involve an execessive number of appeals. The chief complaint is against the 
 spirit in which the system has been administered, and this' complaint sums up 
 and includes most of the others. It is asserted that in the effort to popularize the 
 system and to placate the working classes the legal or juristic conception originally 
 intended to be embodied in the system has been lost sight of. Those in charge 
 di the administration are said to have shown too great solicitude on behalf of 
 the claimants of benefits. Judicial officers have combined the functions to judge 
 and advocate and are influenced by benevolent and philanthropic sentiments rather 
 than by principles of justice. Humanitarian appeals in individual cases weighed 
 strongly against broader considerations of equity and economy. Individual en- 
 croachments are seized upon as precedents for general extension of pension rights ; 
 as a result, it is said that simulation, malingering, fraud and perjury have become 
 so common as to demoralize the whole administration and the effect has been to 
 pauperize the working population and to stifle thrift and enterprise. 
 
 In many particulars, the criticisms are inconsistent and self-contradictory. 
 in other particulars they are manifestly untenable in the light of general know- 
 ledge. While it is deplored in one place that the benevolent attitude of the courts 
 has made it almost impossible for a workman to fail in establishing his claim 
 in another place figures are cited showing that of the total number of claims only 
 18.7 are granted on application, and of the applications for revision in unsuccessful 
 cases only 10.5 per cent, succeed. 4 Again Dr. Friedensburg expresses alarm at 
 the growth of paternalism and bureaucracy while at the same time advocating the 
 complete assumption by the State of the whole administration of the insurance 
 system and the collection of the insurance fund through the medium of the state 
 fiscal machinery. He admits that it was the intention that the State should make 
 provision (staatliche Fursorge) for workers who, through sickness, industrial 
 accident, invalidity or old age, have become incapacitated, 5 and that the system 
 was freed from all legial formalities and red tape": yet he inveighs bitterly against 
 the departure from the "juristic"'' conception of the insurance of the insurance 
 
 1 P. 9 (Gray, 24). 
 
 2 P. 5 (Grav, 19). 
 
 3 P. 6 (Gray, 20). 
 
 4 P. 38 (Gray, 51). 
 
 5 P. 1 (Gray, 15). 
 
 6 P. 3 (Gray, 17). 
 9 L. 
 
130 CANADIAN" MANUFACTURERS' ASSOCIATION: No. 65 
 
 system and the informality of proceedings by which claims are established. The 
 argument that insurance systems have militated against the success of German 
 industry and commerce is refuted by the consensus of opinion amongst expert 
 authorities in Germany and in foreign countries. This opinion is well expressed 
 by Dr. Kaufman, President of the Imperial Insurance Office. "The workers' 
 lives preserved mean maintenance and increase of our national resources, and 
 therefore give splendid returns for the heavy financial burdens which social insur- 
 ance places upon economic structure. It is not an accident that the unprecedented 
 expansion of German commerce and industry and tbe wonderful improvement in 
 the economic welfare of the nation during the last twenty years has happened 
 concurrently with thorough-going improvement in the condition of our workers. 
 There is a close connection between the two events." 1 
 
 The figures given by Dr. Friedensburg as to the number of officials engaged 
 upon tbe system do not appear in the light of the population of Germany and the ex- 
 tent of the system to represent an excessively large administrative staff, and, it may 
 be added, that with the exception of the more fully developed State's scheme 
 suggested by Dr. Friedensburg himself, no other system of insurance would afford 
 any superiority in this respect. Notwithstanding Dr. Friedensburg's criticisms 
 insurance administration in Germany is admittedly the most efficient and econ- 
 omical known in the world. 
 
 As to the solvency of the trade associations it must be remembered that under 
 the German, system it is not necessary to set up reserves, but is sufficient to collect 
 each year only enough to pay the year's pensions with a small margin for an 
 emergency fund. As a matter of fact, it has been strongly protested that tbe 
 margin regularly added to the amount required for the year's outlay has been 
 too large. The accumulated reserves had in 1909 reached the immense sum of 
 $540,000.00. 2 . 
 
 In their general character the criticisms are anything but constructive and 
 little or no attempt is made to point out remedies or alternatives : but a few con- 
 structive suggestions are made, and these, in the light of the general tenor of 
 the pamphlet are of a surprising character. The conclusion of the whole argu- 
 ment is given in the following remarkable passage. "Tbe system of workmen's 
 insurance cannot be fully beneficial until, freed from all exaggeration, and in 
 particular from conscious or unconscious subservience to tbe lower elements, it 
 operates as a state institution unpartisan, as any other department of the state." 3 
 In another portion of the pamphlet he suggests that "A tax might have been levied 
 far more cheaply nor would it have required the huge army of officials the intricate 
 mechanism of administration or the costly system of vouchers and the like." 4 
 
 But while there is little constructive criticism the writer is at pains to disavow 
 opposition to the essential principles of the German system. Thus he states that 
 it is far from his intention to say anything in opposition to the German social 
 insurance legislation or its development. 5 Again, he says: "This does not imply 
 that the Trade Associations should be abolished. That would be the most serious 
 
 1 Schwedtman and Emery, Accident Prevention and Relief, page 38, and eee similar 
 expressions, Resp. Fed. Com. U.S-. 
 
 'Schwedtman and Emery, Accident Prevention and Relief, pp. 38. 41. 
 
 8 P. 48 (Gray, 62). It is difficult to translate the force of the original: "Die Arbeiter- 
 versicherung kann nur dann segensreich wirken, wenn sie, losgellost von alien ubertrie- 
 bungen, insbesondere von der bewuszten Oder unbewuszten Liebedienerel nach unten, als 
 eine Staatsf inrichtung arbeitet, parteilos wie jede andere." 
 
 4 P. 41 (Gray. 54 I. 
 
 B P. 6 (Gray, 201. 
 
1912 WORKMEN'S COMPENSATION COMMISSION. 131 
 
 mistake that could be made for if anything has stood the test it has been the 
 Trades Associations; and they are indispensable as constituting the most effective 
 means of representation for that portion of the community which, notwithstanding 
 the facility which their opponents display in manipulating their figures, bears 
 by far the greatest portion of the cost of the insurance." 1 Even in the title of 
 his pamphlet, Dr. Friedensburg guards himself by announcing his subject as 
 the "praxis" as opposed to the theory or principles of the German system of 
 insurance. 2 And this altitude is borne out in the discussion which is almost 
 entirely a deprecation of the miscarriage of the original juristic conception which the 
 law was intended to embody. The complaint is not against the law or the system 
 hut against the alleged compliant, class-serving and paternalistic spirit shown in 
 its administration. 
 
 The chief and perhaps the only value of the article consists in its calling 
 attention in an emphatic if hyberbolic manner to the dangers of allowing the 
 administration of an insurance system to be controlled by short sighted human- 
 itarian and charitable sentiments. This may be evinced not only in the benevolent 
 allowance of claims not strictly justified, but also by charitably relieving the work- 
 men from participation in the cost. For Dr. Friedensburg does not confine his 
 criticisms to the official and the workman. "Insurance was intended as a right 
 which the insured was to help secure by his own efforts; in this way he was 
 to be won to a participation in the thought and activity of the nation ; he was 
 to learn not to rely upon the help of others but rather to work out his destiny 
 by his own efforts. With deliberate and well-considered purpose, therefore, the 
 original draft of the sickness insurance law made it the duty of the employer to 
 deduct half of his contribution to the insurance fund from the wages of the work- 
 men. But in this instance it was the Reichstag itself, which, unable to do enough 
 in its benignity and its craving for popularity changed the obligation into a mere 
 authorization which to a large extent, has remained a dead letter. Of course, 
 the concept itself is not yet quite dead. Only recently, the Chamber of Commerce 
 at Frankfort-on-the-Oder opposing a projected insurance law for private official-, 
 has placed itself on record that: 'The assumption by the State of too large a 
 responsibility in providing for its citizens involves the grave danger that individual 
 responsibility, that powerful incentive to thrift and enterprise, may become gradu- 
 ally atrophied.'"' 3 And of employers themselves the complaint is that "it has 
 long since become the regular custom for masters — and their example has been 
 followed by many other employers, especially in rural districts — to pay the full 
 contributions towards the invalidity insurance of their insurance ; and not to sub- 
 tract the half as they may optionally do. Many indeed know of no other course; 
 and many would even he ashamed to do it." 4 
 
 Much more remarkable than the article itself is the attempt of the advocates 
 of the system of individual employers' liability with voluntary insurance to use 
 the pamphlet in support of their views, and as an expose of the weakness of 
 state insurance. The article is being quoted by representatives of the liability 
 insurance interests in opposing the idea of state insurance. Used for this pur- 
 pose the article is certainly a boomerang. In the first place, the German system 
 of accident compensation is not a State insurance system, and in the second place, 
 as has been pointed out, the strongest argument contained in the article is a 
 
 ■P. 47 (Gray. 61). 
 
 a Dr. Gray has mistranslated this as "Practical Results." 
 
 3 P. 41 (Gray, 54). 
 
 4 P. 40 (Grav. 54). 
 
132 CANADIAN MANUFACTURERS' ASSOCIATION: No. 65 
 
 plea for state insurance. Moreover, Dr. Friedensburg is most emphatic in disclaim- 
 ing dissent from the underlying principles of the German system. He intimates 
 that he would be a "blind fool" who would "fail to recognize that the blessings of 
 the insurance system cannot be fully described even by the use of the customary 
 expressions of unqualified laudation." 1 
 
 The following letter by Dr. Zacher, the recognized authority on the German 
 insurance system, is quoted from the brief presented to the Federal Commission 
 on Workmen's Compensation by Mr. Ferdinand ('. Schweidtmao, on behalf of the 
 National Association of Manufacturers of the United States, and probably repre- 
 sents with fair accuracy the views of those best in a position to estimate the force 
 of Dr. Friedensburg's criticism: 
 
 Berlin, April 19th. 1911. 
 My dear Mr. Schwedtman, 
 
 In reply to your favours of March 31st, and April 7th, I beg to send you 
 herewith the desired particulars of Dr. Friedensburg. His statement must not 
 be taken too serious. Dr. Friedensburg has been generally known even during 
 his active connection with the Imperial Insurance Department as the solitary 
 advocate of extreme tendencies. His present articles show an unwarranted ten- 
 dency to condemn a great national, social insurance system on account of a few 
 shortcomings in some of its details. That any system, covering by compulsion 
 nearly all of the working population of a nation, has some fault, especially at 
 the beginning, is natural, and I have long ago called attention to them in my 
 works on social insurance but have at the same time pointed out their remedies. 
 
 While I have the highest regard for the sense of justice and fairness of Dr. 
 Friedensburg. who for many years was my associate in office; I know that there is 
 no foundation for his accusation on the part of the German Imperial Department 
 in favour of the wage workers. The labour press has in recent years with equal 
 lack of reason accused this department of the opposite tendency — that is, of 
 injustice to the wage-worker. 
 
 Surely there can be no reasonable talk of a deficit actuarial or otherwise, or of 
 financial difficulties in our insurance system, in view of an accumulated reserve 
 \'wi\<\ of $500,000,000, especially if our insurance laws continue to be carried out 
 properly, and every abuse continues to be promptly and effectually met. I am 
 of the opinion that a compulsory national insurance system does not require the 
 complicated method of figuring in advance exact final costs which of course must 
 be part of a voluntary insurance system, but remains always a factor of uncertainty. 
 Men sufficiently familiar with this subject to judge are unanimous in pro- 
 nouncing the underlying principles of the German insurance system thoroughly 
 sound, and in declaring the system a wonderful factor in establishing for the whole 
 nation a higher level in culture and industrial efficiency. Practically every one 
 agrees that the shortcomings of our insurance system are extremely small in 
 comparison with its wonderful advantages and especially in the compulsory feature 
 responsible for a growing spirit of thrift and economy which is full of importance 
 and promise for the future of the nation. 
 
 Wishing the National Association of Manufacturers a successful annual 
 
 convention, 1 remain. 
 
 Sincerely yours, Dr. Zacher. 
 
 Director German Imperial Statistical Department. 
 
 P. 48 (Gray, ©0). 
 
MINUTES OF EVIDENCE 
 
 First to the Eleventh Sitting, 
 
 OCTOBER 23, 1911 TO JANUARY 24, 1912. 
 
 133 
 
MINUTES OF EVIDENCE 
 
 Taken before the Commissioner 
 THE HON. SIR WILLIAM RALPH MEREDITH, CJ.,C.P. 
 
 O N 
 
 Workmen's Compensation 
 
 FIRST SITTING 
 
 Legislative Building, Toronto. 
 
 Monday, 23rd October, 1911, 11 a.m. 
 
 Present : Sir William R. Meredith., Commissioner. 
 Mr. F. N". Kennin, Secretary. 
 Mr. W. B. Wilkinson, Law Clerk. 
 
 The Secretary read the Commission appointing Sir William Ralph Meredith, 
 C.J.jC.P., Commissioner. 
 
 The Commissioner: Since the issue of this Commission efforts have been 
 made to get together as much material as possible bearing upon the subject of the 
 inquiry, and the Secretary has gathered a very large amount of what may turn out 
 to be valuable information upon the subject. That information will be here, and 
 will be available to anybody who may wish to examine it or to make any use of it. 
 It will not be praticable to take it away unless there are duplicate copies, but any 
 of it may be examined at any time by any person interested. It was intended that 
 the public sittings of the Commission should take place earlier, but owing to 
 circumstances to which it is not necessary to refer more particularly, it was thought 
 inexpedient to hold a sitting of the Commission until the present time. Although 
 this sitting of the Commission is preliminary, I will be glad to hear to-day what 
 anyone has to say. and ;is for any and all other persons who may wish to speak 
 upon the subject of the inquiry, arrangements may be made at convenient times. 
 
 If there is anyone present who wishes to be heard he may speak now. 
 
 Mr. E. C. Hunt : Last year I lost my right arm in a sawmill in Cookstown, 
 and I received no compensation whatever for my loss. My wages stopped as soon 
 as my arm was cut off, and I had to make what provision I could to enable me to 
 get better. Since getting better and getting an artificial arm I have had great 
 trouble in getting employment of any description. It is very hard for a man with 
 one arm to get a job when very often there is an over plus on the market of men 
 with two arms. 
 
 [1341 
 
1912 WORKMEN'S COMPENSATION COMMISSION. 135 
 
 The Commissioner : Was any effort made to obtain compensation ? 
 
 Mr. Hunt : I asked the man and he said he wasn't worth very much. I saw 
 a lawyer about the case and he claimed he didn't think it was worth my while to 
 sue, for the man wasn't worth very much that I was working for, and he didn't see 
 that there was any defect in the machinery, and he thought in the long run I should 
 be the loser if I took action. He said the best thing to do was to let it go, and that 
 is all I got, and I have just had to struggle along as best I could with the one arm. 
 I think some compensation should be made either of a grant of land or a pension 
 such as is in effect in Australia or in some of the States or in the British Isles. If 
 this had occurred in the British Isles I should have got enough to live on for the 
 remainder of my life on account of the injury. I think a man that gets hurt in the 
 industrial army should be compensated in some way similarly to a man that is 
 injured in warfare. I think that is all I have to say. 
 
 Mr. A. C Macdonell, K.C :' Permit me to say a word or two. I was not 
 aware of what the inquiry would be, but I am glad to have an opportunity to say 
 just a few words on the subject. It seems to me as the law is at present on our 
 statute books, and as administered, certainly in the opinion of many, it is entirely 
 inadequate and out of date with our present civilization. The condition is such 
 that it has become more than an abuse, in my opinion, because of the presence of 
 what are called liability insurance companies. In the first place when a man 
 meets with an accident now he has the general law, the Workmen's Compensation 
 for Injuries Act. which has been productive of perhaps more litigation, as your 
 Lordship is aware, than any other act on the statute book. The result has been 
 that almost numberless cases have gone from court to court on practically every 
 section of that act. It has not proved to be a remedial act in so far as the public 
 are concerned. It is not a measure out of which the public has had any very great 
 advantage. In the second place the presence of these insurance companies makes 
 it practically impossible for a man to recover damages for an accident. Now, when 
 I say practically impossible I mean that in its fullest sense. In the first place all 
 employers are insured, generally speaking, by these companies, and they are per- 
 fectly indifferent as to what becomes of the accident after it happens. The insur- 
 ance company takes over all responsibility for it and all litigation in connection 
 with it. The result is that as soon as a man is injured an agent of the company 
 practically follows him in the ambulance, either to his home or to the hospital, and 
 obtains from him fairly or unfairly — very often unfairly — some kind of a release; 
 he gets the company released, or makes some settlement. Very often these settle- 
 ments are unfairly obtained, and nearly always inprovident. They are obtained at 
 a time when the injured person is not in a condition to look after his own affairs 
 and when he is easily taken advantage of. The result is that litigation ensues, and 
 these settlements are very often set aside, and very often stand; but in any case no 
 matter what the accident may be the company defends it. They make it a practice 
 to defend everything, and the result is, even if a man is honestly entitled to com- 
 pensation, or his family is entitled to compensation, litigation, generally prolonged, 
 ensues and the man gets nothing. In many of these cases a legal gentleman is 
 attached to the staff of these insurance companies, and they carry on litigation 
 practically at no expense except the expense of an annual salary of a small nature 
 to the lawyer who is attached to the staff, and justice is impeded in this way. 
 Appeals are taken from court to court, and almost on every motion- and even dur- 
 ing the pendency of litigation again the agent of the company is active. Even 
 months after matters have been placed in solicitors' hands we find the agents going 
 to the house of the man who has been injured, seeing himself or his wife, and 
 
136 MINUTES OF EVIDENCE: No. 65 
 
 obtaining settlements that are improvident, and done behind the back of the legal 
 adviser of the unfortunate person. 
 
 I think public opinion generally is satisfied that this litigation is not in 
 accordance with our present civilization, and that some change should take place. 
 What that change shall be is. of course a matter of opinion. We find magazine 
 articles almost without number upon the legislation in the different countries, and 
 upon what legislation probably will take place in the future in these different 
 countries. Personally I think the present British Compensation for Workmen's 
 Act of 1906 is about as reasonable and as fair a measure as could be adopted. 
 We could have, if we adopted that, the advantage of the British system of leg- 
 islation, and the British system of the interpretation of the act, because although 
 the act is pretty definite in its terms still, as you are aware, a large number of 
 cases have already been tried and taken from court to court regarding the different 
 features of that act, and working of it out. 
 
 I have made a short summary of the salient features of the act, the outstand- 
 ing features, or as it were the bones of the act, and they are shortly these: 
 
 The Workmen's Compensation Act of 1906 is an act to consolidate and amend 
 tie law with lespect to compensation to workmen for injuries suffered in the course 
 of their employment. The act provides generally for the liability of employers to 
 workmen for injuries, and introduces a new principle into the English law, namely, 
 that one man may be made responsible to another for injuries, whether or not there 
 lias been any negligenqe on his part. Broadly speaking the effect of this act is 
 that every workman shall be entitled to recover compensation from his master if he 
 is injured by an accident whilst employed in his service, and this is quite apart 
 from whether such accident was occasioned by the master's negligence or not. The 
 injury must have been occasioned by an accident while in his employment, but it 
 is a matter of indifference whether it was occasioned by the master's negligence or 
 not. The act may be divided under three principal headings: The act itself 
 mainly deals with the question of the liability for compensation; the First Schedule 
 deals witli how the compensation is to be assessed and disposed of; and the Second 
 Schedule deals with the procedure to be adopted. This procedure is new. Along with 
 the introduction of the new principle of liability the act has introduced a new T prac- 
 tice entirely, that of arbitration. I would briefly indicate the chief points to be 
 observed by the inspectors and the workmen in ascertaining and determining such 
 liability. To establish a right to compensation, whatever the amount, the applicant 
 iiiii-t prove: (1) that he was in an employment to which the act applies. In 
 England thai has been very broadly extended to include seamen, and so forth : 
 (2) thai he was injured by an accident; (3) that the accident arose out of and 
 in the course of his employment : ( i) that he was a workman within the scope of 
 the act; (5) that he was entitled to some earnings. 1 think those who earn over 
 £250 a pear are not included in the benefits of the act, that is the equivalent of 
 $1,000: (6) that he was incapacitated by such accident for at least one week; (7) 
 that so soon as possible he gave notice of such accident: (8) that within six 
 months he inadi a claim in respect thereof: (9) that for such accident the res- 
 pondents (they an called respondents there instead of defendants) are persons 
 liable within the act. In addition to controverting the evidence of the applicant 
 on any of the foregoing points, as a matter of defence the respondents, provided 
 they have given the proper notice, may also say: (1) that the accident was occa- 
 sioned by the serious and wilful misconduct of their workman and that it has not 
 resulted in death or serious and permanent disablement; (2) as regards industrial 
 
1912 WOKKMEN'S COMPENSATION COMMISSION. 131 
 
 duties that the workman had at the time of entering his employment wilfully and 
 fraudulent^ misrepresented himself in writing as not having previously suffered 
 from disease: (3) that they have admitted the claim and there is no subject matter 
 for arbitration; ( I) thai the applicant has contracted out of the act, that is in 
 certain eases where benefit societies or funds are provided in lieu of the compen- 
 sation named in the act; (5) thai the applicant has refused to submii himself to 
 medical examination. Further the respondents may say, although not as againsl 
 the applicant, that through liability to the applicant they are entitled to be indem- 
 nified by some other person. 
 
 These are. as I have said, the salient features of the act and present the general 
 Hl'eet of it. In England, as your Lordship is aware, this act has been commented 
 upon most favourably. The result, I think, has been that in England and in other 
 [daces where similar legislation exists at the present time, that the employers would 
 on no account part with the act, or have it annulled or wiped out. It has heen 
 found that the act is beneficial both to the employer and employee. It rids the 
 employer of the harassing feature of law suits and litigation, and the amount that 
 the employer has to pay for damages is assessed by arbitration on a scale provided 
 for by the rules stipulated by the act. Provision is made now by all employers 
 for the annual payment of certain amounts into a fund, with the result that at the 
 piesent time the employer in England adds to his charge of manufacture and to the 
 general charge of his null, or whatever place he is operating, a certain annual sum 
 to he set aside to form a fund out of which to meet claims for compensation. This 
 fund is carried forward the same as any other fixed or permanent charge on his 
 business, the same as his fire insurance, or any other charge, and it is included in 
 the cost of manufacture. It goes into his fixed charges as part of his business. It 
 is provided for and paid off out of the business and he feels no sudden call upon him 
 for moneys to meet claims of this kind, because he has already provided for it in 
 the way I have said. He does not really feel the annual payments any more than 
 he feels his taxes or fire insurance, or any other fixed charge on his business, and 
 so it is that the act has heen found beneficial to both employer and employee. It 
 lids the employer of contentions and constant litigation, and if u'ives the employee 
 a chance, without expense, to go before a tribunal where he can make his claim in a 
 plain simple way without invoking the machinery of the courts, and without being 
 obliged to give up half of what he may recover for law costs even if he does recover. 
 Nowadays, as I have said, it is quite impossible, owing to the intervention of the 
 insurance companies, for a workman to get what he is entitled to, or not until he 
 Has been dragged from court to court, and what he gets is largely dissipated in 
 law costs. 
 
 Mr. Stewart: That refers to this country? 
 
 Mr. Macdonell: Yes. The manufacturer over there now includes in his 
 cost of manufacture a certain annual sum that he has to pay into this fund which 
 goes annually to make up a sum sufficient to meet the demands of the workmen, 
 and he does not feel it any more than he does any fixed charges or overhead charges, 
 as it is called, in his business, and public opinion, as far as it has been expressed 
 in the press and in magazine articles, and so forth, is that it has been found as 
 advantageous to the employer as to the employee. 
 
 The Oommisstoxft? : How do you find the act operates upon small employers 
 of labour, say a man employing five or ten men? The act as introduced has 
 exempted that class of manufacture from the operation of the act. but in the 
 House that exemption was stricken out. Have you looked at that aspect of it, Mr. 
 Macdonell? 
 
138 MINUTES OF EVIDENCE: No. 65 
 
 Mr. Macdonell: I have not observed any criticism of it. From the stand- 
 point of the small emeployer there may be some objections. I have seen a great 
 many articles in periodicals and in the press, but I have not observed any criticism. 
 
 Mr. D. L. McCarthy, K.C.: How does the British Act apply to a case like 
 Mr. Hunt's? 
 
 Mr. Macdonell : That is liable to happen anywhere. The law cannot guar- 
 antee solvency on anybody's part. 
 
 The Commissioner: Have you seen the law of the State of Washington, 
 which is practically State insurance at the expense of the manufacturer? 
 
 Mr. Macdonell: I think that is the German system too. 
 
 The Commissioner: But this is entirely at the expense of the employer. 
 That was passed this year. 
 
 Mr. Macdonell: I have not seen that. The German system is based on a 
 contribution. 
 
 The Commissioner: There are certain percentages of the total wage bill 
 which fix the contribution by the employer to the funds. There is no. risk such as 
 Mr. McCarthy has suggested in the case of Mr. Hunt. There the fund would meet 
 the case. 
 
 Mr. Macdonell: That contribution system is in many acts, but that is the 
 
 first act. I think, in which it is entirely at the expense of the State. 
 
 Mr. Stewart : May I ask Mr. Macdonell, since he has mentioned the dangers 
 of insurance, do not the English manufacturers insure on the same basis against 
 accident ? 
 
 Mr. Macdonell : Well, they don't really need to now. I don't know whether 
 they do or not. Since 1906 the Employers' Liability Act guarantees to a man 
 injured by an accident certain compensation. 
 
 Mr. Stewart: Is there anything in the British Act which prevents an 
 employer from insuring his men so that if an accident does happen he takes no 
 risk whatever, but just like a fire insurance company, they take all the risk. 
 
 Mr. Macdonell : I presume they do that. 
 
 Mr. Stewart : Is it not a fact in England that through the operation of the 
 insurance companies that the employers have to differentiate between the men they 
 employ, and that men who are above the age of 33 and become a little disabled are 
 not employed, simply for the reason that the insurance company will not insure 
 them and take the risk: and therefore it throws the older and weaker workmen 
 into the slough of despond, into the scrap heap? Is that not one of the effects of 
 the working of the act in England? 
 
 Mr. Macdonell : That would follow I think very largely. 
 
 Mr. Stewart: Wouldn't it be a benefit to a few of the workers at the expense 
 of the rest? 
 
 Mit. Macdonell: That is if you introduce the insurance part of it. There 
 is no necessity for that. The employer is made liable by the British Act. and 
 therefore it is a matter of indifference as far as the workman is concerned. 
 
 Mr. Stewart : You do not state that the employers do not insure, because as 
 a matter of fact they do insure in England. 
 
 Mr. Macdonell: I suppose they can, but that does not affect the law. The 
 law makes the employer liable for an accident as T have said under the British 
 Act. 
 
 Mr. Stewart: Tt affects the greater portion of the workers though. 
 
 Mr. Macdonell: I do not know how that would work out. I am just 
 discussing the legal end of it. 
 
1912 WORKMEN'S COMPENSATION COMMISSION. L39 
 
 Tin-; Commissioner: The point that Mr. Stewart has mentioned has been 
 prominently brought forward in the discussion on these acts, and it was pointed 
 out that the result is as he points out, although the age is put a good deal higher 
 than lie mentioned. It is said that employers will not take into their service men 
 over fifty as they are more liable to meet with accidents and it is perhaps more dif- 
 ficult to insure them. That is an inherent difficulty, if it is a difficulty at all, in 
 the system. 
 
 Mr. Macdoneli. : There could be legislation that would remove that evil, 
 perhaps. 
 
 The Commissioner: You have no suggestion to make yourself, Mr. Stewart? 
 
 Mr. Stewart: Well, as far as I am concerned I simply say, not having the 
 mental training of a lawyer, that these acts kind of confuse me, but from the work- 
 ings of the British Act I think it is no benefit at all to the working class, as far 
 as the whole working class is concerned. It is simply the few who get compen- 
 sated. It simply shifts the burden from a few of the working class, but for the 
 majority the load is heavier, for the reasons I have put forward; in the first place 
 that the employer has certain risks to take. Naturally in his business he has the 
 risk of fire, and he has the risk of other things which he insures against. It is the 
 same with the workmen's compensation. A man is injured and someone has got 
 to pay, so he simply insures the whole staff. Now, the insurance companies are 
 not in business for pleasure; they are in business for a profit; and the old man, a 
 man who from working perhaps in a white lead industry has had his nerves 
 shattered, men who are prematurely old from the nature of their work, — are the 
 insurance companies going to insure him when there are others willing to sell them- 
 selves cheaper? Certainly not. The insurance company won't take the risk. The 
 employer also is in business for profit, and naturally the older men are put on the 
 shelf. It is only one in a thousand that gets compensation. A few of the workers 
 are benefited by the British Act, but the majority are not. It is an act for the 
 workers, but it doesn't redound to the benefit of the whole of the workers. It 
 benefits a few at the expense of the others. 
 
 The Commissioner: What is your occupation, Mr. Stewart? 
 
 Mr. Stewart : I have no occupation regularly. I have to do what I can. but 
 i have been in the baking trade. I have learned the baking trade. 
 
 Mr. F. W. Wegenast: I am representing the Canadian Manufacturers' 
 Association. I presume it will not be expected at this preliminary meeting to go 
 into any detail of the merits in this discussion, although I am very much inter- 
 ested in certain of the points raised. Incidentally I might just remark that there 
 can be no exception taken in my estimation to either the view of Mr. Macdoneli, 
 or the view of the last speaker Mr. Stewart, so far as they go. The fact of the 
 matter is, I suppose, that under the British system there is insurance, but it is as 
 has been indicated an employer's liability insurance, and the insurance company 
 simply takes up the burden of defending the action, such as it may be, and it sees 
 to it that its risks are no heavier than it can possibly help, and one of the incidents 
 of that system, of course, is that the older and more decrepit men of necessity are 
 gradually pushed to the wall. On behalf of the Association which I represent, I 
 would like to present the resolution which was adopted at the annual meeting some 
 weeks ago, and to say in connection with that resolution that while we are offering 
 to the Commissioner the co-operation of the Association in his investigation, we 
 do so in no perfunctory way. The manufacturers of this Province, and indeed the 
 whole Dominion, are seized with the importance of this subject, and if I may antic- 
 ipate the attitude that will probably be taken by the manufacturers and probably 
 
140 MINUTES OF EVIDENCE: No. 65 
 
 ii v the employee -interests in tins country, I would say that probably very little 
 exception will be taken to the proposition of Mr. Macdonell, that compensation in 
 some form should be provided. The discussion, if I may anticipate again, so far as 
 the manufacturing interests are concerned at all events, will be confined probably 
 to tbe means by which that compensation should be effected. Realizing as I do 
 that the question of what is the best means is a matter of great perplexity, and that 
 in determining for the guidance of the legislators in this Province' what should be 
 the proper principles to work upon, we have the advantage of the experience of other 
 countries for the last thirty or forty years. The resolution which I may perhaps 
 read js as follows: "Resolved that the conservation of industrial efficiency by 
 organized and systematic means for the protection of the life and health of wage 
 workers, and compensation for the results of industrial accidents is a matter which 
 demands the careful attention of this Association. 
 
 " That in view of the imminence of legislation upon the subject in some of the 
 provinces, this Association ought to undertake a thorough investigation of the 
 whole subject of accident prevention and relief, with a view to formulating a broad 
 general policy for future activities. 
 
 " That recognizing the futility of repeating the experiments of other countries 
 and the possibility of profiting by the failure and success of legislation of other 
 jurisdictions, we urge upon those in authority that, without permitting any undue 
 or unreasonable delay, any future legislation should be undertaken only after the 
 most thorough investigation of the whole subject from all standpoints. 
 
 " That a committee be appointed to investigate the subject on behalf of this 
 Association, and that this committee be authorized, under the direction of the 
 Executive Council, to take such steps as may be deemed advisable to present the 
 views of the Association as occasion may arise during the coming year to any leg- 
 islative or other bodies dealing with the question." 
 
 I do not know that I can say anything further at this stage, your Lordship, 
 except to repeat that we are anxious to co-operate in every possible way with your 
 Lordship in reaching a settlement or solution of the problem, and we shall be 
 glad to have your Lordship's direction, or have your Lordship indicate in some way 
 as to the best method that we can follow to assist. 
 
 The Commissioner : Do I understand that there was any scheme form- 
 ulated by the Association? 
 
 Mi;. Wegenast: No, your Lordship. 
 
 The Commissioner : Have you seen your way yet to grapple with the dif- 
 ficulty that Mr. Stewart points out, and which you seem to think is a defect in the 
 ad ? lias that aspect been considered, and is it practicable to deal with it in a 
 Workmen's Compensation Act? 
 
 Mi:. Wegenast: Off hand I would say yes. Of course it will be realized in 
 speaking for an Association like the Canadian Manufacturers' Association that it is 
 very difficull to speak generally. We represent in our membership in this Province 
 alone 1,800 manufacturing concerns — practically the whole of the manufacturing 
 interests of the Province. One qualification for membership in our Association 
 is thai a man or concern shall employ at least five persons in actual work in some 
 branch of manufacture in Canada, and of those qualified for membership we em- 
 brace 00 per cent,, according to the number of men employed and the amount of 
 tital invested. Numerically it is slightly less, but that expresses in a general way 
 the scope of our Association, Now. if is no small task to formulate the opinion and 
 the views of an Association of 1.S00 manufacturing concerns and corporations, and 
 whatever T shall say io this Commission will always be qualified by that difficulty. 
 
1912 WOKKMEN'S COMPENSATION COMMISSION. Ill 
 
 Oil' hand I would say that I have reason to anticipate thai some scheme may be 
 worked out which will be satisfactory to the Manufacturers' Association. In 
 doing so 1 may also say thai the only thing which would prevent a satisfactory 
 working out of such a scheme will be an undue altitude of criticism on the pari of 
 those who will, have the most to gain by any legislation that is adopted. I think it 
 need not he disguised that in some branches of legislation the Manufacturers' 
 Association and the Employers' Association do come into conflict with the interests 
 of the labour organization, and while that is the case, and while there is owing to that 
 a certain amount of what might be called suspicion, there is no reason to my mind 
 why in this subject of all subjects the elements in which a .possible conflict of in- 
 terest might arise should not be reduced to a minimum. In the larger aspects of 
 the subject the employing and employee interests are concurrent. It is only in the 
 working out of the smaller details that we will probably disagree. Again with the 
 risk that one takes in anticipating, I may say that so far as I can see any contri- 
 butions which the Manufacturers' Association will give to this discussion will he 
 along the line of the working out of the details in such a way as to make whatever 
 system is adopted such a system as will be conducive to the best interests of both 
 parties immediately concerned. 
 
 The Commissioner : I would like to ask you, Mr. Wegenast, could there be 
 got together a number of manufacturers who have associations like the Massey- 
 Harris Company is said to have for the benefit of their employees, which they say 
 has resulted in no actions having been brought against the company? I see that 
 spoken of in the papers that the Secretary has collected. 
 
 Mi;. Wegenast: We expect to have one of the managers of the Massey-Harris 
 Company on the committee. It may interest you if I give the personnel of the 
 committee which has been appointed to co-operate with or assist this commission 
 in the working out of some act. The members are, Mr. J. R. Shaw, of Woodstock, 
 W. K. McNaught, A. W. Kemp, P. W. Ellis, E. J. Davis, R. S. Gourley, John 
 Eirstbrook, A. Fleming, W. B. Tindall, T. A. Russell, Geo. W. Watts, Alex. 
 Saunders. S. J. Williams. R. 0. McCullough, J. P. Murray, S. Harris, H. Murray, 
 John Baillie, C. B. Gordon, of Montreal, F. R. Deacon, A. E. McKinstry, H. Cock- 
 shutt, C. R. McCnllongh, W. M. Gartshore and Thomas Findlay. Amongst these 
 we have endeavored to secure representatives of such types of compensation systems 
 as there are now under the present act. and we anticipate adding to this committee 
 a number of others. 
 
 The Commissioner: Would it be practicable and convenient to get together 
 the different schemes that there are, with the names of the manufacturers that have 
 established them? 
 
 Mr. Wegenast: That would be rather difficult for this reason, that most of 
 these schemes are in the first place unscientific, and they are not supported by any- 
 thing in the shape of written rules. They rest largely upon custom. 
 
 The Commissioner : One feature of the British Act, and a feature of some 
 other acts is that schemes that are approved by some official authority may take 
 the place of the benefits of the act. 
 
 Mr. Wegenast: With regard to that I might say that to me personally the 
 greatest defect in the British Act is the want of machinery to set that provision 
 into operation. That provision is contained in seven of the provincial acts, the 
 seven provinces that have adopted the British Act in Canada, or six rather, and 
 they have vested the power to approve of these schemes in the Attorney-General. 
 Now, I can quite conceive that the Attorney-General would have other duties which 
 would crowd out any possibility of bis dealing with a matter of that kind, and as a 
 
142 MINUTES OF EVIDENCE: No. 65 
 
 matter of fact I have yet to hear of a single scheme being presented to the Attorney- 
 General of any of the provinces for his approval. The experience under the British 
 Act is that the benefit schemes which are countenanced by the act languish and die, 
 and they are actually being reduced in number, instead of increasing. Speaking 
 personally that is I think the greatest defect in the British Act. 
 
 The Commissioner: What does that mean? To allow that method of con- 
 tracting out of the act? 
 
 Me. Wegenast : It is not so much a matter of contracting. 
 
 The Commissioner : A man takes the benefit of that approved scheme in lieu 
 of what the act gives him. 
 
 Mr. Wegenast: Well, that is one way of putting it. The difference is this, 
 that whereas under the British Act without adopting any schemes an employer 
 bears the whole burden of the risk of injury on the part of his employees. I am 
 not speaking of the question of contribution, but the question of liability. Whereas 
 the employer bears the whole liability under any scheme that is adopted, the liability 
 is diffused or spread over a wider area. 
 
 The Commissioner: What does that mean? 
 
 Mr. Wegenast : That means in the first place there is a greater guarantee of 
 solvency. 
 
 The Commissioner: You don't mean a different body assisting in bearing 
 the burden? 
 
 Mr. Wegenast: No, I was thinking of the mutual principle, although the 
 stock insurance principle might be invoked. 
 
 The Commissioner: What is in my mind, you are not suggesting under 
 these schemes that the workman contributes to the indemnity fund or the insurance 
 fund? 
 
 Mr. Wegenast : No, I wasn't suggesting that at this point. I think that is 
 a matter of minor detail, the question of contribution — perhaps not of minor detail, 
 but a question of detail. 
 
 The Commissioner: Have you seen this Washington Statute? 
 
 Mr. Wegenast: No. I haven't seen that, although I was in touch with the 
 proceedings leading up to the passing of the act. I have not seen it in its com- 
 pleted form. 
 
 Mr. Meredith : I would like to ask if this will affect the railroad men at all ? 
 
 The Commissioner: That will depend on what the result reached is. I 
 suppose this covers all branches of industry. 
 
 Mr. Meredith : I didn't know whether it would affect the railroad man or 
 not, or whether it would have to be a Dominion Act. 
 
 The Commissioner: No, it is within the competency of the provincial 
 legislature. 
 
 "Mr. Meredith : Because we have really more accidents in our brotherhood 
 than any other. 
 
 The Commissioner: What branch do you represent? 
 
 Mr. Meredith : The Brotherhood of Railroad Trainmen, Switchmen and 
 Conductors. I represent the railroad men of Ontario. I just came here to watch 
 as I thought probably we would have nothing to do with this act at all. being a 
 provincial act. 
 
 The Commissioner: Oh yes, you are interested. 
 
 Mr. Fred Bancroft: I would like to ask Mr. Wegenast a question, if it is 
 not true thai the provinces of this country can have their Workmen's Compensation 
 Act modelled upon the British Act, and that where the power is vested in the 
 
1912 WORKMEN'S COMPENSATION COMMISSION. 143 
 
 Attorney-General there is a provision also in that act, that where the employer has 
 a beneficial scheme of his own he shall include all the benefits of that Compensation 
 Act, and give also additional benefit to the employee in the ratio to the contribution 
 that the workman gives to the scheme of the employer. 
 
 Mr. Wegenast : I don't think that provision is included in all the provincial 
 acts. That is one of the difficulties, of course, of the British Act. The British 
 Act says in so many words that any scheme the employer adopts must be at least 
 as beneficial to the workmen as the benefits under the act, and the interpretation 
 that has been put upon that provision renders it entirely prejudicial to the em- 
 ployer to enter into any scheme. 
 
 Mr. Bancroft: I have here the Manitoba Act. It is modelled upon the 
 British Act also. " If the Attorney-General after taking steps to ascertain the 
 views of the employer and the workmen certifies that any scheme of compensation, 
 benefit, or insurance, for the workmen of an employer in any employment, whether 
 or not such scheme includes other employers and their workmen, provides scales of 
 compensation not less favorable to the workmen and their dependants than the 
 corresponding scales in this act, and that where the scheme provides for contri- 
 butions by the workmen and the scheme confers benefits at least equivalent to 
 those contributions in addition to the benefits to which the workman would have 
 been entitled under this act." 
 
 Mr. Wegenast: A verdict of $5,000 or $10,000 always looms up so largely as 
 benefit that no scheme would probably be found approved in the eyes of the workmen 
 who would doubtless be represented in any petition to the Attorney-General for the 
 approval of such a scheme. This looms so large that it is found practically im- 
 possible to set that provision in operation. That is really why that provision is 
 not made. 
 
 Mr. Bancroft : The benefit features of employers gradually die out under 
 modern compensation. 
 
 Mr. Wegenast: That is supported, I think, by the statistics. 
 
 Mr. Bancroft: Your Lordship, I think it is only fair that we should say 
 something on this matter as well as the Manufacturers' Association. Myself and 
 two colleagues are here this morning representing the Central Labour Council. I 
 think in the future we will have a representation before you either privately or 
 publicly, whichever way you decide, from the Dominion Trades Congress, which 
 represents about 150,000 members in this country, an Association of which I have 
 the honour to be Vice-President. We likewise will endeavour in every way possible 
 to assist you to draw up a Workmen's Compensation Act that shall have, at least 
 we hope, the favourable support of the workmen of this country, though I cannot say 
 with any degree of confidence that what Mr. Wegenast has mentioned as a minor 
 detail, that of who shall provide the compensation or how it shall be provided, will 
 be a minor detail as far as we are concerned in the future. I think there is a 
 difference of opinion there. But anyway this morning's meeting is a public session 
 and we can speak of that later. I might say it was the Dominion Trades Congress 
 who first asked for this Commission. We asked the Cabinet of this Ontario Gov- 
 ernment, and they appointed a Commission, and we undoubtedly must do all in our 
 power to show you what kind of Workmen's Compensation Act we want. However, 
 I have hardly heard of any scheme this morning proposed for future legislation. I 
 do not know whether there is something waiting, or whether it is necessary to have 
 private sessions or not, but I will say this, that as far as organized labour is con- 
 cerned, of which we are the representatives, they certainly do consider that a Work- 
 men's Compensation Act of the nature of the British Act is in the interests of the 
 
1U MINUTES OF EVIDENCE: No. 65 
 
 workmen of this country or any other country, notwithstanding any statements 
 that may be made to the contrary. 1 would also like to point out to you, sir, 
 while no mention has been made in the- line of a scheme, I will be a little 
 more frank. A considerable number of opinions has been brought forward at dif- 
 ferent times as to the contribution to Workmen's Compensation Act, and largely 
 these schemes have been based on the schemes of other countries. There is no 
 contribution in Great Britain. There is no contribution in the Workmen's* Com- 
 pensation Acts of this country. The burden is on the employer. It is said there 
 is contribution in Germany, which is not true. The German system of insurance 
 has three principal features. One is compensation; another is insurance against 
 sickness; and the third one is insurance against invalidity and old age. They are 
 so interwoven together that it is almost impossible to decipher as to which is which, 
 unless 3'ou go into detail, but the burden of compensation for accidents in Germany 
 rests upon the employer. The insurance against sickness is about two thirds by the 
 employees in an industry, but two thirds of the representatives on the administering 
 Boards of the sick funds of Germany are working men. They control the Sick 
 Boards. It is largely the same in invalidity and old age. 
 
 I should just like to quote a little, to be frank about it, from the Parliamentary 
 Committee of the Trade Union movement of Great Britain, (of which I believe 
 there are some forty or fifty members in the House), the Commissioner of which 
 was Bamsay Macdonald, whose name is not unknown in this country, and some 
 other men of international reputation, and probably some of the clearest thinkers 
 in the world to-day, — they went as a Commission to Germany, and they reported on 
 insurance against accident, and the insurance against accident replaced the old law 
 of employers' liability. The old law of Employers' Liability I think is on the desk 
 this morning. I think it is largely the Ontario Act. It is a very* old one, and I 
 think it is a copy, if my memory serves me, of the old English liability law which 
 has been dead and gone for some years. The insurance against accident replaces 
 the old law of Employers' Liability to-day. 
 
 The personal liability of the employer is changed into a collective charge upon 
 the entire trade and the individual establishment is charged according to the 
 measure of their risk and the amount they have paid. I think Mr. Wegenast him- 
 self, as well as others of the manufacturers, understands clearly the trade associa- 
 tion- of the employers in Germany have the administration of the compensation for 
 accidents, but there is this difference, that while the burden is on the employer in 
 Germany the compensation for accidents does not start until after fourteen weeks, 
 during which fourteen weeks the insurance against sickness has been in operation. 
 For instance, if a man gets hurt in Germany and was taken home he would be put 
 into the insurance against sickness for thirteen weeks. During that time he would 
 have half his wages paid, medical treatment, nursing, and so on. At the fourteenth 
 week the Workmen's Compensation comes into operation. This compensation is 
 furnished by the employers through the trade associations. They take care of the 
 man afterwards and they pay him as high as <>»> 2-3 per cent, of his total income 
 while he is so incapacitated. Thai is in Germany. So that it would be impossible 
 and unfair to attempt to introduce into this province or any other province, a law 
 which had contributions from employees to a fund which would be parallel to 
 insurance against sickness in Germany. In Greal Britain the burden is on the 
 industry. — that is I he people who get injured in the industry. It is the same in 
 Germany. 
 
 You mentioned the Stale of Washington. Here are recommendations for a 
 Workmen's Compensation Act for New York State. This report is one signed by 
 
1912 WORKMEN'S COMPENSATION COMMISSION. 145 
 
 eight of the most prominent labour men in New York, and six of the most prominent 
 men in political work in New York, the labour men representing three hundred 
 thousand men. and the others representing over thirty-eight thousand. This is 
 what they say : 
 
 ■■ Burden of Payment/ 5 Persons to be compensated : They do not draw up a 
 long act, but they say all employees whose wages are less than $2,500 a year. 
 
 " Burden of Payment " is: 
 
 (a) The eutiie eost of compensation to rest upon employer. 
 
 (l>) In ease of occupational disease the eost of compensation to rest upon the 
 last employer. 
 
 (c) The sub-contractor, contractor, and principal to be jointly and severally 
 liable for compensation. 
 
 "Injuries to be compensated." Injuries by accident arising out of and in the 
 course of employment: 
 
 (a) Disability or other injuries from diseases incident to particular occupa- 
 tions to count as injuries by accident. 
 
 (b) The State Department of Health to declare to be an occupational disease 
 any disease as the result of the conditions of a specified occupation. 
 
 (c) The State Department of Health to investigate any alleged occupational 
 disease when so petitioned by any county or municipal medical officer or on its own 
 motion. 
 
 It is clear they are assessed. There is no difficulty about it. 
 
 Now, there is one thing I think undoubtedly that should be left out of the 
 Workmen's Compensation Act, and that is any such thing as contributory negligence 
 on the part of the employee. Modern thought has done away with it. In Germany 
 and Great Britain where compensation has been discussed, the old argument that a 
 workman will injure himself for the purpose of getting a generous compensation 
 has died out altogether. It has died out by its own uselessness. No man gets 
 hurt to-day because be wants to get a little money; and further (and I think this 
 will be a very great help to you) wherever there has been a generous Workmen's 
 Compensation Act with the burden upon the employer, it has almost been un- 
 necessary for the factory inspectors or anybody else to see the machinery, because 
 the employer has seen to it himself that the machinery has been so protected, for 
 he sees it is far cheaper for him to protect the machinery than it is to pay the 
 compensation. 
 
 Now, that is only a little glance of what we mean by compensation. I think 
 in the future we may be able to give to you very clearly what is our idea. I don't 
 know whether it will be in the form of an act itself, but we will make suggestions. 
 I have been a little more frank this morning than the manufacturers, but there is 
 Ihe way we feel about it. We think that contributory negligence has no place in 
 the Workmen's Compensation Act to-day, and that will find no favour with the 
 workmen. The burden, as far as the workers see it, should rest upon the industry, 
 and the compensation should start from the day the worker is injured. These are 
 three fundamental principles of a future Workmen's Compensation Act. As I 
 say we have been a little more frank, and we will be more frank in the future. I 
 wish I could be as optimistic as Mr. Wegenast when he says the whole thing could 
 be reduced to a minimum. If I thought for a moment that he had so accepted our 
 views that the thing would be reduced to a minimum, we would be very happy about 
 the Workmen's Compensation Act. Our views will be stated to you later. 
 
 Me. Miller : Your Lordship, I would like to say a few words here as a correc- 
 tion of something which was said in connection with the Employers' Liability Act 
 
 If) L. 
 
146 MINUTES OF EVIDENCE: No. 65 
 
 of Great Britain, and more particularly in connection with the insurance companies. 
 When the old act was first amended in 1896 the tariff, generally speaking, of the 
 insurance companies, who up to that time had no data on which to go as to the 
 tariff they were to charge to the employers, was 25 shillings per annum per 
 £100 of wages paid to the workman. That in 1906 or 1907, when I left 
 Britain for Canada, had been reduced, and the act had been amended twice. The 
 third amendment was just coming into operation in 1907 or 1908. The tariff of 
 the insurance companies to the employers had been reduced to 10 shillings or half 
 a sovereign per £100 of wages paid to the workman per annum. That 
 is practically one half per cent, of the wages paid yearly. I do not think 
 that any employer can claim that that is an unbearable burden to put 
 upon the industry which he is organizing or the factory working under 
 him. I think also that there should be no limit as to the number of men 
 employed by any manufacturer or employer. If he employs one man 
 m any occupation whereby he is likely to be injured he should come under 
 the compensation law, and there should be no contributory negligence" on the part of 
 other workmen employed, and the compensation should be from the date of the 
 accident. In the first amended *act of Britain there were two weeks, I think it 
 was, wherein he could not claim compensation. That was because those who drew 
 up the act in the first place in trying to safeguard the interests of the employers 
 who bore the burden, the second point was overlooked. The second point was 
 missed in looking after that too keenly, and that was so that malingerers or em- 
 ployees, who might by getting a small accident where it would only be necessary to 
 lay off a day or a couple of days, that they would have to lay off the two weeks 
 before they could get anything. In the last amendment it has been amended 
 so that if the injury incapacitates the workman for longer than two weeks the 
 compensation dates from the date of the accident. In the Manitoba Act I 
 believe that that clause is incorporated, but it also emphasizes the fact further on 
 whereby they do not get any compensation during that two weeks. I am not quite 
 sure, because I have only had a glance at it, but I believe that is so. I claim 
 any compensation act that we bring in the Province of Ontario should be as 
 short and concise as possible. There should be no long clauses or a great number 
 of clauses to it. It is not necessary. Also, there should be no limitation, only in 
 the compensation. In Britain, although I am not clear because I hadn't a 
 copy of the act, but I believe that when an accident is fatal — all accidents are based 
 on the average per week of the twelve months previous to the accident, if he has 
 been in that employment that length of time. If he has been a shorter time than 
 twelve months it is taken on the length of time of service in that firm, and the 
 average of his wages is given to him — that is 50 per cent. Here the same thing 
 should apply. Instead of what has been mentioned where employers 
 may be up against a law suit of $10,000 or $12,000 or $15,000 it should be clearly 
 stated that in the case of a fatality that the remuneration should be based on the 
 earnings of the injured for a certain number of years. I think the British act 
 puts it as three years. I am not clear because T am speaking entirely from 
 memory, but I believe it is three years. It is a limited salary of course. The law 
 onlv takes consideration of workmen who are earning within a certain limit. I 
 think it is £2 or £3. That certainly ought to be closely looked into in the form- 
 ing/ of any act for the Province of Ontario. There are lots of data to go on 
 from other countries and from ihe States, that should make our work here very 
 murih less troublesome, and we should be able to formulate some law whereby we 
 
1912 WOEKMEN'S COMPENSATION COMMISSION. 147 
 
 would eliminate the necessity or the opportunity for litigation in connection with 
 compensation. 
 
 With regard to the insurance companies in Britain, taking the case of our 
 friend who has lost his arm. The injured workman comes within the scope of the 
 Compensation Act in Britain automatically. The Factory Inspector's office in the 
 district has to be notified of every accident that happens in a factory or workshop. 
 Even domestic servants now come within the scope of the act. Every person in 
 Britain to-day, I believe, that is earning wages comes within the scope of the 
 British Act, and if a workman has to leave the workshop for either two or four 
 hours (I am speaking from memory) to be taken care of, that is, to have his wounds 
 dressed, — if it is only a finger cut or a flesh cut, if he has got to leave the factory 
 for a certain number of hours in connection with it, that has to be reported to the 
 Superintendent of Factory Inspectors within that district within so many hours, 
 or the employer is up against the possibility of a fine in the law courts for not 
 having complied with the Factory Act in the way of reporting accidents. The 
 moment that a man is laid off he comes within the scope of the act, and the burden 
 of payment is on the employer no matter how he is insured against that liability, 
 and when a case is brought in a law court it is the employer that has to put up the 
 fight. The employee who has been injured has nothing to do with the insurance 
 company with which his employer may have been insured. I think these 
 various points ought to be taken into consideration. The interpretation of the 
 various clauses in the British Act caused a great lot of litigation in the first three 
 years that the first amendment was in force. There were all the different limit- 
 ations — the height of a building from which a man should fall, and so on, and the 
 kind of place that was going to be declared a factory so as to come within the 
 Factory Act. All these things led to litigation, and it is true that a larger proportion 
 of the money that was spent in those cases went to pay law expenses than what went 
 to the injured. I do not think, sir, that that will be so to-day, although I have no 
 data to go on. I have seen statistics wherein it was said that from thirty to forty 
 per cent., or $30 to $40, in every $100, I think, was all that gets to the workman in 
 Britain, but I do not think that can apply to the last amendment of the British 
 Act. These statistics must have been taken from the beginning, 1896, I fancy. I 
 do not think there is any chance of the same amount of litigation under the British 
 Act now that there was in the amended act of 1896, because of all the different 
 limitations and interpretations that had to be" fought out in the courts. I think 
 the more concise and simple the act the better it will be for everybody. 
 
 With respect to the other objection that the gentlemen have mentioned here, 
 in connection with the insurance companies laying a ban as it were upon the man 
 over 35 or 40, or whatever it may be, that is already in existence independent of 
 the insurance companies. The manufacturer is in business for profit, and when a 
 man gets to a certain age he has more difficulty all the time as he grows older in 
 getting employment under the present industrial system. It is not because of the 
 insurance companies in Britain laying any ban upon the older men because they are 
 more liable to accident than the younger men. That is quite true, but that system 
 is being applied by the employers, and we have been told by the employers, if there 
 had been no Workmen's Compensation Act in Britain, that that is one of the phases 
 of our industrial system at the present time. 
 
 Mr. Bancroft: There has been an argument used against the British Act 
 which has the entire sympathy of labour in this country, and that is that in the 
 case of the insolvency of the employer the workman loses. It is not generally known 
 that there is a provision made in the British Act for the insolvent employer, that 
 
148 MINUTES OF EVIDENCE: No. 65 
 
 if the employer is not insured against liability under the act, a workman can claim 
 up to the extent of £1Q>Q, which is equivalent to $500 as a preferential debt which 
 must be paid in full before any other creditor can receive anything. 
 
 The Commissioner : That would not help a case such as Mr. Hunt's. 
 
 Me. Bancroft: If the compensation is a weekly payment this amount is to 
 be taken out, but with regard to any balance 'over £100 the debt must be 
 proved for as an ordinary debt. That is only one part of the clause and there are 
 Jive. This is an interpretation of the British Act by one of the foremost 
 barristers in Great Britain, and that is how a man can claim. Insolvency has no 
 terrors for the workman. I believe if you were to give us the British Act we would 
 meet the terrors of insolvency and the other objections that the manufacturers 
 put up. 
 
 Mr. Miller: In Mr. Hunt's case he would simply have claimed by notice to 
 
 us employer, and another notice to the Inspector of Factories that he had been 
 
 injured, and the act goes into operation at once. If his employer said he could 
 
 not pay any compensation he is under the law and he is compelled to pay. It is not 
 
 a question of whether he is able or not, the law says he has got to pay. 
 
 The Commissioner : Have you got a country where it is possible to get some- 
 thing out of a man who hasn't got it? 
 
 Mr. Miller : In this particular case the man would have been made insolvent 
 and the first charge against his estate would have been Mr. Hunt's claim. It is 
 a preferential claim the same as a workman's wages are against any insolvent firm. 
 
 The Commissioner: If this man he was working for was a tenant of the 
 premises and had no property, his compensation would be useless to him. 
 
 Mr. Miller : He has a business. 
 
 Mr. Hunt: The mill could be sold, sir. I was just thrown to one side. He 
 owned the mill. 
 
 The Commissioner: How did the lawyer come to advise you that you 
 couldn't get your money? 
 
 Mr. Hunt : He claimed the case would go against me because there was no 
 actual negligence shown on the part of the employer. 
 
 Mr. Bancroft: " In any case where the workman knew of the defect or 
 negligence which caused his injury, and failed without reasonable excuse to give 
 or cause to be given within a reasonable time information thereof to the employer 
 or some person superior to himself in the service of his employer, unless he was 
 aware that the employer or such superior already knew of the said defect or neg- 
 ligence " and so on. That is where the onus is put upon the employee. This is 
 the old Employers' Liability Act in Great Britain, but I believe it ought to be 
 sufficiently changed, and very much changed, before the public get justice. 
 
 The Commissioner: I think the juries generally apply that in favour of the 
 workman. 
 
 Mr. Miller : There is one phase of the question which ought to be taken into 
 consideration that has not been dealt with very largely this morning, and that is the 
 prevention of accidents. The whole trend of the law should be for the prevention 
 of accidents as much as for the compensation for an accident when it has happened. 
 In Greal Britain they have a very large system of factory inspection. I do not 
 believe there is anything better any place in the world than they have there so far 
 as factory inspection is concerned. The employer is bound by law to protect his 
 machinery in such a way that it will eliminate the possibility of accident as much as 
 possible. 
 
1912 WORKMEN'S COMPENSATION commission. L49 
 
 Mr. Bunt: That brings up the point of where I was hurt. If it had heen 
 in Britain 1 wouldn't have been hurt, hut in this country there is uo inspection 
 under the act for a portable sawmill. I don't think that comes under the Factory 
 Act. 
 
 Me. Meredith : I would like to say with respect to the railway man that the 
 chief difficulty we have found has been the matter of putting the matter back from 
 one court to another. If we get a verdict in one court and there is anything in 
 favour of the workingman it is a. dead sure thing it will be put back to another 
 court, ami if it still is sustained in favour of the workingman then it is put back to 
 another court, till at last whatever compensation the man got or his family got 
 would amount to nothing, — the law costs had eaten it all up. That lias been one 
 of our great difficulties as railroad men. Perhaps in the Dominion we have some 
 better laws than some of these men seem to enjoy with respect to the manufacturers, 
 hut I think if there could be some way arranged, as far as we railroad men are con- 
 cerned, that if a man is killed or hurt that there should be a definite sum set 
 which lie should be able to gei without saying he was contributory to the act. he- 
 cause it is easily shown nearly always in the case of railroad men, I know — in fact 
 in my own case it was shown that way — that I probably was as much to blame as 
 anybody else in getting hurt. Well, T may have been a little careless, but at the 
 same time here is one thing we find: there is provision made in the Railway 
 Companies' Laws that there are certain things we must not do in shunting and 
 coupling, and in going around the trains, but we find if we don't do those things 
 they don't want us. Tf you are not prepared to take a risk you can simply go 
 about your business, we can get somebody else that will. So a man naturally goes 
 and takes a risk and he gets hurt. I had that hand all smashed up, and I have had 
 two or three other accidents besides that, in getting up between the engine and the 
 car. and so on. I was a conductor at that time, and I found if I didn't take those 
 risks they didn't want me. Now, that was all there was about it. We want to 
 get over that difficulty. What we want is when a man gets hurt, when his family 
 is dependent on him for a living and he is dependent on his good health, and his 
 strength and his limbs to get a living for them — he suddenly finds that that source 
 of living is cut off. What we want is that something should go into effect that 
 would insure a man's family and himself if he is permanently injured, that he 
 will be able to get, at any rate, a bare living at the expense of somebody, we are not 
 going to say who. In the great majority of cases with us we have an insurance 
 scheme. I am in it myself to-day. I am paying in it yet. I tried when I got to 
 be nearly 70 years old to get part of that out, but the doctors said I was yet fit to 
 work as well as any other man and he would not pass me. So I have to pay into 
 this insurance yet. although there is a provision made that we should be able to 
 pull out. Thank God, I am not dependent on the railroad for a living to-day so 
 I am able to get along without it, but if I was I would be like I see a good many 
 more, my family would be probably starving and I would be out of a house and 
 home. 
 
 Mr. Taber: As an employer of labour T would like to say a few worls. I 
 have had some accidents in my place and not having liability insurance I of course 
 had to see them through. I now have liability insurance, that is, insurance against 
 legal action, but T do not think but that when employees are hurt a good em- 
 ployer will always stand behind them. I would just like to say that we want 
 insurance ; that any good employer feels he wants insurance, not assurance in that 
 way, and I surest some form of reciprocal insurance, and that all the hazards be 
 classified, and the government would deal with the liability to each injured person, 
 
150 MINUTES OF EVIDENCE: No. 65 
 
 and the manufacturers and employers of labour would" then be assessed according to 
 the damage. There are so many different lines of business that it would require 
 very comprehensive legislation to protect all the different workmen that are injured. 
 There is no doubt about that, but it is a matter for the Government or the Com- 
 mission in some way to get at the whole question to secure everybody, because there 
 is the insolvent employer you can't get at, like the case of Mr. Hunt. He can get 
 no remuneration or no help, and if it was done through a Government tribunal 
 in some way this man could get some help, because the whole class of that par- 
 ticular manufacturer or employer of labour would have to bear it universally. A 
 manufacturer or employer of labour would then feel secure also. Liability insurance 
 is not satisfactory to a man from the human side of view. I feel that way. I 
 feel I would like to do something for those who are hurt in my employ, and I do it, 
 but the liability insurance would not help me or them at all. I pay the money 
 out to them and the return is only legal protection, and the moral side is lost sight 
 of. I think that is all I have to say. 
 
 Mr. Wegenast: What company do you represent, if you don't mind telling 
 me? 
 
 Mr. Taber: The Toilet Laundry Company. 
 
 The Commissioner : I didn't quite follow what your suggestion was. Would 
 it be that there should be an assessment upon all the employers when an accident 
 happens, that they should by an assessment form a fund to meet all the expense? 
 
 Mr. Taber: Well, in that case, your Lordship, there would be some delin- 
 quents. Let the Government deal with this question, and attend to all accidents 
 and remunerate according to the loss, taking into consideration the risk and how 
 the employee had been injured and the conditions he worked under, and whether 
 he had been careless or negligent. They could weigh all those matters and then 
 afterwards assess that class of industry with that loss. That is over the whole 
 class, on a basis of insurance or an assessment in the form of a tax. That would 
 cover the points that I learned from the gentlemen here the Workmen's Act does 
 not cover. That is what I would think. 
 
 Mr. Bancroft: Would you be in favour of the German system of compen- 
 sation, where the employers form trade associations and have a fund for that 
 purpose, and distribute it over the industry? 
 
 Mr. Taber: Of course that would be working against the interest of some. 
 There would be a class that would be in that association and a class that would 
 not. An insolvent man would possibly not be in that association and a man in 
 i-hat case would have no relief at all : he would have no remuneration. 
 
 Mr. Bancroft : Do you intend the whole burden to be borne by the 
 employers ? 
 
 Mr. Taber: Yes, as a class. Arrange them all into classes. Classify them 
 as our present system of assessment is. 
 
 Mr. Gibbons : You mean for instance take men who are engaged in foundry 
 work, in the case of an accident those who operate foundries would be liable foit 
 that accident? 
 
 Mr. Taber: Yes, and in the furniture business anybody who is injured in 
 ihat line, it would be that class. 
 
 The Commissioner: Do you not think it would make some trouble with a 
 man who has been hurt in a factory, and where the man has been careless or had 
 not proper appliances? Would the careful man not say: Why should I be called 
 upon to help pay his loss? 
 
 Mr. Taber: It would then work against some men who had fine factories 
 
1912 WORKMEN'S COMPENSATION COMMISSION. 151 
 
 with safety appliances. It would work out against those men and it would be a 
 case then for the factory inspectors to see that the equipment was up to date. 
 
 Me. Bancroft: In Germany they have, I don't know whether it is a Con- 
 ference Board or what it is, but they have some kind of a Board where they decide 
 as to the most modern protective devices, and the employer has to instal them. 
 
 The Commissioner : It has been pointed out that there is nothing analogous 
 to the trade associations in England at all, that they are what used to be the old 
 Gilds; that these trade associations are live associations, and that there is no 
 such thing in England. 
 
 Mr. Bancroft: They are nothing like the Gilds. The Employers' Asso- 
 ciation in Germany consists of employers, and the Gilds have masters and appren- 
 tices and journeymen. 
 
 Mr. Taber: I can understand the manufacturers' position. Their attitude 
 is perfectly right. They feel they want insurance. They feel they have to stand, 
 as I have had to do, behind old employees or someone who has been faithful in 
 their business and they don't like to see turned out, although they may be a little 
 negligent and get hurt. I think that is a proper position to take. 
 
 Mr. Wegenast: The chief concern of the manufacturing interests and the 
 employing interests in this Provinee will be to my mind to eliminate the waste that 
 is incident to our present system, and to any system of employers' liability. If we 
 can eliminate the ambulance-chasing-lawyer it will be a good thing. 
 
 The Commissioner: What is that? 
 
 Mr. Wegenast: The so-called ambulance-chasing-lawyer, and the dividend 
 collector of the liability insurance, then we shall have conserved to a very large 
 extent the interests of the employers. I do not want to enter into any details, but 
 it just occurred to me to add that to what Mr. Taber had said. 
 
 Mr. C. Lawrence: I am a locomotive engineer by occupation. We have 
 been interested for some time in a Workmen's Compensation Act, and I have been 
 trying to get what information I could from different sources. I attended a 
 meeting in Chicago last Monday and Tuesday, of a Commission appointed by the 
 President of the United States, to enquire into and report upon some form of 
 Workmen's Compensation Act. A number of gentlemen spoke at that meeting. 
 Among them were two or three solicitors for railroad companies. A gentleman 
 named Lathrop, a solicitor of a company in 'Sante Fe spoke, and said he was one of 
 a number of twenty-one lawyers who met in New York City sometime last April, 
 I think. I am not sure as regards the date, but it was after this Commission was 
 appointed. These lawyers were from different parts of the United States, all rail- 
 road solicitors, and he said they were unanimous in their opinion that there should 
 be some better compensation act for interstate commerce. I understand that 
 in those engaged in commerce from one state to the other. He read a resolution 
 there pledging themselves to lend this Commission all the assistance they could 
 towards working out a Compensation Act along those lines. There was another 
 solicitor there representing the New York Central lines named Carv, a Chicago 
 gentleman. He gave some valuable information, and he cited the method that the 
 New York Central lines had used in meeting these cases. He said they never 
 allowed a case to go to court if they could prevent it. They often paid out what 
 to their judgment was more in order to settle a case, to prevent it going to court, 
 and he gave two or three different reasons. The principal one was that if a case 
 went to court there always was created a bad feeling between the employees and 
 the officers of the road, and they wished to avoid that as much as possible. He 
 thought in the end they paid out a little more, or it cost the companies a little more 
 
152 MINUTES OF EVIDENCE: No. 65 
 
 by doing this than if they allowed it to go to court, but they had better service from 
 their employees by not doing so. 
 
 This Com mission has been meeting a number of times and there are some 
 minutes of the previous meetings, and if it would be any service to the Commission 
 1 would be willing to let them have the books. They have promised to furnish me 
 with the minutes of all the meetings. 
 
 At one of the meetings which was held in June, in Washington, there was 
 a gentleman there who had a Bill drafted up. and I think something along this 
 line would be satisfactory to the railway men of this country. This gentleman 
 stated, " We would like to get away from this litigation if we possibly could." The 
 man who had this Bill drafted up — I couldn't say it was submitted to Con- 
 gress, but it was drafted up for that purpose, has nearly everything covered in it. 
 They propose in this Bill to assess steam roads for instance. They were talking 
 .most about them. He proposed in this Bill to tax every locomotive in the country 
 so much a year for the purpose of creating this fund. Then there is so much 
 allowed in the case of death, and it is paid to the widow or the man's, benefic- 
 iaries, so much a month. For instance, in the case of a widow it would extend 
 over until 90 days after she re-married, or as long as she lived. It also provided 
 a percentage for the loss of a hand or an eye; for the loss of both eyes; and so on. 
 The cases are too numerous to mention, but it covers almost everything you could 
 think of in the case of an accident, and it is figured out on a percentage. It runs 
 all the way from a man's life to the loss of a toe or part of a finger, in monthly 
 payments. It is figured out on a percentage basis of what his salary would be. 
 At this same meeting there were a number of solicitors — not this one I attended, 
 but the one held in June — and besides their speeches in here they have filed a brief 
 and in this brief there is this Bill that this gentleman had drafted up. There was 
 another gentleman by the name of Boyd who gave some valuable information. He 
 is the Chairman of the Compensation Commission of the State of Ohio. He men- 
 tioned a number of cases. For instance, he said, with accidents on a railroad, a 
 good many people think the accidents are all caused by some person's negligence, 
 either the employer or employee. He says not. He has spent the last twenty- 
 one years in getting statistics along those lines and he claims forty-four per cent, 
 of the accidents on railroads are not to be avoided. That is, they cannot be 
 avoided. They happen through circumstances that cannot be foreseen, for instance, 
 the case of a broken rail which causes the loss of the lives of the employees as well 
 as the travelling public. He cited a number of cases where it was true these 
 accidents had happened and where they could not be avoided. Then he went on 
 to say that eighteen per cent, of the accidents is due to the employer and twenty- 
 eighty per cent, is due to the employee. He had also figured out what was account- 
 ' able for the other accidents, but I didn't get those statistics. He also showed at 
 the present time on account of litigation that there is only in the State of Ohio, 
 for instance, eight per cent, of the employees who recover from the company. 
 Thai is those who enter into litigation. In the State of New York there is a 
 trifle over twelve per cent, recovered from the railway company, and I suppose 
 those figures will largely apply to all countries, Canada as well as the United 
 States. If that is the case there is a lot of money spent that should not be spent. 
 The information is also given fo show there is only thirty-seven per cent, of the 
 money that is recovered from the railway companies that goes to the beneficiaries. 
 The rest of it is eaten up in costs and things like that. Sometimes these cases 
 extend over a number of years. Now, if we conld get something that would help 
 us to gel away from Him litigation I think if would be satisfactory to the railway 
 
1912 WOKKMEN'S COMPENSATION COMMISSION. L53 
 
 employees. That is our main object, to get something worked out along the right 
 lines, and this Bill that this gentleman has provided seems to be all right. He 
 has provided for a "Commission to settle these cases, and of course it is worked out 
 in such a way that I cannot see where there could be any chance of fraud in con- 
 nection with it. Of course you can readily understand if we can get away from 
 litigation that all parties interested would be better satisfied, and it would be much 
 more satisfactory than at the present time, especially to the henelieiaries. Take the 
 case of the widow, for instance, suing for the recovery for the loss of her husband. 
 It naturally happens that the family has had distress enough by the. loss of the 
 bread-winner without being necessary for them to engage in litigation in order to 
 recover something for his loss. 
 
 I thank you very much, gentlemen, for your attention, and if something 
 could be worked out along that line I am sure that we as railroad men would 
 appreciate it very much. 
 
 The Commissioner: If you will hand those books to the Secretary we can 
 have them before us. 
 
 Me. Lawrence : Certainly. You can keep them for I have two sets. 
 
 The Commissioner : As there seems to be no one else who wishes to be 
 heard just now we will adjourn. If anybody desires to be heard more fully an 
 appointment can be made later on. I would like to know what date would be 
 convenient as I have other work to attend to, and I would like to make them all fit 
 in as well as I can. When will the body you represent, Mr. Wegenast, be in a 
 position to lay your views before me? 
 
 Mr. Wegenast: I can hardly say just now. We have a meeting of our 
 committee to-morrow, and 1 could lei you know after that. 
 
 The Commissioner: We cannot let it stand very long. 
 
 Mr. Wegenast: I will make every effort to expedite matters, but as I said 
 before it is a very large task to formulate the views and opinions, and the desires of 
 1,800 manufacturing concerns. It is to the interest of everybody, I suppose, to 
 have those opinions formulated and to have whatever representations we make to 
 this commission really represent the views of the manufacturers of the Province, 
 and it is only to that end that there may be some delay. 
 
 The Commissioner: When would you like to be heard on behalf of your 
 organization, Mr. Gibbons? 
 
 Mr. Gibbons : I think the workingmen would like an opportunity of meeting 
 some evening. A great many men who are interested in this are working for their 
 daily wage and cannot get away during the day, and if some evening- could be set 
 aside when they could express their views it would be appreciated. I think any 
 evening you might set we would be prepared. 
 
 The Commissioner: Well, Mr. Kennin, the Secretary, can be notified and 
 I will see what can be done. 
 
 Mr. Bancroft: Is it the intention of the Commission to hold sittings in 
 other cities besides Toronto? 
 
 The Commissioner: Nothing yet has been decided as to that. 
 
 Mr. Bancroft: We may have representations from the Dominion Trades 
 Congress which represents over 100,000 members, and we would like to know so 
 that we can give you all the information we can at the most convenient place. 
 
 The Commissioner: That can be settled later. 
 
 I would like those who are interested in this matter to consider one or two 
 aspects of the case that seem to be important. Under an accident system there is 
 practically a guarantee that whatever is to be paid as compensation will be paid. 
 
154 MINUTES OF EVIDENCE: No. 65 
 
 Under the Workmen's Compensation Act,, the British Act, or any act I have 
 seen, beyond a somewhat meagre provision in the case of insolvency there is no 
 security, and if the man that is under the liability goes to the wall the person to 
 whom the compensation is to be paid loses it and they are out in the cold. That 
 does not follow under an accident system, because as I have said that would be 
 guaranteed as long as the thing continued. 
 
 Mr. Meredith : By whom ? 
 
 The Commissioner: By the State in some cases, the State taxing the in- 
 dustry in some way, or levying in some way that the legislature deems best. That 
 aspect I think is an important one. I do not see in the case of periodical payments 
 spread over a number of years, what guarantee there is to the persons entitled that 
 they will surely get their compensation. If failure comes the later it comes the 
 worse for those people, for they need the money most perhaps at the time it stops. 
 That difficulty would not be incident to an accident system, and it occurs to me it 
 might be possible to have a scheme on the lines of the legislation of the State of 
 Washington, or partly along those lines. Of course I cannot say. I don't know 
 whether the State would be willing to take that matter up. 
 
 Then there is another matter which the gentlemen might consider. It 
 would occur to one that if in one province an industry is handicapped by a greater 
 liability than in another province, that industry will compete at so much dis- 
 advantage with the other industry. I do not know whether under our constitu- 
 tional system it would be practicable, or if practicable whether it would be desirable 
 that there should be a Dominion law of compensation applicable to the whole country. 
 I would like you to consider that. I am not throwing it out as a view I have at all, 
 but merely as a matter which might properly be considered. I have heard it said 
 that the manufacturers do not object to compensation, but they do object to their 
 being handicapped with greater compensation than their competitors in other 
 provinces. I suppose any measure to be satisfactory must be a fair one and we 
 must look at all sides of the case, and I want you gentlemen who are of the army 
 of industry to consider these aspects of the case as well, and let me know if you do 
 not agree with the argument what your reasons are for differing from it, because I 
 assume that you will not differ unless you have a reason for differing. 
 
 Mr. Bancroft : It might be well to have sessions where the manufacturers' 
 representatives and the representatives of organized labour could meet the Com- 
 missioner. 
 
 The Commissioner : I would like to see them face to face. 
 
 You mentioned something about private meetings, and I don't know what that 
 means. It does not mean surely that representations are to be made on behalf of 
 anybody that are not public representations? 
 
 Mr. Bancroft : If I made any reference to a private session, I meant private 
 sessions held by yourself where representatives of the different organizations could 
 state their ideas, that was all. 
 
 The Commissioner: Every meeting I hold, unless I see some reason to 
 change my present view, will be public where everybody shall have a right to be 
 heard. Perhaps you gentlemen can arrange some time that will be convenient foT 
 both of you. However, do not let U3 waste time, if I may use that expression, 
 because we want to get at some result, and unless something can be got ready in 
 time to be considered before the House meets nothing can be done. The House 
 usually meets in January or February. I may call another meeting such as this 
 even if I get no intimation such as I ask for. 
 
1912 WORKMEN'S COMPENSATION COMMISSION. 155 
 
 SECOND SITTING 
 
 Legislative Building, Toronto. 
 
 Friday, 27th October, 1911, 11 a.m. 
 
 Present: Sir William E. Meredith, Commissioner. 
 Mr. F. N. Kennin, Secretary. 
 Mr. W. B. Wilkinson, Law Clerk. 
 
 The Commissioner: I have received a communication from the Dominion 
 Minister of Labour which the Secretary might read. 
 
 The Secretary read a letter from Mr. Thomas E. W. Carruthers, Minister of 
 Labour, to Sir William B. Meredith, dated 25th October, 1911. 
 
 The Commissioner: When the Commission adjourned on Monday it was 
 understood that the persons interested would meet and arrange a suitable time or a 
 convenient time for a hearing of their interests, so that persons upon both sides 
 would be present at the same time, and we are here in answer to their desire to hear 
 what they have to say. The day before yesterday, Mr. Wegenast, representing the 
 Manufacturers' Association, called me up and said that the Association was not 
 prepared to lay its views before the Commission, and intimated that some delay 
 would be necessary, not saying what delay. I told him I could not deal with the 
 matter except publicly and that I would call a meeting for to-day when any repre- 
 sentations that the Association desired to make could be dealt with. Mr. Wegenast 
 intimated that the Association had relegated the matter, as far as it was concerned, 
 to a committee consisting, I think, of Mr. P. W. Ellis> Mr. Gourlay, and Mr. 
 Gr. M. Murray, the general secretary of the Association. 
 
 Mr. Wegenast : Mr. Murray and Mr. Gourlay are here, but Mr. Ellis cannot 
 be here to-day, unfortunately. 
 
 The Commissioner : I am ready to hear anything the Association has to say. 
 
 Mr. Wegenast: I suppose it devolves upon me to open the matter. As 
 your Lordship has stated the object was to have a committee wait upon your Lord- 
 ship to explain the attitude of the Association on certain phases of the inquiry. 
 Unfortunately the Chairman of the sub-committee could not be here to-day as he 
 is engaged at a meeting of the Niagara Falls Park Commission at Niagara Falls. 
 It may not be amiss to state that Mr. Murray, as your Lordship is aware, is a 
 member of the Dominion Technical Education Commission, and he is here only by 
 sacrificing his attendance on a week's sittings of this Commission in the New 
 England States. I say this in view of the request that we are making for further 
 time in which to consider this matter. As the resolution of the Association sets 
 forth the Association is prepared to go into this question in the fullest manner that 
 anybody could desire. I need not state that the question of compensation involves 
 further considerations of what might be termed a conservation of industrial effic- 
 iency, to which Mr. Carruthers alludes, and also to a very large extent the economic 
 welfare of the country generally. I need not perhaps elaborate either on this phase 
 of the situation, that the Province of Ontario is in a unique position to deal with 
 this question. Apart from the Chamberlain Act of 1885, which was introduced 
 here in the Act of 1885, the ground is absolutely clear for the adoption of any 
 scheme of legislation and compensation that may seem best. We stand in this 
 
156 . MINUTES OF EVIDENCE: No. 65 
 
 unique position that we are the only jurisdiction that has not adopted legislation of 
 some kind, with the exception of the American States, which are hampered by their 
 constitutional restrictions, and find themselves in a very much less favourable 
 position than we do. Taking that view of the matter perhaps our Associa- 
 tion may be pardoned for assuming that it is intended to make the whole inquiry a 
 most thorough one into all the phases of the subject. I think we are not going too 
 far in assuming that under any circumstances. We have also the advantage 
 of the accumulation of experience during the past thirty or forty years in other 
 jurisdictions. We have that experience available in an immense mass of data, 
 which has to be gone through by anyone to realize its real importance, as your 
 Lordship knows. Eleven years ago the Government of Ontario appointed Professor 
 Mavor, of the University, as a Commissioner to report to the Government on the 
 question, and the gist of his report was that the time was not opportune then for 
 going into the question. The paragraph giving his general conclusion is this: 
 " On all grounds so far as any definite conclusion is suggested by the foregoing it 
 would appear to be wise to wait for some time in orler to ascertain more fully 
 what has been the effect in the c^arae in the English law, and ascertain, also, 
 whether the change in the German legislation or otherwise be not amended in 
 England." The matter has now rested for eleven years, and data has accumulated 
 so that now it consists of an immense mass of reading for anyone who undertakes 
 to intelligently discuss the subject. Recognizing these phases, I was in- 
 structed by the committee of the association, when your Lordship was first 
 appointed, to write your Lordship offering the co-operation of the Association in any 
 manner in which your Lordship thought we could be of any assistance. That offer 
 was repeated from time to time and responded to by your Lordship, ..with the assur- 
 ance that in due time we would be called upon and advised as to your Lordship's 
 wishes. I have, being in charge, to report to the parliamentary committee who 
 were then taking up the matter from time to time, your Lordship's attitude in the 
 matter, and we have been waiting the proper time for taking the matter up. Now. 
 without unduly magnifying the part that it is possible for the Association to play 
 in the matter, we recognize the fact that we have in our power as an organization 
 to serve your Lordship to a considerable extent ; in the first place, by collecting and 
 formulating the opinions of the members of the Association; and I presume if this 
 work were not done by our organization it would devolve upon your Lordship to 
 hear individual members and to formulate these opinions and views for the 
 Commission. We are also in a position to give information to our members. Your 
 Lordship is well aware that this is a subject which it is scarcely possible to intelli- 
 gently discuss without having some idea of what has been done in other jurisdic- 
 tions, and we are in a position to take up the whole question from that standpoint 
 Avith our members. On the other hand we are in a position as an organization to 
 carry on negotiations with those who represent what we may term the other side 
 of the question. But apart from this it has been suggested, and we have thought 
 it might be possible, that the Association's organization might be utilized in an 
 administrative manner. Your Lordship has suggested' for example, why couldn't 
 the Manufacturers' Association lake up the question along insurance lines? Now, 
 whatever the attitude of the Association might be on any suggestion of that kind. 
 it would be a question which would require the most careful and most mature 
 deliberation of those in charge of our organization. We realize this too. We 'do 
 not wish to unduly emphasize it, but there is not, I think, in any jurisdiction in the 
 world to-day an organization corresponding precisely to ours in this Dominion. 
 I say that without undue pride, rather with a sense of our responsibility. When 
 
1912 WOWK MUX'S COMPENSATION COMMISSION. 157 
 
 the German Act was framed in L884, the Government of Germany had to deal 
 with some forty or fifty organizations representing manufacturing interests — 
 perhaps not all representing manufacturing interests, but at least some thirty 
 manufacturing organizations. We arc in a unique position in this respect in 
 Canada. I do not- think there is another jurisdiction where there is an organi- 
 zation of corresponding size to thai of the Canadian Manufacturers' Association. 
 We have as I say, without unduly arrogating to ourselves any importance that we 
 are not entitled to, tried to look upon the whole matter with a sense of respons- 
 ibility commensurate with our opportunity. While we have certain facilities 
 for assisting your Lordship in the discussion and perhaps in the practical carrying 
 out of whatever scheme is adopted, it would have been presumptuous for us to 
 anticipate the course of this inquiry, or the attitude of your Lordship, or the 
 attitude of those who will represent, the wage-workers' interests, by a premature 
 discussion, or by a premature formulating of opinion. If we had anything for 
 instance, in the shape of the suggestion which your Lordship threw out at the 
 first sitting of the Commission, that is, for instance, the suggestion of the Act of 
 the State of Washington, or the suggestion of Dominion legislation, or a suggestion 
 of a further development of the British Act so as to include some guarantee of 
 solvency — if we had had anything of that kind to discuss we would have been in a 
 position to take the matter up; but any one of half a dozen or a dozen very large 
 phases of the subject may call for extended deliberation and most careful con- 
 sideration on the part of the Association, before the Association's position could 
 in the nature of things be stated. Your Lordship will understand my own position 
 personally in the matter. I would be called upon to answer question after question 
 and to state the position of the Association on these matters, and it is in the nature 
 of things an impossibility for us to assume the responsibility of doing that without 
 sufficient time for securing instruction. If I had attempted to anticipate your 
 Lordship's views, which I think T had no right to do. or if I had presumed to 
 anticipate the course of the discussion. I know now that I would have been entirely 
 mistaken, and that any discussion which the Association would have entered upon 
 at my instance would have been entirely wide of the mark. As a matter of fact 
 I have feared that our Association may have gone too far as it is. We have issued 
 certain circulars, certain publications, to our members. We had here in connection 
 with our annual meeting a lecture in which the lecturer advocated certain lines of 
 activity. I have thought that perhaps we made a mistake in going so far as that, 
 and that we have possibly misled the public and the labour interests as to our 
 attitude in the matter, whatever it will develop into. My opinion is not that we 
 should have had some expression of opinion from your Lordship or from the labour 
 interests as to what their desires were, or what line of policy would be adoptedl, or 
 what type of legislation the labour interests would ask for. My point is this, that 
 when the matter has reached the stage of propositions or the presentation of views, 
 it will require a considerable length of time for discussion and counter proposition. 
 I gathered from your Lordship's remarks that it is intended to report at the coming 
 session of the legislature. We, on our part, will undertake to do everything that 
 is possible to assist your Lordship, and do our part, whatever it may be, in this 
 inquiry to enable your Lordship to report within that time, but personally I cannot 
 see how it is possible for us to put our matter in shape within that time. I am not 
 prepared to urge anything — I am prepared to undertake what seems to me im- 
 possible, but I thought it was only fair at this stage of the inquiry to place our 
 views on that phase of the question before your Lordship. Now, your Lordship has 
 
158 MINUTES OF EVIDENCE: No. 65 
 
 also suggested the possibility of our getting together with the labour interests and 
 eliminating a large part of the discussion by mutual agreement on certain questions. 
 The Commissioner : I didn't suggest anything of the kind. 
 Mr. Wegenast : Well, it has been suggested. 
 
 Mr. Bancroft: By whom was it suggested? Was it his Lordship, or the 
 labour men, or was it the manufacturers? 
 
 Mr. Wegenast: Well, my recollection of it is that his Lordship said, Why 
 can't you people work out some scheme that would be mutually satisfactory ? That 
 is as far as his Lordship went in the matter. I understood that of course to be an 
 intimation that his Lordship desired something of the kind, and I took steps im- 
 mediately and reported so to his Lordship, that I had approached the representa- 
 tive men who are supposed to represent the labour interests to that end. That was 
 over a year ago, and I have not heard of it since. I said of course that it was 
 hardly our place, whatever our desires were, to press the matter, but I said we were 
 willing to negotiate, and I stated that in this room again on Monday to Mr. Ban- 
 croft, that we are willing to meet them. In fact so far as it was proper for us 
 we were anxious to meet them, because I couldn't see that any possible harm 
 could come to anyone from a mutual discussion, and there was a possibility of great 
 gain by having discussion on certain points. Then we have thought that it might 
 be possible to secure conferences of the employers other than the manufacturers, 
 who only represented a proportion. Mr. Murray, the Secretary of the Manufacturers' 
 Association, is here, and he may have something to say on that point. I think it 
 is possible to secure some degree of uniformity amongst the employing interests in 
 all these matters. Of course I can't help feeling that I have done, and the Asso- 
 ciation has done, a little more than its share, and it seems the irony of fate that I 
 should now be placed in a position of not being ready to do enough. The immediate 
 occasion of my appearing before your Lordship is, that I had arranged before the 
 announcement of your Lordship's first sitting to go to British Columbia on an im- 
 portant Commission there. I was to have been there on the 10th of November, but 
 I received a wire last night which informs me that it would be possible to expedite 
 the matter by appearing there on the 6th. However, as with Mr. Murray who has 
 sacrificed his other engagements, I am prepared to do what I can to work the matter 
 out, and if( necessary I suppose I shall have to choose between the two engagements 
 and another man will have to be appointed for one of them, although as a matter of 
 fact they are matters which I have had in charge for a year and a half, and which it 
 would be very difficult for anybody else to take up. That is in brief the position. 
 
 The Commissioner: I have not yet learned what is your position. You 
 have not indicated what you want. 
 
 Mr. Wegenast: What we desire is more time. 
 
 The Commissioner : That is indefinite. Do you want a year or do you want 
 a month, or what do you want? 
 
 Mr. Wegenast: Well, it is as difficult to state what length of time will be 
 required as it is to discuss the matter. 
 
 The Commission er: You have had sixteen months since this Commission 
 was appointed in which to get your material ready, and I do not understand at all 
 that it is possible you could have been lying on your oars all that time doing nothing. 
 You knew all the phases that were being discussed. Nobody knows them better 
 than you, and the different methods of dealing with this question, and it has been 
 possible in that time for the Commission to gather a great deal of information from 
 all parts of the world. T do not know what the Manufacturers' Association has been 
 doing if it has not also boon engaged in that work? Now, there can be no trifling- 
 
1912 WORKMEN'S COMPENSATION COMMISSION. 159 
 
 with the work of this Commision. There was legislation introduced before the 
 Commission was appointed looking to the adoption of the British Act. I think 
 two Bills were introduced, and the House thought it better not to pass upon those 
 until an inquiry had been made by a Commission. The result was the appointment 
 of this Commission. It would be out of the question I think that the session 
 should meet without any report from this Commission. While I am quite willing 
 to give every reasonable facility to everybody that is interested to present his views, 
 •I am bound to have my report before the House sometime during the session at all 
 events; that is a sine qua nan. I think it would be trifling with the question 
 if that were not done. 
 
 Mr. Wegenast : Of course, as your Lordship has stated, I have had an oppor- 
 tunity of gathering this information and to no small degree have placed all the 
 information which I have at the command of the Secretary of the Commission, and 
 I am willing to place anything I have and anything that I know at the command of 
 the other interests concerned, but that is a different matter from committing an 
 Association and an organization like ours to lines of policy which may possibly 
 require entire reorganization. The suggestion for instance of Dominion legislation 
 was a matter which I had not personally considered, except as the remotest 
 possibility. 
 
 The Commissioner: That is outside the scope of this Commission. I am 
 to report legislation that is competent for the legislature of this Province to pass. 
 AVhatever recommendation might be made it would be outside the direct line of the 
 mandate I have. 
 
 Mr. Wegenast: That was of course -the view I took of the matter. My point 
 is this, that it is impossible for the Association to pronounce on phase after phase 
 of the question of workmen's compensation that will arise as the discussion proceeds. 
 
 The Commissioner: You have had the British Act before you and its oper- 
 ation for nearly five years, and surely you know what it means? 
 
 Mr. Wegenast: My point is that while I may be personally able to give a 
 personal opinion, this inquiry, so far as I am concerned, cannot be conducted like a 
 law suit in which I can, off hand, commit the Association on every phase that comes 
 up in which the policy of the Association will have to be enunciated. It will re- 
 quire fresh instructions from time to time, and the question of what length of time 
 it will take is a matter which I am not competent to say. 
 
 The Commissioner: I think, Mr. Wegenast, you will have to make your 
 arrangements so that if you have any views to present they will be presented in time 
 for the report to be made to the legislature at the next session. 
 
 Mr. Wegenast: Mr. Murray, the general secretary of the Association, is 
 here, with Mr. Grourlay and Mr. Fleming. 
 
 The Commissioner: I shall be glad to hear what any or all of these gentle- 
 men have to say. 
 
 Mr. Murray: Your Lordship. I appear, as Mr. Wegenast has stated, in my 
 capacity as secretary of the Canadian Manufacturers^ Association. To begin with 
 perhaps it might be in order for me to intimate to you just what that Association 
 stands for in the industrial life of Canada. It is an organization which covers in 
 a general way the entire manufacturing field in this country. Its members are 
 located in every province of the Dominion, and the industries which it embraces 
 cover practically every type of manufacture that is carried on within this country. 
 As regards the Province of Ontario, in which perhaps you are more directly inter- 
 ested, I may say that we embrace within our organization approximately 1,600 
 separate and distinct manufacturing establishments. These carry representation 
 
Kill MINUTES OF EVIDENCE: Xo. 65 
 
 in all the important points of the Province, and so as in the case of the Dominion, 
 i hey also cover practically all the types of manufacturing operations that are carried 
 on in the Province. This subject of compensation therefore is one which inter- 
 ests us very, very deeply. It is a subject on which we have been carrying on 
 investigations for a number of years. I think it is fully five years ago that we first 
 began looking into the British Act and studying its operation. Commissions were, 
 as you know, appointed in the Province of Quebec and in the Province of Manitoba 
 to introduce new legislation on the subject there. Our branches in those provinces 
 on their own initiative without waiting for direction from our governing body, 
 undertook to formulate views for presentation to those Commissions. In the main, 
 1 think those views will find sympathy with the governing body of our Association, 
 but there are certain features of the legislation which has followed the work of the 
 commission in those two provinces which have not been entirely satisfactory either 
 to the manufacturer and employing interests or to the employee. We feel we ought 
 to profit by the experience of other provinces as well as by the experience of other 
 countries. It is true perhaps that our investigations on this subject were carried 
 on more or less spasmodically for a time, but realizing the necessity, if anything of 
 a satisfactory nature was ever to be^accomplished, of getting down to a systematic 
 basis and prosecuting our inquiries in a thorough manner, we instituted some six- 
 teen or eighteen months ago a legal department in connection with our Association, 
 and retained Mr. Wegenast to look after its affairs. It is true that that department 
 has not been able to specialize itself altogether on this one subject of compensation. 
 We have had other matters to deal with which certain members of our Association 
 would consider of equal importance. I need only mention the subject of extra- 
 provincial corporation legislation. However, T can say this in all truthfulness that 
 a very large portion of Mr. Wegenast's time in the last sixteen months has been 
 devoted to compiling information on this subject, and the collection of opinions 
 from those who are familiar with the operation of the laws of other provinces and 
 other states and other countries. After he had collected a great deal of this infor- 
 mation a summary of it was prepared. It was printed and sent out to the members 
 of our organization throughout the Province of Ontario, with the request 
 that they should get thinking along these lines with a view to formulating 
 their opinions for this Commission. Under instructions from our Association 
 Mr. Wegenast went to New York to attend the New York meeting of 
 the Manufacturers of the United States, in order that he might consult with their 
 officers and find out how they were viewing the question, and obtain the benefit of 
 their experience. He there made arrangements to bring to Toronto for the annual 
 meeting of our own manufacturers a lecturer, who has himself spent nearly two 
 years in the investigation of this subject, not simply by reading reports and Acts, 
 but by visiting foreign countries and studying conditions at first hand. On the 
 whole we have conducted a campaign of education so that we could bring the manu- 
 facturers to a proper appreciation of the importance of this subject, and the pos- 
 sibilities of it. The upshot of it was that at our annual meeting held two weeks ago 
 in this city a special committee was appointed to work upon the data which Mr. 
 Wegenast has collected. That committee consists of representative manufacturers 
 from all parts of this Province. They have already held a meeting to which they 
 have come at their own expense and without compensation of any kind, and they are 
 prepared to continue those meetings just as frequently as circumstances will permit. 
 They have already made progress to the extent of drawing up a tentative declaration 
 of principles. I am sorry I am not at liberty to say just at present what thai 
 declaration of principles contains, because it has not been approved by the com- 
 
1912 WORKMEN'S COMPENSATION COMMISSION. 161 
 
 mittee, and it would be presumption on my part to anticipate what the committee 
 may decide upon. 1 may say this, however, that there has been apparent through- 
 out the discussion a desire to substitute the present system of liability insurance for 
 some form of accident insurance, whereby those who are injured in the course of 
 their employment would receive a reasonable compensation without having to have 
 recourse to legal process. That is one tendency which I feel justified in saying I 
 have observed. 
 
 The Commissioner: What does that mean, Mr. Murray? 
 
 Mr. Murray: Possibly, your Lordship, I can explain it by reference to 
 another matter. Feeling the injustice of forcing those who are injured to fight for 
 every cent of compensation which they may get as a result of their injury, a number 
 of our manufacturers have formulated an insurance scheme of their own. In the 
 formulation of these schemes they have consulted their employees. In some cases 
 they are bearing the entire cost themselves, and in other cases a small portion is 
 contributed by the employees, but I can instance a number of establishments in this 
 city and in outside cities, where such schemes are in effect and where they are work- 
 ing out to the satisfaction of both employers and employees. Now, sir, it has been 
 suggested that in the extension of that system there should be organized among the 
 manufacturers of this Province a large mutual accident insurance company, in 
 which every manufacturer would insure his pay-roll, not in the way of a liability 
 insurance to fight claims for compensation, but to insure it in such a way that those 
 who are injured will immediately, upon proof of the accident, receive the com- 
 pensation to which they are entitled. I may say further that I think that scheme 
 is viewed with very general favour by the manufacturers. I need not remind you 
 that less than four years ago the suggestion was made that we should organize a 
 mutual fire insurance company among the members of our association, and we did 
 it, and what we have done in that direction we can do in the direction of accident 
 insurance if we make up our minds to do it. We are now merely discussing the 
 advisability of it and as soon as that question is decided then we are ready for action. 
 But here we are confronted with this question: will our efforts along that line be 
 acceptable to this Commission, or to the Government to which this Commission will 
 report? In order to organize a mutual accident insurance company a great deal 
 of time and effort and money will be necessary. To begin with we are confronted 
 with an embarassing lack of statistics on the subject of accidents and causes con- 
 tributing to them. Before we can intelligently classify industrial risks and base 
 rates of insurance we must have the full statistics, and those statistics have not 
 been compiled by any authority in this country, and, therefore, it will be for us to do 
 pioneer work in that field. The present basis of liability insurance rates is so vague 
 that the liability insurance companies themselves will not divulge what it is. As 
 I say, therefore, we are in some doubt as to whether our efforts along that line 
 would be acceptable. We would welcome any direction that this Commission might 
 give to our efforts, and on behalf of the manufacturers personally and our Associa- 
 tion I can assure you, sir, that we will bend our best energies to the solution, or at 
 least to the formulation of onr ideas, upon any line of policy which you might see 
 fit to indicate. As regards the question of time, I regret exceedingly that I cannot 
 state just how much time might be required, but I can say that even as the manu- 
 facturers have not dallied with this question since the time when we inaugurated 
 our legal department, about a year and a half, or a year and four months ago, we 
 will continue to prosecute our inquiry with all the diligence of which we are capable, 
 and I can conceive that it might be possible for us to have our recommendations in 
 shape to lay before you in time to permit of a report being presented to the next 
 session of this legislature, providing some direction is given to our inquiry. 
 
 11 L. 
 
162 MINUTES OF EVIDENCE: Xo. 65 
 
 The Commissioner : How would it be possible for any direction to be given ? 
 Conclusions have to be reached before any direction can be given, and conclusions 
 cannot be reached until the whole subject has been considered. Surely it would be 
 quite competent for the Manufacturers' Association if they favoured a -system of 
 mutual insurance of all their employees to say that, without elaborating all the 
 details. You need not go into that now, one would think, for the purposes of this 
 Commission. I suppose you could very soon determine whether it would be ben- 
 eficial and a feasible scheme to form a company of that kind. It would not take 
 long to determine that. 
 
 Mr. Wegenast: We have the manager of our Insurance Department here. 
 
 The Commissioner : The State of Washington evidently had to grapple with 
 that because it has adopted State insurance with a graduated tax upon the manu- 
 facturers, and that of course must be based upon the same considerations as would 
 be involved in a scheme of mutual insurance. I don't know anything about the 
 basis, whether it is a fair one or not. 
 
 Mr. Murray: On that point I might state, sir, that I would not anticipate 
 any difficulty in obtaining an expression of opinion from the special committee of 
 our Association having the matter under investigation within the next month. 
 
 The Commissioner : Supposing that was considered, as far as that branch 
 was concerned, a fair method of dealing with the matter, what about the other large 
 interests involved? While that is a very considerable portion of the industrial 
 army it is only a part of it. What about the part that Mr. Merrick represents? 
 What would you do about the other organizations not coming within the scope of 
 your organization ? 
 
 Mr. Murray: That is one of the reasons we feel that time is necessary, 
 uecause any ideas we may have to advance ourselves will only be on behalf of the 
 manufacturers, and we would prefer to come before you with suggestions which we 
 know would be acceptable io other employing interests, and if possible to the labour 
 interests as well. 
 
 The Commissioner : The effect of the British Act is practically to make the 
 manufacturer an insurer of his men, unless the man by serious misconduct has to 
 suffer the loss, if the injury takes place in the course of his employment. Is that 
 not individual insurance? 
 
 Mr. Murray: Of course that is a form of insurance, but we would like to 
 approach the subject from an entirely different standpoint. 
 
 The Commissioner : Do not misunderstand me. I want all the information 
 I can get, but I do not want any undue delay in reaching a conclusion. Something 
 ought to be done. I do not suppose that what is reported and what is done, if any- 
 thing is clone, by the legislature will be final. We are moving on all the time, but 
 the tiling is, if the law is in a bad shape, to get it in a better position. Let us 
 make a step onward. 
 
 Mr. Murray: All I can state, your Lordship, is that on behalf of our Associa- 
 tion I will give you an undertaking that this matter will be pushed in our committee 
 jusl as diligently as it is possible for anyone to push it. We have already post- 
 poned other work in order to expedite this question, and Mr. Wegenast is prepared 
 to cancel his engagement to appear before the Tax Commission of the Province of 
 British Columbia on a question of extra-corporal ion legislation. As Mr. Wegenast 
 has told you, I happen to be a member of the Royal Commission of Technical 
 Education, and after a somewhal lengthy recess my colleagues left to prosecute their 
 inquiries in the New England States in the early part of this week, and that field 
 promises to be one of the most fruitful fields for our investigation, and T felt very 
 
1912 WORKMEN'S COMPENSATION COMMISSION. 163 
 
 strongly that I should he there with them. I feel, however, that this question of 
 compensation is of such far reaching importance to the manufacturers of this 
 Province that my duty requires me to be here and to assist so far as we can, sir, 
 through the work of our committee, and the presentation of views, and suggestions 
 to you that will enable you to report to the legislature what will he, I hope, one of 
 the best acts ever put upon the books of any State on any country. It is in that 
 spirit, sir, that we are approaching this investigation, and the manufacturers will 
 be very sorry indeed to see their efforts thus far negatived by lack of time of 
 perhaps at the shortest a few weeks, or perhaps at the most a couple of months. 
 
 Mr. Gourlay : I do not know that I have very much more to say than what 
 you have already heard, other than to emphasize the fact that the manufacturers as 
 a class, independent of their officers, have not as yet had much opportunity of 
 getting together and discussing this matter from its various aspects. Rightly or 
 wrongly we had hoped, some of us, that we would have had some months' notice in 
 advance of the time of the sitting of the Commission, and whilst it may in some 
 measure appear as if [ were blaming our officials, yet as you have heard it was only 
 two weeks ago that the committee was appointed with power to profit by the 
 investigations that have been made during these months, and which, I can assure 
 you, have occupied a great deal of time and thought to give the whole question 
 careful consideration, not merely in the interests of the manufacturers — because 
 after all we are citizens as well as manufacturers — and we feel the legislation 
 which is contemplated at the present time should be on such a provincial or national 
 plane, if I may so put it, that it will give the maximum compensation at the min- 
 imum of cost in the matter of administration. It should also take into consider- 
 ation, I submit, sir, not merely the individual factors that may be represented by 
 the members of the Associations, but the whole question of prevention of accidents, 
 and of legislation to make the appliances for the prevention of accidents more 
 thoroughly and universally used, not merely by the manufacturers themselves, but 
 by employees, because the court statistics indicate very often that safety devices are 
 not used at the time of accident. The question is a large one from the standpoint 
 of the prevention of accidents, and from the standpoint of the utilization of medical 
 aid so as to minimize the injury from the accident, as well as to get the maximum 
 of compensation at the minimum amount of cost in the matter of administration, 
 and also as to the provincial aspect as to dealing with all classes of accident. We 
 suffer largely from accidents outside of merely industrial enterprises, and even if 
 this act should deal with only industrial enterprises it should 'be large enough to 
 take in prevention along the lines of a larger measure for the whole Province and 
 the whole State. I submit to you, sir, as men who are vitally interested, and of 
 men who are in daily contact with their employees that there should be an under- 
 lying principle that the legislation should be of such a nature that the bond between 
 the employee and the employer shall be stronger and better than it has been before, 
 and that any element of friction shall be taken out of the way. In regard to any 
 act that is put upon the statute book that the administration of any such act as 
 this shall he along such lines that the bonds shall be closer than ever before, and we 
 think we are entitled, if it takes time, to give all these aspects thought. The 
 suggestion has been made, no matter where it (Mine from, that the employee and the 
 employer should get together and discuss this matter in a conference, and we might 
 come to an agreement on some of the matters, if not upon all the matters, and we 
 could then have your judicial opinion as to what is right and proper; and therefore, 
 I submit if you could see your way to carry it over for even three months I am 
 
164 MINUTES OF EVIDENCE: No. 65 
 
 satisfied we will come before you with something, having given the matter thought, 
 that will be in the general interests of the community. 
 
 T!he Commissioner: Just one word, Mr. Gourlay, I would like to say. This 
 question of prevention of accidents is, no doubt, a very important matter. One of 
 the objections that Mr. Asquith urged to the legislation by the Government some 
 years ago on the Compensation Statute was that it did not deal with prevention. 
 It was pointed out by Mr. Chamberlain in answer that they were not ne- 
 cessarily connected, and that the other matter could be dealt with separately. Now, 
 I have no mandate to make any inquiry upon the subject of prevention of accidents, 
 hut I would like to make this observation in consequonce of what has often appeared 
 hefore me in accident cases, and that is that safety devices are provided by the 
 employer and the workman does not use them. The foreman knows that he does 
 not use them. Now, if the employer would let his foreman understand that if he 
 does not report and dismiss a man who does not use his safety device, I think you 
 would not have many of these cases of workmen being injured owing to the safety 
 device not being used. What they do is, they practically wink at the disregard of 
 the safety device which the employer puts there. That is a feature that has struck 
 me in several trials which have taken place. 
 
 j Mr. Firstbrook: Your Lordship, there is only one phase I would touch on 
 in addition to what has been said, and that is there is no antagonism between the 
 employers and any other class in this matter. We are seeking to get at a solution 
 that will be in the interests of all. Of course at times I compare notes with my 
 fellow manufacturers on the matter of treatment of employees in the case of sick- 
 ness and accident, and I have failed yet to meet an employer who has not compen- 
 sated his men in the case of an accident and sickness, and nearly all in addition to 
 the protection that they pay for from the companies. I have in mind now a firm 
 that were unfortunate enough to have a fatal accident in their factory some years 
 ago. The employee who was killed left a widow and two boys, and that firm took 
 <'are of the widow and took care of the children during a number of years, until 
 they were able to learn a trade and do for themselves, and until the widow married 
 again. The weekly compensation that the husband was receiving was paid to the 
 widow during these years. In fact in every case of an accident to an employee of 
 that company a portion at least of the wages is paid without reference at all to the 
 heads of the firm. It is paid by the time keeper. In many cases the full wages 
 have been paid both in the case of accident and sickness; so that with the employers 
 that I have spoken to, I have failed yet to meet one who has not been sympathetic 
 and who has not helped in that direction, and for this reason I submit we are work- 
 ing in the interests of all concerned, both the employers and the employees. There 
 is another matter that occurs to me in this connection, and that is, that any legisla- 
 tion that is put through in Ontario should be, perhaps, as nearly as possible, in con- 
 formity with what may be in other provinces, for this reason, that ^ve have to 
 compete. Our manufacturers have to compete with the manufacturers in other 
 provinces, and if there is an extra tax on one beyond what may be in other pro- 
 vinces it would perhaps be a hardship, not only to the manufacturers ^and employers 
 of labour, but io the labour men themselves. I think these are the only points that I 
 might mention. 
 
 Mr. Merrtck : Your Lordship, I represent a section of the employing inter- 
 ests. To a large extent the interests of the employers are not identical with those 
 of the manufacturers, for this reason, that the employers are in a very large number 
 of cases, men of very small means. I might say that the majority of them have 
 arrived at the position of employers on emerging from the ranks of the workmen. 
 
1912 WOEKMEN ? S COMPENSATION COMMISSION. 165 
 
 so that in the cases that were cited here at the last session, if a penalty is placed 
 on the employer, without great care being exercised, not only would the working 
 men not receive compensation, but the employer would automatically be ex- 
 tinguished in business. That is a phase that requires a very great deal of con- 
 sideration in connection with the employing interests. There is a disposition on 
 the part of the employers to give this matter their careful attention and very 
 general attention and with the view point of giving as wide compensation as possible 
 to the injured workman. The employers, as I say, are drafted largely from the 
 ordinary workmen, who have graduated from the working ranks by reason of skill 
 and efficiency or the saving of the necessary capital to start in a small way in 
 Business. We have felt that not only, is the present Ontario Act an unjust one, 
 but that the act that is in force in Great Britain is also an unjust one, and one 
 instance was brought forward by the young baker who questioned Mr. Macdonell 
 at the last session with regard to how insurance rates automatically removed those 
 who were maimed or physically unfit from the ranks of industry. That is a case we 
 want to guard against in the Ontario act, and as far as I can see the most reason- 
 able suggestion is the one along insurance lines where automatically if a man is 
 injured he would be compensated for the damage he has suffered by reason of the 
 fact of having come in contact with the unfortunate part of industrial life. The 
 man who is wilfully negligent or through some other reason under our present Act 
 is deprived of compensation would, we believe, be permitted to receive this compen- 
 sation on account of the fact that the premiums which now go to resist claims will 
 go to pay compensation. It is along that line that we require a fair amount of time 
 io consider the best method to submit to your Lordship in connection with the em- 
 ploying interests. I had a meeting called to-day to go into the questions raised at 
 the last meeting, but on account of the unexpected date of the sitting of this Com- 
 mision the meeting was cancelled. We will have that meeting adjourned until 
 next week and go on w-orking with the idea of bringing in as soon as possible a 
 report from the employing end. The employers include also all the sections of the 
 building trades, which are represented here to-day by their President and Secretary, 
 and it will be our effort to ally ourselves with the building trades and also with the 
 Painters' Association, in order to have with their assistance a general report from 
 all the employing industries of the city, so that at one glance you will be able to 
 ascertain exactly what our view point is. The only necessity is to have sufficient 
 time in order to bring it before these men who have not very much leisure time in 
 the busy building season. As .you are aware in committee matters it is only when 
 a vital question comes before the committee that there is a continuance of attend- 
 ance and attention, and now that the present matter has come before the employing 
 and manufacturers' interests it can be assured that every reasonable .despatch will 
 be taken so that our report will be presented to your Lordship if possible before 
 the first meeting of the legislature. 
 
 Mr. Wegenast: There is only one thing I have to add. Your Lordship 
 made a suggestion the other day that data should be placed before the Commission 
 as to the schemes of compensation at present in operation. It would be a work of 
 considerable magnitude to gather this data. It would be necessary for me to send 
 out circulars. 
 
 The Commissioner: Can you not count upon the fingers of your two hands 
 the number of organizations that have such schemes ? 
 
 Mr. Wegenast: No, I think not your Lordship. As Mr. Firstbrook has 
 stated I think a very large proportion of the employers that our Association repre- 
 sents — some sixteen or eighteen hundred — have in operation schemes which depend 
 
166 
 
 MINUTES OF EVIDENCE: No. 65 
 
 altogether, as I stated to your Lordship the other day, rather on custom than on any 
 organization. 
 
 The Commissioner : I did not understand that Mr. Firstbrook spoke of any 
 scheme. He spoke of generous treatment by the employers of their workmen. 
 
 Mr. Wegenast : Take the case that your Lordship instanced, of the Massey- 
 Harris Company. I doubt whether the Massey-Harris Company can show a shred 
 of writing as to its organization, although it is most effective and most satisfactory 
 to the company and to the employees, and if any data of that sort is to be gotten it 
 will require time. 
 
 Mr. Corkill (Inspector of Mines) : I believe the views of the mining com- 
 panies and the mining employees throughout the Province have not been presented 
 to this Commission. While going around the Province during the last few weeks I 
 have been approached by both the employees and the mine managers with the idea 
 that an opportunity should be given for their views to be presented to this Com- 
 mission, and I was requested to ask if a meeting could be held in say a couple of 
 weeks to give them an opportunity of being present. 
 The Commissioner: Where? 
 
 Mr. Corkill: Well,, it Avas asked by the employees most largely if a meet- 
 ing could be held in Cobalt, or Cobalt and Sudbury. Those are centres where 
 employees are gathered, and it would be much more convenient for the employees 
 if the Commission could sit there. I presume that the mine owners themselves 
 could come to Toronto. As I understand it there is only one organization of em- 
 ployees, and that is at Cobalt. 
 
 The Commissioner: Would it not be easier for the officers of those 
 organizations to come down here than to take the Commission up there? 
 Mr. Corkill: I just gave that as a suggestion. 
 
 The Commissioner : I suppose there is no reason why the travelling expenses 
 of these gentlemen should not be paid. They could be paid like a witness, I 
 suppose. 
 
 Mr. Corkill: It is very difficult for the employees to get off a sufficient 
 length of time, and also pay their expenses. 
 
 The Commissioner: Will there not be somebody to represent the body and 
 speak for them ? 
 
 Mr. Corkill: That would be in Cobalt. There they could have the 
 President or Secretary of their Union speak for them, but in Sudbury and other 
 mining camps they have no organization, and consequently there would be no 
 member who could present the views of the miners. In the Sudbury camp prob- 
 ably sixty or seventy-five per cent, of the employees are foreigners. Fifty per cent, 
 could not speak English, probably. 
 
 Mr. Bancroft : I might say that at the Dominion Trade Congress at Calgary 
 some few weeks ago, there was a resolution passed. There were 163 delegates 
 present representing 57,000 paying members, and indirectly 150,000 members on 
 this continent, or in the Dominion of Canada rather, and the resolution was this, 
 that the Ontario Executive Committee immediately get in touch with the Com- 
 mission organized for the purpose of considering workmen's compensation in 
 Ontario, and ask that there should be no unnecessary delay, and why there had been 
 delay, if any ; so you see it is impossible for us to consent, or even to think that any 
 delay is necessary. I think your Lordship's observations were quite correct. Every- 
 body knew when the Commission was appointed that evidence was needed, and that 
 conclusions would be drawn from the evidence which was given largely by the Com- 
 mission. Since that time T believe organized labor has undertaken to collect all 
 
1912 WORKMEN'S COMPENSATION COMMISSION. 167 
 
 the evidence that they possibly need, and to present it when you wished it in a 
 proper manner so that you should understand what we want. I am not so sure 
 but that the manufacturers have done the same, from observations which we have 
 had, and I believe from what has been written in their organization. I think Mr. 
 Wegenast went to New York and he heard the report of the representative who had 
 travelled all over Europe, and I understand that was for the purpose of gaining 
 information on the subject. The manufacturers have had their convention, and 
 they had representatives from all over the Province of Ontario. They had a lecturer 
 there who was to give them all the statistics possible from his experience in going 
 all over Europe. And now when the* Commission meets a request is made that 
 delay is absolutely necessary for them to state what their members want. They say 
 for eleven years or so this matter has been held up, and that we have only had the 
 old Employers' Liability Act, and so on. That is true ; and in that eleven years who 
 knows how many have suffered, and have been injured and maimed and crippled in 
 the industry who have gone without any compensation, and the mothers and chil- 
 dren that have been thrown upon the world without any resources. From that 
 standpoint we don't believe in any delay. We don't believe there is any reason 
 whatever for delay at the present time, and we do hope you will report to the next 
 session of the legislative House in Ontario. As far as the workers are concerned 
 we are here, I think, to speak for the workers from the Toronto Central Body, and 
 we hardly hesitate to say there that the views which we will express will be coincided 
 in by organized labour generally. In the Dominion Trade Congress there is probably 
 every kind of workman represented, including miners, and from the discussions 
 from year to year of one kind and another we know, I think, what labour wants 
 in the way of compensation. It has been said this morning that the delay was 
 necessary in order to consult all the members of the Manufacturers' Association. 
 However, it seems to me from the unanimity of opinion this morning for delay 
 there must have been some consultation, and some reason for the delay. If the 
 Workmen's Compensation Act is to he modelled upon the British Act, as I believe 
 organized labour wants it, I do not see any reason for any unnecessary delay in the 
 matter. It is plain. With regard to extinguishing employers by workmen's com- 
 pensation such as is in existence in Great Britain, I don't believe that any evidence 
 has ever been produced in Great Britain in the last five years, or in Germany since 
 compensation and social insurance was in existence, that gives anybody any reason 
 to make any such statement anywhere at any time. An employer who does not 
 insure himself when the law calls for it against risks to his employees, is like the 
 employer who refuses to take out fire insurance, and then blames his loss on the 
 carelessness of somebody else. After all it is a tax upon industry. In the last 
 analysis, there is no doubt about it, but what the consumer will pay for it. The 
 employers of the Old Country are not individually liable only so far as they insure 
 against all risks and hazards of industry in an insurance company. They talk about 
 insolvency, but it is strange to say that it is the employers who are the ones that 
 wish to protect the workmen against the insolvent employer. The workmen of 
 Great Britain have not found it difficult to deal with that question, and the insol- 
 vency part of the workmen's compensation is covered hy the British Act and is 
 entirely up to date to the satisfaction of the workingmen. 
 
 It has been said that men have gone all over Europe and investigated these 
 conditions for themselves, and they have observed apart from reading reports. I 
 might say that from time to time we have members of organized labour in Europe. 
 Men who are leading men in organized labour both in Great Britain and on the con- 
 tinent, come to this country and we understand and know, exactlv what they are 
 
16« MINUTES OF EVIDENCE: No. 65 
 
 doing. It is not exactly from reports, it is from actual contact with industry in 
 every part of the world, and we have men in Canada who go over there. Now, I 
 hope that your Lordship will direct a certain time when both parties will be ready. 
 A complaint has been made — I don't know whether it is a complaint, but a sug- 
 gestion — that labour should consult with the manufacturers. I wish that the manu- 
 facturers on all things were as ready to consult with organized labour as they are on 
 workmen's compensation. We do not feel altogether that our case has got to be 
 made out before the Manufacturers' Association. I believe that the case of work- 
 men's compensation has got to be made out before this Commission and to the 
 Ontario Government; and from that standpoint we feel that we have truth and 
 justice on our side as far as workmen's compensation is concerned, and are ready 
 to meet before this Commission at any time any objection to our position, and to 
 meet the objections taken by other parties. The individual case cited by a manu- 
 facturer where an employer took care of a widow and children until they became of 
 certain years, and so on— I only wish that was true in a larger sense. If there is 
 that feeling amongst the manufacturers that that is a good thing they should have 
 no objection whatever to the British Workmen's Compensation Act— none what- 
 ever — But I am afraid that is an exception rather than the general rule. In fact 
 I know from personal experience it is so. I do not see that we have any reason to 
 make argument this morning on workmen's compensation, but only to raise objection 
 to any delay. When you desire at any time information as to the position of labour 
 on this question we will be ready and willing to give it to you. I believe, however, 
 that it may be possible for our information to be drawn up in such a manner that 
 it could be given almost without explanation and so that you could understand 
 thoroughly what labour desires. I believe we could do that, and I believe it would 
 not take us very long either. So I say that we object to any delay whatever. We 
 are prepared to give evidence at any time. If the scope is for the Province of 
 Ontario, why, we will endeavour to do that. In fact I believe we can get the 
 Dominion Trade Congress represented here to give evidence before you. Why, the 
 "Royal Commission on Technical Education would not go to a city and ask for evi- 
 dence and because somebody would say tbey were not prepared put if off for three 
 months. The Eoyal Commission would not dream of that. The Eoyal Com- 
 mission tell people to be prepared to give their evidence. This Commission has 
 been appointed, I believe, for one or two years. We were the ones that asked for it. 
 I do not see any reason for delay in the matter whatever. The delay, of course, is 
 more beneficial to the manufacturer than to the employee, because delay for years 
 has meant cripples in industry who have never got anything because of the legis- 
 lation. I am not so sure that the sentiments that are expressed before Commissions 
 are always the sentiments that guide employing interests of any country when 
 dealing with practical cases of compensation. So, your Lordship, I suggest that 
 you name a time yourself and tell the parties to be ready, and that we give the 
 evidence when you ask for it. 
 
 The Commissioner: • When will those you represent be ready, Mr. Bancroft. 
 
 Mr. Bancroft: Well, I don't see that we need more than a week or two. A 
 week or l wo notice to us will be enough. 
 
 The Commissioner: I suppose you would prefer an evening meeting? 
 
 Ah;. Bancroft: It would bo better. 
 
 'I'm: Commissioner: If you will say about the time we will lcl you know. 
 
 I would like to ask if anyone is here representing the agricultural interests. 
 Notice was sent to the gentlemen who were supposed to represent those interests 
 
1912 WORKMEN'S COMPENSATION COMMISSION. 169 
 
 
 because that is within the scope of the British Act. I think it would be well to 
 notify them. 
 
 Mr. Bancroft: I would like to draw your attention to one point which we 
 would like borne in mind. In the British Columbia legislation on workmen's com- 
 pensation there has been an interpretation made, I believe, by a judge of the court 
 in that province, whereby if a man is killed in British Columbia and his wife and 
 children happen to be living in Saskatchewan his dependants would get no com- 
 pensation. I hope, your Lordship, for the benefit of all concerned that nothing of 
 that nature will be allowed to creep* into any Workmen's Compensation Act in 
 Ontario. 
 
 The Commissioner: There is something like that in the Manitoba Act? 
 
 Mr. Bancroft : Yes, and it is a mistake. It is so much of a mistake that the 
 Dominion Trade Congress intend to fight that case to the Privy Council, where it 
 now is. 
 
 The Commissioner: Unless there is something in the Act specially provid- 
 ing otherwise it was so held. 
 
 Mr. Bancroft: It was never before the Privy Council, but it is going there. 
 
 The Commissioner: Mr. Justice Darling decided that the Fatal Accident 
 Act was not applicable to a foreigner, and that was over-ruled. 
 
 Mr. 'Geo. Gander: Speaking for the building trade, your Lordship, I gen- 
 erally coincide with Mr. Merrick's words, that we would like a little time, and I 
 believe we will come before you with a more decided and general view that will be 
 perfectly agreeable on certain points, and I think myself that will almost occur on 
 both sides of the house. The reason I express the view that way is at the last 
 meeting there was quite a difference of opinion as far as the labour people themselves 
 
 Mr. Bancroft : The gentleman, as far as we know, who gave his views was 
 an individual. The labour people were being represented. 
 
 Mr. 'Gander : I only mention this to show there must be a large diversity of 
 opinion, for you see I have run against a snag already. We\ may have different 
 opinions in the building trades, hut we feel by meeting, in a very short time we 
 could come before you with an opinion that we would not differ on. We would not 
 wish to state that sucli a thing might occur to the extent of ten per cent., and 
 another individual turn around and say it might occur to the extent of thirty per 
 cent. I believe we could get these opinions pretty well formulated and in a better 
 state in a little time. 
 
 Mr. Gibbons: As this meeting seems to be called for the purpose of asking 
 for delay and the employing classes seem to be united in wanting delay, 
 yet we cannot see what can be gained by delay. As has been pointed out 
 by my colleague, the manufacturers had a convention, and they have been gathering 
 statistics from the United States, and they have had all the acts ,of the various 
 provinces before them. Now, probably we come here in a different way to what 
 they do. We come here with the purpose of giving evidence to the Commission 
 formulating the act. We do not suppose that we are coming here today down an 
 act clause by clause that will be submitted to the Government. I -do not think 
 the Commission expects that. They want us to give what information we have 
 and our opinions, and I do not see anything to prevent them from doing that. If 
 we were to ask for time to go and consult every individual we would not be able to 
 give you evidence for the next two years. Therefore, I do not see anything to be 
 gained by delay. The last gentleman mentioned, an employee or a worker, 
 who came here last time, and I would say that that gentleman came here on his 
 
170 MINUTES OF EVIDENCE: No. 65 
 
 own initiative, and no matter what scheme was put up he was here to oppose it. 
 We know where the opposition came from, and therefore that is no excuse for delay. 
 I do not think the Commissioner expects the employers or the employees to lay 
 down a hard and fast Act. I think what the Commission wants is evidence, and 
 they will formulate, or the Government will formulate, an act on that evidence; 
 and we are prepared to go ahead any time. 
 
 Mr. J. W. Doggett: I would certainly like, your Lordship, to pass my 
 opinion against this delay. I might state that since the last meeting of the Com- 
 mission there have been accidents in the building trades of the city, even since 
 last Monday. I am just saying this to show that delay is pretty costly to the 
 labour interests in those cases, and I think myself that all possible aid and every 
 effort should be made to bring a Workmen's Compensation Act into the Province 
 of Ontario, and put upon the statute books of the Province of Ontario, whereby 
 the workers will be getting compensated instead of looking for charity, such as a 
 case that came to my notice this week, where a man was laid up for seventeen weeks 
 in St. Michael's hospital who met with an accident, and his wife and children were 
 going to the House of Industry asking for bread. That man met with an 
 accident in the course of his occupation, and that is one reason for our protest 
 against any delay in giving evidence. 
 
 The Commissioner: You might give the Secretary the name and address 
 of that man. 
 
 Mr. Bancroft : We would hope that you would direct a time when the manu- 
 facturers' representatives shall be ready to give evidence, as well as ourselves, 
 because if you remember we intimated we would like both to be here at the same 
 lime. 
 
 The Commissioner: That possibly may be impracticable. We cannot force 
 them to come together unless they choose. 
 
 I do not see any reason to change the view I expressed during the course of the 
 discussion. I must have this inquiry completed so that I shall be in a position to 
 report to the House at its next session. I recognize the reasonableness of the 
 request that there should be no undue thaste, and that an opportunity should be 
 afforded to everybody interested to present his views before the Commission con- 
 cludes its labours, but it would be out of the question, I think, as I have already 
 stfated, to allow any delay which would prevent the Commission reporting during 
 the next session. The Commission was issued sixteen months ago, within a few 
 days, and public notice was given of it, and the matter was discussed before the 
 Commission was issued, so that the manufacturers were well aware that this subject 
 was one that would engage the attention of the Commission, possibly at an earlier 
 date, it might have been expected, than the date when the Commission was able to 
 meet, and during all this time I cannot imagine, that the manufacturers have been 
 lying on their oars and not gaining information and formulating views with regard 
 to the question. 
 
 I think it i< probable that I shall go to some of the other cities. I shall 
 make some further inquiries before deciding that, however. It would perhaps 
 look invidious to take only views here in Toronto. I may possibly go to other 
 large centres of trade and business throughout the Province, and I may go, as the 
 Inspector has asked, to the 'Cobalt and Sudbury districts, if that is thought to be 
 the most convenient way of getting the views of the mining industries. Then in the 
 meantime I will hold meetings and I will hear the Trades and Labour Council, 
 or any individuals who desire to be heard. Possibly there may be some evidence 
 
1912 WORKMEN'S COMPENSATION COMMISSION. 171 
 
 taken. In the meantime the manufacturers and building trades can be getting 
 ready with whatever they are proposing to submit; but they must understand that 
 however much I may desire to have the benefit of their inquiry and opinion upon 
 the question, that anything they have to offer must he in time to enable me to 
 make the report at the next session. 
 
 Then, Mr. Bancroft, if you and Mr. Gibbons and Mr. Doggett will find out 
 what time will he most convenient for those you represent to be here I will arrange 
 the date, and in addition to any written statement I would like to make some 
 inquiries of those who may attend, and of course it will be open to anybody else 
 to be present. Mr. Wegenast possibly may be here as representing the manu- 
 facturers if he chooses to hear and take part in the discussion. 
 
 Mr. Doggett : I have now the name of the man I referred to. His name is 
 W. Barnett, living in the rear of 61 Oak Street, Toronto. He met with the 
 accident while working for the National Iron Works, Toronto. 
 
 The Commissioner : Would it not be a good idea to have one of the factory 
 inspectors here when we are discussing these questions? 
 
 Mr. Bancroft: I think it would. 
 
 The Commissioner : Mr. Kennin can notify them. 
 
 THIRD SITTING 
 
 COBALT MTNERS. 
 
 Held at the Town of Cobalt, Ontario. 
 
 Thursday, lith December, 1911, 2 p.m. 
 
 Present: Sir William R. Meredith, Commissioner. 
 Mr. W. B. Wilkinson, Law Clerk. 
 
 The Commissioner : I have been commissioned by His Honour the Lieuten- 
 ant-Governor of Ontario to make inquiry into the subject of workmen's compensa- 
 tion with a view to recommending to the legislature a measure which will be satis- 
 factory to conditions in this country. My duty has been to collect information as 
 to the laws that obtain in other countries; and I am taking advantage of meeting 
 the people who are interested, both employers and employees, in order to get their 
 views, so that I may have before me when I come to make a recommendation to 
 His Honour all the views bearing upon this most important subject. 
 
 Mr. Corkill was at one of the earlier meetings which took place in Toronto, 
 and he suggested that in view of the very large number of persons who were in- 
 terested, both as employers and employees, in the mining industry, one of the most 
 important industries of the Province, it would be desirable to hold a meeting here, 
 and I am, therefore, here to hear the views of those who desire to express their 
 views to me. I am anxious to hear not only from the organizations, both of the 
 mine foremen and the workmen, but also from any individual who thinks he has 
 
172 MINUTES OF EVIDENCE: No. 65 
 
 * 
 
 anything to say that will be useful for the purpose of assisting in the work which 
 I have been called upon to do. I shall be glad now to hear anybody who desires to 
 present any views. 
 
 Me. Ware : I represent the four Miners' Unions, the Western Federation of 
 Miners' Union at Porcupine, Elk Lake, Cobalt and Silver Centre. As the matter 
 has only just been brought to my attention, and I have only been instructed within 
 the last two hours, I will give you the information, or the opinions which have 
 been expressed, with regard to the subject from these bodies. In the first place the 
 Unions and the members which I represent consider that the Workmen's Compen- 
 sation Act in Ontario is very much too narrow, and that according to their ideas 
 it should in its working, as amended, embrace all kinds of accidents arising from 
 any cause whatsoever. That is to say not only those which are accidental accidents, 
 but those which arise from defective machinery and plant and the defective systems 
 of working, but also from the negligence of fellow employees, and from accidental 
 accidents, if I may use the term, pure accidents, which result in injury to any of 
 the employees. It is also considered advisable in connection with the administra- 
 tion of this Act to have a system of State Insurance in which the employers only 
 should be asked to contribute to the premiums, and supply the needed funds to a 
 large extent, in conjunction with the State, for the compensation of accidents and 
 injuries which occur. The matter has been gone into very carefully with the dif- 
 ferent councils representing these organizations, and they have drafted out an 
 epitome of what they considered advisable in the amendment of the law on the 
 subject. They have prepared and signed a brief of the suggestions which, with 
 your Lordship's permission, I will hand in to you. 
 
 The Commissioner : That is the same that has come from Toronto ? 
 
 Mr. Ware: Yes. 
 
 The Commissioner : Perhaps you had better read it so that the mine owners 
 can hear it? 
 
 Mr. Ware : It is addressed to Sir William Meredith, Commissioner of the 
 Provincial Government, re Workmen's Compensation Legislation. 
 
 " Sir — 
 
 " Understanding that it is the desire of the Commission to make recommenda- 
 tions for a Workmen's Compensation Act in harmony with modern industrial con- 
 ditions, we have the honour to submit herewith recommendations for a Workmen's 
 Compensation Act for the Province of Ontario. 
 
 "These recommendations have been discussed and unanimously agreed to, by 
 representatives of the Dominion Trades and Labour Congress, Toronto Central 
 Labour Council, the Building Trades Council of Toronto, and the Metal Trades 
 Council, whoso signatures are appended hereto. 
 
 " We also understand that it is the expressed desire of the Commission to re- 
 port to the next session of His Majesty's Provincial Legislature the conclusions 
 and recommendations for legislation of this Commission, on this subject. We, 
 therefore, have lost no time in taking the matter up, to suit the convenience of the 
 Commission. 
 
 "We propose 1o give plainly, therefore, the fundamental principles which we 
 believe should be the basis for construction of a new Workmen's Compensation Act 
 in this Province. 
 
 "It is unnecessary to refer to the present legislation in Ontario. Its useless- 
 ness has been pointed out for years by representatives of labour, its obsoleteness in- 
 deed, preventing almost anyone from even an attempt to defend it. 
 
1912 WORKMEN'S COMPENSATION COMMISSION. 173 
 
 " The ancient character of the present legislation may make it seem to many 
 that a new Act in harmony with modern conditions, with modern legislation in 
 countries that have made serious attempts to solve the question, is in the nature of 
 radical legislation, but that is merely because the matter has been so long neglected 
 in Ontario. We propose that the new act shall cover: — 
 
 "1. All employments, the employees of the Province, Municipality, County, or 
 other administrative bodies in the Province to be covered the same as employees in 
 industries. 
 
 " 2. Compensation for all injuries arising out of, and in the course of employ- 
 ment. 
 
 " 3. Compensation for being disabled, or other injuries arising out of, or as the 
 result of a specified occupation, the said disablement and injuries being in the 
 nature of occupational diseases. 
 
 " 4. Entire cost of compensation to rest upon employer. 
 
 "5. In the case of injury resulting in death, the defendants as outlined in the 
 British Act, and State of Washington Act, shall be the beneficiaries, with the 
 expenses of the funeral as outlined also. 
 
 "6. The doctrine of negligence on the part of employees or employer, fellow 
 servant or otherwise, shall have no place in the new legislation. 
 
 " 7. State insurance in connection with Compensation Act. 
 
 "8. The creation of a provincial Department of Insurance with three Com- 
 missioners, for the purpose of administration of the act. 
 
 "9. Compulsory insurance of employees in the State department, by a yearly 
 tax levied upon the industry or occupation, covering the risk of the particular 
 industry or occupation. 
 
 " 10. The tax shall be upon the yearly wage roll. 
 
 "11. No employer shall attempt to pay the tax by deduction of wages of 
 employees, by agreement or otherwise, such action to be regarded as a gross misde- 
 meanour, as provided for in the State of Washington legislation. 
 
 "12. The schedules of payment under the act to be based upon the payments 
 under the British Act, with the proportional increases due to the difference in the 
 wages in Ontario, reflecting the difference in the cost of living. 
 
 " 13. The Provincial Government shall provide revenue for the creation of 
 the department of insurance. 
 
 The following will give you some idea of the weight of opinion in favour of the 
 burden being borne by the employer or industry alone: 
 
 Great Britain. The employers alone bear the burden, and they insure volun- 
 tarily in state, mutual, or private stock companies. 
 
 Norway. Employers bear the burden and State insurance is compulsory. 
 
 Sweden. Employers bear the burden and insure as in Great Britain. 
 
 Holland. Employers bear the burden by compulsory insurance in State, 
 mutual or private organizations. 
 
 Denmark. Employers bear the burden and insure as in Great Britain, but 
 insurance is compulsory. 
 
 Belgium. Employers bear the burden by voluntary insurance as in Great 
 Britain. 
 
 France. Employers bear the burden by voluntary insurance as in Great 
 Britain. 
 
 Italy. Employers bear the cost by compulsory insurance, but insure in State, 
 mutual or otherwise, as in Great Britain. 
 
174 MINUTES OF EVIDENCE: No. 65 
 
 Germany. Employers bear the cost of workmen's compensation. Insurance 
 is compulsory in State, mutual trade associations and State Executive Boards. 
 
 Wage earners covered by such compensation: 
 
 Great Britain 13,000,000 
 
 Norway \ 400,000 
 
 Sweden 1,000,000 
 
 Holland 1,000,000 
 
 Belgium 2,100,000 
 
 France , 9,500,000 
 
 Italy 10,000,000 
 
 Germany 15,000,000 
 
 Total 52,000,000 
 
 Fifty-two million workers covered by compensation legislation in which the 
 whole burden is on the employer or industry. 
 
 There are those who confuse the contributory schemes of sick insurance, inval- 
 idity and old age, with compensation legislation, but this Commission is not deal- 
 ing with social insurance, only so far as it affects compensation for accidents, fatal 
 or otherwise, arising out of or in the course of employment, and we therefore deal 
 with it as such. 
 
 The doctrine of contributory negligence was the always fruitful source of 
 litigation, and as the position, " That the worker would injure himself to obtain 
 compensation " has become untenable, as well as the fact that if a workman takes 
 risks, it is generally because in the nature of his employment conditions make him 
 do so. This doctrine has almost wholly passed away. It exists mostly in old legis- 
 lation on the matter. 
 
 The tendency of thought in Europe as well as North America is towards com- 
 pulsory State insurance. 
 
 The British Act, an admirable one, is found to be in need of improvement in 
 this direction, as the British Trades Congress, the mouthpiece of organized labour, 
 is seeking to have established compulsory State insurance in connection with the 
 act. 
 
 The Manitoba Act, modelled upon the British legislation, is found to be want- 
 ing improvement in this direction also, as the CentraJl Labour Council in Winnipeg 
 has expressed itself a short time ago as intending to seek compulsory State insur- 
 ance in connection with the legislation. 
 
 The splendid legislation of the State of Washington recently placed in opera- 
 tion with a State Department of Insurance, and a declaration of police power, is 
 worthy of your most serious attention, from which we quote the following: 
 
 " The common law system of governing the remedy of workmen against 
 employers for injuries received in hazardous work is inconsistent with modern 
 industrial conditions. In practice it proves to be economically unwise and unfair. 
 
 "Its administration has produced the result that little of the cost to the 
 employer has reached the workman and thai little only at large expense to the 
 public. 
 
 "The remedy <>f the workman has been uncertain, slow and inadequate. 
 
 "Injuries in such works, formerly occasional, have become frequenl and inevi- 
 table. 
 

 1912 WORKMEN'S COMPENSATION COMMISSION". 175 
 
 " The welfare of the State depends upon the industries and even more upon 
 the welfare of its wage workers. 
 
 "The State of Washington, therefore, exercising herein its police and sov- 
 ereign power, declares that all phases of the premises are withdrawn from private 
 controversy, and sure and certain relief for workmen, injured in extra hazardous 
 work and their families and dependants, is hereby provided, regardless of questions 
 of fault, and to the exclusion of every "other remedy, proceeding or compensation, 
 except as otherwise provided in this act; and to that end all civil actions and civil 
 causes of actions for such personal injury and all jurisdiction of the courts of 
 the State over such cases are hereby abolished except as in this act provided." 
 
 Surely, Sir, this must commend itself as a guide for administration of com- 
 pensation, without litigation, such as any one having at heart the welfare of the 
 workers might follow. 
 
 Perhaps the best feature of the Washington legislation is the fact that it 
 makes for the prevention of accidents, which we regard as more important than 
 compensation. The taxing of industries according to their respective risks, is an 
 incentive to the employers to reduce the risks, which means a reduction of the 
 yearly premium. 
 
 It is only by making risks expensive in industry to employers that we can 
 hope to reduce them to a minimum. 
 
 Contracting out clauses, sub-contractors' liability, all the aggravating ques- 
 tions of controversy and litigation, could be obviated by provincial compulsory 
 insurance, with a department of administration, in connection with which the 
 Provincial Health Department could, on investigation among the workers of 
 Ontario, tabulate what are occupational diseases in our own Province. 
 
 We believe that an act modelled upon the British Act in principle, with the 
 Compulsory State Insurance of the Washington Act, with its police administration, 
 and tax upon industry, as a preventive for accidents, would be the best for the 
 workers as well as for the employers. 
 
 With regard to the sums of compensation in the schedules, we will be willing, 
 if you decide on the British Act altogether, to work out the payments for Ontario, 
 taking into consideration the different financial proportions of wages and cost of 
 living. 
 
 We would say, however, that if you follow the British Act completely it should 
 cover all workers in Ontario getting less ttian $2,000 a year. 
 
 If on the other hand you should favour the act of the State of Washington we 
 will endeavour to prove to you that some of the payments made by the month are 
 too low. 
 
 Anything less than either of these two acts will he inadequate to meet the 
 needs of the workers of Ontario, and as this Province is the manufacturing centre 
 of our Dominion, we claim that the legislation that should be adopted and which 
 we desire is that pointed out by the fundamental principles we have laid down for 
 your consideration. 
 
 Any further evidence you may need we will be only too pleased to procure, 
 and we ask you to request our co-operation for this purpose at any time. 
 
 The Commissioner: Do you understand exactly what they mean? As I 
 understand it they mean that the individual employer shall be answerable for all 
 accidents happening whether they happen through the fault of the employee or not, 
 if they arise out of and in the course of his employment, and instead of insur- 
 ing with accident insurance companies they effect insurance with the State against 
 that individual liability. That differs widely from the Washington scheme. The 
 
176 MINUTES OF EVIDENCE: No. 65 
 
 Washington scheme does not involve any individual liability by the employer at 
 all. There is a graduated tax which is based upon the risk pertaining to the 
 different industries that are mentioned, and when the employer contributes that 
 he satisfies all that he is called upon to do. 
 Mr. Wake: That appears to be so. 
 
 The Commissioner : Their proposition is a composite one, part State of 
 Washington and part British Act. 
 
 Mr. Ware: Yes, I noticed that apparent discrepancy in discussing it. The 
 object of the insurance, as I understand it, is to provide a fund which is always 
 certain and always available for the purpose of satisfying the damages. 
 
 The Commissioner: That would not be their scheme as I understand this. 
 Say John Smith is an employer of labour. He is bound to insure all his men with 
 the State Insurance Department. Then when an accident happens that fund, 
 whatever his insurance is, provides for the injured employee or his dependants, 
 as the case may be. I would like if you would find that out. Perhaps I can ascer- 
 tain it nearer home, from Mr. Bancroft who is the leading man in Toronto deal- 
 ing with the subject on behalf of the labour men. If there is to be a tax have you 
 any suggestion to make as* to how that tax should be collected ? Are you going to 
 make the Government a tax collector to collect from every employer of labour, the 
 man who employs a large number and the man who employs from one to five men? 
 Mr. Ware : According to the suggestion there the taxes are to be levied on 
 the yearly pay roll. 
 
 The Commissioner: Who is to collect it? 
 
 Mr. Ware : There is no suggestion as to that. This is a matter to be worked 
 out in the machinery of the Act. The Government would naturally be the best 
 party to collect it. 
 
 The Commissioner: I should think the result of that would be to turn out 
 
 any existing Government, if they started to collect taxes from everybody employing 
 
 one, two or three men. It would be lucky if it comes immediately after an election. 
 
 Mr. Ware : If your Lordship would care to hear some of the individual men 
 
 they might have some ideas. 
 
 Mr. Botly : I represent Local 145, Miners' Union. Referring to this ques- 
 tion of who shall collect the taxes it is an undoubted fact that the Government, 
 so far as we have seen, has no difficulty whatsoever in collecting taxes for other 
 purposes than for the cause of labor, and I think if there should be experienced 
 any difficulty by the officials of the Government, either of Ontario or Canada, in 
 collecting taxes for the purpose of benefiting the cause of labour. I think the cause 
 thereof lies not so much on the face of it in their inability to raise that tax, as 
 their nnfamiliarity with the cause for which that taxation is to be levied. Now, 
 this perhaps one of the first actual labour reforms that has been instituted in 
 this country. I agree with Mr. Commissioner that it is perhaps one of the most 
 important pieces of legislation that was ever proposed in the Province of Ontario. 
 We regard it, speaking as a Union, as the thin end of the wedge, and I have no 
 hesitation right here in saying that we intend to demand, to ask, for all we think 
 that we can possibly get. We consider that we have been labouring for years in this 
 country under an injustice in that we have been compelled to work for our masters 
 on whatever terms they chose to dictate, in the majority of cases, and then when 
 wo were injured Ave had to have recourse to the courts in which courts we have no 
 representation whatsoever. Now, with regard to this proposition as to how we 
 are (o levy the taxes, I believe there is a system or a law on the statute books of 
 the British Isles which compels, in the event of a receipt being given for over the 
 
1912 WORKMEN'S COMPENSATION COMMISSION. 177 
 
 sum of $10 or two pounds, that a stamp bo placed upon the receipt, and the receipt 
 is not legal without that stamp is thereon placed, and I think therefore we mighl 
 find a very reasonable way in which to collect this tax, by instituting a system 
 of stamping the pay roll. That is, stamping the pay receipts of each employer with 
 a stamp of a certain valuation. I think that would be a very equitable way ol 
 collecting his tax. In the event of any employer asking a receipt from an employee 
 for his wages without placing that stamp thereon you could make the receipt 
 invalid, and the employee could come back for the full amount of back wages. 
 
 The Commissioner: A workman is injured, and it is manifest to his Unior 
 that he is injured owing to his own grops carelessness and disobedience of rules 
 Is it just that he should be in as good a position as the man who does not violat< 
 rules or is not grossly careless? 
 
 Me. Botly : I submit to you in this form of production that we now have 
 it is presumed that the employer of labour, by virtue of the fact that he is ar 
 employer of labour, therefore controls that industry. He does not hesitate to ?a) 
 that he has the right to control the revenue from that industry, and that being 
 the case he certainly should accept the full responsibility for the way in which tha 
 industry is carried on. Incidentally also he should accept the full responsibility 
 for the class of employees that he employs, and if he chooses to employ suet 
 employees as are not suitable for the craft or occupation they follow I maintain 
 and I think the rank and file of the membership is behind me, that the employe! 
 and he alone is responsible. 
 
 The Commissioner: Take an individual man. He may be the most skilfu 
 man in the mine, but he deliberately goes to work under dangerous conditions ant 
 invites Providence to strike him. How should that man be compensated? Shoulc 
 he be compensated in the same way as the man who takes reasonable care ? 
 
 Mr. Botly : I come from a mining camp which, in my opinion, is the mos 
 dangerous mining camp in New Ontario, and we have Government appointee 
 mines inspectors. On the train on which I came down there was a man came dowi 
 in a coffin. How he died I don't know, but I do know there are instances when 
 men are killed, and something should be done to prevent it, I know one persona 
 friend of mine that got injured. He didn't say anything very much about it, bu 
 he was injured by falling rock, and I submit to you that if this legislation is passe< 
 and the State does institute a system of State Insurance, if the State thereby i 
 compelled to pay that insurance. I think the State will do far more towards pre 
 venting accidents, both of death and any other nature, than they are doing at th< 
 present time. 
 
 The Commissioner : Well, one of the arguments against State insurance 
 is that it does not provide any incentive to protect the lives and limbs of employees 
 A man goes on carelessly, and he is on the risk, he gets his compensation just tb 
 same, whether he is careless or not. 
 
 Mr. Botly : There is machinery right in this Province for the inspection o: 
 mines, factories and mills, and I know of numerous cases where accidents occur 
 and those works have never been inspected as far as I know. We could get n< 
 information whatsoever. I think this, that if the State was responsible fo 
 the compensation to be paid that the State itself would attend to this question o 
 the conditions under which the men work. 
 
 The Commissioner : Do you not think there is some duty owed by the mai 
 who labours to assist as a member of society in minimizing the cost and lesseninj 
 the cost of production? Does he not owe some duty to society? 
 
 Mr. Botly : I do not quite follow that. If it is a fact that it is the duty o 
 12 L. 
 
178 MINUTES OF EVIDENCE: No. 65 
 
 the labouring man to lessen the cost of production it is, therefore, the duty of the 
 employer to increase the return to the labourer, and we do not find that being in- 
 stituted here in any case. Every increase in wages we have obtained we have had 
 to fight for, and to fight hard for. I maintain, on the other hand, that the in- 
 terests of the laborer and the master are not identical, and are practically opposed 
 in every direction. 
 
 Mr. Cohen: At the mine I represent, and other mines, I think, in Cobalt, 
 we voluntarily have given employees a bonus on the earnings of the company. We 
 have also provided for the insurance of the men. In reply to the statement made 
 by the last speaker I may say this wasn't done on any demand ; it was done volun- 
 tarily by the company who felt the men were entitled to a profit. The mine is 
 not a Union mine. We have nothing against the Union, but we don't feel we have 
 much in common with them. I just make that point in contradiction of Mr. 
 Botly's statement. 
 
 Mr. Gatjthier : In reference to the collection of that tax which is referred 
 to, I think it could be very easily collected if the Government made up its mind 
 to have it. I will give you an instance. When the mines were collecting fees for 
 the hospital they collected it, and if the Government insists on having the em- 
 ployer collect that tax that can be collected. Now, the point I want tp make is 
 according to number 7 in that article, I think it is. I would be in favor of putting 
 the cost eventually upon the employer solely. Now, that may sound queer, but still 
 1 have a few arguments to put up, and I think some of the employers will realize 
 when I am through that they would benefit by it. Now, you are insuring your men 
 to-day. Why? For the simple reason you do not want to pay the costs of the 
 accidents which your men go through, and now the insurance company has got to 
 do the fighting. I have been secretary of the Masters' Union for three years and 
 a half, and I know a little about that business, and that is why I am stating these 
 facts. The point is the insurance governs the amount paid for accidents to your 
 employees. Now, if the employer paid the ratio of insurance to the provincial in- 
 surance company, which would be governed by the government, provided of course 
 that the Government would have to provide a fund for a start, but I am of the 
 opinion that if this was done the employer would see that his mine or his mill or 
 (lis factory, or any other proposition of which he is the master, would be properly 
 run. That ratio of insurance would be governed by the number of accidents or the 
 cost of the accident, which means the less accidents the less cost, and the ratio 
 would be lessened, and therefore I think the employer would benefit, and so would 
 the employee. I will say something later if I am given the opportunity- 
 
 The Commissioner : What would you do if an inspector goes out and takes 
 two men with him to work? How would you provide if his man is injured? How 
 would you provide for raising money to pay for that? A couple of men go out 
 together and they hire a couple of men to go with them, and one of the men is 
 killed, it may ho through carelessness or without the fault of anybody, but he is 
 killed while the operation is going on. How would that case be provided for? 
 Take the case of a prospector? 
 
 Mr. Gautiiier: The prospector would have to insure his two men before he 
 takes them with him. 
 
 The Commissioner: Would it not be pretty difficult to get all these little 
 things in? 
 
 them. 
 
 Mr. Gautiiiki!: But he would have to insure the men before he goes with 
 
1912 WOK KM UN'S COMPENSATION COMMISSION. 179 
 
 —i 
 
 The Commissioner: Well, take the employer himself? They are all about 
 on the same plane. One happens to work for wages and the other works for what 
 he gets. Supposing the prospector gets killed he gets nothing and his dependants 
 are left without anything. 
 
 Mr. Gauthier: In that ease the prospector is not a working man. He is 
 working for himself. 
 
 The Commissioner: That would not be much consolation to his family. 
 
 Mr. Gauthier: Well, he is taking chances to get dollars. 
 
 The Commissioner : We are all *taking chances for the matter of that. 
 
 Mr. Gauthier : The majority of the workers to-day are making a fight for 
 a living and they haven't got a chance to get the dollars. All they earn is a mere 
 living. The majority of the workers are getting a mere existence. This camp 
 is a prosperous camp. Why? Because the wages are high. It has been stated that 
 in the cities there is more misery, but when there is more money in circulation, 
 although the cost of living is high, still the living is better. 
 
 Mr. G. W. Mahon: I represent the Timiskaming Mine Managers' Associa- 
 tion. That is an Association consisting of twenty-one, or practically all the ship- 
 ping mines in the Cobalt camp. In submitting their propositions to your Lord- 
 ship I may make some admissions, or go even further than possibly the workmen 
 think the mine managers would be prepared to do, or possibly what your Lordship 
 would think they were willing to do. In the first place they are willing to admit 
 that the employer, in so far as it relates to the mining industry, and that is all I 
 am speaking in regard to — in so far as it relates to the mining industry the em- 
 ployer has a responsibility in respect to his employees, and even in the case of where 
 an employee is guilty of contributory negligence they are willing to assume a cer- 
 tain responsibility and make certain compensation to thje dependants of an employee 
 who may be killed even by his own contributory negligence. The amount, however, 
 would he very considerably smaller than it would be in the case of any other acci- 
 dent, that they would be willing to assume. The next point is that in regard to 
 the mining industry, — which is different from any other industry in the manu- 
 facturing field, — it is generally conceded in the discussion on Workmen's Compen- 
 sation Acts that any liberal act imposing heavy burdens to meet the damages that 
 may result from accidents adds to the cost of production, and in manufacturing 
 establishments particularly that added cost can be met by adding it to the cost of 
 production and charging it up to the consumer, the general public. In the case of 
 metal mining particularly the mine owners have absolutely no control over the price 
 of its output. They control it in no way whatever, and if too heavy a burden is 
 placed upon them by a Workmen's Compensation Act there would be the danger 
 of them reimbursing themselves by a reduction in the wage. A high wage is paid 
 to the mine workers by reason of the fact that it is a hazardous occupation, but if 
 they are going to be obliged to pay a big wage because it is a hazardous occupation, 
 and then compensate in every instance a heavy compensation, the tendency would 
 be to reduce the wages of the mine workers, the employees, and hence a too liberal 
 Workmen's Compensation Act might he a disadvantage rather than an advantage 
 to the workmen in the metal mines. My next point would be that it would be ad- 
 visable, if possible, in any Workmen's Compensation Act to have a separate pro- 
 vision for the mines, or at least a separate schedule, and keep it separate from other 
 industries, so as to protect the employer, particularly if any provision is made for 
 payment to employees or the dependants of employees who have been guilty of con- 
 tributory negligence. The employers should be protected so that the employees will 
 not grow careless, feeling that there will be compensation in any event. Then 
 
180 MINUTES OF EVIDENCE: Xo. 65 
 
 v 
 
 there should be a very rigid inspection and frequent inspection of mines, and the 
 work being carried on by the employees as well as by the employers, so that there 
 would be certain inspection, and that that expense should be borne by the Govern- 
 ment for that rigid inspection. I know in one mine in the camp at the present 
 time, in addition to the fact that there is the daily inspection required by the act 
 by the captain or shift boss, they have taken on another employee solely for the pur- 
 pose of walking through the mine and inspecting the mine to see that no one is 
 growing careless in his work and endangering their lives, and I submit there should 
 be some such method adopted if there is to be any added burden of any moment 
 placed upon the mining industry. There should be very frequent, in fact almost 
 daily inspection of the mine. 
 
 Now the Association suggests if there is a revision of the Workmen's Com- 
 pensation Act, such a revision should be based rather upon the New Zealand Act 
 of 1908. That has been taken fly reason of the fact, as is well known, that the 
 New Zealand legislation is an advanced legislation, and it is suggested that that 
 act should be taken as the basis for the amendment of the Workmen's Compensa- 
 tion Act. Certain modifications of course would have to be made in the schedule 
 as to the compensation for various injuries, and it is suggested that instead of 
 taking the New Zealand Act, that the schedule, which is very complete and very 
 full, as set out in the Act of Eussia, 1903, should be adopted, instead of the 
 schedule as appended to the New Zealand Act. I have the schedules here. I do 
 not know whether your Lordship has seen it. 
 
 The Commissioner : I have seen that book, yes. 
 
 Mr. Mahon: It is set out very completely, and provides for every possible 
 accident, and gives a rate of so much per cent, on total disability, or death, and 
 it is suggested that such a schedule as that should be adopted in connection with 
 the adoption of the New Zealand Act, 
 
 The Commissioner: I was told a short time ago of a very peculiar accident 
 to a man, where gangrene set in after the injury and he lost both his legs. Would 
 it be governed by the ultimate injury or by the primary injury? 
 
 Mr. Mahon: I believe the New Zealand Act provides that if the parties 
 agree upon the amount or scale of compensation — or it may be the Norwegian — 
 that the settlement may be revised, I think it is every three years. 
 
 The Commissioner : A man might lose a finger, and that might be a simple 
 thing, but it might result in serious consequences. Would each accident by which 
 a finger is lost be compensated for just the same, no matter what the results are? 
 
 Mr. Mahon : I would say if it eventually caused death it would come under 
 the death compensation. Every three years there is a revision, and if during that 
 time more serious results have resulted from the more trifling accident, then it 
 would move up in the scale according to the schedule, and if within three years 
 death resulted, T presume then the maximum would be paid. 
 
 Now, the mine managers suggest that during a period of total incapacity the 
 weekly payment, if any, should not commence until after the expiration of seven 
 days. That is the same, I think, as in the British Act, and also the New Zealand 
 Act. 
 
 The Commissioner : The British Act as introduced, I think, was fourteen 
 days, but that was struck out in the House, and there was no limit. 
 
 Mr. Maiion : In New Zenland it is seven days, and in some other Acts. 
 
 The Commissioner: In some of the American Acts it is' seven days, and no 
 payment unless the disability continues for fourteen days. 
 
 Mi;. Mahon: Where death or total incapacity results from an accident his 
 
1912 WORKMEN'S COMPENSATION COMMISSION. 181 
 
 _ 1 
 
 total dependants should receive three times the actual average yearly earnings of 
 the employee, and hy total dependants as denned by the New Zealand Act, I mean 
 those who have no other source of income whatever, but are dependent on the em- 
 ployees, but in no case should the sum to be payable under total disability be less 
 than $1,000 or more than $2,600. That is basted upon three times the average 
 earnings of an employee in this camp. 
 
 The Commissioner: That would be going back upon our present legisla- 
 tion, which is three years or $1,500, whichever is the larger. 
 
 Mr. Mahon: In no case should it be less than one thousand dollars, no mat- 
 ter what their yearly earnings should be. 
 
 The Commissioner: As it is now it never can be less than $1,500. 
 
 Mr. Mahon : That is true, but the maximum would be $2,600, which would 
 be practically three times the average yearly wage of a man in this camp. That 
 meets the objection raised by one of the previous speakers, that the schedule would 
 have to be revised from the British Act to suit the wages here. I have a statement 
 here which shows in the twelve mines in the past year the average yearly wage was 
 $869, and three times that would be approximately $2,600. 
 
 Then during the period in case of death and incapacity the weekly payment, 
 if any, should commence to be paid not until a period of seven days, and then 
 should be at the rate of 50 per cent, of his average weekly earnings. 
 
 The Commissioner : You would have his wages run on for those seven days ? 
 
 Mr. Mahon : Some companies pay that, but in no case should the total 
 amount be under the weekly payment except the death and maximum, and in the 
 case of death finally resulting the amount paid under these weekly payments 
 should be deducted from the maximum amount he would receive. Then we say 
 that the New Zealand Act should be altered in this respect. By section 10, I 
 think it is, of the New Zealand Act very broad provisions are made for the payment 
 of compensation in cases of disease. We say that should be eliminated as open- 
 ing the door altogether too wide for fraud. 
 
 The Commissioner: You must have some provision for occupational dis- 
 ease. Take the tanners, for instance. 
 
 Mr. Mahon : If it is strictly confined to occupational diseases there would 
 not be the same serious objection to it, although even then it has been found, I 
 understand from those who have had experience, there is a door opened pretty 
 wide for fraud on the part of the employees, if they desire to take advantage of such. 
 If it is confined very strictly to occupational diseases there would not be the same 
 objection, but the New Zealand Act, it seems to me, to be very wide in that respect, 
 and extends for a period of twelve months after the employee leaves the employer's 
 employment, he is still responsible. There should be, I think, a limit placed upon 
 that and confined very strictly to occupational diseases. 
 
 Then the provision in the New Zealand Act is entirely satisfactory fo the 
 mine managers upon the point raised by one of the previous speakers as to con- 
 tractor and principal. They are jointly and severally liable, and the contractor 
 shall indemnify the principal. The mine managers are willing to make this state- 
 ment, that compensation according to the schedule shall be paid whether the em- 
 ployer shall prove negligence or not on the part of the employee. So long as the 
 accident happens he can receive compensation according to the schedule which 
 would be appended to the act. In the Now Zealand Act it say? no compensation 
 shall be paid in the case of serious or wilful misconduct. 
 
 The Commissioner : The same as the British Act. 
 
182 MINUTES OF EVIDENCE: No. 65 
 
 1 
 
 Mr. Mahox : In that ease the Timiskaming mine managers say in ease of 
 his total incapacity, or in case of his death, they would be willing to submit to a 
 payment to the dependants of a certain percentage of the regular schedule, say 15 
 per cent, of what he would otherwise receive, he or his dependants, in case of total 
 incapacity. In the case of partial incapacity or temporary — - 
 
 The Commissioner : I suppose that would mean where the injury was due 
 wholly to the misconduct of the employee? 
 
 Mr. Mahon: Yes. 
 
 The Commissioner : As to contributory negligence it seems to be almost 
 common ground that that must go. 
 
 Mr, Mahon: Yes, that is the idea. 
 
 Mr. Botly : In the event of an employer working in a mill, say a saw mill — 
 
 Mr. Mahon : I am only considering mines. 
 
 Mr. Botly: 1 am familiar with the milling industry, and that is why I said 
 that- In the event of an employee seeing a notice placed up by an employer, we will 
 say over an exposed shaft, to keep away from this shaft. Would it be considered 
 wilful misconduct if the employee in the course of his employment went near that 
 exposed shaft and got caught in it. or, on the other hand, would it be necessary 
 before the employee would be guilty of misconduct to have a guard rail placed 
 around it, or something placed over it ? Would it be necessary for the employee to 
 'do tampering with the shaft itself? 
 
 Mr. Mahon: The Factories Act provides what shall be guarded and what 
 shall not, and if the owner does not guard what should be guarded, it does not 
 matter how many notices he puts up, he does not escape responsibility. 
 
 The Commissioner : This gentleman does not seem to see the force of the 
 word "wilful." If a man was working around that shaft, and not thinking, got 
 pretty near it and got hurt, that would not be wilful. Wilful means he knows what 
 he is doing, intending to do what he does. But supposing the notice was up there, 
 and the man deliberately and with his eyes open, knowing it was dangerous, and 
 seeing it there, walked up and came too close, that probably would come under the 
 definition of wilful misconduct, or wilful violation of the rule. 
 
 Mr. Gauthier : I would like to ask the counsel here if a man, for instance, 
 scratches his hand, and we will concede that there are poisonous germs, which occurs 
 very frequently in the camp here, and through this little scratch he gets blood 
 poison and dies, would lie get remuneration for that under the act. 
 
 Mr. Mahon: My instructions are that that clause in the New Zealand Act 
 should be struck out. 
 
 The Commissioner: The case that Mr. Gauthier points out is covered by 
 the present act, and ho would be compensated for the injury. The present law 
 would look after him in that case, as I understand it. 
 
 Mr. Mahon : Then as to the procedure for determining what particular 
 heading of the schedule each individual accident would come under, it is suggested 
 that if the parties cannot agree, with the schedule as full and complete as it is 
 made in the Uussian Act — if they cannot agree the matter should be adjudicated 
 upon by the County judge, quite irrespective of the amount involved; and either 
 party might on application to him ask for a date of hearing when all parties could 
 be heard, and the hearing should be heard at the most suitable place near where 
 the accident occurred. 
 
 Then as to all lump sums, — if they are not paid in weekly payments, all lump 
 sums to be paid to parties in settlement, particularly to dependants, should be paid 
 into court and apportioned by the County or District judge among the various 
 
1912 WOKKMENS COMPENSATION COMMISSION. 183 
 
 classes of the dependants, and there should be the right of appeal from the decision 
 or any ruling of the County or District judge. There should be one righl of ap- 
 peal to the Divisional Court, and neither party, to have any further right of appeal. 
 
 The last suggestion 1 have to make, and perhaps your Lordship can set me 
 right as to whether it is in the power of the Provincial Legislature to include in 
 the act that no employee should have'the right of action at common law? There 
 would be just one remedy. 
 
 The Commisioner : That would be perfectly competent, to substitute it. It 
 is there at present. 
 
 Mil. Mahon: Then as to conditions that exist here, this is a report taken 
 from the twelve mines for 22 months, from January 1st, 1910, to January 1st, 
 1911, and it sets forth the average number of men employed is 2,201; the average 
 wage per year per man amounts to $869. The total wages for the 22 months was 
 $3,263,788. The average premium rate paid to the liability companies now is 
 2.12. 
 
 The Commissioner: What is the gross amount? 
 
 Mr. Mahon: The total amount for premiums for the 22 months was $69,- 
 267.37, and during that time the liability companies have paid out in insurance 
 $20,490, which includes some that are still pending. 
 
 The Commissioner: You include those as if they had been paid? 
 
 Mr. Mahon: Yes. There are some still under adjustment, but we conclude 
 that the full amount will be paid. 
 
 Under the schedule as outlined here, under the act, there would at the s.iiue 
 time have been paid out of that sum for premiums of $69,000 odd, $40,341, or 
 over double, or practically double the insurance that the liability companies have 
 paid in compensation. 
 
 The Commissioner: Under your suggestion? 
 
 Mr. Mahon : Yes, under our suggestion. 
 
 The Commissioner: What does that tax upon the industry amount to. that 
 $69,000? Have you got anything to show what that percentage bears to the net 
 profit of the mines? 
 
 Mr. Mahon: No, T haven't. It is based upon the pay-roll. It i- two 
 decimal something. It is a little over 2 per cent, on the industry, assuming that 
 every company would carry employers' liability policies. 
 
 The Commissioner: What is that percentage of? 
 
 Mr. Mahon : Of the gross wage, the pay-roll. 
 
 The Commissioner : I wanted to know how much of a burden it is upon the 
 industry? 
 
 Mr. Mahon : That can be worked out, I think. 
 
 Then I have some figures here as to the accidents which have happened, and 
 so on, during the same length of time. Incapacity for less than eight days, 84 
 cases; incapacity for more than seven days and less than fifteen days, 32 cases; 
 incapacity for more than two weeks and not over four weeks, 28 cases : incapacity 
 between four weeks and eight weeks, 9 cases; incapacity between eight weeks and 
 26 weeks, 6 cases; permanent and total disability, 2; permanent and partial dis- 
 ability, 3, etc. That is during the 22 months for those twelve mines. (Statement 
 handed to the Commissioner.) 
 
 The Commissioner : Mr. Corkill was telling me about 48 altogether for the 
 Province. 
 
 Mr. Mahon: This is just the twelve mines of the Timiskaming Mine Man- 
 agers' Association, returns of which we got. 
 
184 MINUTES OF EVIDENCE: No «5 
 
 As regards State Insurance I have no direct instructions, but so far as the 
 Mine Managers' Association is concerned there is no doubt they would just as 
 soon pay the same premiums into State insurance as they would into a private 
 company. 
 
 I do not know that I have anything further to add. 
 
 The Commissioner: I do not suppose anybody has figured this out, but 
 supposing there was a Department of State Insurance, what difference would there 
 be in the cost to the State of managing the fund? It must make quite a differ- 
 ence. 
 
 Me. O'Connell: Some two months ago I read in the New York Sun an 
 article giving the gross returns from all the employers' liability companies in the 
 United States, and it showed the greater number of companies operating there. 
 There is much more keen competition for business and the industries are very 
 much larger, but it would give you some sort of idea of what the revenue and ex- 
 penses were. If I remember correctly the gross premiums paid into these com- 
 panies were $96,400,000. Of this amount only $41,000,000 were paid in settlement 
 of claims, and lawyers' fees amounted to the huge sum of $11,000,000, and there 
 were other costs which were very much larger, and the profits were something like 
 $20,000,000 odd. That is just a portion of all the liability companies operating in 
 the United States. In this country the matter would have to be worked out by in- 
 surance actuaries, whether the business could be carried on as a sound business pro- 
 position or not, or whether they would have to seek aid from the State or the 
 Province. The mining industry, as you know, with the exception of coal and iron 
 mining, is fluctuating and not stable. As you all know the longer you work a mine 
 the nearer you come to the end. You can't eat your cake and have it. The camp 
 of Cobalt has been operating now for the past seven years. During the year 1901 
 the operation was only prelimiary and very slight, but since that time it has 
 assumed very much larger proportions than was once thought it would. It has 
 been stated by people who are competent to judge that possibly in the year 191 2 
 or the year 1913 the industry will reach the peak of production in this camp. That 
 is a matter that only the final figures for those years will show. The industry is 
 not on the wane yet, and operations here will continue for a number of years, bur 
 just how many I would not venture to guess, because it would be a mere guess. 
 As regards the position of the employers and the employees, speaking only as the 
 manager of the Trethewey mine which I represent, and as a member only of the 
 Timiskaming Mine Managers, I beg to submit the following views. I think I 
 speak without prejudice when I say the employers are as willing as the employees 
 to have such legislation as the Province proposes to enact and to put in force. We 
 are all human, and while there has been sometimes clashes between the mines and 
 the employees, it has never lasted very long, and I might say now that the labour 
 we have in this camp is as efficient, and perhaps more efficient, than any other 
 part of the Province of Ontario. The hazards of the occupation, as our counsel 
 stated, are great, but the wages are proportionately great. The lowest wage we 
 pay, I believe, is around $2.25 a day. Some of the men work ten hours and some 
 eight hours and some nine hours. I think there has been some statement made in 
 the newspapers that the Government now in power propose to enact an eight hour 
 day. Of course that is not before us now, and outside the question, but the propo- 
 sition of the Govermnenl in selecting you, sir, to take testimony in regard to this 
 thing we regard as a wise and beneficent thing. Personally we are paying, as stated 
 by our counsel, the sum of $69,000 for premiums for 22 months to these insur- 
 ance companies. Some of the companies do not carry any insurance, and while 
 
1912 WORKMEN'S COMPENSATION COMMISSION. 185 
 
 _ ( 
 
 the}' may make a little money by remitting this premium for a time we believe it 
 is right, and while some of the employees who are hitter think we want to beat them 
 out of their lives, we regard it as insurance on his own life "for the benefit of his 
 family. We regard it similarly to life insurance. 
 
 Now, when we made these statements through our counsel to-day, I may say 
 we had them compiled at some considerable expense and time, and we are willing 
 to submit the statements to you, and they are open to any criticism, and we can 
 show where we got the figures. They were supplied by the separate mines as the 
 average. There is no desire on the part of the operators of this district to hinder 
 matters. On the contrary they fully desire to help and assist in every way they 
 can to have a full and complete solution of this vexed problem, and I think I voice 
 the sentiments of the other members of the Association when I make these state- 
 ments. 
 
 The Commissioner: I suppose there would be no objection to your giving 
 to Mr. Ware a copy of that. 
 
 Mr. O'Connell: No. Further, your Lordship, we have statements showing 
 all the causes of these accidents, and we can give you all that data. 
 
 The Commissioner: Do you think the feeling between the employer and 
 the employee is what one gentleman speaking as a workingman has said, that it is 
 practically eternal warfare? 
 
 Mr. O'Connell: That is the socialistic side of the story. I have been a 
 member of the Miners' Union. I started in the mine and worked just as all these 
 other men are working, and I don't think so. Without prejudice to anybody here, 
 because we are friendly to every man that works in this country, I think labour has 
 divided itself into two camps. There is the socialistic and the non-socialistic. 
 There are lots of good men working in this country who are not in the Miners' 
 Union, and they are not represented here because they are all at their jobs. They 
 are getting good pay and they are working. There are some of the men ai our 
 mine who are not members and they could have come if they wanted to, but thev 
 didn't come. It is the socialistic men who make those statements. The men here 
 are good workmen, because they couldn't hold their jobs if they weren't. Every 
 job stands on its own bottom here". The mine managers are not against the Union. 
 We have only had one strike in this camp in seven years, and there is no feeling 
 against them. The companies that Mr. Cohen and Mr. Rogers represent give their 
 men a bonus. The Crown Reserve pays their men five per cent, of their salary, to 
 every man that works for a year. That does not look like bitter warfare. The 
 Coniagas pay their employees four per cent. There is no bitter warfare. There 
 is no tendency of that kind on the part of the employers. I think all the men are 
 fair, but we all do not think alike, and it is probably for the good of the world 
 that we don't, or there wouldn't be much progress. Some of them are disgruntled, 
 but taking it all through the camp I think that we have more satisfied workers in 
 this camp than any other part of the Province of Ontario. That is a poor policy, 
 and it does not exist to my mind. 
 
 Mr. Kingswell: I mined for fifteen years in New Zealand, and I am thor- 
 oughly conversant with the Act there, and the only weak part of our act is the 
 compensation for accidents. That is how they determine what a man should have 
 Now, the Government there say that a mine manager shall have three years under- 
 ground experience before they will issue to him his mine manager's certificate. 
 Now, I suffered an accident in New Zealand: I had my leg smashed, and the In- 
 surance Company that was in that mine fought me for two years, because they 
 said if they paid me, every man in the mine, or who was connected with that mine, 
 would have to be paid if there was any accident happened there. They fought me 
 
186 MINUTES OF EVIDENCE: No. 65 
 
 because they did not wish to pay the other men. I was laid up fourteen months 
 by my accident to that leg, by bad timbering, and that company fought me for 
 two years, and they beat me because I hadn't the money to carry it through. It 
 cost me several thousand dollars. 
 
 Mr. O'Connell : That was some years ago. Wasn't that before the present 
 act came in? 
 
 Mr. Kingswell: That was the insurance company. 
 
 Mr. O'Connell : It was before the Government insurance ? 
 
 Mr. Kingswell: Yes, it was the insurance company. That is the danger 
 of that system. I am a practical miner myself, and the inspector in New Zealand 
 had never been a mine manager, and he didn't know what a sill was. A sill is tim- 
 bers put in to hold up the ground, and he didn't know what a sill was. Now, an 
 inspector who does not know what a sill is should be put out of his place, and a 
 practical man put in. The insurance companies will fight the men on every occa- 
 sion, and that is the whole point," If you can take that New Zealand Act it is the 
 grandest act in the world aside from that, and in my estimation I think the Gov- 
 ernment should take that question up and have thoroughly practical miners so as 
 to be able to settle that question. I have seen a mine manager right in this camp 
 who said that a hitch was in the hanging wall, and anybody knows if a man puts 
 a hitch in a hanging wall he doesn't know anything about mining. If they have 
 experienced men then the miner has a chance, hut if he has to fight the insurance 
 company, there you are. 
 
 Mr. Mahon : I think Mr. Kingswell must be speaking before the time of the 
 present act. 
 
 Mr. Kingswell : Yes, that is twelve years ago. 
 
 Mr. Mahon : Any dispute that arises under the New Zealand Act now is re- 
 ferred to a court of arbitration, which prevents any long litigation, and our pro- 
 position is to submit it to the District judge who will investigate, and the judge 
 will come up to the place of the accident, rather than a whole lot of witnesses com- 
 ing to the judge, and then only one appeal to the Divisional Court, which as your 
 Lordship knows, is comparatively inexpensive. 
 
 Mr. O'Connell: Further in reply to Mr. Kingswell's statement the propo- 
 sition of the operators here is to have the Russian schedule which provides for just 
 such a case. 
 
 Mr. Botly : He says there is no bitter warfare between the employer and 
 the employee in this country. Of course we are not here to discuss socialism. We 
 are here to discuss workmen's compensation to the working class, and that being 
 the case I do not think it is quite relevant, but, at the same time, I consider myself 
 justified in making a few remarks upon the question. He makes the statement that 
 there has been only one strike in this camp in seven years. 
 
 Mr. O'Connell: One real strike. 
 
 Mr. Botly : And ho advanced the theory that the employers and the em- 
 ployees are like the lion and the lamb, the lion lying down with the young sheep 
 That is a delusion. Now, I maintain where you have had a strike in seven years, 
 especially where there is a strike like that, it is a concrete instance to show that 
 the employer and the employee are not on friendly terms, and T am not ashamed 
 to Bay that 1 am not friendly with the employers. 
 
 Mr. O'CONNELL: Do yon work? What mine do you work at? 
 
 Me. Botly: T have never worked in this Cobalt camp. 
 
 Mr- O'Connell: Sure you haven't? 
 
 Mr. Botly: As far as my work here is concerned, I want to inform my 
 friends I worked in the Cobalt camp up till 1003, and 1 quit working in the Cobalt 
 
1912 WORKMEN'S COMPENSATION COMMISSION. 187 
 
 camp when the strike came up. 1 am not like a whole lot more. I can't be bull- 
 dosed into taking a job under conditions where they are not favourable. 
 
 The Commissioner: Perhaps Mr. Maguire has something to say? 
 
 Mr. J. P. Maguire : While I quite understand we are not here to debate 
 the class struggle, yet I wish to call attention to this significant fact, that when 
 we are in a position to debate on those subjects our friends are conspicuous by 
 their absence, and I may say I am quite willing to meet anyone if they wish to 
 participate in such a debate. But coming to the question, I object as a working- 
 man, and as a man who has worked in the Cobalt camp until I was blacklisted and 
 can't work any longer, and you can take that home — as a workingman I object to 
 those provisos in regard to negligence on the part of workingmen, not as a question 
 of the justice or injustice of it, because I must confess that the lines of justice 
 and injustice are very largely lost in our complicated modern system, but for this 
 reason that these provisos as to the negligence on the part of the employer or em- 
 ployee leave the possibility of a law suit, and when we get into law we always 
 know who comes out best. We know the man with the money and the man with 
 the influence comes out on top, and we know the District judge who is supposed 
 'to settle this is invariably not a member of the working class, but a member of 
 the wealthy class himself, and the consequence is — 
 
 The Commissioner: He is the hardest worker of the lot, the judge is; he 
 works all the time. 
 
 Mr. Maguire : Well, your Lordship, you work under a different environment 
 than we do and consequently you see things from a different standpoint. I may 
 say further that our Conservative politicians have gone forth and told the people — 
 and I read their speeches with much interest — that they would introduce a Work- 
 men's Compensation Act without provisos, which would allow a man to be com- 
 pensated for injuries. Now, your Lordship, I wish to impress this point very 
 deeply upon you, that while I am afraid that politicians after election can change 
 their complexions as well as their shoes, still I think your Lordship will assist 
 those politicians to keep to their promises, and see that they introduce an Act that 
 will be of real benefit to the working people, because I hold most emphatically that 
 any act that permits of litigation or legal entanglements betwieen those two classes 
 is not 'beneficial to the working class. 
 
 The Commissioner : One of the great difficulties, Mr. Maguire, that has 
 been felt all over is in determining how far claims are honest; whether the man 
 is really as bad as he represents himself to be. In England now fhey have some- 
 what solved that because the judge — they have no jury in England at all — the 
 judge may call upon a medical officer to examine a man and he may act upon that 
 medical man's advice. 
 
 Mr. Maguire: Is his decision final? 
 
 The Commissioner: If the judge chooses to adopt it- He may adopt it 
 against the evidence of the man. 
 
 Mr. Maguire: He takes that information, and he gives his decision? 
 
 The Commissioner: He appoints : an impartial man. 
 
 There have been one or two remarks made here on each side that I think are 
 not very desirable to remain unchallenged, or to have such an impression abroad, 
 that because a judge is not of the labouring class therefore the labouring man will 
 not get justice when he comes before the court. That is a libel upon the admin- 
 istration of justice in this country. It has never been so. I venture to say that 
 as a whole the sympathies, as far as a judge is permitted to have sympathies, have 
 been with the working man, and where they have had to determine against him in 
 
188 MINUTES OF EVIDENCE: No. G5 
 
 hard cases it is because they have been compelled by the law to do so. You might 
 just as well say that a tribunal, because it had not an employer of labour upon it, 
 was not a fair tribunal. 
 
 Me. O'Connell : As an instance of that I might s»ay at the mine where I am 
 now manager, sometime during the spring there was a man, a Frenchman named 
 LePage, was employed to do some painting at the mine, and we had never been 
 able to determine whether he had received instructions plainly or not. At any rate 
 the man was a man of very good intelligence and a man that was paid $3 at his 
 trade, and he was represented to be a good workman. He was told to paint the 
 outside trimmer of the transformer house of the Trethewey mine, and he fin- 
 ished first of all the trimmings of the windows and doors, and then he was where 
 the high tension comes in to transform the current from 15,000 volts down to 150 
 volts, which is the voltage that the motors use. He got up there and he painted 
 everything within ten inches, and his foot slipped on something and he fell 
 on the dead lines which were going in and the other three phaze line was charged 
 with 15,000 volts, and he was all but off when his hand struck the 15,000 volt line, 
 and immediately the current hit him. It doubled him up and he went right over 
 on the 15,000 volt line, and one of the other workmen came up to push him of with 
 a dry board, and his feet were dry, but one of the heads of the department fearing 
 he would be killed, too, told him not to do it. Well, it has been a mooted question 
 since about that. Electrical men say if they had pushed him off he probably would 
 have recovered, but anyway the man was killed. The case came up in the court 
 at North Bay and the judge there awarded damages against the company of $4,000, 
 and the case is now in appeal. We will never know whether it was contributory 
 negligence or what it was, because there was no one there at the time. At any 
 rate the judge in assessing the damages took a fair way. He was getting $3 a day, 
 and assuming he could work 250 days a year it would be $750, and then he took 
 his possible life on the actuaries* table, and he had a boy about something like 
 eleven years, and he figured out also when the boy would be able to earn something 
 for his mother, and gave judgment for $4,000. 
 
 Me. Maguire : I don't want it understood that I am casting any reflection 
 on the ability or the integrity of the courts of our country, but I do say that judg- 
 ment is a concept of things. It is not anything that is concrete. As your Lord- 
 ship is no doubt familiar with history you will know that the concepts of justice 
 have changed just as often as corresponding conditions have changed. Your Lord- 
 ship is well aware of that fact, and I hold the concept of justice that your Lord- 
 ship holds at the present time may change, and the concept of justice that the 
 working men hold is at variance with your concept of justice. It is not one con- 
 cept of justice by any means. 
 
 The Commissioner : How do you know that? 
 
 Mr. Maguiee: Judging by the decisions that are handed down by our courts 
 of which yon are a member. We don't attack your honesty or integrity in any 
 way. 
 
 The Commissioner: Well, you think a court is entitled to do natural justice, 
 l)ii t tbo court lias no such power. The court is confined to administering justice 
 according to tin' law, and a jndge sitting would have no more right in determining 
 a case contrary to the law than he would have to go to you and take out of your 
 pocket your money. The fault is not in the administration of justice: you must 
 change your law. It is the law that is at fault. 
 
 Mb. MAGUIEE: You know our laws are such that they can be interpreted and 
 re-interpreted to suit the idiosyncrasies of those who interpret them. 
 
1912 WOKKMEN'S COMPENSATION COMMISSION. 189 
 
 Mr. A. Smith: Willi reference to the discussion with Mr. Malum I would 
 like to mention one point, as to the primary or ultimate injury. 1 haven't had 
 the privilege of considering the New Zealand Act, as recommended" by the Associa- 
 tion, and I don't know what your Lordship's Commission is considering, hut from 
 my little experience of accidents and the accident insurance business I am 
 impressed with one thing, and that is that an employer of labour should be respon- 
 sible only for the primary loss. There is undoubtedly a very large amount of loss 
 of life and valuable time to people who meet with a trilling injury and through 
 ignorance or prejudice or carelessness or unsanitary conditions or constitutional 
 complications sustain serious loss from what was only a trilling injury, and that 
 loss the employer in all justice should not be responsible for. There are in these 
 days, we know, advocates of a cult of philosophy or medicine, or what you please, 
 who will not consult a physician, and who will magnify a loss by what they believe 
 to be an approved procedure and in reality neglecting to give it scientific attention. 
 It is the commonest thing in the world for a scratch of the hand that is perhaps 
 •inflicted with a septic tool, by neglect and failure to dress it, and failure to treat 
 it properly, becoming infected. Perhaps it is mere uncleanliness of the injured 
 person, but it results in blood poison, loss of limb, loss of life, and it is an exag- 
 gerated loss. If the employer were to be responsible for the ultimate loss resulting 
 tfrom every accident of employment, he should have the power to regulate the 
 injured man's personal conduct and care of his injury from the time of its receipt. 
 Anything that is fairly and justly traceable to direct and unavoidable result of 
 the accident might be properly included, but I would think otherwise it would be 
 a hardship and injustice. 
 
 Mr. Mahon : There is a provision in the New Zealand Act that any one who 
 will wilfully abstain from having medical or surgical attendance loses his right to 
 any further compensation. I think it is the New Zealand Act. 
 
 The Commissioner: Mr. Ware, do you understand that such a provision 
 as is suggested by the Unions you represent and by the Toronto and Dominion 
 bodies, would be in substitution of existing rights? In other words il such a law 
 as that is passed would there accompany it a cancellation of the common law 
 obligation on the employer? 
 
 Mr. Ware : With regard to the insurance ? 
 
 The Commissioner: You prefer compensation with State insurance. 
 
 Mr. Ware: Yes. 
 
 The Commissioner: They would secure whatever the act provides for an 
 employee when he is injured. Is he to take that in lieu of any other right the he 
 has got now, or may he elect to take what the law would give him with the disad- 
 vantages of the doctrine of common employment and contributory negligence, if 
 he chose to take that? 
 
 Mr. Ware : Well, as I understand the proposals it would be in lieu of the 
 common law liability. The common law liability is so restricted now that it 
 is difficult to get any compensation under it. 
 
 The Commissioner: They run side by side in England. The common law 
 liability is not gone, and if a man fails to recover under the act, he may under 
 certain circumstances proceed on his common law right, if he has any. 
 
 Mr. Ware : I understand that is the case here in Ontario. 
 
 The Commissioner: One of the things that there is so much trouble about 
 is this notice of the accident, which is very often unjustly used to the prejudice of 
 the man that is injured. It is sometimes too strict in the time the notice was 
 required. Now, I cannot imagine, unless a man is inventing an injury, that if 
 
190 MINUTES OF EVIDENCE: No. 65 
 
 there is an injury happens to a man that it would not be known to the managers 
 of the mine. 
 
 Mr- O'Connell: Small things sometimes happen , and they might have 
 after-results which would come back. 
 
 Mk. Ware: There is nothing serious happens which they do not know. 
 
 Mr. O'Connell : No, but it is a possibility. 
 
 Mr. Ware : There is another point which my clients desire me to mention, 
 and that is this: in some mines people apply for employment and they do not give 
 a correct representation as to their experience, and the consequence is we find 
 that incompetent men are placed in positions of control and trust in the mine, 
 where they direct the men, which they are unfitted for and incompetent to fill, 
 and as a consequence of their directing of the work and the control of the men 
 accidents happen, and the mine is put in a much more dangerous condition, or 
 allowed to get into a much more dangerous condition than if competent men were 
 employed. 
 
 The Commissioner: What do the workers do when that state of things 
 arises? Are they dumb, or do they make a complaint to the manager? 
 
 Mr. Ware: Well, it is very seldom complaints are made by the working men 
 of the men above them. I don't think that is a common thing. 
 
 Mr. O'Connell: The point you wish to make, for instance, is there is a law 
 on the statute books here that every man that runs a boiler over a certain number 
 of horse power should have a certificate, and the government is very lax in those 
 things. They never come and see. The mines try to get men of that kind, but they 
 can't always get them. 
 
 The Commissioner: Do you mean a man in the mine? 
 
 Mr. Ware: One speaker gave an illustration of a man who didn't know a sill. 
 That is what I mean, and that is the point I want to make, that there are often 
 incompetent men, and there should be I believe some provision either in this act 
 or in the Mines' Act that none but experienced men should be employed. 
 
 The Commissioner: Would that not be along the lines of the views sug- 
 gested of having better Government inspection? 
 
 Mr. O'Connell : That is the thing. 
 
 The Commissioner: And then give that inspector the right to see that men 
 in positions of trust are fit for the positions, and to require him to be sent away if 
 he is not. I don't suppose there would be any objection to that. 
 
 Mr. O'Connell : No, and another thing, and I voice this question as a per- 
 sonal view on the matter, and without prejudice, or without any idea of criticis- 
 ing the Department of Mines at all. This camp lias been operating for some seven 
 years, and some six years ago Mr. Corkill was made Chief Inspector, but as you all 
 know the Province of Ontario is very large, and the number of operating mines 
 in the Province are far greater — greater by ten times than they were five years 
 ago — a nd I do not think the (iovcrnment is treating the mine operators fairly, and 
 I don't think they are treating the mine managers fairly, or treating themselves 
 fairly when they are so niggardly with their appropriation for the inspectors. 
 They ask an inspector to work for a salary that he can get running a grill in this 
 mine, and I don't think it is fair. The men who are inspectors are competent, 
 Faithful men. and they are not paid properly or in proportion to the Labour they 
 lender. It is a physical impossibility for Mr. Corkill to come up bore every time 
 a little accident happens, as he is supposed to do now. and it is an enormous waste 
 of labour and time. I am .-peaking personally of course, hut I think it would be \';w 
 better for the mine workers and the mine operators if there was a good resident 
 
1912 WORKMEN'S COMPENSATION COMMISSION". 191 
 
 . — — — . 1 
 
 inspector in a camp of a certain size who would make at least a monthly inspec- 
 tion of every mine in the camp. 1 think it would he hotter for the workers and the 
 employers, and if that point could he brought hefore the Government in the form 
 of a memorial, or through your Lordship, I think we would he benefited by it. 
 
 Mr. Gauthier: I think the argument that our representative has put up 
 there is weak in this way, that the mine managers or the mill operators, or any 
 other operators, have sub-bosses. They have shift bosses, and it is the duty of 
 these men to see they do their work, and put the men to work, and let me tell you 
 if they don't do their work in a few hours the shift boss will fire them. That is 
 what they have shift bosses for, and they go around the men whlo are drifting and 
 raising and so on, and if the shift boss does his duty he watches the men put in the 
 mine by the operator, and if they don't do their .work properly it is his duty to 
 fire them. 
 
 Mr. Kingswell: In New Zealand the Miners' Union can have one inspector 
 of their own. They have an inspector in every district in New Zealand which has 
 more than four mines, and it is the duty of that inspector or head man of the 
 Union to listen to the complaints of the men, and see if they are reasonable- 
 That man is allowed to go down to the men at the discretion of the mine owners, 
 of course- If they are timbering a mine, of course he couldn't go down, but he is 
 allowed to go down to examine the conditions, and he represents to the Govern- 
 ment if the mine is safe. I may say New Zealand is the worst country for mining 
 accidents, but they have an inspection of the mine every day, if they want it. 
 
 Mr. Botly : I would suggest that the mine owners of this camp have refused 
 to recognize the Miners' Union. 
 
 The Commissioner : Do I understand, Mr. Gauthier, you would be opposed 
 to better inspection of the mine by the Government? 
 
 Mr. Gauthier: No, certainly not. I am certainly humanitarian, and I am 
 against accidents of any kind, and I believe if a man gives his hard labor he should 
 be protected. It doesn't matter how the protection comes. Speaking as an officer 
 in the Miners' Union here, we pay sick benefits, and I say the less accidents the 
 better for all workers, and the life and limbs of these workers that go down and 
 breathe the had air, and work for eight and nine and ten hours, should be pro- 
 tected. There is a little correction I would like to make. Mr. O'Connell stated 
 that the lowest wage was $2.25 a day, and I may say there are men working in 
 this camp for $1.75. 
 
 Mr. O'Connell: Underground? 
 
 Mr. Gauthier : No, $2 underground. But I am not opposed to any measure 
 that would provide a strict inspection. I wish they had about 15 mine inspectors 
 here, and we would have less accidents. 
 
 Mr. Maguire: I think to satisfy your Lordship on the point raised by Mr. 
 Gauthier, Mr. Gauthier takes the position that there should not be any specific 
 inspection of the employees before they go to work. That is to say they should 
 not have to give evidence that they are up to a certain standard, or they should not 
 have to give evidence that they have been working so long, because if I was hungry 
 I would tell a man I could make watches, and it would only be a loophole for fraud. 
 
 Mr. Gauthier: That is my point. 
 
 The Commissioner : I thought the suggestion was not that the workingman 
 would have to he inspected, hut the men put in positions of trust would be inspected 
 as to their cmalifications. 
 
192 MINUTES OF EVIDENCE: No. 65 
 
 Mr. Ware : I didn't get quite finished with what I was saying when Mr. 
 O'Connell spoke. I intended to give the point that has been brought out by Mr. 
 Gauthier, but it is not necessary for me to say anything more on it. 
 
 Mr. J. Whalen: There is a little ground here that I think hasn't been cov- 
 ered, and I think it is a most vital point in the Compensation Act. It is with 
 regard to the carelessness or negligence of the employee. Now, I have been in 
 places where men have been insured in a mine. In British Columbia, I may say, 
 in those boundary mines, they pay his compensation whenever it is due without 
 any trouble, and this is the way they go about it. Their foremen and their man- 
 agers and their shift bosses are competent to do their work; they are trained men 
 or they wouldn't be there; they have had a lot of practical experience, which is 
 not the case in some of these camps around here. I know there are men in some 
 of these camps put in charge of workmen who know nothing at all about it. Now, 
 I think the companies could protect themselves in this way. They could put up any 
 apparatus they thought fit, and they could instruct their foremen and shift bosses 
 to look after all new men especially, and see that they were not negligent, and if 
 they were negligent discharge them right away. After a man has been there for 
 some length of time and has proved himself, then if an accident happens it would 
 strictly be up to him, but if we leave this loophole for the company to say that in 
 one case it was through the negligence of one man or the other, why, the Compen- 
 sation Act for us will not amount to a snap of your fingers. It is easily proven. 
 
 Mr. O'Connell: I think the point he wants to make is that there should be 
 some sort of inspection or supervision. Mr. Kingswell instanced a case where 
 the miner had to have a certificate. "Where they are operating coal mines such a 
 thing is in force by reason of the fact that coal mining conditions are much more 
 dangerous by reason of damp and explosions and they have all got to get certificates 
 of competency before they assume their duties. I don't know whether it is the 
 intention of the Government to bring this in or not, but if it is, we should like to 
 be heard further on it. 
 
 Mr. Maguire : Who is going to give a man a certificate that he is compe- 
 tent or not? 
 
 Mr. Kingswell: The Inspector of the Government. I could question you 
 and soon see whether you know anything or not. 
 
 Mr. Maguire : I think it would resolve itself into the greatest orators having 
 the best certificates, and not the practical men. 
 
 Mr. Cohen : I think we ought to take into consideration here that the min- 
 ing business is a special business, and the men working in mines are mostly sup- 
 posed to be men skilled in their business, and they get ^compensated to a greater 
 degree for their skill and fo"r the chances they take, and any legislation that is 
 made should take the mining business specially into consideration. 
 
 Now, in factories and businesses of that kind where it is possible to get 
 unskilled labour, they don't get the money that the men in the mining business get. 
 Some of the labour representatives here say that they have no objection, or 
 would have no objection to men who were unskilled going into the mine and claim- 
 ing they had skill and claiming they had experience. They would get paid for 
 the skill they were supposed to have and they would add to the danger of the 
 other men. Now, the thing seems to me to be paradoxical. They are either miners 
 or not miners, and if they are getting paid in one way for the hazard they take 
 and the skill they have, it seems to me that any legislation that is made should be 
 made specially for the particular business. If we pay the compensation to them 
 in wages we arc practically paying insurance to them. That is just a point I make 
 as a mining man. 
 
1912 WORKMEN'S COMPENSATION COMMISSION. 193 
 
 Me. Maguire: Just a won! in reply to that. 1 may say what the average 
 man gets in wages he usually spends in living. Whether he does it judiciously 
 or injudiciously is not the question. The question is to provide something for 
 his family. The average miner does not do it, and that is the question. 
 
 Mr. Kings Vvkll: We were always expected as shift hosses to go down with 
 the men to see if they are miners, and if they are not we put them out of the 
 mine- We would ask a man to put dpwn a hole, or take a hammer, and we would 
 see whether he could strike a drill. You can soon tell whether a man is a miner 
 or not when he starts to work. That is the way they did in Sow Zealand. 
 
 Mr;. Maguire: What would this gentleman do with a man like Bill Eoss? 
 Bill Eoss was a blacksmith and yet he was one of the greatest prize drillers that 
 the world ever knew. How would he get along with him? 
 
 The Commissioner: Is there any miner from any other point? 
 
 Mr. Maguire: I am in addition a representative from Porcupine. 
 
 The Commissioner: If there is anybody here who desires to say anything 
 do not hesitate. I am here to hear all, and I do not want anybody to go away and 
 say he is sorry he didn't get a chance, or didn't avail himself of the opportunity. 
 
 Mr. Gorman: I may state so far as the position of the workingmen of this 
 district is concerned, they desire to have the best possible act they can seen re 
 from the Government to cover this Workmen's Compensation. I may state that 
 the general consensus of opinion among them seems to be that contributory negli- 
 gence should not in any way affect the payment of compensation which would be 
 provided for in the act, because if there is a loophole left for any litigation it follows 
 that those with means are in a far better position to fight the case and to deprive 
 the workingman of the revenue and the amount, than what the workingman is in 
 a position to come in and prove his claim, and in fact in many cases in the courts 
 it might possibly be construed as carelessness where it is only a matter of common 
 occurrence in the following of the occupation by every man. A man may often 
 overlook certain points which may be construed into negligence in a court of law, 
 where it is only following out his occupation. I might state that the Bussian Act, 
 as defined, seems to be a pretty good act, as far as I understand, except inas- 
 much as labor has to contribute, and we held that the employer alone should con- 
 tribute to pay for any accident that the workman is a victim of, just as much as to 
 make good for any machinery or anything else that is put out of commission. 
 
 The Commissioner: In a camp like this would it be possible that some 
 local tribunal upon which the workman and the mine owners would be represented, 
 should deal with all claims of compensation finally? I do not suppose the gentle- 
 men may lie in a position to say off-hand as to what the view would be, but I would 
 like both sides to consider that, and see if there couldn't be some kind of a tribunal 
 in a district like this so that when an accident happens it would be investigated 
 immediately and dealt with on the spot. 
 
 Mr. Mahon : Without any right of appeal whatever? 
 The Commissioner : Yes, or perhaps a very limited one. 
 Mr. Mahon: I should think as far as the mine managers are concerned they 
 would be very glad if there were some such Boards appointed locally. 
 
 The Commissioner: In the State of Washington they have a board where 
 they investigate all these complaints. 
 
 Mr. Lothian: In the event of a case coming up like that in this camp, who 
 would select the men to take the case of the men? Would the representatives of 
 the men come from the Miners' Union? The Federation of Miners here is not 
 recognized. 
 
 13 L. 
 
194 MINUTES OF EVIDENCE: No. 65 
 
 The Commissioner: In a case of that kind would it make any difference 
 whether a man was a Union man or not? Surely he would be in sympathy with 
 labour. 
 
 Mr- Lothian : It wouldn't matter to me as long as the man got the compen- 
 sation. 
 
 The Commissioner : Supposing you are going to select a Board, the mine 
 owners would choose a representative on that Board, and the mine workers would 
 choose another member of that Board. It would not do to exclude the Union 
 men, and it would not do to exclude the non-Union men- 
 
 Mr. Lothian: How would it be possible for the non-Union men and the 
 Union men to come together? 
 
 The Commissioner: I suppose they could. 
 
 Mr. Lothian : They are not together. If they were together they would be 
 Union men. 
 
 Mr. Botly : The Mine Owners' Association at Cobalt does not include all 
 the mine owners in Cobalt, and in that case they are accepted as competent wit- 
 nesses, I presume, for what you might call the defence in this Compensation Act 
 case, and I submit to you why should it not be as reasonable for the organization 
 of the labour men in this camp that the Cobalt Miners' Union should be accepted 
 as witnesses for the plaintiff, as you might put it, in this case? 
 
 The Commissioner: It wouldn't be witnesses at all. It would have to be 
 a case of an honest, independent Board that would determine according to the 
 truth and the right. 
 
 Mr. Botly: I presume it would be constituted as many other Arbitration 
 Boards are constituted, one representative from one side, and one from the other, 
 and both to agree upon the third. 
 
 Mr. Maguire : Just a word on the question you ask for your benefit. This 
 is my individual opinion, that a workingman in this or any other camp who does 
 not belong to a labour organization where one exists, either hasn't got the necessary 
 amount of intelligence to see the situation in his own interests as a workingman, 
 or if he has the intelligence he lacks the moral courage to express it, and such 
 a man as that I feel would for either one or the other reason be inclined to give the 
 benefit of the doubt to the mine owner, and not to the workingman. 
 
 The Commissioner : "Wouldn't the man, on the other hand, say I haven't 
 confidence in men that haven't confidence in themselves; I stand upon my own 
 bottom : I know what my rights are and I know what my interests are, and I act 
 as my judgment teaches me : I am not bound to subordinate my views to my fellow 
 workman and have him dictate when I shall work or how I shall work. There are 
 two sides to all these questions. 
 
 Mr. Maguire : As we Union men here are the only representatives of labour 
 that are here I am simply giving my humble opinion. 
 
 The Commissioner: I am not quarreling with your opinion. I am only 
 pointing out there are two sides. 
 
 Mi;. Whalen: I myself have served on a jury in this country where the 
 Provincial Police selected a jury with regard to a mining accident, and the result 
 was the greater part of the jury, when it came to explaining the circumstances that 
 led to the accident, didn't know anything about it because they weren't miners, 
 and they brought in a verdict it was just an accident. Now, it might result the 
 very same in this ease which you suggest, so you would have to use pretty good 
 judgment in selecting the men. 
 
 Mr. Mahon : That is referring to a coroner's inquest, no doubt. 
 
1912 WOKK.MK.VS COMPENSATION COMMISSION. 195 
 
 , __ — _, 
 
 The Commissioner: I am not suggesting that it is feasible at all. I am only 
 throwing out the suggestion to see what you think of it. Something is desirable 
 to get immediate settlement of claims, .and preventing the wasting of money in 
 litigation, and letting the hungry lawyer get it instead of the man who suffers. 
 It is hard to devise a satisfactory scheme. 
 
 Mr. Gorman : The scheme adopted by the Carnegie Steel Company seems to 
 be a very fair one, both to the men and to the managers or owners. They havp 
 a safety committee which is composed of men chosen by the men themselves, and 
 the officers of the company. I don't see why it wouldn't be possible to go a little 
 further in that, not only for the prevention of accidents, but in settlement of 
 claims, by having the manager as one party for the company, and a chosen 
 employee who is chosen by the men themselves, together with a definite appointeee, 
 a judge of a Division Court, or any equitable party, and those three men get 
 together and settle the case off-hand, but I think that the Compensation Act 
 should be the scale on which it was based, according to the views which Mr. Mahon 
 has expressed, and then work out the solution of the employees and managers with 
 some definite appointee. 
 
 The Commissioner: You see there are so many injuries that a man might 
 sustain that are not easily located. It is difficult perhaps in these spinal troubles 
 to tell whether a man is really suffering as he thinks he is, or whether it is some- 
 thing else. That is a class of case where it is difficult to get at the extent of the 
 injury. I suppose if it is a broken leg or that kind of thing it is easy enough to 
 form a judgment- Perhaps those cases are not so frequent in a mine. 
 
 Mr. Whalen : In the mining industry the work is very heavy as well as 
 hazardous, and a man that can go and lug around a three hundred-pound machine 
 or swing an eight-pound hammer for eight or ten hours has very little the matter 
 with him. 
 
 Mr. Kingswell : "Will you allow me to make an explanation with regard to 
 what Mr. Maguire said. He said that a man can go into a place and prove another 
 man is a miner when he isn't. He says a blacksmith could go and take out a hole. 
 Could a man come in and fool a man who knows how to make that hole and how 
 to blow it out to the best advantage? There is no blacksmith can work like a 
 miner. Any miner in this room knows that. I want to impress upon you the 
 advisability of having good practical men. 
 
 The Commissioner : I have heard from the Union men and the mine man- 
 agers, and some who are not Union men, and now I would like to hear from the 
 only independent man, the man who does not work at all. 
 
 Mr. Kingswell : I am one that doesn't work at all. 
 
 Mr. "Whalen : If it were decided to grant compensation for diseases peculiar 
 to the industry, I think it might occasion some trouble in fixing the liability on the 
 parties responsible for that disease. If a man w r orks two months and then leaves 
 and works somewhere else for a month, how are you to tell? 
 
 The Commissioner : That is covered by one of the acts, and they divide it 
 up. In some the disease is progressive, and if he has been in several employments 
 — I am now speaking with certainty — they apportion it between the different 
 employers. 
 
 Mr. Maguire : I would like to call this very important fact to your atten- 
 tion, with regard to drawing lines of demarcation as to what would be right and 
 what would lie wrong and where one thing would stop and another commence. 
 We know it is the hardest thing in all science, and we know it is the hardest thing 
 in all practical life, and that lines of demarcation are always hard to draw; but 
 
196 MINUTES OF EVIDENCE: No. 05 
 
 Governments or people cannot possibly stop progress simply over a difficulty of 
 drawing lines of demarcation. 
 
 The Commissioner : If there is anybody else wishes to speak I will be glad to 
 hear him. I am very much obliged to you for having put in your appearance here, 
 and for the information you have been able to give me. It has been all taken 
 down so that not only I will have the benefit of it in performing the duty which I 
 nave been commissioned to do, but the House and the country will have the benefit 
 also, because it will no doubt be printed. The ultimate tribunal are the people 
 of th^s country to determine all these matters, and they will have it before them. 
 
 The only thing which has jarred upon me to-day at all is the statement by 
 one gentleman here that seems to indicate that he believes that war between the 
 employer and employee is a natural condition, and apparently a condition that he 
 does not see much harm in. Now, I think that is a most terrible state of things. 
 
 Mr. Botly: If I might interrupt you, I might suggest that there has been 
 war carried on amongst the various nations of the world for untold centuries, and 
 after the lapse of time has passed we have seen those wars have actually benefited 
 the human race, and I claim that this war is in the same position. 
 
 The Commissioner: We wouldn't have any more wars just for the purpose 
 of trying the experiment. No doubt labour has had a great deal to complain of in 
 the past, and perhaps it is only now coming to its own, but it is not helping itself 
 on by proclaiming war against the rest of the community. It is all wrong, unsound 
 and dangerous. 
 
 Mr. Cohen : I do not think that is the sentiment of the workingmen of this 
 camp. In our own mines, speaking of it because I am more familiar with it than 
 any other, I have 174 men on the average pay roll that were employed in 1910. 
 "We paid a bonus to the men who worked there three months and who were in the 
 employ of the company at the end of the year, and we paid a bonus to 159. In 
 other words there were 159 men who were satisfied to stay, and that is under 
 conditions where men come and go. Miners are restless and don't stay long in 
 one place, and they are single men. Those 159 men were paid bonus cheques and 
 they were employed over three months, and 100 men out of the 174 were employed 
 the whole twelve months, and they undoubtedly were satisfied with their conditions 
 or they wouldn't have done so. I don't think there is any such feelino in the 
 camp at all. I think the majority of the men are satisfied, but there are a few men 
 who in their zeal — I am not speaking personally — or in their desire for advance- 
 ment, take that position. We do not want you to go away with the opinion that 
 the men in this camp are dissatisfied. I have been a workingman myself. I have 
 worked in mines just the same as these other men have, and I know the working- 
 man's views. I don't look at him from my position of mine manager; and I know 
 the men are not at war with the mine managers. They have nothing but a friendly 
 feeling, and the feeling is reciprocated. 
 
1912 WORKMEN'S COMPENSATION COMMISSION. 197 
 
 FOURTH SITTING. 
 
 Legislative Building, Toronto. 
 
 Wednesday, 2Wi December, 1911, 11 a.m. 
 
 Present: Sir William R. Meredith, Commissioner. 
 Mr. F. N. Kennin, Secretary. 
 Mr. W. B. Wilkinson, Law Clerk. 
 
 The Commissioner : Have you something to bring up this morning, Mr. 
 Bancroft? 
 
 Mr. Bancroft : Your Lordship, I think we arc ready with our case. Prob- 
 ably you are aware of that, but I will go over it and perhaps make some explana- 
 tions, and Ave may give some evidence afterwards, if it is necessary. I will read 
 what has been prepared, which has been put in the way of recommendations. It 
 is addressed to Sir William Meredith, Commissioner of the Provincial Government, 
 re. Workmen's Compensation Legislation. 
 
 "Sir, — Understanding that it is the desire of this Commission to make recom- 
 mendations for a Workmen's Compensation Act in harmony with modern indus- 
 trial conditions, we have the honour to submit herewith recommendations for a 
 Workmen's Compensation Act for the Province of Ontario. These recommenda- 
 tions have been discussed, and unanimously agreed to by representatives of the 
 Dominion Trades and Labour Congress, Toronto Central Labour Council, the 
 Building Trades Council of Toronto, and the Metal Trades Council, whose signa- 
 tures are appended hereto." 
 
 This represents probably in the neighborhood of 150,000 in the Dominion 
 Trades and Labour Congress ; 18,000 to 20,000 in the Toronto Central Labour Coun- 
 cil; the Building Trades Council, I believe, represents somewhere in the neighbor- 
 hood of 12,000, and the Metal Trades in Toronto probably 5,000 or 6,000. 
 
 "We also understand that it is the expressed desire of the Commission to 
 report to the next session of His Majesty's Provincial Legislature, the conclusions 
 and recommendations for legislation of this Commission on this subject. We 
 therefore have lost no time in taking the matter up to suit the convenience of the 
 Commission. We propose to give plainly, therefore, the fundamental principles 
 which we believe should be the basis for construction of a new Workmen's Com- 
 pensation Act in this Province. It is unnecessary to refer to the present legislation 
 in Ontario. Its uselessness has been pointed out for years by representatives of 
 labour, its obsoleteness, indeed, preventing almost any one from even an attempt to 
 defend it. The ancient character of the present legislation may make it seem to 
 many that a new Act in harmony with modern conditions, with modern legisla- 
 tion in countries that have made serious attempts to solve the question, is in the 
 nature of radical legislation, but that is merely because the matter has been so long 
 neglected in Ontario. 
 
 " We propose that the new Act shall cover : 
 
 "1. All employments, the employees of the Province, municipality, county, or 
 other administrative bodies in the Province to be covered the same as employees 
 in industries. 
 
 " 2. Compensation for all injuries arising out of, and in the course of employ- 
 ment. 
 
198 MINUTES OF EVIDENCE: No. 65 
 
 " 3. Compensation for being disabled, or other injuries arising out of, or as 
 the result of, a specified occupation, the said disablement and injuries being in the 
 nature of occupational diseases. 
 
 " 4. Entire cost of compensation to rest upon employers. 
 
 ' " 5. In the case of injuries resulting in death the dependants, as outlined in 
 the British Act, and State of Washington Act, shall be the beneficiaries, with the 
 expenses of the funeral, as outlined, also. 
 
 " 6. The doctrine of negligence on the part of the employee or employer, fel- 
 low-servant, or otherwise, shall have no place in the new legislation. 
 
 " 7. State insurance in connection with Compensation Act. 
 
 " 8. The creation of a Provincial Department of Insurance with three Com- 
 missioners, for the purpose of administration of the act. 
 
 " 9. Compulsory insurance of employers in the State Department, by a yearly 
 tax levied upon the industry, or occupation, covering the risk of the particular 
 industry or occupation. 
 
 " 10. The tax shall be upon the yearly wage roll. 
 
 "11. No employer shall attempt to pay the tax by deduction of wages of 
 employee, by agreement or otherwise, such action to be regarded as a gross mis- 
 demeanour as provided for in the State of Washington Legislation. 
 
 " 12. The schedules of payment under the act, to be based upon the payments 
 under the British Act, with the proportional increases due to the difference in the 
 wages in Ontario, reflecting the difference in the cost of living. 
 
 " 13. The Provincial Government shall provide revenue for the creation of 
 the Department of Insurance. 
 
 " The following will give you some idea of the weight of opinion in favour of 
 the burden being borne by the employer, or industry alone : 
 
 " Great Britain. The employers alone bear the burden, and they insure volun- 
 tarily in State, mutual, or private stock companies. 
 
 'Norway. Employers bear the burden and State insurance is compulsory. 
 ' Sweden. Employers bear the burden and insure as in Great Britain." 
 
 That is voluntarily in State, mutual or private companies. 
 
 The Commissioner: What State insurance is there in Great Britain? 
 
 Mi;. Bancroft: There is State insurance whereby the employer can insure. 
 
 The Commissioner: When was that created? 
 
 Mr. Bancroft : I wouldn't be prepared to say when it was created, but it is 
 the fact. I have here a report of a Commission which was probably one of the 
 best Commissions that ever took into consideration Workmen's Compensation. 
 In the summary of Workmen's Insurance in Europe, Prankel, who is the head of 
 the industrial side of the Metropolitan Life Insurance Company, says that in 
 Great Britain the character of that insurance is according to the choice of employers 
 in State, mutual, or private stock companies. " Frankel and Dawson " is a 1910 pub- 
 lication. It also goes on as to establishment funds, compulsion, the number of men 
 covered, etc.: by the employers alone is the burden borne. It is all here for your 
 perusal. 
 
 The Commissioner: T think that is a mistake. T do not think there is any 
 State insurance in Great Britain. 
 
 Mn. Bancroft: T think myself that in Great Britain at the present time there 
 is a means of (Jhe employer insuring in State insurance. Tn fact T "think it would 
 be only the truth to say so. This is the most complete report of any Commission 
 thai has gone to Europe, in my estimation. Tt is on the Russell Sage Foundation, 
 and is one of the best reports that has ever been made. I know the British Trades 
 
 « 
 
1912 WORKMEN'S COMPENSATION COMMISSION. 199 
 
 -i 
 
 Congress arc asking for State insurance, and they are asking for compulsory 
 insurance. They are not merely asking for State insurance, but compulsory State 
 insurance, so that if State insurance isjaossible at the present time, it seems to be 
 the fact that the employers do not take advantage of it, and the labourers want to 
 make it compulsory. 
 
 "Then in Holland employers bear the burden by compulsory insurance in 
 State, mutual or private organizations. 
 
 "Denmark. Employers bear the burden and insure as in (ireat Britain, but 
 insurance is compulsory. 
 
 "Belgium. Employers bear the burden by voluntary insurance as in Great 
 Britain. 
 
 " France. Employers bear the .burden by voluntary insurance as in Great 
 Britain. 
 
 " Italy. Employers bear the cost by compulsory insurance, but insure in State, 
 mutual or otherwise as in Great Britain. 
 
 "Germany. Employers bear the cost of workmen's compensation. Insurance 
 is compulsory in State, mutual trade associations, and State Executive Boards. 
 
 " Wage earners covered by such compensation : 
 
 Great Britain 13,000,000 
 
 Norway " 400,000 
 
 Sweden 1,000,000 
 
 Holland 1,000,000 
 
 Belgium 2,100,000 
 
 France 9,500,000 
 
 Italy 10,000,000 
 
 Germany 15,000,000 
 
 Total 52,000,000 
 
 " Fifty-two million workers covered by compensation legislation, in which the 
 whole burden is on the employer or industry. 
 
 "There are those who confuse the contributory schemes of such insurance, 
 invalidity and old age, with compensation legislation, but this Commission is not 
 dealing with social insurance, only so far as it affects compensation for accidents, 
 fatal or otherwise, arising out of or in the course of employment, and we therefore 
 deal with it as such. 
 
 " The doctrine of contributory negligence was the always fruitful source of 
 litigation, and as the position 'that the worker would injure himself to obtain 
 compensation ' has become untenable, as well as the fact that if a workman takes 
 risks it is generally because in the nature of his employment conditions make him 
 do so, this doctrine has almost wholly passed away. It exists mostly in old legis- 
 lation on the matter. 
 
 " The tendency of thought in Europe as well as North America is toward 
 compulsory State insurance." 
 
 The Commissioner: This contributory negligence in the ordinary sense is 
 done away with in England, but they retain the provision where a workman is 
 injured " owing to serious and wilful misconduct." 
 
 Mr. Bancroft: Yes, gross misconduct. 
 
 The Commissioner: "Serious and wilful misconduct" is the wording. 
 
200 MINUTES OF EVIDENCE : No. 65 
 
 * ' — ■ 
 
 Mr. Bancroft : Except where it is fatal. The great source of litigation was 
 the contributory negligence clause, which allowed the employer to show in the 
 slightest accident that the workman had contributed in some manner or other to 
 the accident. 
 
 The Commissioner : That is gone, of course, under the British law. 
 
 Mr. Bancroft: I think the British law was built somewhat on other Euro- 
 pean legislation. Germany had three different acts. First they had a sickness and 
 death insurance legislation, and then they had legislation which covered invalidity 
 and old age, and the Workmen's Compensation Act was the completing of the 
 social insurance of Germany; and of course the first step in social insurance in 
 Great Britain was Workmen's Compensation, and naturally she took probably one 
 or two ideas from Germany, but finally she had to make almost a completely new 
 piece of legislation, because insurance for sickness, invalidity and old age has got to 
 follow workmen's compensation in England. Where Germany started out Great 
 Britain has got to end. It is just vice versa in those two countries. 
 
 "The British Act, an admirable one, is found to be in need of improvement in 
 this direction, as the British Trades Congress, the mouthpiece of organized labour, 
 is seeking to have established compulsory State insurance in connection with the 
 act. The Manitoba Act, modelled upon British legislation, is found to be Wanting 
 improvement in this direction also, as the Central Labour Council in Winnipeg has 
 expressed itself a short time ago as intending to seek compulsory State insurance 
 in connection with the legislation. The splendid legislation of the State of Wash- 
 ington, recently placed in operation with a State Department of Insurance, and a 
 declaration of police power, is worthy of your most serious attention, from which we 
 quote the following : 
 
 " The common law system governing the remedy of workmen against employ- 
 ers for injuries received in hazardous work, is inconsistent with modern industrial 
 conditions. In practice it proves to be economically unwise and unfair. 
 
 " It's administration has produced the result that little of the cost to the 
 employer has reached the workman and that little only at large expense to the 
 public. 
 
 " The remedy of the workman has been uncertain, slow and inadequate. 
 
 " Injuries in such works, formerly occasional, have become frequent and 
 inevitable." 
 
 I want to draw your attention to that last clause particularly: "Injuries in 
 such works, formerly occasional, have become frequent and inevitable." That is 
 under the common law system. 
 
 The Commissioner : What does that mean ? 
 
 Mr. Bancroft: It means this, that under the present legislation that we 
 have in Ontario it is not expensive enough. An accident is not expensive enough 
 to an employer to induce him to prevent it. The only way to stop accidents in 
 industry is to make it too expensive for them to have them. You can't blame the 
 employer. You can from a moral standpoint, but not from a business standpoint. 
 He is running the business at the lowest cost of production, and unless it is made 
 expensive, which legislation generally has to do, the employer doesn't make it his 
 business to prevent those accidents. 
 
 The COMMISSIONER: What do you mean "by making it expensive? 
 
 Mi;. Bancroft: By the compensation. 
 
 The Commissioner: That is the state of the present act. 
 
 Mr. Bancroft: Here is tbe evidence under the common law: "Injuries 
 in such works, formerly occasional, have become frequent and inevitable." That 
 is wlmi experience has proved. 
 
1912 WORKMEN'S COMPENSATION COMMISSION. 201 
 
 The Commissioner: AY hat is the authority for that statement? 
 
 Mr. Bancroft: I suppose the authority of the people who drew that act of 
 the State of Washington. I have three" volumes of the evidence taken before the 
 Commission. 
 
 Tin: Commissioner: You are reading from the preamble? 
 
 Mr. Bancroft: Yes. 
 
 "The welfare of the State depends upon the industries and even more upon 
 the welfare of its wage worker. 
 
 •• The State of Washington, therefore, exercising herein its police and sov- 
 ereign power, declares that all phases of the premises are withdrawn from private 
 controversy, and sure and certain relief for workmen, injured in extra hazardous 
 work, and their families and dependants, is hereby provided, regardless of questions 
 of fault, and to the exclusion of every other remedy, proceeding or compensation, 
 except as otherwise provided in this act; and to that end all civil actions and civil 
 causes of actions for such personal injuries and all jurisdiction of the courts of 
 the State o\er such eases are hereby abolished except as in this act provided.** 
 
 The Commissioner: Does that mean that these organizations which you 
 represent are in favor of substituting whatever compensation is provided for for any 
 other remedy which the workmen might have at common law? That is what 
 the Washington Act does. 
 
 Mi?. Bancroft : Not completely, sir. 
 
 The Commissioner: Practically so. There is only a very limited case. It 
 leaves the one case if death results from the deliberate negligence of the employer. 
 Then they also have an action at common law. 
 
 Mr. Bancroft: Sure. 
 
 The Commissioner : But apart from that as I understand it the Act takes 
 the place of any common law liability. 
 
 Mr. Bancroft : Yes. Well, if we could be guaranteed a AYorkmen's Compen- 
 sation Act so wide in its provision as the State of Washington I don't see that the 
 workers of this country would have any objection to the jurisdiction of the court 
 as far as injuries are concerned — injuries arising out of employment. It should 
 be given to a tribunal such as three commissioners in a provincial Government like 
 this, because they are practically constituting another court. 
 
 The Commissioner : I do not think you have comprehended my point. There 
 may be as the result of an injury a liability of the employer at common law. Now, 
 the State of Washington Act with the one limited exception that I mentioned takes 
 away that common law right, and substitutes for it the provisions of their law. 
 
 Mr. Bancroft: Yes. 
 
 The Commissioner : I would like to understand whether your body have con- 
 sidered that aspeet. and whether they favour it? 
 
 Mr. Bancroft: Yes, I think we are thoroughly in favour of that providing 
 that we also have the provision or loop hole that is left in the State of Washington 
 Act, which, in my opinion, is intended for the specific purpose of allowing a man, 
 if he does not get thorough justice under the State of Washington legislation, to 
 still have the courts, jnst as the British Act, because the State of Washington act 
 was undoubtedly modelled on the British Act, with the addition of State insurance. 
 We would like the same rights as in the State of Washington and the British Act, 
 if justice is not done. 
 
 The Commissioner: That is an appeal from this Board you speak of? 
 
 Mr. Bancroft: Exactly. 
 
202 MINUTES OF EVIDENCE: No. 65 
 
 Surely^, Sir, this must commend itself as a guide for administration of com- 
 pensation, without . litigation, such as anyone having at heart the welfare of the 
 workers might follow. 
 
 Perhaps the best feature of the Washington legislation is the fact, that it makes 
 for the prevention of accidents, which we regard as more important than compen- 
 sation. The taxing of industries according to their respective risks, is an incentive 
 to the employers to reduce the risks, which means a reduction of the yearly pre- 
 mium. 
 
 It is only by making risks expensive in industry to employers that Ave can hope 
 to reduce them to a minimum. 
 
 Contracting out clauses, sub-contractors' liabilities, all the aggravating ques- 
 tions of controversy and litigation, could be obviated by provincial compulsory in- 
 surance, with a department of administration, in connection with which the Pro- 
 vincial Health Department could, on investigation among the workers of Ontario, 
 tabulate, what are occupational diseases in our own Province. 
 
 It is possible that in our Province we have not the occupational diseases that 
 they have in other parts of the world, but it is also possible that we have occupa- 
 tional diseases in this Province that they have not in other parts of the world, and 
 it would be necessary probably for the Provincial Health Department to find that 
 out. I think they could get all the evidence that was necessary. 
 
 "We believe that an Act modelled upon the British Act in principle, with the 
 compulsory State insurance of the Washington Act, with its police administra- 
 tion, and tax upon industry, as a preventive for accidents, would be the best for the 
 workers as well as for the employers. 
 
 With regard to the sums of compensation in the schedules, we will be willing 
 if you decide on the British Act altogether, to work out the payments for Ontario, 
 taking into consideration the different financial proportions of wages and cost of 
 living. 
 
 The British Act is founded upon the principle that the workers that are cov- 
 ered get below £250 a year, or $1,250. That would be too low in Ontario, 
 because the same class of workers in Ontario would not be covered probably unless 
 a sum of $2,000 was stated. There are probably many mechanics to-day who are 
 getting very near that mark, and over. 
 
 The Commissioner : Our present law is $1,500, or three years wages in the 
 trade, whichever is the larger. 
 
 Mr. Bancroft: In speaking about that you must remember in the British 
 Act they have covered them in a different manner than the present act in Ontario. 
 
 The Commissioner : No doubt. 
 
 Mi:. Bancroft: "We would say, however, that if you follow the British Act 
 mpletely, it should cover all workers in Ontario getting less than $2,000 a year. 
 endeavour to prove to you that some of the payments made by the month are too 
 low. 
 
 "Anything less than either of these two Act? will be inadequate to meet the 
 needs of the workers of Ontario, and as this Province is the manufacturing centre 
 of our Dominion, we claim that the legislation that should be adopted, and which 
 we desire, is that pointed out by the fundamental principles we have laid down for 
 your consideration. 
 
 "Any further evidence you may need we will be only too pleased to procure, 
 and we ask you to request our co-operation for this purpose at any time." 
 
 This is signed by all the representatives of the different organizations which 
 
1912 WORKMEN'S COMPENSATION COMMISSION. .203 
 
 have met and discussed the question. It is signed by myself as Vice-President of 
 the Trades and Labour Congress, with Joseph Gibbons and J. W. Doggett; for the 
 Toronto District Trades and Labour Council by Frank McCann, President, and 
 Henry R. Barton, Secretary; for the Melal Trades Council, by James H. Ballantyne 
 and Joseph Hellicker; for the Building Trades Council by William Nettleship, 
 President; by Andrew Miller for the Brotherhood of Carpenters; and by the joint 
 executive Board of the Carpenters' Organizations, H. A. Ryder, Gerald Baines, 
 A. J. Udall, and George Thomson. 
 
 That is a statement of the principles upon which we believe, your Lordship, 
 a modern Workmen's Compensation Act should be built. In support of our state- 
 ment we have the proofs ready and will give them to anyone, or answer any ques- 
 tions that anybody may wish to ask on the matter. I may saj- i think myself, and 
 I think organized labour thinks all over this country, that State insurance is the 
 real principle for making a Workmen's Compensation Act efficient. The question 
 then arises as to whether State insurance should be compulsory. In countries where 
 they have State insurance it looks as if it had been found necessary to make it com- 
 pulsory before it was efficient. Probably the word " compulsory " is not one that 
 the employers will like very much, but all things more or less in legislation are 
 compulsory. I will not read any more or give any more of the evidence, but it is 
 all here, and anything you wish to ask, or anything the manufacturers wish to ask, I 
 will be ready to answer any questions. 
 
 The Commissioxek: What do you say as to this argument that is -used 
 against the Washington system, as to the stated percentage of the wage bill, which 
 represents the tax upon the particular industry? — Take the printing industry, for 
 example. — It is said now that that tax being levied equally upon all, the man who 
 is careful of his workmen and up-to-date in his appliances to prevent accidents, has 
 to pay for the careless man who is on the same footing with him and pays no more 
 and does nothing to prevent accidents? 
 
 Mr. Bancroft : It is not a good argument, your Lordship, for this reason, 
 that the State of Washington Act provided a penalty for the careless employer as 
 well as the careless workman. 
 
 The Commissioner: Does it? 
 
 Mr. Bancroft : Ten per cent. He has to pay a certain sum into the treasury 
 when he is convicted of carelessness. 
 
 The Commissioner : That is a particular carelessness, not the ordinary care- 
 lessness, that is a breach of some State law. 
 
 Mr. Bancroft : No, I think you will find it is where he is convicted of care- 
 lessness. 
 
 The Commissioner: The British Act provides one method of determining 
 the amount of compensation, and refers to a joint committee composed of repre- 
 sentatives of the employers in a particular trade, and the workmen in that trade. 
 Is there anything like that in this country, or is there anything like that presented? 
 
 Mi;. Bancroft: Well, as far as the British Act is concerned, your Lordship, 
 I think the first step that has to be taken in the matter of compensation is a con- 
 ference between the representatives of the injured party and the employer, and if 
 they can't agree then it is submitted to arbitration. 
 
 The Commissioner: If they have such a committee it may go first to the 
 committee. Have you got any such thing? 
 
 Mr. Bancroft: No, there is no permanent committee under the British Act. 
 
 The Commissioner : Hndouhtedly, but I am asking whether you have any 
 such committee? 
 
204 MINUTES OF EVIDENCE : No. 65 
 
 Me. Bancroft: In Canada? No. 
 
 The Commissioner : Would there be any difficulty in providing for that ? 
 
 Mr. Bancroft : I don't know, but I would like to read this to your Lordship. 
 In Great Britain the settlement of disputes is (a) by a Committee of the em- 
 ployers and the workmen. 
 
 The Commissioner: That is the Joint Committee? 
 
 Mr- Bancroft: Yes, but it is not a permanent one. (&) By arbitrators 
 selected by both parties, and if the employer and the injured party cannot agree 
 then they submit it to arbitration. The arbitrators are selected and they choose 
 a third; if they can't agree or it is not satisfactory to the parties it is settled by 
 a judge of the County Court; that is, a third man, and he generally settles it. 
 
 The Commissioner: Where are you reading from, because I don't find that 
 in the British Act, about the third method of arbitration? The only arbitration 
 provided for is that it is determined by the judge of the County Court sitting as 
 arbitrator, or somebody appointed by the judge with the sanction of the Lord 
 Chancellor. That Joint Committee is a kind of Board of Arbitrators. 
 
 Mr. Bancroft: If the Joint Committee can't agree they appoint an arbitra- 
 tor each. 
 
 The Commissioner: Where the Joint Committees of employers and work- 
 men exist for the purpose they shall settle the compensation to be paid and other 
 matters relating thereto, including costs, unless either party objects in writing. 
 If they fail to act within six months the matter has to be dealt with by the County 
 Court judge. 
 
 Mr. Bancroft : That is true, but what I mean is first of all the employer and 
 employee get together, and then it is submitted to arbitration, and then to the 
 County Court judge. 
 
 The Commissioner: Of course they can submit it to private arbitration, but 
 the Act makes no provision for submitting it to private arbitration. 
 
 Mr. Bancroft : There are three kinds of arbitration under the act. 
 
 The Commissioner : I don't find it. 
 
 Mr. Bancroft : There is an explanation of it by one of the foremost bar- 
 risters in the country, Mr. Emery. 
 
 The Commissioner: Of course there is nothing to prevent an arbitration 
 between A and B, whether workmen or not. but there is no provision in the Act. 
 That is all I am speaking of. 
 
 What, if anything, do these labour organizations do for the wounded mem- 
 bers of the Order? If they meet with an accident in the course of their em- 
 ployment do they do anything for them? Is there any provision for helping 
 them ? 
 
 Mr. Meredith : In our Brotherhood if they lose a hand or foot they are en- 
 titled to insurance, the same as though they were killed outright. 
 
 The Commissioner: That moans that if what is proposed is made a law a 
 man is paid twice over for the same injury, does it not? 
 
 Mi;. Doggett: I might explain that point you have just referred to, your 
 Lordship. I belong to an organization that is all over the English-speaking 
 world, the Amalgamated Carpenters and Joiners, and in countries where there 
 is legislation along these lines that we arc now discussing there are certain pro- 
 visions made in onr constitution whereby one of our members receiving compen- 
 tion through the Slate it is less considerably than what lie gets in Canada, 
 where we have no legislation along those lines. 
 
1912 WORKMEN'S COMPENSATION COMMISSION. 205 
 
 Tile Commissioner: If you had legislation giving full compensation to 
 the workmen for the consequences of an accident, what would your organization 
 do, so far as paying him the insurance is concerned? 
 
 Mr. Doggett: Under our Constitution, your Lordship, the Amalgamated 
 Society of Carpenters and Joiners, if the injured member of our organiztaion 
 receives compensation through the State, or compensation through the courts, he 
 receives half of what he does in another part of the world where he receives no 
 compensation through the State. 
 
 The Commissioner: Is that fair. Mr. Doggett? Supposing the man has 
 got full compensation from the employer, why should he get anything from his 
 fellow employees ? 
 
 .Mi;. 1 5 \ ycroft : Would you say, your Lordship, if a man was paying on a 
 policy of insurance for a number of years, and something happened where he got 
 compensation, that it would be unfair for him to draw the insurance for which lie 
 had paid so long? 
 
 The Commissioner: I should think it would. If the injury is covered by 
 what he gets from the State surely it is all wrong that he should get more. 
 
 Mr. Bancroft: In no case in the world does a workman get full compen- 
 sation. 
 
 Mr. Doggett : I would like to point out, your Lordship, a man receiving 
 compensation from our organization pays for that before he receives it, and also 
 if we obtain in this Province a Compensation Act with State insurance, if the 
 compensation is charged up to the different industries, or the liability is charged 
 up to the different industries, we as consumers will also again pay him. 
 
 Mr. Gibbons : We have found it necessary to have insurance for the reason 
 that there has been no compensation up to date. 
 
 The Commissioner: I can't understand that. 
 
 Mr. Gibbons: And possibly if we get a Compensation Act we will then mould 
 our organization to fit in with the act. Up to the present it has been a matter of 
 us looking after the injured, or the widow, or the orphan, and we found it neces- 
 sary, or our organization found it necessary, to raise the amount. We only paid 
 $100 funeral expenses, but we found it necessary to raise that to $800, to pro- 
 vide something for the widow and orphan. I have gone into a house after death 
 and I have found that there wasn't another dollar between that woman and the 
 family and starvation but that $100. Now, of course, a great many members 
 may die without being injured, and therefore we pay the same in the case of 
 death in any event. It is not an accident insurance, it is an insurance in case 
 of death. 
 
 Mr. Miller: In the Brotherhood of Carpenters I may say we pay $200 at 
 death, and also for disablement $400. That of course is covered by the dues 
 which we get in, and, as Mr. Gibbons has said, up till now we have had nothing 
 to take its place. I have no doubt the organization will have to remodel their 
 payments and benefits. 
 
 The Commissioner : They could give more for sickness and things of that 
 kind. 
 
 Mr. Miller: Yes. All the organizations don't even have sick benefits. 
 
 Mr. Bancroft: Besides, Mr. Emery, the barrister, there was Philip Snow- 
 don . 
 
 The Commissioner: He is pretty wild. 
 
 Mr. Bancroft: In this case he savs there are three kinds of arbitration. 
 
206 MINUTES OF EVIDENCE: No. 65 
 
 One of these gentlemen is a barrister, and they are never wild. There are two 
 by agreement and the third by proceedings in the County Court. Then, Philip 
 Snowdon says, there are three methods of arbitration under this Act, two under 
 agreement by the parties, and the third by the County Court judge. This is the 
 result of a Commission according to the Eussell Sage basis, (a) by agreement, 
 (&) by arbitration, (c) by a judge of the County Court if the parties can't 
 agree. That is the interpretation of the British Act. 
 
 The Commissioner: Your argument is that the exception in the British 
 Act as to contributory negligence should be done away with? Supposing a 
 motorman, for instance, deliberately disobeys the rules of his employers and as 
 a result kills a dozen of the passengers, and he himself breaks his leg. Do you 
 argue that the public would stand for making the employer pay that man com- 
 pensation ? 
 
 Me. Gibbons : We find in those cases where the company makes rules, they 
 make other conditions that render it impossible for the men to carry out the 
 rules. 
 
 The Commissioner : That cannot be general. 
 
 Me. Gibbons: I have no doubt your Lordship is referring to an accident 
 which happened the other day. Now, it has been heralded broadcast that there 
 was a notice for a stop, and there was no notice there for a full stop. 
 
 The Commissioner : I am putting the case where a man deliberately goes 
 past a signal that he knows means stop, and kills a dozen people, and breaks his 
 own arm and leg. Would it not shock the public's conscience if that man could 
 compel his employers to pay him compensation? 
 
 Mr. Bruce : Doesn't that come under the common law, if a man is convicted 
 of manslaughter? 
 
 The Commissioner: He would be paid compensation according to the pro- 
 posed act, Mr. Bancroft? 
 
 Mr. Bancroft: Not if we model it under the British Act. 
 
 The Commissioner: No, but you are objecting to that. You want all con- 
 tributory negligence of every kind done away with. 
 
 Mr. Gibbons : We find in a case of this kind that the company puts up 
 orders for certain stops, and if a man obeys that order and runs behind time 
 the chances are that he is in more danger of an accident than by passing on, and 
 if he obeys that order and gets behind time the company has no use for him. 
 
 The Commissioner: I suppose there is no doubt about that, Mr. Gibbons, 
 that there are rules that are made not to be observed? 
 
 Mr. Bancroft: Now, your Lordship, do yon think that is a fair argument 
 against Workmen's Compensation, that if a man deliberately and criminally did 
 something for which the public wouldn't stand he would be paid compensation? 
 I am not very old, but I don't remember yet of a case where it has happened. 
 Does your Lordship remember a specific instance? If there is a specific instance 
 it is not an argument against compensation. 
 
 The Commissioner: There are dozens of cases happening where men de- 
 liberately disobey signals. 
 
 Mi:. Bancroft: With criminal intent? 
 
 The Commissioner: T don't care whether you call it criminal or not. They 
 have done it with their eyes open. 
 
 Mr. Bancroft: There may be motives behind that we cannot discover. 
 
1912 WORKMEN'S COMPENSATION COMMISSION. 207 
 
 The Commissioner : Do you rn^an to argue if a locomotive engineer, seeing 
 a, semaphore against him, deliberately goes by and comes into collision with 
 another train, that that man has any claim morally or otherwise for compensa- 
 tion if he is injured? 
 
 Mr. Bancroft: I don't see, your Lordship, where that is an argument 
 against contributory negligence. 
 
 The Commission Kit: I am not talking about that. Nobody questions now 
 that ordinary contributory negligence ought not to disentitle a person. That 
 seems to be generally conceded. The question is whether where a man is guilty 
 of serious and wilful misconduct which leads to accident, whether he would be 
 entitled to compensation. 
 
 Mr. Bancroft : If you will read our statement we have asked for a Bill that 
 shall not be less than the British Act or the State of Washington Act. We have 
 asked for the abolition of contributory negligence. We haven't heard stated a 
 specific instance of a locomotive engineer criminally doing something. We have 
 asked on general principles for the abolition of contributory negligence as we - 
 understand it, and not from specific negligence such as the locomotive engineer 
 doing something that is criminally negligent. There could be a clause put in 
 where a man has criminally disobeyed orders that he should not receive com- 
 pensation. 
 
 The Commissioner: I do not see very much objection to the words in the 
 British Act, if the words " wholly " is put there, " Where the accident occurs 
 wholly from the serious and wilful misconduct of the employee," — where it is due 
 wholly to that cause. Then, as one of the gentlemen pointed out, where death en- 
 sued that exception does not apply. 
 
 Mr. Bancroft: Well, I don't think the workers of this country would have 
 any objection to that part of the British Compensation Act, the way it is worded, 
 provided the administration of it is the same as in Great Britain, but we have 
 found this, that the conditions in this country are so different and so far behind 
 Great Britain. 
 
 The Commissioner: Do you mean to say industrial conditions in this 
 country are behind Great Britain? 
 
 Mr. Bancroft: No, conditions as far as legislation is concerned, I should 
 say. They are, or we wouldn't be here to-day. 
 
 Mr. Miller: There was a case in Great Britain of contributory negligence, 
 where a man met with an accident who was under the influence of drink, and 
 that is generally, or almost invariably understood among the workers to be the 
 only bar to a man getting compensation. Now, that ease was tried out in the 
 courts, and the man won out for this reason, ^that the superintendent allowed 
 him to go to work in that condition. 
 
 The Commissioner : There may be exceptional cases. 
 
 Mr. Miller : That is one. It was said where the superintendent allowed 
 him to go to work they didn't have complete supervision over their plant that 
 was necessary, as the law thought, in that case. 
 
 The Commissioner : Now, one of these things that has created trouble under 
 the British Act is where there is nothing to show how it did happen, and there- 
 fore it is left in doubt as to whether it happens in the course of a man's employ- 
 ment. Now, it seemed to me that possibly it might be proper to provide that 
 where the accident happened that there should be a presumption that it arose out 
 
208 MIXUTES OF EVIDENCE: No. 65 
 
 of the employment unless the contrary be shown by the employer. Under the 
 present law a good deal of hardship is created. A man is killed, nobody being 
 present, and the death may have happened in two or three different ways, and 
 sometimes a man's representatives have failed because there was nothing from 
 which a court or jury could draw properly the inference that he was killed 
 owing to something that he was not himself responsible for. Do you follow what 
 I mean? 
 
 Me. Miller: A man being killed, without witnesses. 
 
 The Commissioner : Without witnesses. Ought it not fairly to be pre- 
 sumed that that accident arose out of his employment unless the employer shows 
 the contrary. 
 
 Me. Banceoft: Certainly. I would say the inference is if he was killed he 
 was following his employment. 
 
 The Commissionee : There was a curious case in which the workman failed 
 under the British Act. They were working at threshing, and a wasp stung one 
 of the men that was working, and blood poison set in and he died. He could 
 not recover anything. They held while the injury happened during his employ- 
 ment it did not arise out of his employment, and it might happen wherever he 
 was. 
 
 Me. Miller: I should certainly say, yonr Lordship, that it did arise out of 
 his employment. The very fact of him being working in the open air and it was 
 possible for the wasp to sting him while he was acting properly in his employ- 
 ment. I don't see that it could be brought in under anything else. 
 
 The Commissioxee : They decided the other way, unfortunately for the 
 man's family. 
 
 Me. Miller: I may say, your Lordship, I am the subject of compensation 
 under the British Act, and no one saw my accident. 
 
 The Commissioner: I am talking about the man that is killed. 
 
 Mr. Millee: Had I been killed the cause would have been the same. Had 
 the article hit me on the body.it would have gone right through me, but instead 
 of that it hit my finger, cutting it completely off. Nobody saw it, although I 
 was working in a shop with 50 or 60 others, and some of them close by me. But 
 there was no question that it arose out of the course of my employment because 
 nobody saw it. 
 
 Mr. Meeeditii: I have been railroading since 1S66. That is something over 
 forty-five years, and I have found that it is one of the greatest difficulties in the 
 world to settle the responsibility for an accident. I have made out, I was going to 
 Bay, many hundreds of casualty reports, being a conductor on the train, and you 
 will find every different workman in his different class will try to set the acci- 
 dent on to the other fellow, and the company will generally try if a man is 
 killed to put the blame on him. That is how I have found it. A dead man can 
 say nothing. Therefore you will find it is perhaps one of the hardest things in 
 the world. When we had an accident happen it was my duty to go home and 
 make out a casualty report and to send it in to the superintendent as to what I 
 thought was the cau.-c of it. and more often than not you would gei into a row 
 if you put in jusl what you thought was the right thing. If it reflected a little 
 on the company, why, you were pretty nearly sure to lose your job. That was 
 pretty near a dead certainty. 
 
 The Commissioner: How many years did you say you had been there? 
 
1912 WORKMEN'S COMPENSATION" COMMISSION. 209 
 
 Me. Meredith: I started in 1866. 
 
 The Commissioner: You must have made out the reports and doctored 
 them up to suit the company to stay so long? 
 
 Me. Meredith : A man when he is working for a living I tell you is mighty 
 careful what he says. That is my excuse. Now, perhaps it is out of the way 
 to talk ahout this accident where these people were killed, but still I think it 
 should be. I was down there yesterday, and to a practical man, a man that is 
 a railroad man, there is no reason to think that it wasn't the faulty construction 
 of the switch that caused the accident. That switch is a regular man-killer, I 
 would call it, when that switch was put in like that on that sharp curve. There 
 is no protection made whatever if a car happened to race away, which is very likely 
 to happen on a grade like that. That is my experience of it. There is no reason in 
 the world why it should stay on the track. The chances are that it is almost 
 sure to go over if it was going anything over ten miles an hour. I took particu- 
 lar stock in it, and yet most people are blaming that motorman for running the 
 car down that hill. Perhaps it is right. I am not saying it isn't, but still the 
 primary cause of that accident, if I was making out a casualty report, I should 
 say was that faulty switch which was not put in right. Yet if I was working for 
 the company I would he mighty careful, mind you, if I had a good job earning 
 two or three dollars a day, how I put in that report. I should probably figure it 
 out and put it in in such a way that nobody could be blamed for it. I confess 
 it. I have made out reports, simply because I wanted to keep my job. I had a 
 family that I was working for and I had a home that I wanted to keep up, and 
 a man is naturally careful about those things; and 1 say in this Compensation Act 
 what we want as railroad men is something that will give a man fair compensation, 
 never mind what it is. Sir William puts it quite nicely there, where it is purely 
 his own fault that he gets hurt, and he hurts someone else into the bargain, but 
 at the same time that man's family has to be looked after; you can't let them 
 suffer; you have got to' look out for them. I think I would make it a little wider 
 than the workmen. A farmer is a workman, and Sir William himself is a work- 
 man. Probably he has got enough money and he does not need a couple of thou- 
 sand dollars if he got hurt, or his family doesn't, but the biggest part of us 
 do, you know; $2,000 comes in mighty handy if a man gets knocked out. T 
 think it should be made in such shape that, never mind what happens, something 
 should be done. That is my impression, and I don't expect to get anything either. 
 I have quit railroading now, although I am still a railroad man, and say that 
 I would give a man, or his family — I wouldn't give it to the man if he was put 
 in jail — it is no use to him — I would give it to hi? family. This State insur- 
 ance that Brother Bancroft put in is a splendid thing. It is not fair to ruin 
 an employer because he happens to meet with a serious accident, but at the same 
 time the people have got to live. I am on the City Board of Sick Relief, and 
 I am going around every day pretty nearly relieving poor families, and really as 
 a rule you could say it was not their own fault, but the poor things have got 
 to live. That is the way I look at it. Somebody has got to help them. 
 
 The Commissioner : Mr. Kcnnin, did you send a message to Mr. Drurv, 
 and to Mr. Smith and to Mr. Gregory? 
 
 Mr. Kennin: Yes, Sir William. 
 
 The Commissioner : It is surprising to me that these bodies of persons that 
 assume to represent the farming interests of this country do not seem to wake 
 14 L. 
 
210 MINUTES OF EVIDENCE: No. 65 
 
 up to the fact that what has been asked for is that the farmers should be brought 
 under the operation of this act. They never have been, in this country, up to 
 the present time, and they are not in the State of Washing-ton. I do not know 
 whether it is intended that those who assume to speak for them want the thing 
 to go by default and concede that the act should be applicable to the farming 
 industry. I should think it would be well if somebody would attend on their be- 
 half to state what their views are. 
 
 Mr. Wegenast, have you anything to ask these gentlemen who represent 
 Labour ? 
 
 Mr. Wegenast: No, I think not, Your Lordship. 
 
 The Commissioner: That Washington Act has only been in force since 
 October last, I think, and it is very difficult to say how it is going to work out. 
 Some people seem to think the schedule of rates is altogether too low. I think 
 we should have somebody from the accident insurance companies. 
 Mr. Gibbons : Couldn't they be adjusted from time to time ? 
 The Commissioner: No doubt. 
 
 Mr. Gibbons : So far as I could gather I believe the proposition of the manu- 
 facturers was to insure their pay-roll. I am not surprised that they haven't any 
 questions to ask for I think it is in their interests as well as the workmen's. We 
 know that the insurance companies are not in business for their health hut to make 
 a profit, and if there is a State insurance the State is not here to make a profit. I 
 have no doubt if they found out the scales were too high they could adjust them, 
 and it would be insurance at cost to both parties. T think that is the advantage of 
 State insurance. 
 
 The Commissioner: I suppose, Mr. Gibbons, you have read what a member 
 of that German Imperial Insurance Department has to say about the operation of 
 their system? He says there are frightful frauds committed. That is Mr. 
 Friedensburg, I think. I don't know whether he is a prejudiced witness or not, but 
 the great difficulty in State insurance is to prevent fraud upon the community by 
 dishonest claims. That is one of the greatest difficulties under any Workman's 
 Compensation Act, to guard against claims that have no foundation in fact. 
 
 Mr. Wegenast: There is one thing perhaps I might mention. I wanted 
 to ask Mr. Bancroft whether any action had been taken by the labour organizations 
 on the communication which the chairman of our committee sent a week or so 
 ago suggesting a conference to discuss the whole question? 
 
 Mr. Bancroft: It was discussed at the Trades and Labour Council meeting 
 and it was referred to a committee that has been in existence for eighteen months. 
 You will get a reply, 1 think, to-morrow or the day after. 
 
 M r. Dillon : Something was said about making it too expensive for manu- 
 facturers. Now, we have an inspector that comes into our factory and he tells us 
 where he wants guards, and we have to put the guards on. It is a question of 
 coming up in the police court if we don't, whether we think it is safe or not safe. 
 The inspector calls around and makes an inspection quite often, and he tells us 
 wbat be wants done. Then he comes shortly afterwards to see that we did it. Wo 
 have one big machine there and we had to guard the gears. I didn't think it was 
 altogether dangerous, but he said it might be, so we put guards on. The inspector 
 looks after it pretty well now. T know ho looks after my factory well. We have 
 never had an accident in our factory, but wo have had several accidents out on 
 buildings. 1 don't think the employer wants to see an accident. Tie is as careful 
 as the workingmen. Onlv yesterday I wont down on King street to the bank 
 
1912 WORKMEN'S COMPENSATION COMMISSION. 211 
 
 building, and the man was putting up a cornice. They all have instructions to 
 be careful and to build scaffolds that are safe, and if there isn't sound material 
 on the job they are to get it. That is on the back of the time sheet. This man 
 was working on a narrow ledge and I had to get him oil' and compel him to build 
 a scaffold. I know lie was doing it to cheapen the work and to get it done a little 
 faster, but still for all that it doesn't cost very much, so I compelled him to build 
 a scaffold. We don't want accidents. I just say ibis in connection with what was 
 said about making it more expensive for the employers or the manufacturers. 
 
 Me. Bancroft: I think if the gentleman will get Mr. Schwedtman's report 
 that was given at the Manufacturers' Convention he will find that prominent 
 manufacturers who organized their own mutual trade associations had rules of 
 their own for governing employers who would not come up to certain specification- 
 and safeguards. I think if "the cost of State insurance is made absolutely upon 
 the employers then the employers would see to it that every man in the Canadian 
 Manufacturers' Association, or every employer, would do his utmost to reduce 
 the risk, or a penalty would be imposed if they didn't. The manufacturers them- 
 selves do it in Germany. 
 
 Mr. Gibboxs: The statement of Mr. Dillon clearly demonstrates the fact 
 that if care is used in having safety devices accidents will not occur. He has 
 stated here that he has never had an accident in his factory. It has been the 
 minimum. That is due to the fact that he looked after his scaffolding so as to 
 prevent accidents, while another man would allow his workmen to go on. 
 
 Mr. Dillon : I said we had no accidents in the factory, but we have outside. 
 
 The Commissioner : He may have been fortunate in having had very care- 
 ful workmen. You cannot eliminate that factor. There are some men who are 
 careful and other men who are very careless. 
 
 Mr. Miller : My experience of the planing mills around here in four years' 
 work is that they are not to be compared with the planing mills in Britain. There 
 are belts running from the floor right up to the machines, and if a man gets his 
 leg in. nothing can save him, and there is no inspector comes around to see about 
 it. 
 
 The Commissioner: Why do you not as a public benefactor report it? 
 I don't think it is right to blame the inspectors if people whose lives and limbs 
 are in jeopardy from conditions of that kind do not take the trouble to write to 
 the men who have to look after this, calling their attention to it? 
 
 Mr. Miller:- There are also piles of lumber in some of the mills too danger- 
 ous for men to stand around them. I myself have been a victim in one of the 
 planing mills. 
 
 Mr. Bancroft: The evidence that was given here by the representative of 
 the Brotherhood of Eailroad Engineers shows that the employers make it so that 
 the men cannot complain. Take a big industry to-day where there is something 
 happening that needs the inspector's attention, and a man sends a letter, and it 
 comes out that his name is at the foot of it, and he won't have his job ten minutes. 
 
 The Commissioner : These are all confidential communications. 
 
 Mr. Bancroft: We attempted once to get a whole lot of evidence regarding 
 bridge construction in Ontario where the men were not being paid according to 
 their contracts, and there wasn't one man who dared sign his name. He would 
 give you all the evidence but he wasn't willing to do more. There are conditions 
 that make it so they won't complain. It is a matter of bread and butter to them. 
 It should not be a workman's business to make the factory inspectors inspect build- 
 ings ; it is a matter for the Department. 
 
212 MINUTES OF EVIDENCE: No. 65 
 
 i . ___ 
 
 The Commissioner: I should say that every honest citizen should do all he 
 can to assist the provincial officers in having the machinery and applances in 
 proper order. I should think there was a moral duty upon every man who knew 
 of a defective condition in his shop to communicate that to the factory inspectors. 
 
 Mr. Doggett : Your Lordship, only last night I was attending an inquest 
 down at the City Morgue regarding the reason of the death of one of our members 
 last week, where one of the outlooks on a scaffold collapsed, and as the gentleman 
 over here says it is very difficult to get men who are in the employ of a company 
 or contractor to come up and tell the truth. Last night down there we had the 
 men that were working there, and although the man that was killed was a brother 
 member and a fellow craftsman, those men were in that position — they recognized 
 the fact that the two contractors were there, and they were afraid. The Coroner 
 last night could not get evidence out of those men. The economic conditions that 
 those men are working under prevented them, the way I saw things, from giving 
 evidence. They were afraid if they gave evidence in favour of the people, who will 
 take action I presume against, those contractors, they would lose their jobs. 
 
 The Commissioner : How do you know they could have given evidence 
 against the contractor? Did you take the trouble to enquire? 
 
 Me. Doggett: I might state, your Lordship, that I went up to this par- 
 ticular job before there was another nail driven, or before any more work was 
 done, after the accident took place, and any man that is a practical carpenter 
 going up there could see in a minute exactly how that accident happened. I had 
 no chance to see the outlook that was pulled down or fell down until I got down 
 to the inquest last night, but I had explained to our organization just exactly how 
 the nails were. 
 
 The Commissioner: Was that not the fault of some artisan or scaffold 
 builder ? 
 
 Mr. Doggett: The fault was with the man that built that scaffold. 
 
 The Commissioner : Then why in the name of common sense will men who 
 are employed and whose duty it is to do the work properly and who have the 
 facilities for doing it, jeopardize the lives and limbs of their brother workmen by 
 doing the work in a manner in which you say it is done. You want education. 
 You want to educate the men of your organization. 
 
 Mr. Doggett : That is quite right, your Lordship. We recognize that, but 
 under the present competitive system, when prices are so keen, and contractors 
 are jumping over one another to come out on top of the job — and in this case one 
 of the contractors helped the oilier man to put the scaffold up. Now, there has 
 ,been quite a bit of talk this morning about accidents in industry. If your Lord- 
 ship will take note of the daily papers in this city you will notice the building 
 trades are suffering a great deal lately from want of proper protection on scaffolds. 
 Even on ibis building thai is being rectified. Around in the west wing there have 
 been open well holes and open stairways without any protection, right in the build- 
 ing where the Commission was sitting on Compensation to Injured Workmen and 
 in the building where the Legislature or the Governmeni saw fii to pass a Scaffold 
 Bill. 
 
 Tiir: COMMISSIONER: Did you go in to the Minister of Public Works and 
 call his attention to it? If you did not and an accident happened would you not 
 be to some extent morally responsible for it? 
 
 Mr. Doggett: 1 did complain to the foreman carpenter. If you go over 
 the foreman carpenter the cesull is every time almosi they will refer you back to 
 the foreman. Tf I went and saw Mr. Lennox he would say, " Have you seen the 
 foreman ?" 
 
1912 WOKKMEN'S COMPENSATION COMMISSION. 213 
 
 The Commissioner: Did the foreman carpenter do anything to rectify it? 
 
 Mb. Doggett: There was a railing put up afterwards. I saw it myself on 
 some of the stairs, hut other openings had heen made and other places were left 
 unprotected. That is happening all the time. It is quite true, as your Lordship 
 says, we need a great deal of education in the huilding trades to protect our- 
 selves, hut the way I see it, we have got to legislate against the careless man to 
 make him protect himself, and not only himself, hut the wives and children. 
 They are the people who generally suffer. This past summer in the city of 
 Toronto, in the past building season, we had an enormous number <>f scaffold 
 accidents. Our organization alone has had live serious cases, and two deaths out- 
 right. We had one of our men killed at Oakville by the faulty const met ion of 
 concrete work, where the mesh iron was put in too near the top. Instead of being 
 put down four or five inches it was half an inch too near the top. This legislation 
 is badly needed in this Province, there is no question about that. 
 
 Mr. Harris: Would you make it a criminal offence for a workman to con- 
 struct improperly, or leave improper openings of this kind? How are you going 
 to avoid it unless you punish him? 
 
 Mr. Doggett: Tlie building trades in general, I believe, your Lordship, are 
 always endeavoring not only to lift the wages of the workers up, but to see that 
 other things are looked after in their interests, such as the proper protection on 
 
 buildings. Lots of these cases arise where contractors in the city of Toronto . 
 
 Take the job at the present Legislative Building where perhaps there are half 
 a dozen different contractors. Perhaps one contractor will put a scaffold up, and 
 the tinsmiths will come along and work on the same scaffold, and these are the 
 conditions that we are confronted with in the building trades in this country. 
 
 Mr. Miller: In my opinion there will certainly have to be some legislation 
 along with the compensation on safeguards to minimize accidents. In Great Britain 
 if an employer works or operates a machine without a safeguard that has been 
 ordered or suggested to be put on by the factory inspectors, or if it is a regulation 
 safeguard that is required, they take the employer to court and fine him for work- 
 ing his own machines. 
 
 The Commissioner: We have the same law in this country. 
 
 Mr. Doggett: 1 would like to ask your Lordship a question, or ask any 
 gentleman around that could answer it. Under the present Compensation law 
 that has just gone into effect in the State of Washington what would a small 
 building contractor pay to that State fund? 
 
 The Commissioner: He would pay upon his wage roll just the same way. 
 Of course there will be great difficulties in working out a law such as that, to make 
 the State tax collector hunt up everybody that has anybody in his employment and 
 collect a tax from him. I don't know- whether the thing will break down of its 
 own weight. 
 
 Mr. Bancroft: They have travelling auditors. 
 
 The Commissioner: Fancy over this Province with hundreds of thousands 
 of employees, and the thousands of establishments. The Government would require 
 an army of officials to hunt up all these people and then collect the tax from them. 
 
 Mr. Dillon: The insurance companies have those now, and we pay to the 
 insurance companies. 
 
 The Commissioner: If you don't insure then you bear the loss yourselves. 
 
 Mr. Dillon : I would rather have it compulsory insurance. I think it 
 would lessen it some. 
 
314 MINUTES OF EVIDENCE: No. 65 
 
 The Commissioner : But you don't want to be delivered over with com- 
 pulsory insurance to the mercy of the company? 
 
 Mr. Dillon : Oh no, not the mercy . of the company. 
 
 Mr. Gibbons: In the building trades everybody has to take out a permit, 
 and they can find out from the places where permits are taken out who has built. 
 The Government could do it that way. 
 
 The Commissioner: The tax is collected in localities. I don't know how 
 this State of Washington law is going to work. I have forgotten whether there is 
 any machinery provided. 
 
 Mr. Bancroft : Yes, it is in the last few pages. 
 
 Mr. Wegenast: Just at this juncture it might be well to say that in the 
 State of Washington both the employer and the employee have been almost too 
 anxious to report. 
 
 The Commissioner: Beport what? 
 
 Mr. Wegenast : Beport pa} T -rolls, accidents, and everything. The Insurance 
 Commissioners have been flooded, so to speak with reports. The persons in charge 
 of the Department for the administration of the Act are three Commissioners and 
 their assistants, a staff of twelve. I have been in rather close touch since I visited 
 the State, particularly with the active Commissioner, and so far as he reports to 
 me there is no difficulty whatever in regard to that feature. 
 
 The Commissioner: I wouldn't want to be the Prime Minister who passed 
 a law that made it necessary to go to everybody employing a man and demanding 
 of him a tax every year. 
 
 Mr. Wegenast : In the State of Washington? it only applies to extra hazard- 
 ous industries, but there is a provision that it may be made wider by consent. I 
 think there is no doubt the reason it was hedged about in that way was because it 
 was thought it would not be constitutional if made applicable fo the lesser indus- 
 tries. 
 
 Mr. Bancroft : That is the great difficulty over there. 
 
 The Commissioner : I do not see any machinery for collecting this tax. 
 
 Mr;. Wegenast: They have machinery, your Lordship. It may not be in 
 that act. but I have in my office copies of the first reports, and a good deal is 
 being left to the judgment of the Commissioners. A good deal is, of course, not 
 yet worked out. 
 
 The Commissioner: Their system enables it to be done more simply than 
 in this country. There they collect the State tax through local municipal organi- 
 zations. 
 
 Mr. Wegenast: I do not think they depend on State taxation. I think the 
 employer sends his cheque. 
 
 Mi:. Kim < e: At the present time there is an income tax law, and isn't it a 
 criminal offence to offend against that law? 
 
 The Commissioner: That is a municipal law. 
 Mi;. Bruce: Wouldn't it be as applicable as the other? 
 
 The Commissioneb No. if they are not going to do it through the munici- 
 pal body. You wouldn't want an army of officials going around all the time. 
 
 Mr. Bancroft: Why should you assume that, your Lordship? All legis- 
 lation that has had for it- objed the interest of the worker in any particular, that 
 has been the first argumenl generally used, that it will need an army of officials. 
 We nerd ;m army of officials for every piece of legislation, and surely there should 
 be no objection on that account. 
 
1912 WORKMAN'S COMPENSATION COMMISSION. 315 
 
 <. _ — i 
 
 The Commissioner: I should say it was a most cogent argument. In 
 democratic countries they are borne down by the weight of these parasites thai are 
 living upon the community. Thai is the trouble. 
 
 Mr. Bancroit: Which parasites? 
 
 The Commissioner: 1 am talking about an army of officials. They are 
 parasites. I don't use it offensively, but they are eating up the substance of the 
 people. 
 
 Mr. Bancroft: There are an army of parasites in connection with every 
 legislation, and it seems peculiar that it should be mentioned as to legislation 
 with regard to the workers. The same argument was used in Great Britain as here, 
 but it hasn't proved to be true. 
 
 The Commissioner : There is no use talking about legislation that at present 
 is merely experimental. They haven't got to the end of it. 
 
 Mr. Bancroft: Is it not possible to administer a Workmen's Act in Ontario 
 without an army of parasites? 
 
 The Commissioner : I am not talking about the AVorkmen's Compensation 
 at all. I am talking about State insurance. 
 
 Mr. Bancroft: The arguments that are used against workmen's compensa- 
 tion say that it is the workers that need education. The workers of this country 
 as well as any other country go to school until they are fourteen years of age, and 
 then they are sent out in the battle of life to earn their living, and they are subject 
 to all the economic conditions, and they are speeded up to the limit to earn a liv- 
 ing and to make the employer's profit, and Avhen an accident occurs they say the 
 workers need education. If the workers had the intelligence to-day that they ought 
 to have they wouldn't allow these things to stand for a moment. I feel that keenly 
 this morning. We have been asking for education for the workers from time 
 immemorial, and we are asking to-day, and it isn't given to them. It is not their 
 fault that they haven't got education to understand these things. That argument 
 might be used against protecting little children because they are ignorant, but the 
 legislation protects little children, and they haven't got education or anything 
 else. It is compulsory. From what we believe about legislation, it is to protect 
 the weak against the strong, it is to protect those that cannot take care of them- 
 selves, and if the workers are brought under economic conditions where they can- 
 not take care of themselves then it is absolutely necessary that there should be 
 some legislation in the nature of workmen's compensation. 
 
 The Commissioner: You are missing the point. You are making a moun- 
 tain out of a molehill. The point is, and Mr. Doggett has admitted it, that the 
 workmen are not so careful of the lives and limbs of their fellow men as thev ought 
 to be, and they need education on that. It is not a matter of want of knowledge, 
 or children having education ; it is a matter of teaching them what they ought to 
 do to protect the other men and to prevent an accident to the other man. 
 
 Mr. Bancroft : Then I think the point of Mr. Doggett's argument has been 
 missed, and I would ask Mr. Doggett- to explain that. 
 
 Mr. Doggett : I think I said previously the economic conditions that prevail 
 to-day, that men are living and working under make men do things that they 
 would not do under a different system. 
 
 The Commissioner: There is no doubt about that, but there is no use put- 
 ting our heads in the sand. There is no doubt that workmen are extremely careless 
 in their work, although they know if the work is hadly done it may jeopardize the 
 lives of their fellow-workmen. We must deal with conditions, not fanciful theories. 
 
216 MINUTES OF EVIDENCE: No. 65 
 
 i . 
 
 Mr. Meredith: I know in railroading every department tries to run its de- 
 partment as cheap as they can. Now, that is probably the fundamental principle 
 under which a great many accidents happen. The locomotive department tries 
 to run its department with as little money as they can, and the car department the 
 same, and the road department the same; and we find when an accident occurs 
 each one of these departments tries to lay the fault on the other. 
 
 The Commissioner: We are getting far afield. The question raised was a 
 question of scaffolds. The employer gives to his workmen material to put up a 
 scaffold properly, and they don't nail it properly or they don't put it into put- 
 locks properly, and that is what we want to guard against. That is what I under- 
 stood Mr. Doggett to speak of when he spoke of education needed by the working- 
 men. I think they need it. 
 
 Mr. Meredith: I think he said they skipped their work on account of eco- 
 nomic conditions. 
 
 The Commissioner : That would not appeal to me at all. It is not common 
 sense. No doubt there are a great many things a man does under the stress of 
 modern industry that he would not do if there was not stress, but there is no use 
 giving me the idea that every workman is angelic when everybody knows there are 
 careless men and reckless men in the business, and these are the men against 
 whom their fellow workmen require some protection. 
 
 Mr. Gibbons : There is one explanation I might make. As you are aware, 
 manufacturers and contractors are in business for profit, and the workmen recog- 
 nize the fact that the men who they retain in their service are those who bring them 
 the greatest profit, and a man who takes a lot of time in order to make things sure, 
 while he is doing that he is not making profit for the contractor, and therefore 
 they retain the men in their service who bring them a good deal of profit, and a 
 man rushes his work to hold his job. It is the economic conditions that bring that 
 about. You take a man and educate him so that he will make everything solid 
 and you will find he is not retained by the contractor very long, and rather than 
 lose his position he rushes the job as fast as he can, and while he is rushing the 
 job, while he may think it is all right, yet he hasn't taken time to see it is secure. 
 
 Mr. Miller: I would like to say in connection with this carelessness on the 
 workman's part one of the principles of the workmen's compensation is not only 
 to give compensation but to prevent accident. I want to say this too in connection 
 with the scaffold accident that Brother Doggett mentioned, if the contractor is 
 not going to supervise his work properly by putting a superintendent on each 
 building to see that the scaffolds are properly made, as well as all other parts of 
 work, then he has to suffer and should suffer for any accident that occurs on that 
 building. Now, the fact is that in many cases there is no proper supervision on 
 the smaller buildings in this city. The contractor himself goes around from one 
 job to another and he has many a time no recognized foreman on these buildings. 
 1 mean whore the buildings are only small, residential property, and so on, he 
 gives instructions and he £oos away, and those instructions may be carried out 
 to the belief of the workmen that they are doing what their employer wished them 
 to do. They always know for certain he wishes them to hurry and when he comes, 
 around again probably there has been an accident. Why? Because as 1 pay there 
 has not been proper supervision on that building. Now. the employer should bear 
 the onus of supervising his work in a proper manner and these accidents would be 
 prevented; and I think this workmen's compensation, if it is brought in at all for 
 the benefit of the workers and for the safeguarding of the workmen in their 
 employment, will certainly put the onus of supermten'ding the work on the 
 employiT. 
 
1912 WORKMEN'S COMPENSATION COMMISSION. 2Vt 
 
 The Commission ke : Surely you do not moan to put forward such a proposi- 
 tion that it a man has an experienced scaffold builder, and lie has got three men 
 working on a house, he has to go to the expense of employing a superintendent in 
 addition? 
 
 Mr. Miller: No, hut he should have a superintendent on that building all 
 the time. 
 
 The Commissioner: It would he utterly impossible. 
 
 Mr. Miller: It only means a matter of four or live eents an hour. I don't 
 think it is a very great hurden on the industry. 
 
 The Commissioner : The unreasonable demands that are made by some of 
 the working-men, or those who assume to speak for them, creates a prejudice against 
 their reasonable claims. They do not seem to recognize any man has rights 
 except the man that works with his hands. 
 
 Mr. Miller: 1 don't take that position at all. What I maintain is that if a 
 man is building a two or three storied house, from seven to twelve rooms, there 
 certainly should he a foreman on that building who should take the onus in the 
 absence of the employer for anything that is occurring on that building. That only 
 means a matter of four or five cents an hour. 
 
 Mr. Bancroft : I flunk those are tremendously strong remarks, your Lord- 
 ship. I should like you to give us an instance. 
 
 The Commissioner : I intended them to be as strong as I made them. 
 
 Mr. Bancroft: Your remarks are not based upon the experience of those 
 who know the conditions about which they are speaking, and I don't know of any- 
 thing that would call for the remark that organized labour is unreasonable in 
 respect to the rights of individuals 
 
 The Commissioner: Sit down, sir. You have no right to misinterpret me. 
 I have not said anything of the kind. I will not listen to you at all if you attempt 
 to misrepresent what I say. T wasn't talking about organized labour. I am talking 
 about certain people who assume to speak on behalf of labour, that they make 
 unreasonable statements which prejudice the reasonable demands of labour. I 
 know what I am talking about. 
 
 Mr. Doggett: We recognize the fact as workers that there are extremist- 
 on both sides. We are not all perfect, and we have not all been given the same 
 dispositions or the same ability. We recognise that. 1 am willing to admit that. 
 
 The Commissioner : It does me good to hear a man like you speak, Mr. 
 Doggett. It shows there is reason in the thing. 
 
 Mr. Doggett: I didn't just get through, your Lordship. I wanted to say 
 there are employers of labour who look upon a man who does use his hands as. prac- 
 tically speaking, insignificant, and takes no account of him at all, and they are 
 extremists as well. There are extremists on all points — we recognize that — but T 
 don't think there has been anything said here this morning that has antagonized 
 either interest, on one side or the other. 
 
 The Commissioner: At Cobalt I had a gentleman who did not hesitate 
 boldly to say that there must be eternal warfare between the employer and the 
 employee, and all he wanted was to get compensation on these lines as the thin 
 end of the wedge to upset the social order altogether. That is the kind of man 
 I am talking about. Gentlemen, when they come to discuss and make a law. have 
 to endeavour to discuss it fairly and try to look at both sides of the question, and not 
 to press unreasonable views or want to press home things that would not be fair to 
 the other side. I am not expressing any opinion as to what is fair, but T have 
 heard some remarks that seemed to me to indicate that the person who made them 
 
218 MINUTES OF EVIDENCE: No. 65 
 
 had not fully considered what he was saying and apparently was shutting his eyes 
 entirely to there being anything to be said upon the other side. 
 
 Me. Meredith : I think it would be a pity if there was any antagonism 
 here. I think we have come with the intention of trying to do the best we can for 
 everybody, and to make it good for the employer as well as the employee. I know 
 that is the object of the Brotherhood of Eailroad Trainmen. We are working as well 
 as we can in harmony. Of course when it comes to a matter of putting up the 
 wages the employer generally thinks it would be better if they could pay them on a 
 lower basis. Well, that is all right. That is his side of the question, and the man 
 has the other view. We are to-day as trainmen working to cut out double-head 
 trains. We consider it is one of the most dangerous things that is done perhaps 
 on the railroad to-daj, to run a train with two engines on it. I believe as a work 
 man that is so. As a railroad man I don't expect to ever run on them again. It 
 is the same in all these things, and yet they will run them because they think it 
 saves a little money. It saves a gang of men to run two engines on a train, and 
 yet perhaps if they worked the thing out with some one who understood figures 
 they would find there was nothing in it, and that they didn't make money on it. 
 But they think they do. I think most of the things we have suggested to the 
 Grand Trunk Railway — and I have been at it ever since there has been anything 
 of the kind, for perhaps I am the oldest Union man in Canada — I think that what 
 we have done, as a rule, worked out for the good of the company as well as the 
 men. To-day they are making more money on the railroad than they ever did 
 before, and I believe that the suggestions of the men have helped to bring about 
 this condition. 
 
 Mr. Dempster: As a student I have looked at this matter and tried to keep 
 myself unprejudiced, and I think I can reasonably say and truthfully say that I 
 •can look at it with an unprejudiced mind- But there is plainly here to-day a 
 pulling, a see-sawing, to get legislation, and one fellow wants to get the best of it. 
 Undoubtedly it is so. He says he hasn't had the best of it in the past. Now it is 
 most unfortunate when those who are in the industrial world (for I think the 
 employer, especially the small employer, and the worker are both ^together brothers 
 in the one thing), that as we have heard it said economic conditions are such that 
 the man who does the work for the least money gets the contract. Certainly the 
 public, those same people who are wage earners, buy where they can get the cheapest. 
 They have produced economic conditions. The man catering to them says : " Can 
 you make me a thousand of such and such, or so many dozen of such and such, at 
 a certain price ?" Very often they go to the workers and say : " Look here, we 
 have got to push this thing through." Machines break down and the compensa- 
 tion, where does it come from ? It comes out of what was considered a profit, but 
 which finally vanishes. Workers may break down, but when the work is finished 
 who has profited by it? I have tried to search for the profits and place all the pay- 
 ments for the same on the people who get the benefit, and I find the people, the 
 public, get the benefit of the workers in the industrial world's oxtremest exertions, 
 driven at a high rate of speed, and they have been working for the community just 
 as much, I find, as the army called military, and many others, and I have found 
 that if was a most unfortnnate thing that the worker should be left with litigation 
 ahead of him after he had been injured. There is despairing anxiety as to how 
 the litigation may come out, no matter how you fix this law, and the same will be 
 the case until the final arbitration boards decide: and then the solvency of the one 
 who has to pay for it comes in, and it will probably leave you at the latter end in 
 a worse slnie thnn when you started. It seems to me that the workers in the indus- 
 
1912 WORKMEN'S COMPENSATION COMMISSION. 219 
 
 trial world, and they are all one, the employer as well as the workman, because 
 compensation never pays for the injury that has he en done to the workman; ii 
 never pays it. I do not think there is any valid argument in the statement some- 
 times made that should compensation he easily obtained the worker will court 
 injury. A man is insane who does such. There is no employer but what would 
 almosl even risk his own life for the life of his employee. We see examples all 
 through the whole world to-day, in mining accidents, and so on. Where is the 
 man that will not risk his life to help another man, and yet we have heard to-day 
 arguments of men who actually place on one side one class of men as wolves try- 
 ing to eat the other. It is unfortunate such ideas are getting abroad. We are 
 human and we are brothers, after all, and I would take it out of litigation alto- 
 gether. I think the fact that the man can hold up an arm and show it is maimed 
 is sufficient proof that he should be compensated by the Government who in- the 
 name of the people should see that the worker in the industrial world should be 
 looked after. The people to-day look after them, but how is it done? Not in a 
 manner satisfactory. It makes the worker who has been injured, and we all 
 recognize that, live on the people to some extent. It may be selling small wares : it 
 may be friends who are charitable; but it makes them feel like a recipient of 
 charity, while he has given his life, and he has been sacrificed on the altar of 
 industry for the benefit of the people. Is he any less a ward of the State than 
 the man who has served in the Fire Department, or in many other Departments, 
 where the injured members are looked after at the public expense? I think it 
 ought to be taken away from the worker to feel that despairing anxiety over what 
 will be the result when he has been injured, and I would recommend, after looking 
 at this thing, not from a biased standpoint, but a fair standpoint, that the indus- 
 trial workers of the world should be looked upon as fairly as any other State worker 
 who gets pensions. But I do not believe in saying that the industries that are 
 hazardous should pay for all the expense. Why should they? There are other 
 industries that are less hazardous. There are men who have got to take the risk 
 owing to economic conditions. We hear it said to us repeatedly over and over 
 again, if you can't come to the mission fields, send us your money. Why should 
 those who have got the best positions in society, so far as industry is concerned, 
 not contribute to help those who are in the hazardous industry? I think it is only 
 fair. I commend this to your Lordship. I think the state ought to take away 
 from the workers this anxiety. It is always hedged around with considerable liti- 
 gation, and not by any means free from prejudice and heartburnings, yes. and 
 bitter feelings often for a long time afterwards, not only on the part of the injured, 
 but on the part of those who would be champions for such people. There is con- 
 tinually hitter strife with the employer and employee, and both of them when 
 you get close to them are nearer to each other than brothers, and yet there is one 
 trying to show the other is a wolf trying to eat the other. There are illiterate men 
 who need education ; they are on both sides. They have now inspectors who 
 look after machinery and who look after the interests of the workers to some 
 extent, and those who have taken the onus of providing compensation would look 
 to it that the means of protection were adequate and sufficient. The investigation 
 following the accident w r ould put the blame where it rightfully belonged, not on 
 the employer, because he was the employer, but on the man who was the cause of 
 tit, let him be employer or workman. A gentleman here said make it expensive, 
 but you would probably have to make it a. year in jail to have it expensive enough: 
 but I would commend the taking of this matter entirely away from litigation. 
 As I have said already, let the maimed or injured workman have argument enough 
 in the fact that he has been injured in order to obtain compensation. 
 
220 MINUTES OF EVIDENCE: No. 65 
 
 Me. Gibbons: Now, your Lordship, in all that has been said I don't think 
 there was any disposition to bring about the impression that every employer is 
 ,a man of that kind. We all know it is a matter of history that there are companies 
 in business for money, and in those cases we ask for legislation to protect them. 
 While they make rules they do not expect the workman to carry them out. While 
 they make rules they make conditions so that you can't carry them oitt and retain 
 your job. We do not refer to the fair employer. We are all aware of the fact 
 that there are fair employers and employers who, without any Compensation Act, 
 do the right thing by the man that is injured, but it is for the man who will not 
 do that. Now, as your Lordship said, for the man that has criminally brought 
 about an accident we don't say he should not be punished for it. We are not 
 speaking in general. We are speaking of extreme cases only. 
 
 Mr. Miller : When I spoke, Mr. Chairman, about the onus of the superinten- 
 dence being put upon the employer, especially in the building trade, I didn't intend 
 at all that it should be an inspector with a big salary going about doing nothing. 
 The kind of foreman I referred to in that case is this: it is where the foreman 
 works as well as the other men do and who is producing a good value for his wages 
 apart from his superintendence. Now, at the first sitting- of the Commission I 
 endeavoured to point out the burden that the insurance companies placed upon 
 private individual employers in the old country, and I gave you figures to show 
 that even private insurance companies didn't make it an unbearable burden on 
 the industries for the private employers who insured. We are advocating this 
 morning a State insurance to do away with the private insurance companies. 
 They are out to make all the profit they can, and we want the legislation to be of 
 such a nature that the workers will be compensated when injured, and that the 
 legislation shall safeguard the workman as much as possible by preventing accidents 
 happening. We do not want to appear this morning as if we were crying for the 
 whole loaf as it were. We know the employer has to live as well as we have to live. 
 We only want a fair share of the living, a fair and comfortable life, and we con- 
 tend that the workers are entitled to that and they should be safeguarded from 
 accident in their employment. When a man to-day is killed or dies from occupa- 
 tional disease, the family becomes a burden on the State in most cases, and in any 
 case it is the State that is bearing the burden because if a man's family has to go 
 to the Workhouse or the House of Industry for relief is it not the State that is 
 carrying the burden there? I have said nothing this morning with the intention 
 of antagonizing anybody whatever, and I do not think any of our friends around 
 the table have, and I should be sorry to think they did so. 
 
 Mr. Dempster: I think you have referred more than once to the fact that 
 there should, be proper superintendence. It would be difficult, I suppose, for you 
 to say what proper superintendence would be, but as far as I have seen it worked 
 out, say for the man who has two men earning $3 a day, you would have to put 
 another mar on who wouldn't come for less than $6, and that is putting too much 
 of a burden on it. 
 
 All;. Millee: My friend doesn't know anything about the condition of the 
 building trades. Tie does not understand what T meant. 
 
 Mi:. Dempstee: Bui speaking generally, T would think the burden would lie 
 too great. 
 
 Tin: COMMISSIONEE : He said he didn't mean a highly paid superintendent, 
 but a foreman who works and would superintend for a fow cents an hour more. 
 
 Mi;. MiLLEft: They do thai until the superintendence becomes too much. 
 When lie has got a dozen men under him then he is not expected by his employer 
 
1912 WORKMEN'S COMPENSATION COMMISSION. 321 
 
 io work with tools, but where there are only two or three or four. It is in those 
 cases where most of the accidents are occurring to-day, where there are only a 
 few men working on a building, and not where there are perhaps two or three 
 dozen men. The superintendents in those eases are more than efficient. These 
 men I am speaking of get four or five cents an hour more than the workmen with 
 whom they are working, that is all. 
 
 Mr. Dempster: Your whole argument leads to where Mr. Doggett has placed 
 it. We need intelligent workmen so that they get more of what they produce 
 instead of half of it going to the superintendent. 
 
 Mr. Dillon: AVe had one very had accident where we had a really good 
 superintendent, and we still have him. He can't watch everything. This man fell 
 and broke his hack and we were sued under the common law for $5,000. Sir 
 William Mulock was the judge and he gave them $1,500. The insurance company 
 defended the suit, hut they failed, and we were let in for $500 besides that. This 
 was under a superintendent. I don't know whose fault it was for it was hard to 
 get evidence to prove whose fault it was, hut it was a very had accident. It, I 
 suppose, cost us $2,000 which was more than we got out of the insurance company. 
 The doctor's hill alone was $600. There seems to be no law that they can col- 
 lect off you for doctor's bills, and the insurance companies very often won't pay 
 that doctor's hill, and other expenses. 
 
 The Commissioner: What rate is paid in the building trade for insurance? 
 
 Mr. Dillon : I think inside we pay 40 cents on the thousand. Outside we 
 pay $2. 
 
 The Commissioner: It is not done on the pay-roll? 
 
 Mr. Dillon : Yes, but it is separated. Outside work is more hazardous than 
 inside. The outside costs us $2 or $2.25 a thousand, or something like that. 
 
 The Commissioner: That is very much in excess of what it is under the 
 the Washington law. 
 
 Mr. Bancroft : The Washington law is .035 inside. It is less outside. 
 
 The Commissioner: Somebody was figuring up and, assuming that the 
 Toronto Railway wage bill was $1,000,000, all it would pay under this act would 
 be $365. 
 
 Mr. Wegenast: No, your Lordship, I think it would he $3,650. 
 
 The Commissioner: It is very hard to understand it. 
 
 Mr. Wegenast: I went into that thoroughly with the Commissioner over 
 there. 
 
 The Commissioner : A professor of mathematics makes it a different figure. 
 
 Mr. Wegenast: The figure that one would gather from the actual reading 
 must be multiplied by ten. 
 
 The Commissioner: That would be $3,650. It is 40 cents inside? 
 
 Mr. Dillon : I think that is what it is. I could get it for you. 
 
 Mr. Wegenast : In this particular case, Mr. Dillon, how much of the money 
 which was paid out either by you or the insurance company actually reached the 
 injured workman? 
 
 The Commissioner : He can't tell. Ask the lawyer. 
 
 Mr. Dillon: We paid $1,500 to the workman, and through a suggestion of 
 Sir William Mulock's we paid him $5 a week, and paid his hospital expenses. 
 Then he had several bills to the lawyers and different ones, and I don't think he 
 got more than $500 or $700 out of that. We paid the court costs which were $300 
 and something. 
 
22? MINUTES OF EVIDENCE: No. 65 
 
 Me. Wegenast : Were you insured in the ordinary form of employers' 
 liability insurance? 
 
 Mb. Dillon : In the Ontario Accident. 
 
 The Commissioner : You were worse off in that case where you had a super- 
 intendent ? 
 
 Me. Dillon : He is a first-class superintendent. 
 
 The Commissioner : If the three men had been working together then there 
 would have been no liability under the present law, if it was the fault of one of 
 them. 
 
 Mr. Miller: Supposing the workman was working on one building when 
 you insured him and you moved him to another building, would you be compelled 
 to reinsure him? Would your insurance be null and void if you took your work- 
 men from one place and put them on another where there was another contract? 
 
 Me. Dillon : Oh no, we are taxed on the pay-roll. We have to keep a sepa- 
 rate pay-roll for the inside and the outside men. 
 
 The Commissioner: It is a blanket insurance on your men when they are 
 working outside ? 
 
 Mr. Dillon: Oh, yes. 
 
 Mr. Wegenast: May I ask Mr. Dillon a question: How far does that 
 blanket insurance reach? Supposing it was an accident in which ten thousand dol- 
 lars damage was done, does your policy protect you, or would it only protect you 
 up to five thousand dollars? 
 
 Mr. Dillon : I think it protects us up to $5,000. I am not just sure about 
 that. 
 
 Mr. Wegenast : In order to get a larger measure of protection you must pay 
 a considerably higher rate? 
 
 Mr. Dillon: I don't know about that, I am sure. 
 
 The Commissioner : I was thinking of having somebody from one of these 
 insurance companies here probably Friday night to explain how that works. 
 
 Mr. Bancroft : I would like to ask Mr. Dillon if he would have any objection 
 to compulsory insurance if it covered all employers, similar to private insurance? 
 If it would not cost any more would you have any objection to State insurance? 
 
 Mr. Dillon : No, we have no objection to State insurance. I myself am in 
 favour of tnat. We don't care who we pay the money to, and we would be better 
 protected under the State than under the insurance companies. 
 
 Mr. Wegenast: Supposing the contributions were called insurance premiums 
 and paid to the State Insurance Department on a basis similar to what you pay 
 now to the insurance companies, but be compelled to pay that rate? 
 
 Mr. Dillon: We are almost compelled now to pay it to protect ourselves. 
 I don't think it would be sound business to carry it along unless we had some 
 insurance. I know some firms have a protection of their own. They put away a 
 certain sum of money, and they claim that is cheaper than insurance. 
 
 Mr. Wegenast: Would there be any widespread objection to that form of 
 insurance, to the Provincial Government saying to each employer in the building 
 trade, or whatever the trade might he, you must pay every year instead of your 
 accident insurance your liability insurance rate, you must pay a premium rate 
 of so much lo the Government and we will protect you from liability for injuries 
 to your workmen ? 
 
 Mr. Dillon: I don't think so. The only protection we get under the insur- 
 ance now is they protect us in the case of a law suit. It is very unfair, I think, 
 that way. They protect us against the case of a law suit, and very often they 
 
1912 WORKMEN'S COMPENSATION COMMISSION. 323 
 
 won't give a man anything unless he does go to law. That is the only protection 
 we have from the insurance companies. Of course they will pay up to $1,500 for 
 one accident. 1 would like to see some law where we could get away without a law 
 suit, so that the man that is hurt wouldn't have to prove anything. Let some arbi- 
 tration board or somebody prove that for him, so that he doesn't have to get 
 lawyers to prove it. 
 
 Mi;. Wegexast ; You have your men insured. You are not compelled to 
 insure, but in your private insurance which you carry there is a large measure of 
 waste as between you and the workman? The money which you pay out does not 
 actually go to the workman ? 
 
 Me. Dillon : Yes, that is it. 
 
 The Commissioner: Did you ascertain, Mr. Wegenast, in your enquiries 
 about this Washington law, how they hope that these rates which are lower than 
 the rates of insurance companies can provide a fund sufficient to pay for the losses, 
 when the region of accidents is so much extended as it is under the Washington 
 Act? That is to insure in the way in which the State insures, when these com- 
 panies require double the premiums that they get now, or more than that? 
 
 Mr. Wegenast : My information is that the rates are not higher. 
 
 The Commissioner: Which? 
 
 Mr. Wegenast : That the rates under the Washington Act are the fair rates 
 under such an act as in Manitoba and Alberta and Quebec. I have talked the 
 matter over with a number of managers of the liability companies and they say 
 these rates are fair average rates. 
 
 The Commissioner: It can't be so if Mr. Dillon's information is accurate, 
 because they are higher than 40 cents. 
 
 Mi;. Wixjenast: I think the rate in the Washington Act is in the neighbor- 
 hood of 3!/2 per cent, on the pay roll. 
 
 The Commissioner: That is 35 cents. The act does not read that way. 
 
 Mr. Bancroft : I think if you take outside structural work .065, if you 
 multiply that by ten and say $65 a thousand, you get at the rate. 
 
 Mr. Wegenast: 10 per cent, on the 1 pay-roll. 
 
 The Commissioner : That would put some men out of business. 
 
 Mr. Wegenast: Of course I am not advocating anything, but that has not 
 been the experience. 
 
 The Commissioner: They told me at Cobalt that the insurance company 
 charges them 2 per cent., I think. 
 
 Mr. Wegenast: That is only to carry the legal liability. 
 
 Mr. Bancroft: If you take .065 and multiply that by 10 and say it is $65 
 on the thousand instead of 65 cents, that would be enormous. 
 
 The Commissioner: That is $6.50 on the thousand? 
 
 Mr. Bancroft : Yes, that is better. 
 
 The Commissioner: I can get insurance in an accident company for $5 a 
 thousand. I can't now, for I am past the age, but I did carry it for a time. 
 
 Mr. Wegenast : That is only against a limited number of accidents. I don't 
 know what the basis of comparison would be. 
 
 The Commissioner : It covers some diseases as well. 
 
 Mr. Wegenast : Of course the intention under that Act was explained to me 
 by those who were instrumental in having it passed and those who were at present 
 administering it that the rates would be subject to adjustment, and that the 
 insurance will cost exactly what it costs. 
 
 Mr. Gibbons: Your Lordship's occupation is not as hazardous as some. 
 
224 MINUTES OF EVIDENCE: No. 65 
 
 The Commissioner : No, it would be higher no doubt for a brakeman on a 
 railroad. 
 
 Mr. Wegenast : There is power under the Washington Act itself to adjust 
 the rate. I may say this has been done now. The lumber manufacturers found 
 that their rate was somewhat higher than the rate which they had been levying in 
 a mutual society of their own, and under which they had worked out a scheme of 
 compensation. They secured the consent of the State Department to carry their 
 risk at their former rate, I think, without setting aside a capitalized amount to 
 meet future payments; simply paying the annual payments which were due under 
 the schedule of the Act, without setting aside the capital amount to meet each pay- 
 ment, and in that way they reduced their rates. 
 
 The Commissioner : I don't understand what that means, as to setting aside 
 an amount? 
 
 Mr. Wegenast : The capitalized value of a capital injury if one may so call 
 it. In the case of death it is $4,000, and when an accident occurs the sum of $4,000 
 is set aside during the year that the accident happened to meet, all further payment. 
 
 The Commissioner : Set aside by them ? 
 
 Mr. Wegenast: The Insurance Department. The Insurance Department 
 that year levies a sufficient amount to set aside $4,000 for each case that has arisen. 
 
 The Commissioner: On the particular establishment or manufacturer ? 
 
 Mr. Wegenast: On all the industries in that class. 
 
 The Commissioner: I do not so understand this act. Do you mean to say 
 in addition to paying this rate upon the wage-bill they also pay for every accident? 
 
 Mr. Wegenast : When a man is killed an application is made for compensa- 
 tion. The sum of $4,000 is set aside out of the general fund to meet that, and 
 that $4,000 is assessed upon the employers that year. 
 
 The Commissioner: Why should that be? They have paid the premium. 
 
 Mr. Wegenast: It is a matter of book-keeping. The sum of $4,000 is set 
 aside, and that $4,000 is levied that year. Now, these lumber manufacturers ob- 
 tained in this case, instead of setting aside that $4,000 for that year they would 
 simply pay the pensions under the act, which were due for that year, amounting 
 to about $240, or $20 a month for 12 months, so that that year's assessment would 
 be $240 instead of $4,000. 
 
 The Commissioner: I do not see anything like that in this act. 
 
 Mr. Wegenast: The provision is there. 
 
 The Commissioner: The man is paying twice over, according to that. 
 
 Mr. Wegenast : No, that is the assessment for the year, and there is only 
 one assessment. 
 
 The Commissioner: On the 1st of October or the 11th, whatever the date is, 
 I pay my cheque, the percentage on the pay-roll, and surely that ought to proted 
 me against any accident, whether fatal or otherwise, during the year. 
 
 Mr. Wegenast : Yes, but the premium is based on a capitalization of the 
 injury instead of being based upon simply the annual payment. All the employers 
 in the States must pay a rate to set aside $4,000 for each injury that arises for 
 that year, and the rate is based on the assumption that that $4,000 will be set 
 aside for the purpose. Where it set aside only $240 the rate of course would be 
 very much lower. 
 
 The Commissioner: I do not see anything like thai in the act. 
 
 Mr. Miller : Wouldn't that have the effect, Mr. Wegenast, of making the 
 insurance much more expensive in the experimental stage than it would later on? 
 
1912 WORKMEN'S COMPENSATION COMMISSION. 225 
 
 Me. Wegenast: The insurance rate would gradually rise as the number 
 of dependants increased, until such time as the older ones dropping off reached 
 the same rate as the new ones coming on. 
 
 The Commissioner: If they are taking the place of an insurance company 
 and paying the premium, I don't see why that doesn't pay. 
 
 Mr. Bancroft: I thought the definition of that was, when an employer has 
 paid his tax he has paid his yearly contribution, and that goes into the Revenue 
 Department of the State Insurance, and if there is an accident happens that year 
 and it is a permanent injury, according to the mortuary tables of the United 
 States $4,000 is the amount that is set against the permanent injury, and they 
 set $4,000 against that injury, and say $20 a month for a year is $240, and five 
 times that would be $1,200. You see that would go 15 years, which is the estimated 
 life of the person that was injured. It is to set aside that amount for the purpose 
 of guaranteeing the compensation as long as the person lived. 
 
 Mr. Miller: That is the idea. 
 
 Mr. Wegenast: I will deal with that in the brief that I expect to submit. 
 
 The Commissioner: Very well. 
 
 Mr. Bancroft: They set it aside to cover the compensation, according to 
 the mortuary life tables of the United States. 
 
 Mr. Wegenast: I was under the impression that that amount was set aside. 
 I haven't been able to lay my eyes on the section, but I am still under that im- 
 pression. 
 
 The Commissioner: You see in that way the State ought to make a lot 
 of money. This table is based upon the idea that it will pay for all the accidents, 
 and if they get that besides that will be in addition. 
 
 Mr. Wegenast : It is not besides' that. That rate is fixed on the assump- 
 tion that it will be necessary to set aside that amount as a reserve to meet future 
 payments, but if the act were framed in such a way that each year it would take 
 care of that year's pensions or periodical payments, then the initial rate at all 
 events would be much less. There is another provision in case of .death or total 
 disability, the monthly payment provided may be converted in whole or in part 
 into a lump sum payment, not in any case to exceed $4,000, on the theory, accord- 
 ing to the expediency of life, and so on, and that a monthly payment of $20 to 
 a person thirty years of age is worth $4,000. The rate is worked out on a capital- 
 ized basis, the injury being capitalized, and a sufficient amount being set aside 
 that will take care of it for the future. That is not the way the German system 
 is worked out. The German system started in with the idea of paying only the 
 year's pension and these pensions would gradually rise for a period of about 30 
 years, when they would reach the normal rate. 
 
 Mr. Bancroft: Before we close, I would like to say that the case we have 
 presented we have built up on the best evidence we could procure. I believe the 
 Friday night meeting would be better for labour in general to get here. 
 
 The Commissioner: There will be a meeting on Friday at eight o'clock, 
 and I think I will ask Mr. Neely, of the Ocean Accident Company, to be here to 
 explain how that insurance works. 
 
 Mr. Bancroft : If there is anything we can provide in the way of informa- 
 tion we will be glad to furnish it. 
 
 15 L. 
 
226 MINUTES OF EVIDENCE: No. 65 
 
 FIFTH SITTING. 
 
 Legislative Building, Toronto. 
 
 Friday, 29 th December, 1911, S p.m. 
 
 Present: Sir William E. Meredith, Commissioner.: 
 Mr. F. N. Kennin, Secretary. 
 Me. W. B. Wilkinson, Law Clerk. 
 
 The Commissioner: Are there any of the farming community here, or 
 anybody who would like to speak on their behalf? 
 
 The Secretary: I notice Mr. Waldron here. 
 
 The Commissioner : The proposition is by those who represent the employees 
 that this act should be like the British Act, applicable to farmers, and also to 
 domestic servants. The British Act as introduced by Mr. Gladstone accepted 
 that, and it was apparently struck out while in the House of Commons. Have you 
 any view upon that subject, Mr. Waldron? 
 
 Mr. Waldron : Well, I came rather to learn than to express any views of my 
 own. I have been looking into the matter. I started in with the lawyer's assump- 
 tion that we were getting on very well by progressive decisions fixing the law. 
 Later, however, I looked up some reports published by the International Committee 
 in Eome giving a synopsis of the legislation in various countries in Europe on this 
 question as affecting farmers, and I was surprised to see how far it had gone. They 
 have gone step by step, irresistibly apparently, and it appeared to me that it was 
 a very serious question for this Province. There is first the question whether the 
 farmers will be disposed to entertain legislation of this kind favourably, and as to 
 that I can only express my own opinion. I should think they would be jealous of 
 it. I should think when the matter was discussed they would regard the proposals 
 made by these gentlemen, which I have seen in the daily press, as class legislation, 
 as indeed it appears to me to be. It appears to me that the manufacturers are 
 seeking to distribute evenly over the community a burden which sometimes sits 
 heavily upon individuals, and that the labourers are seeking to secure more certain 
 compensation and more compensation than they are getting now. I should think 
 it would appear to the farmer when he thinks the matter out that the burden both 
 of compensation to himself and compensation to his own labourers would fall wholly 
 upon him, and may have important economical results. It may tend perhaps to 
 increase the difficulties of the farm labourer. It is likely to be followed, logically 
 followed, by sickness and old age insurance, which would appear to rest on the same 
 grounds or sentiments, and thus it might intensify the movement of labourers from 
 the land to the town, which is now becoming in my view the most serious public 
 question that we have. Perhaps we exaggerate sometimes, it appears to me, the 
 grievances of labour. Labour and capital seem to think they occupy the whole field, 
 and that there are no other interests in the country but theirs. But there is the 
 producer on whom they shift their burdens and whose profits they continually 
 struggle to acquire and divide as unequally as they can. We are doing in an 
 unorganized way something along the same line. We have our institutions of 
 charity and of relief, to which municipalities and individuals, and governments 
 contribute, and so we take care of the unfortunate. We are relieving them now 
 
1912 WORKMEN'S COM P KXSATION COMMISSION. 227 
 
 perhaps to a large extent by such legislation, but we may in the working out of these 
 things economically and socially merely create other social difficulties. However, 
 about that I speak with great modesty because it would need a very close study such 
 as might be facilitated by the report you will make, sir, to lead one to just con- 
 clusions. However, I should fancy the farmer would regard the whole thing with 
 suspicion and jealousy, and not without just cause. If he is well informed and if 
 he has good journalists to advise him as to the reasons. However, I am greatly 
 interested myself in the investigation, and I only regret that I don't know more 
 about it. It must be manifest to everyone that the grievances of #he labourer who is 
 injured in his employment are but a very very small portion of the griefs and woes 
 of society, that appeal to all reasonable sentiment and fine feelinged men, and if 
 we mend one wc must undertake the mending of others. The lawyer who works, 
 as these gentlemen use the phrase, with all the risks of employment, takes typhoid 
 fever and dies, leaving a wife and little children, is entitled to be compensated by 
 society when it is put, as it appears to be put here, upon mere grounds of fine feeling 
 and sentiment; because the law puts it on the grounds of the duty of one man to 
 another, and of negligence, and the like. I have no doubt you have had brought 
 to your attention the laws in the various European countries. 
 
 The Commissioner : A great many of them. 
 
 Mr. Waldron : I came across a little bulletin by the Bureau of Economical 
 and Social Intelligence, and I have three volumes here which contain information 
 on this point. It is published in Borne in three languages. 
 
 I would be much interested to know what the view of the labourers is as to the 
 scale of compensation ? I have not seen in the press anything as to that. 
 
 The Commissioner : What they have stated is that the scale of compensation 
 in England is too low, and they suggest that the scale should be raised here in 
 proportion to the difference between the rate of wage here and in England. They 
 have offered to submit figures of that at a later stage. They have submitted none 
 up to the present. 
 
 Mr. Waldron: I thought that was the crux of the question probably. I 
 see in one of these volumes in France an agricultural labourer receives in the case 
 of death, or his representatives receive in the case of death, 2,000 francs for an 
 adult male, and 1,000 francs for an adult female. They classify compensation 
 into death and total incapacity, or absolute incapacity, and two other degrees of 
 incapacity. There does not seem to be any provision for the sprained back and 
 pain and suffering cases such as we have before our courts here, where men suffer 
 minor injuries leaving no permanent injury. The compensation in Italy and 
 Germany and Belgium appears to be small compared with what I thought labourers 
 could ask for here. 
 
 The Commissioner : Assuming you start with the proposition that the risks 
 that an employee is under in his employment should be compensated for when they 
 result in accidents, by his employer, how logically could you distinguish in the class 
 of employer without making it class legislation? If a carpenter employing two 
 men and one of his men is injured must pay, why must not the farmer pay if he 
 has two men and one of them is injured ? I am putting it logically ? 
 
 Mr. Waldron : Oh, I don't see any logical difference. 
 
 The Commissioner : It struck me the only thing that could be said was that 
 practically in this country we had no farming on a large scale with machinery and 
 that sort of thing. Most of the farmers in this country employ not more than one- 
 man, or sometimes two. 
 
228 MINUTES OF EVIDENCE: No, 65 
 
 Mr. Waldron: In most cases none at all. 
 
 The Commissioner : Well, of course he is then in no trouble. The risks of 
 that employment are not at all as great as in industrial employments, such as 
 manufacturing. 
 
 Mr. Waldron : Somebody made the statement here in a recent meeting that 
 insurance companies say the risks are greater on the farm, and on reflection t 
 thought that was probably true. I looked at the report of the statistical regis- 
 tration of births and deaths, and there are 264 men die from accident on the farm 
 as compared with only 459 in the whole Province. 
 
 The Commissioner: The farming community are very much larger 
 numerically. 
 
 Mr. Waldron: No, the farming population has fallen very much below the 
 urban population. 
 
 The Commissioner: I didn't think that was so. 
 
 Mr. Waldron : Oh yes, that is so. The percentage is about 40 to 60, I think. 
 That is what is pointed out by those who have studied the matter. That can be 
 readily verified. 
 
 The Commissioner: In the case of a farmer employing one man of course 
 no question of common employment could arise, and even if he had two generally 
 the farmer himself is taking part in the operation, and if an accident happened 
 he probably would be responsible at common law. 
 
 Mr. Waldron: I speak with diffidence about that. The farm labourer has 
 not the benefit of the legislation. 
 
 The Commissioner : But supposing a farm labourer is injured by machinery 
 that is supplied by the farmer, then it would be almost a clear case of common law 
 liability. 
 
 Mr. Waldron: Yes. In those foreign countries I see they introduce the 
 farm labourer benefits. They applied it first, I think, in France to labourers 
 employed on the farm in working farm machines propelled by power. Then in a 
 subsequent act it is extended to labourers engaged in forests, and so on. It 
 
 gradually creeps in. 
 
 The Commissioner: If this thing were being discussed in the House by 
 those who represent farming communities I fancy they would not IodIc up Da it 
 favourably. In a discussion a case like this was put : A farm labourer is working 
 about the stable and a horse kicks him and kills him; nobody is at fault, and 
 nobody knew about it. Under the British Act there was compensation to be paid. 
 That would probably mean ruin to that farmer. 
 
 Mr. Waldron: Exactly. You must bear in mind the farmer's economic 
 condition. If you cut out the mere legal bearing of being an employer and owning 
 land, in the great majority of cases he is in the same class as the labourer, econom- 
 ically, and he can bear no additional burden. He has no power to add the cost of 
 compensation to his prices, because his prices are made in the world's competition, 
 and therefore he is jealous about anything that imposes a further burden upon him. 
 
 The Commissioner : Your arguments meet with those of the mining people. 
 They claim that they ought not to be in the same position as the manufacturer 
 because the world governs the price of silver, and they cannot raise it. 
 
 Mr. Waldron: It is unquestionably a strong argument. The manufacturer 
 is in a happy position, for he has a high tariff in this country. 
 
 The Commissioner: I thought you thought that was the worst thing that 
 could happen, that they would be better off in an open market? 
 
 Mr. Waldron: I didn't think it was the worst thing for the manufacturer, 
 
1912 WORKMEN'S COMPENSATION COMMISSION. 229 
 
 but ultimately it would be the worst thing. But 'he is in a happy position when the 
 demand is rapidly increasing with the incoming dwellers. He can name his own 
 prices within the limit of the tariff advantage. The farmer has no such advantage. 
 
 Mr. Kingston: Is there not this rather serious difficulty which will confront 
 you in any proposed legislation of this class for the farmer ? Probably, for example, 
 we will pay half the farmers do not employ labour at all. Supposing the proposed 
 State compulsory insurance were introduced and it were made to apply to the 
 farmers, it would probably make all these farmers contribute according to the 
 schedule adopted in the act. 
 
 The Commissioner : It would be only those employing labour. 
 
 Mr. Waldron : In France or Italy it says it does not apply to the farmers 
 who employ less than three men, I see, in one case. 
 
 Mr. Kingston : Some such provision would require to be made because a 
 great many farmers only employ a man, when they do employ labour, for a few 
 months in the year. The most of them get along with themselves and their sons. 
 
 The Commissioner: I fancy the principal difficulty would not be with the 
 Commission, hut in the House. I doubt very much that any proposition to bring 
 the farmers under this act would meet with approval. I recollect when the original 
 act was introduced which excludes agricultural labourers and domestic servants, 
 there were very strong arguments all over the House against bringing them in, 
 and some very peculiar arguments were adduced. 
 
 Mr. Waldron: I feel quite sure about it. 
 
 The Commissioner : However, we will have to propose what is right and 
 let the legislature do what they think best. 
 
 Mr. Kingston: There has been no demand from the farmer or the farm 
 labourer for this legislation. 
 
 The Commissioner: There is Mr. Bancroft, and Mr. Doggett, and Mr. 
 Meredith. 
 
 Mr. Meredith : I don't represent the farmers, but I thought when it comes 
 up in the House that the farmers' representatives would be more liable to pass the 
 act than they would be if they weren't included in it. I don't know whether Mr. 
 Waldron meant that the farmers who do not have more than two or three working 
 men would not have to pay towards this legislation, or whether they would not 
 get the benefit of it? 
 
 The Commissioner: I think you will find it is not the farmers, but the 
 men who want to bring the farmers in are the manufacturers. 
 
 Mr. Waldron : That is how it appears. 
 
 The Commissioner: If they could bring them in of course they would get 
 a much easier measure. 
 
 Mr. Kingston : I would take it that that would hardly be so, because if you 
 are going to prepare a schedule you have got to prepare a farmer's schedule and a 
 manufacturer's schedule. 
 
 The Commissioner: The farmer helieves in keeping things down all round. 
 
 Mr. Kingston : If you take the Washington Act as a basis you would simply 
 add another schedule to the act. 
 
 The Commissioner: I do not think you understand the farmers quite as 
 well as I do, or the farmers' representatives. 
 
 Mr. Kingston : I lived there for some years. 
 
 The Commissioner: I think Mr. Wegenast, if he was at confession, would 
 tell us. I don't want him to confess. 
 
 Mr. Wegenast: I am not going to confess, but I expect to have a state- 
 
230 MINUTES OF EVIDENCE: No. 65 
 
 ment here in a few minutes, if the time is opportune to give a statement, which I 
 made before the Bar Association. 
 
 The Commissioner: I see Mr. Neely here, and we wanted to get a little 
 information from him on the subject of accident insurance. 
 
 Where a manufacturer insures his employees upon what is the rate based? 
 Has it any regard to the wage-roll? 
 
 Mr. Neely : Yes, it is based upon the pay-roll. 
 
 The Commissioner: The average pay-roll of the year, or how do you get 
 at it? 
 
 Mr. Neely: The total pay-roll for the year. 
 
 The Commissioner: Have you seen the Washington schedule? 
 
 Mr. Neely : I don't know that I have, sir. 
 
 The Commissioner : It only includes hazardous employments. Mr. Wege- 
 nast, you said that that .035 meant what? 
 
 Mr. Wegenast : The word percentage is misleading. The word fraction or 
 decimal is better. It is .035 or .065 of the pay-roll. 
 
 Mr. Waldron : In Denmark there is compulsory insurance for all agricul- 
 tural labourers not exceeding a certain amount. In Italy only the agricultural 
 labourer with machinery and the forestry workmen are included. 
 
 The Commissioner : Will you please explain what you learned about that, 
 Mr. Wegenast? 
 
 Mr. Wegenast : It doesn't make any difference which you multiply the pay- 
 roll by, .065 or &y 2 per cent. 
 
 The Commissioner: But your accident rates are based upon accidents 
 arising from the negligence of the employer or somebody in superintendence. This 
 is much wider, covering accidents arising from any cause. 
 
 Mr. Neely: With a Compensation Act? 
 
 The Commissioner: Yes. There is compensation where the workman in 
 certain cases brings the injury upon himself. What is your experience with regard 
 to claims that are made, whether there are many that are exaggerated or many 
 that are without foundation? 
 
 Mr. Neely: Under Compensation Acts? 
 
 The Commissioner: Under the system that is in vogue here with insurance 
 companies? 
 
 Mr. Neely : Well, we deal with oases in Ontario and also in British Columbia 
 and also in Alberta. In the latter two Provinces they have Compensation Acts, 
 where in Ontario we have the Employers Liability Act only, and the common 
 law, so that we have rates varying in each Province. In the Compensation Act 
 Provinces not all the claims are made under the Compensation Act. A very large 
 proportion is still made at common law and for negligence. Generally the more 
 serious cases are made at common law. The chief reason for that we find is that 
 there is a speculative chance for larger sums, and the act gives an alternative in the 
 event of failure. It encourages speculation, and the man has nothing to lose by 
 trying at common law. 
 
 TriE Commissioner: Can he make an alternative claim? 
 
 Mr. Neely: The Provinces are somewhat different, hut they may award 
 compensation under the act, and it has generally been done. If there was no 
 such alternative, and we have one Province where it does not exist, Manitoba, we 
 find a great many more claims made under the Compensation Act, and there is less 
 litigation and less disputes, of all kinds. 
 
 The Commissioner: Well, what are the principal difficulties you have in 
 
1912 WORKMEN'S COMPENSATION COMMISSION. 231 
 
 dealing with claims? Is it as to whether an accident for which you are responsible 
 has happened, or whether the man has really been injured, or the extent of his 
 injuries ? 
 
 Mr. Neely: Well, the first real essential with us is to know that the man 
 has been injured in the occupation. Then it becomes solely a question of the 
 amount to which he is entitled. In dealing under the Compensation Acts we have 
 very little difficulty in arriving at those amounts, but in dealing with a case at 
 common law it is quite different. 
 
 The Commissioner : Do you find many fraudulent claims made ? 
 
 Mr. Neely: If you mean by fraudulent no foundation in fact, we don't have 
 many of those. 
 
 The Commissioner: Exaggerated claims. 
 
 Mr. Neely : A great many. 
 
 The Commissioner: Are there any difficulties in the way of getting a 
 prompt enquiry and determination as to the extent of the injury? 
 
 Mr. Neely: We do not find that very difficult in the larger centres where 
 we have facilities for making those inquiries. In the more remote sections the 
 reports are very often slow in arriving, and we have had a few accidents we do not 
 understand, and delays occur. 
 
 The Commissioner: Is the British Columbia Act modelled on somewhat 
 the same lines as the British Act? 
 
 Mr. Neely: Almost entirely. 
 
 The Commissioner: What difference is there in the rate for thaft Province 
 in this regard? 
 
 Mr. Neely : In the different trades it varies considerably, but I should say, 
 speaking generally, perhaps 50 to 100 per cent, more, there. 
 
 The Commissioner: I was told that the rate among the miners was 2 per 
 cent, on the pay roll. It seemed to be a flat rate of 2 per cent, charged on all 
 the mines at Cobalt. Mr. Dillon who is a builder here and contractor says, I 
 think, he pays $2.10 on the hundred for outside employees. That is carpenters 
 working at outside work, on scaffolds, and that kind of thing. It is much less 
 for men who are employed in the shop. 
 
 Mr. Neely: In mines in Ontario it would be $2, and carpenters it would 
 be $1.50. 
 
 The Commissioner: Whether they are employed indoors or out? 
 
 Mr. Neely: No, outdoors. It is a great deal less indoors. I think there 
 are very few that insure for carpenters employed in the shop. 
 
 The Commissioner: Are your rates often re-adjusted? 
 
 Mr. Neely : As frequently as we can find reason for it. 
 
 The Commissioner: Do you often find reason? 
 
 Mr. Neely: Oh yes, adjustments are going on constantly in certain classes. 
 
 The Commissioner : Do you take any farmers' risks ? 
 
 Mr. Neely : No sir, they don't insure so far as I know. 
 
 Mr. Waldron: Why? 
 
 The Commissioner: They don't want to insure I understand Mr. Neely 
 to say? 
 
 Mr. Neely: I don't think they ever have insured in this country. 
 
 The Commissioner: In British Columbia does the compensation extend to 
 farm labourers? 
 
 Mr. Neely: I think not. 
 
232 MINUTES OF EVIDENCE: No. 65 
 
 Me. Kingston: That is eliminated from all the acts? I do not think there 
 is any act in the Provinces that includes farm labourers. 
 
 Mr. Wegenast: I have a schedule here, Sir William, that I would like to 
 put before Mr. Neely, with your permission? 
 
 The Commissioner : Certainly. I would be glad if any one who is interested 
 here would ask any questions of Mr. Neely. 
 
 Mr. Wegenast: That gives the rate on certain industries in Quebec and 
 in British Columbia before and after the passing of the liability law. 
 
 The Commissioner: According to this in 1907, under the Employers' Lia- 
 bility law, bakers and biscuit factories were seven and a half to twelve and a 
 half cents. In 1908 under the Compensation Act it is $1.12 1 /£. 
 
 Mr. Wegenast : Yes. 
 
 The Commissioner: Bakers and biscuit factories under liability law 17 
 cents; British Columbia under Workmen's Compensation 89 cents; Quebec $1.37. 
 Brick-making 42 cerfts under liability law; $1.26 in British Columbia under Work- 
 men's Compensation; $2.10 in Quebec. Carpenters $1.50 under liability law; 
 $2 in British Columbia; $5 in Quebec. Stone quarries $2.10 under liability law; 
 $4.06 in British Columbia under Workmen's Compensation, and $6.25 in Quebec. 
 New York; carpenters under liability law $1.75; $5 under compensation, and 
 $1.13 under Pennsylvania Liability Law. Bridge building is pretty hazardous, 
 steam railroads are pretty high. 
 
 Mr. Wegenast : I understand from conversations with insurance men that 
 the insurance rates for Employers' Liability insurance would probably be in- 
 creased by fourfold under such an act as that of British Columbia or Quebec. 
 
 The Commissioner: Does not that seem to indicate that unless they re- 
 adjust the figures in the Washington Act they are going bankrupt? 
 
 Mr. Wegenast : They have practically the same rate. These rates are in 
 some cases higher. That is, the Employers' Liability rates there are higher than 
 the State rates. 
 
 I would like to have Mr. Neely express his views as to whether that is correct 
 or not. The general statement that I have heard is that the rate under a liability 
 law such as that in force in British Columbia would be four-fold the present rate 
 in Ontario approximately. It is difficult to strike an average I know, but would 
 you say that was correct? 
 
 Mr. Neely: I tbink that is incorrect, generally speaking, and I am quite 
 sure it would be wrong with the Compensation Act if it had certain limitations. 
 The one great reason why the British Columbia rates are so much higher than 
 the Ontario rates to-day is that there is this alternative — the man is entitled to 
 his compensation in any event, and he first tries at Common Law or Employers' 
 liability, and puts the employer or the insurance company, which is the same 
 thing, to a- very heavy expense of litigation. It is practically impossible to settle 
 the claim for a reasonable sum with the lawyers. They know they are going to 
 recover a certain measure of damage anyway, and the case has to be defended 
 and then finally pay in the end. Now, in Manitoba, that hardship is eliminated, 
 and the rates we have begun with the Manitoba Act are very much less than 
 British Columbia, and there is every evidence that as soon as we have a little 
 more experience we can reduce them still further, and it appears so far as we 
 can see now that under the Compensation Act in Manitoba the rates will not 
 be higher than they are in Ontario to-day. 
 
 Mr. Wegenast: You mean to say the rates in Manitoba under the new act 
 
1912 WORKMEN'S COMPENSATION" COMMISSION. 233 
 
 where compensation is given for practically all accidents unless they are due to 
 serious and wilful misconduct of the injured man — you say the rates in Manitoba 
 will not likely be any higher than in Ontario to-day? 
 
 Mr. Neely : As far as we can see at this time. 
 
 The Commissioner: You see in Ontario there is still the common law 
 liability. That is probably what is in Mr. Neely's mind. 
 
 Mr. Neely: Yes. 
 
 Mr. Wegenast: I don't undertake to set up my knowledge against Mr. 
 Neely's, but I wouldn't like to leave that statement unquestioned. However, I 
 am not prepared to challenge it now. The same thing would not apply however 
 in Quebec. 
 
 Mr. Neely: That is on an entirely different basis. The Quebec Compensa- 
 tion Act has departed from the lines on which all the Britisih Compensation Acts 
 originally have been drawn. Each Compensation Act in Canada, aside from 
 Quebec, has the privilege of capital settlement. There are absolute limitations, 
 except in one Province. There are ho annuities or anything of that sort. In 
 Quebec, the whole basis of the act is annuity and it is impossible to make a 
 capital settlement under the law. A man having lost any part of his anatomy, 
 no matter how small, is less than a whole man, and therefore as long as he lives 
 is impaired, and on that basis is entitled to compensation. 
 
 The Commissioner: Annually? 
 
 Mr. Neely: It is payable quarterly. 
 
 Mr. Wegenast: There is no difficulty under the Quebec Act, though, that 
 the employer is subject to any common law liability, and besides the liability 
 under the act is lower than that under the British Columbia Act, if my memory 
 serves me rightly, and lower than that of the Manitoba Act, I think. 
 
 What I am getting at is this schedule which shows for instance in the brick- 
 making industry, under the laws we have now, practically the rate was 42 cents, 
 and under the Compensation law in Quebec it jumped to $2.10. Now, I would 
 like, if I can, to have this schedule verified or otherwise. This is a schedule drawn 
 by Mr. Dawson, who is a consulting actuary in the city of New York, a joint 
 author with Mr. Frankel of a work on compensation, and it is only in the way 
 of verifying that schedule that I am raising the point. 
 
 Mr. Neely": I cannot be sure from memory that that is the exact rate, 
 although it looks as though it might be. 
 
 Mr. Wegenast : And so on down the list, The carpenters were raised from 
 $1.50 to $2 in British Columbia, and to $5 in Quebec? 
 
 Mr. Neely: Yes. 
 
 Mr. Wegenast: Blast furnaces from 40 cents to $1.36 in British Columbia, 
 and $3.90 in Quebec; glass factories from 42 cents to $1.26 in British Columbia, 
 and $2,10 in Quebec, the largest being quarries in which the rate raised from 
 $2.10 to $4.06 in British Columbia, and $6.25 in Quebec. Those rates look fairly 
 reasonable to you from a liability insurance standpoint? 
 
 Mr. Neely: Well, the Quebec rates as a whole are greater than in British 
 Columbia, but I didn't recall that any rate was so very much greater as appears 
 here. 
 
 Mr. Wegenast: It would appear there, though, that the estimate that the 
 present rate would be multiplied by four is fairly reasonable. 
 
 Mr. Neely: Not in all classes. 
 
 Mr. Wegenast: As nearly as you can strike an average, of course? 
 
 Mr. Neely : It is difficult to strike an average, for this reason, in Quebec 
 
234 MINUTES OF EVIDENCE: No. 65 
 
 I mean, that in certain industries the accidents that occur are more apt to cause 
 permanent disability than certain other industries, and where we have had to 
 deal with the rates have increased very much greater than in others. For in- 
 stance, in the stamping and pressing of metals with dies and such things where 
 fingers are lost, and hands are lost, and in rolling mills and works of that sort, 
 the risks proportionately have increased much more than in certain trades where 
 injuries are temporary and the people recover from them. 
 
 Mr. Wegenast: Then, I suppose in industries like the textile industries 
 where the injuries are usually of a minor character, and where, under the com- 
 mon law, or such law as we have here, there is little chance of recovery, the ratio 
 of increase would be much larger. 
 
 Mr. Neely : Yes, for the reason that in like hazards, in boot and shoe manu- 
 facturing and things like that, under the common law conditions a compara- 
 tively small percentage of accidents result in claims, and under a Compensation 
 Act a very large percentage, as high sometimes as 90 per cent., result in claims, 
 and that causes a much heavier increase in the rate. 
 
 Mr. Wegenast: Then in those industries where the hazard is great and 
 where there is recovery under the present law in Ontario in a larger proportion of 
 cases, the ratio of increase in the rate would not be so large? 
 
 Mr. Neely: Exactly. 
 
 Mr. Wegenast: The rate is already high and would not raise very much 
 more? 
 
 Mr. Neely: In the bridge building class, which I think is the highest class, 
 the rate in Quebec was actually reduced under this Act. 
 
 Mr. Wegenast: To what do you attribute that? 
 
 Mr. Neely : For the reason that when accidents occur in the bridge building 
 trade they are very very serious in any event, and their claims are made in large 
 amounts — have to be made. 
 
 Mr. Wegenast : That is under the common law the recoveries are for large 
 amounts, and now the amounts are reduced? 
 
 Mr. Neely: It is now on the basis of half the wage, and it has acted as a 
 relief. 
 
 Mr. Wegenast : In these more hazardous occupations, for instance, quarries, 
 where the rate under the liability law now is apparently about $2.10, it is likely 
 that the rate would rise as high at least as in British Columbia, where it is 
 $4.06, practically double, or perhaps even go to what it is in Quebec, $6.25. It 
 would be very likely in a hazardous occupation to double? 
 
 Mr. Neely : That would all depend upon the text of the act. 
 
 The Commissioner : The amount of the compensation. The limit of the 
 compensation ? 
 
 Mr. Neely : No, sir, riot entirely, if the workman was required to elect. 
 
 The Commissioner: But assuming he must get compensation and that only. 
 That is what I understood you to say, that if that were the law in this Province 
 you did not think the rates would be much increased ? 
 
 Mr. Neely: Not a great deal, I think. 
 
 The Commissioner: Now, if it is a fair question to ask you, supposing you 
 were asked to have a monopoly of the business on that schedule, could it be pro- 
 fitably run and all employers of labour brought within it? 
 
 Mr. Neely: It would require more of an actuary than I am to answer 
 that question. 
 
1912 VVOKKMK.VS COMPENSATION COMMISSION. 23! 
 
 Mr. Wegenast: That confirms what I said about the rate. Of course they 
 are set down there in percentages, 6y 2 per cent. That is the form of the report 
 that is put in under the Washington Act. 
 
 Mr. Neely : In fact, I doubt if any one could answer such a question where 
 the rates are constantly changing, as experience shows they should. 
 
 The Commissioner: I thought you said, Mr. Neely, looking at the same 
 thing I showed you, that it wasn't very different from the accident insurance 
 company rate? 
 
 Mr. Neely: Yes, but I didn't know to what sort of law this applied. 
 
 The Commissioner: There is the common law. 
 
 Mr. Wegenast: It depends on the amount of the benefits. 
 
 Mr. Neely: It depends on the benefits, the limitations, and the various 
 conditions in the act which will make for the cost of it. 
 
 Mr. Kingston : Might I make this suggestion, Mr. Neely, that most of your 
 liability rates applying to this Province are based upon the statutory limit of 
 $1500.00? 
 
 The Commissioner: Or three years' wages? 
 
 Mr. Kingston : To the ordinary rate I think they apply the limit of $1500.00, 
 except in certain cases where the higher rate is paid if the applicant for the in- 
 surance wants the increased indemnity. That is so, is it not, Mr. Neely? 
 
 Mr. Neely: The basis rate is $1,500.00. 
 
 Mr. Wegenast : In one accident, or one person ? 
 
 Mr. Neely: For one person. 
 
 Mr. Wegenast: What is the limit for any one accident? 
 
 Mr. Neely: $10,000. 
 
 Mr. Wegenast : Even if a man wants to have that limitation removed, and 
 if the limitation was $20,000, what increase will there be in the rate? 
 
 Mr. Neely: From $1,500 to $20,000. 
 
 Mr. Wegenast: Supposing the limit is now $10,000, and suppose a man 
 wants a policy which will raise that limit to $20,000, what increase will there 
 be in the rate? 
 
 Mr. Neely : It would depend upon the industry first. 
 
 Mr. Wegenast : For instance, in quarries ? 
 
 Mr. Neely: From memory I cannot say, but I should think about 15 per 
 cent. 
 
 Mr. Wegenast: I understood the increase was about 100 per cent. 
 
 Mr. Neely: No, it can't be. 
 
 Mr. Wegenast: I understood it was the practice to charge twice the rate 
 when they raised the limit. Perhaps I am mistaken. Perhaps I should say the 
 $1,500 limit, if that is raised to $3,000 in the case of each person, would the rate 
 be doubled then? 
 
 Mr. Neely: That would be about 25 per cent, additional. 
 
 Mr. Kingston : I don't suppose many of the companies would increase their 
 total liability above $10,000? 
 
 Mr. Neely: Well, it would depend upon the industry. 
 
 Mr. Wegenast: They would reinsure, I suppose. 
 
 The Commissioner: In your company, Mr. Neely, how many cases have 
 you where your limit of $10,000 has been passed? Has there been one? 
 
 Mr. Neely: Yes. 
 
 The Commissioner: Any more than that? 
 
236 MINUTES OF EVIDENCE: No. 65 
 
 Me. Neely : I don't think so. 
 
 Mr. Wegenast: I don't suppose you would be prepared to say what was 
 done in that one case? But it has come to my notice that cases of this kind 
 happen. In an industry in the city of Toronto where a fire occurred sixteen 
 persons were injured, and the liability company refused to settle the claim. I 
 don't know what company it was. The employers settled the claim on the best 
 basis that they could get, and after considerable dispute with the insurance 
 company finally got a settlement from the insurance company on the basis of 
 one half of what they had paid. 
 
 The Commissioner : How does that bear upon it unless the amount ex- 
 ceeded $10,000? 
 
 Mr. Wegenast : Now, the question that arises there, and that I suppose will 
 be raised sooner or later, is the disposition of the company and its policy where 
 the legal liability is not strictly defined. Perhaps the matter can be brought to 
 a point in this way. Is it the practice of liability companies to hold themselves 
 and their responsibility to the strictly legal liability of the employer, or do 
 they consider their insurance covers more than the legal liability of the em- 
 ployer ? 
 
 Mr. Neely : That is all they pretend to insure. 
 
 Mr. Wegenast: Then if an employer wishes to have his men insured for 
 something further than the mere liability under the law, if he wants his men 
 insured against accident, he would have to pay a higher rate? 
 
 Mr. Neely: It would be impossible to ins^^re a man against accident. We 
 only attempt to insure an employer against loss on account of the accident. 
 
 Mr. Wegenast: Against his liability to pay compensation? 
 
 Mr. Neely: That is all. We couldn't prevent the accident. 
 
 Mr. Wegenast : I am not speaking of that. You cannot prevent a death. In 
 insuring a man's life you don't assume that, but what I mean is, suppose the 
 employer is not legally liable you do not consider yourselves liable to pay the 
 claim. You put yourself in the place of the employer? 
 
 Mr. Neely: Exactly. 
 
 The Commissioner: Does that mean you recognize no moral claim? 
 
 Mr. Neely: I am speaking of our contract, sir. Our contract is to insure 
 the employer against legal liability. 
 
 Mr. Wegenast : 1 have a statement here if at any stage you care to hear it- 
 It bears directly on that question, and I would like to ask Mr. Neely some ques- 
 tions about it. It arises directly out of this. There is a page or two leading up 
 to it that I would almost have to read. 
 
 The Commissioner: Very well. 
 
 Mr. Wegenast: Practically all workmen's compensation legislation is an 
 effort to embody what is called the theory of 'professional risks.' Under this 
 theory the cost of human wear and tear is supposed, like the cost of machinery, 
 raw material, etc., to be thrown upon the industry and included in the price 
 charged to the consumer for the product of the industry. When we come to ex- 
 amine the different conpensation systems of the world we find three distinct 
 methods of applying this theory. These methods may respectively be termed the 
 individual liability method, the collective liability method, and the State liability 
 method. Every system in the world can be classified under one or other of these 
 heads. 
 
 Under an individual liability system the liability to compensate the work- 
 
1912 WORKMEN'S COMPENSATION COMMISSION. 23 
 
 !" 
 
 man is thrown upon the individual employer as an element of the relationship of 
 employers and employees. A term is imposed upon the contract of employment 
 by which the employer assumes an obligation, more or less extensive, to in- 
 demnify the workman for injuries received in the course of, or in connection 
 with, the employment. The injured employee looks for his relief to his employer, 
 who thus becomes an individual insurer of the workman against injury. The 
 principle of individual liability is illustrated in the English Workmen's Compen- 
 sation Act of 1897 as extended in 1906, and in the Acts which are now in force 
 in seven of the nine provinces in Canada, including the Province of Quebec. I 
 am aware that the act of the Province of Quebec was copied to a large extent 
 verbally from the law in force in France, under which a State guarantee system 
 is set up; but by the omission of the provisions of the French law respecting the 
 participation of the State, the Quebec Act was made merely a replica of the Eng- 
 lish Act couched in different phraseology. The English system .has also been 
 copied in other portions of the British Empire and in a number of States of the 
 United States. In all these jurisdictions employers within the scope of the laws 
 are required, regardless to a very large extent of questions of fault, to compen- 
 sate their employees for injuries received by them in the course of their employ- 
 ment. Employers are, of course, permitted, and in some cases encouraged, to 
 insure themselves against their liability for compensation by some form of in- 
 surance. 
 
 Right here, let me point out a vital distinction between the two classes of 
 insurance, a consideration of which is involved in any discussion of the subject 
 of workmen's compensation. There is, on the one hand, accident insurance, and 
 on the other employers' liability insurance. A great deal of confusion in dis- 
 cussions of the subject is due to a failure to distinguish the two types of insur- 
 ance, and superficial theorists who have advocated the so-called voluntary in- 
 surance system as against the so-called compulsory insurance system, have argued 
 that the employer who finds himself under the heavy obligations imposed by an 
 individual liability law will almost inevitably resort to insurance. This is in one 
 sense true, but the insurance which the employers thus effect is not of a type 
 which affords any great protection to the workman. It is true that some em- 
 ployers under these systems take out real accident insurance policies for the 
 benefit of the workman injured or the family of the workman killed. Such insur- 
 ance may cover the risk of injury in the course of employment only, or may be 
 extended to any accidents to the workman regardless of the occasion. 
 
 I understand that to be the case, Mr. Neely. There is a form of policy 
 which I think they call a workman's collective policy, under which the company 
 assumes not only the legal liability of the employer, but also assumes the burden 
 of insuring the workman against all accidents. That is what I want to get at. 
 
 Me. Neely : We have various kinds of policies. 
 
 Mr. Wegenast: That is not, then, a strictly liability policy? 
 
 Mr. Neely: We call it a workman's collective, meaning a collective accident 
 policy. 
 
 Mr. Wegenast: Then what I wanted to get at was the difference in the 
 rates of insurance. What difference would you make, for instance, on the pay- 
 roll of a stove foundry, between insuring the men against all accidents, and in- 
 suring only the employer against liability to pay compensation ? 
 
 Mr. Neely : Well, the difference would rest entirely upon the nature of the 
 legislation under which we had to deal with the liability case. The terms of an 
 
238 MINUTES OF EVIDENCE: No. 65 
 
 act, the common law, and such things, all govern the rates of liability insur- 
 ance. The physical hazard alone governs the rate of personal accident .insurance. 
 
 Mb. Wegenast: What I want to get at is, there wouldn't be anything to 
 prevent your company issuing a policy. I suppose . 
 
 Mr. Neely: I would be very glad to give you an idea, but it is entirely 
 impossible until one knows the law about which you are speaking. 
 
 Me. Wegenast: Take under the present law in Ontario. What ratio would 
 there be between a workman's collective policy, under which the workman is insured 
 against accident, and a liability policy under which the employer is insured against 
 liability. 
 
 The Commissioner : You eliminate one of the important features of our act, 
 that it is only in the case of negligence that the employer is liable. 
 
 Mr. Wegenast : I understand that, but I am trying to get some sort of basis 
 to build on. I don't want to press the matter. 
 
 Mr. Neely : Well, in different occupations or industries of course that 
 difference varies. Take the carpenters' and builders' trades, my recollection is where 
 $1.50 is the rate in Ontario for employers' liability, the collective policy is about $2. 
 I am just speaking from recollection. That is in that trade. 
 
 Mr. Wegenast : What I have read, I may say, your Lordship, is what I read 
 before the Bar Association yesterday. The Association, I believe, passed a resolu- 
 tion to pass it on to your Lordship, but I protested against that for reasons that 
 are probably apparent. I would not have brought it up now if it was not that the 
 subject had been opened up. I go on to say that it is true that some employers 
 under these systems take out real insurance policies for the benefit of the workman 
 injured or the family of the workman killed. " Such insurance may cover the risk 
 of injury in the course of employment only, or may be extended to any accident to 
 the workman regardless of the occasion." 
 
 These collective policies would not cover the man who happened to be injured 
 putting up a set of pipes outside? 
 
 Mr. Neely: If they paid for it. 
 
 Mr. Wegenast: That would be a third policy? 
 
 Mr. Neely: No, a similar policy with a higher rate. 
 
 Mr. Wegenast: " The essential feature of this class of insurance is that it is 
 the workman who is insured. The large bulk of employers, however, for reasons 
 which are quite apparent, insure, not the workman against accident but themselves 
 against liability for accident. And this practice has occasioned the development, 
 in all jurisdictions where the compensation legislation takes the individual liability 
 form, of a system of employers' liability insurance. Under this type of insurance 
 the employer insures not the workman against accident, but himself against liability. 
 Liability insurance bears to accident insurance a relation analogous to that which 
 would exist between a policy under which a man should insure himself against 
 legal liability for non-support of his wife and children, and an ordinary accident or 
 life insurance policy." 
 
 The Commissioner: What connection has that? 
 
 Mr. Wegenast: The insurance company in the case of liability insurance 
 assumes absolutely no moral obligation, as you have suggested, sir It simply 
 insures, and stands in the place, and subrogates itself to the position of the employer, 
 and takes up the burden that he would otherwise have borne, and takes up the 
 defences such as they may be that the employer has, and I thought it might be well 
 to emphasize that, and get Mr. Neely to confirm it. 
 The Commissioner: He has already said that. 
 
1912 WOEKMEN'-S COMPENSATION COMMISSION. 239 
 
 Mr. Neely: I would like to answer that a little more explicitly since the 
 question has been asked. The insurance company sells a certain contract which 
 is the kind of contract that the purchaser wants to buy. Now, if the purchaser 
 being an employer wishes to cover these moral obligations, these charitable obli- 
 gations or humanitarian obligations, the company is quite prepared to issue him 
 such a contract, but when the employer tells us that he is not willing to pay for 
 these things at all, that he wants the bare price of his legal obligation, we give him 
 that price and we give him that contract. 
 
 The Commissioner: Would it make any difference supposing a case of this 
 kind. Take this International Harvester Company with 2,500 to 3,000 men, and 
 they came to you and asked you to write an accident policy on 3,000 men. Would 
 your rates be any cheaper than if I came, being in the same employment ? 
 
 Mr. Neely : Being a larger risk ? 
 
 The Commissioner: You get 3,000 risks in one case. Would the rates be 
 much lower? 
 
 Mr. Neely: If we were writing personal accident insurance it would. On 
 the collective insurance basis it would not, because the expense rate contemplates 
 the same on both. Where individual policies are written on those 3,000 men the 
 work attendant upon it, and so on, is very extensive. 
 
 Mr. Wegenast: There is another feature of the rates I would like to ask 
 about, Mr. Neely. The origin of liability insurance, so far as Anglo-Saxon juris- 
 dictions at all events are concerned, I think was after the Chamberlain Act of 1880. 
 
 Mr. Neely : Yes, it began in England about that time. 
 
 Mr. Wegenast: And your company, being one of the largest companies in 
 England, I suppose took it up at that time? 
 
 Mr. Neely: Yes. 
 
 Mr. Wegenast : Now, what do you say as to the correctness of the basis 
 of rates on which you started, and the alterations which you found necessary in 
 those rates as you gained experience under the act? I don't want to put it in the 
 form of a definite question. 
 
 Mr. Neely: Do you mean, were the changes upwards or downwards? 
 
 Mr. Wegenast: Did you find, for instance, that you could really strike a 
 proper rate at first? 
 
 Mr. Neely: It was all speculative at first. 
 
 The Commissioner: Of course they went on the high side. 
 
 Mr. Wegenast : Is that a fact, Mr. Neely ? 
 
 Mr. Neely : The records of the companies have shown that they have gener- 
 ally been on the wrong side. 
 
 The Commissioner: At the start? 
 
 Mr. Neely: Even with the increasing rates they have not got them high 
 enough. 
 
 The Commissioner : Not making any money ? 
 
 Mr. Neely : One of the very large companies in the States doing a business 
 of over $1,000,000 of premiums annually showed a net underlying loss last year 
 of over 3 per cent. 
 
 The Commissioner : I would like to know how many law suits that company 
 has in its solicitors' hands? 
 
 Mr. Neely : Something over 4,000. 
 
 The Commissioner : That is where the trouble comes. 
 
 Mr. Neely : That is exactly what I tried to say in the beginning. It is the 
 enormous waste that is caused to the insurance companies or the employer, being 
 
240 MINUTES OF EVIDENCE: No! 65 
 
 the same thing, through the misunderstanding of the act, and through it being 
 impossible for the workman and the employer to agree. That is what causes these 
 high rates and these high losses. If a Compensation Act were enacted giving reason- 
 able benefits to the workman that are clearly defined, having reasonable limitations, 
 ■and making it alternative if he chooses to make his recovery at common law he 
 forfeits his right to compensation, there would be a great reduction in the cost and 
 no hardship to the workman. 
 
 The Commissioner : Why should not the odd workman here and there that 
 might have a common law action give up the right for the sake of the many getting 
 a better compensation ? 
 
 Mr. Neely: I don't know that it is necessary that he should be required t» 
 give it up before the event, but after the event it does not seem a hardship that he 
 should be required to determine then how he is going to proceed to recover. 
 
 The Commissioner: You see he has certain rights at common law. Now, 
 if you give him additional rights that he would not have, giving him the right to 
 recover where he could not recover at all at common law, would it not be just in 
 return to ask him to surrender his common law right? 
 
 Mr. Neely : I think where that has been tried very serious objections have 
 been found to it, on the ground that he should not be asked to surrender his 
 common law right except voluntarily, but where the compensation was given to 
 him through a legislative act it was quite proper he should not be entitled to that 
 compensation if lie saw fit to pursue his other claim. 
 
 The Commissioner: That would involve a hardship. If a man thought he 
 had a claim at common law and failed in that then he would be without a remedy. 
 That seems a pretty harsh result. 
 
 Mr. Neely: He always has the opportunity of taking that common law 
 right before he takes action. 
 
 The Commissioner : But perhaps he does not find out before he is on the 
 last heat that he has been on the wrong track? 
 
 Mr. Neely: Our experience in Canada under these acts has shown where he 
 must elect that very few cases that are brought at common law fail. 
 
 Mr. Wegenast : Do you find that borne out by the statistics in England ? 
 
 Mb. Neely: I am speaking of Canada. 
 
 Mr. Wegenast : What I understand his Lordship wants to know is the 
 possible effect under a compensation law such as they have in England. Here the 
 conditions are of course entirely different. 
 
 Mr. Neely: T understand from our people in England that common law 
 claims are quite exceptional now under the existing act. 
 
 Mr. Wegenast: The workmen prefer to take the certainty under the Com- 
 pensation Act rather than the uncertainty at common law. 
 
 Mr. Neely: Yee, and that would be so here if, as I say, the Commission 
 required to look after the accidents 
 
 Mr. Wegenast: What effect would it have on the rate? It would still have 
 an effect on the rate if the common law right of action remained open? 
 
 Mr. Neely: As an alternative? 
 
 Mr. Wegenast: Yes. 
 
 Mr. Neely : I think the rate might be increased somewhat. It would not be 
 increased anything like the present British Columbia rate. 
 
 The Commissioner : Of course it must be increased because there is a greater 
 risk. 
 
 Mr. Neely: There are a greater number of claims out of one hundred 
 
1912 WORKMEN'S COMPENSATION COMMISSION. 211 
 
 accidents that would result no doubt, but the average cost of each claim would be 
 very much less. Now, under employers' liability conditions and negligence con- 
 ditions such as we have in Ontario, we find the percentage, we will say, of about 
 40 to 100 where claims are made. Under Workmen's Compensation conditions the 
 percentage increased at once until we expect from 80 to 90 per cent., but a great 
 many are for very small sums. The first week or two weeks elimination, which 
 most Acts carry with them, prevents a large number of petty claims. They are 
 claims of temporary disability, three, four, six, eight, and ten weeks, and so forth. 
 The amounts are comparatively small and the money goes directly to the claimant 
 without cost. 
 
 The Commissioner: A statement has been made here, and made elsewhere, 
 that the present law is practically useless to the workman and does not help him. 
 I would like to know if you could tell us off hand in what percentage of cases you 
 have defended you have succeeded? 
 
 Mr. Neely: I couldn't give you that correctly. 
 
 The Commissioner: Was it very small? 
 
 Mr. Neely: It is very small. It is quite the exception that we succeed in 
 the defence. 
 
 Mr. Wegenast: Speaking of the rates in the United States, I think you 
 mentioned that the American companies found that the rates are still inadequate 
 and that there are no profits in the business of liability insurance. What would 
 you say as to the conditions in England at present? 
 
 Mr. Neely : The same report comes from England, that the business is not 
 profitable at the present rates. 
 
 Mr. Wegenast : So that that means if you are to get any profits the rates 
 would have to be raised? 
 
 Mr. Neely : In England, yes. 
 ' Mr. Wegenast : Now, I have here a statement copied from one of the leading 
 scientific journals of England, on which I am not able to lay my hands for the 
 moment. It is taken from a report of the Board of Trade showing the percentage 
 of premiums that are paid into employers' liability companies that are actually 
 paid out in the form of benefits to the injured persons or their dependants, and I 
 see here that there is still credited to commissions and expenses under the English 
 system 35.91 per cent, of the premium. Could you say anything as to the correct- 
 ness of that? 
 
 Mr. Neely : I think that is about correct. 
 
 Mr. Wegenast : So there is nearly 36 per cent, of the money paid out by the 
 employers that does not reach the workmen? 
 
 The Commissioner: We had the figures at Cobalt, and it is very much 
 greater. The amount that the person injured received, or his dependants, was very 
 much less than went in other directions. I have forgotten the figures. 
 
 Mr. Wegenast: There might be a condition, your Lordship, where, as in 
 England, the employer is, so to speak, stripped of his defences, and his chances of 
 being able to defend are lost. It might tend to lessen litigation to strip him of 
 defences, and induce settlements in a larger number of cases where there is a good 
 defence, but still in England apparently 36 per cent, of the money that is paid out 
 does not reach the pockets of the workmen. 
 
 Mr. Neely: I do not think that is exaggerated. 
 
 Mr. Waldron : Does that include the expense of litigation ? 
 
 Mr. Neely: Yes, all expenses. 
 
 The Commissioner: The expenses of getting business also? 
 16 L. 
 
242 MINUTES OF EVIDENCE: No. 65 
 
 Mr. Neely: Yes. Eliminating the expense of getting the business it is 
 very doubtful whether any concern, whether it' is a private corporation or otherwise, 
 could conduct its business for a smaller ratio than the insurance company. The 
 stock interest necessary looks after the expenditure and the directors are looking 
 after the expenditure, and all things are curtailed as much as possible. The one 
 charge of getting business is something which might be eliminated where there is 
 State insurance. 
 
 Mr. Wegenast: But apparently the ratio ought to be still larger to allow 
 for some profit to the stockholders, because you say the business is being run at 
 a loss. The additions to the premiums would necessarily be added entirely to that 
 
 35 or 36 per cent. 
 
 The Commissioner : I did not understand Mr. Neely to say it was run at a 
 loss, but the rates were not high enough to make a fair return. 
 
 Mr. Wegenast : Yes, but any added expense would have to be added to that 
 
 36 per cent. It would not decrease what went to the workman or his dependants. 
 
 Mr. Neely: I don't quite understand you. 
 
 Mr. "Wegenast : The increase in the rates is not for the benefit of the work- 
 man. He would not get any more for each individual claim by the increase of 
 the rates? 
 
 Mr. Neely: The presumption is he is getting what he is entitled to. 
 
 Mr. Wegenast: The tendency is not to increase the efficiency of the Eng- 
 lish Act, but to decrease it. 
 
 Mr. Neely: It is not a question of affecting the act in any way. It is 
 as affecting the business end. 
 
 Mr. Wegenast: I am speaking of the act as an agency for putting in the 
 pockets of the workmen the money that is paid out by the employer. There is 
 still apparently 35 or 36 per cent, that goes astray, and if there is an increase in 
 it it would be still more. 
 
 Mr. Neely: Is it presumed by anyone that insurance operated by the State 
 could be done for nothing? 
 
 Mr. Wegenast : I am not speaking of that, Mr. Neely. I am just speaking 
 of the general point there. Then there is another point I would like to raise if 
 this is the time to do it. A liability insurance system is not compatible with a 
 system where the payments are periodical. That is, a liability company would 
 not assume the payments of weekly or quarterly or monthly amounts. Their de- 
 sire is to commute the payments and wipe them off the books. 
 
 Mr. Neely: On the contrary the liability insurance is better in the case of 
 deferred and annual payments because the liability insurance company under the 
 supervision of State Departments is required to make certain deposits and guar- 
 antees and is a far safer institution for the workman to draw from than the in- 
 dividual manufacturer who might be out of business to-morrow, and he has nothing 
 to get. 
 
 Mr. Wegenast: Do you as a matter of practice in England, your company 
 being one of the largest in business in England, assume the payment of these 
 weekly periodical payments. 
 
 Mr. Neely: Yes. 
 
 Mil Wegenast: You have the men coming to the office drawing their 
 weekly payments? 
 
 Mr. Neely: Yes. 
 
 The Commissioner: You do it in Quebec too, don't you? 
 
 Mr. Neely: Yes. 
 
1912 WORKMEN'S COMPENSATION COMMISSION. 243 
 
 , . — > 
 
 Mr. Wegenast: I understood the contrary was the case, that your policy 
 
 was to commute. 
 
 Mr. Neely: Our company is an annuity company. We are qualified to 
 
 sell those annuities. 
 
 Mr. Wegenast: Then what is the practice of other companies in employers' 
 liability business? Do they all assume the burden of paying these? 
 
 Mr. Neely: As far as I know. 
 
 Mr. Wegenast: So that the employers' liability companies here in Tor- 
 onto, and other liability insurance companies here are making pension payments 
 •under the system where the liability would be thrown directly on the employer? 
 
 Mr. Neely: Yes. 
 
 Mr. Wegenast: The injured persons would get their cheques for that? 
 
 Mr. Neely: The Compensation Act in Quebec has contemplated that one 
 ihing by providing that upon application of the workman in the case of a per- 
 manent disability, the employer may be required to pay into an insurance com- 
 pany a capital sum, and the annuity paid, and the insurance company being the 
 ■one qualified has to be the custodian of the fund and pay out the annuities. 
 
 Mr. Bancroft : There is just one thing, your Lordship, I would like to ask 
 Mr. Neely, and that is if this would represent the conditions as the company has 
 found them in Canada since the introduction of the Compensation Acts in the 
 different Provinces that are modelled somewhat along the lines of the British Act. 
 It says here speaking about Europe particularly that, "it is everywhere testified 
 by Government authorities, by employers, employees, and managers of insurance 
 ■companies, that the introduction of bills for the workmen's compensation for 
 industrial accidents was at first a very disturbing element owing to the fact that 
 the insurance companies had no accurate knowledge of the hazards they were 
 asked to cover. 
 
 " While at first great difficulties arose about proper rates of premiums, and 
 others, not so serious about accommodating the policies of companies to the new 
 conditions, the general result of the legislation has been good, and in nothing 
 is this more evident than in its effect upon employers' liability insurance. Thus, 
 a materially larger proportion of the premiums paid by employers is now directly 
 applied to the indemnification of employees. This includes reserves which must 
 necessarily be set up to meet the unexpired liability under the policies, the accrued 
 but unmatured liability for annuity payments to dependants or to those totally 
 disabled, and periodical sums remaining to be paid on account of temporary dis- 
 abilities. In fact the percentage of claims to premiums varies from 60 per cent. 
 to as high as 70 per cent, or even 75 per cent, instead of from 40 per cent, to 
 50 per cent, as previously." 
 
 Mr. Neely: I think that is the tendency. 
 
 Mr. Wegenast: This refers to the passing of the Workmen's Compensation 
 Acts. 
 
 Mr. Bancroft: In the percentage of claims after the passing of the legisla- 
 tion to which we have all been referring, which is English legislation, they vary 
 now from 60 to as high as 75 per cent., whereas formerly under the employers' 
 liability insurance they were only 40 to 50 per cent. 
 
 Mr. Neely : Yes, we find in the Provinces where there are Compensation 
 Acts the money that reaches the workman's hands is a much greater per cent. 
 than under the old conditions. 
 
244 MINUTES OF EVIDENCE: No. 65- 
 
 - - , 
 
 The Commissioner: Do you find, Mr. Neely, where those Acts are in 
 force that you deal more often directly with the injured man than with the 
 lawyer ? 
 
 Me. Neely: Ye®. 
 
 Mr. Meredith: In the Brotherhood . of Trainmen we have nearly 120,000 
 men insured, and I can go hack a great number of years. We used to pay $2 
 a month; which would be $24 a year. We used to insure a man for $1,350, and 
 we never paid any more than $2 into the insurance, and that was able to main- 
 tain an insurance against death and against total disability for railroad work. 
 That is, if a man took consumption, or if he got sick in any way so that he couldn't 
 follow his occupation, he would get this $1,350, and if he lost a hand or a foot 
 he was entitled to the same thing. If he lost his eyesight he would get it. Now, 
 we have never found any difficulty in keeping that up, and last year or the year 
 before last we were able to increase that indemnity to $1,500 instead of $1,350. 
 We gave that voluntarily. We found we were accumulating on that $24 a year 
 proposition, and as you know we insured all these yard-men and men in the most 
 hazardous occupations in the world. I think that is conceded. We feel that 
 this thing can be done all right, that there is no trouble whatever in carrying 
 these things out. We sometimes have a little difficulty. A man will put in a 
 claim when he is not injured as much as we think. I have taken a man to a 
 doctor outside of his own doctor, who has reported he was disabled, and asked him 
 to pass upon him, but it is very seldom that we ever get taken in, and very seldom 
 we turn a claim down; and we feel that could be carried out in every case. I 
 don't see if it can be carried out among railroad men, the very worst class of 
 risk, as I think our friend Mr. Neely would say, that other bodies couldn't. Tn 
 fact, I recollect the time they wouldn't insure a man. If I wanted to insure my 
 life against accident when I was a trainman running on a train they simply 
 wouldn't give it to me. They would give it to a commercial traveller or a man 
 travelling on the train, but they wouldn't give it to me. They thought my occupa- 
 tion was too hazardous to get a thing like that. Now, I think we can get this 
 thing up. I think Sir William is trying to find out how this thing can be run 
 smoothly and for the interests of everybody, and I think that is only right. T 
 don't believe in pressing another man to increase my riches or the amount of 
 liability for myself. I have always been one that has said that a man should 
 take his own liability. That is one of the troubles we find amon? the working- 
 men. to assume the liability, to come into the Brotherhood of Trainmen for 
 instance. We have a job to persuade men in their best interests, and yet when 
 they come in they feel perfctly satisfied it is for their best interests. I don't 
 know how Mr. Neely would look upon that payment, that is that $1,500, and assume 
 all those liabilities, in the case of switchmen and brakemen and conductors — I 
 don't know whether that rate is higher than his rate. I can hardly figure it out 
 on the basis you put it on, but we were able, as I say, to give another $150 more 
 than we were giving, simply on a flat rate paid every month. 
 
 Mr. Neely: Of course our rates are never blanket rates in the form that 
 you describe. Our rates are based upon the hazard in each occupation. I couldn't 
 say without some little calculation just what the average cost would be to train- 
 men, for the yardmen and the freight brakemen, which is the highest, down to 
 the passenger conductor. There is a very wide difference in the rate, and just 
 what the average would be if they all came in I could not say without some 
 calculation. 
 
1912 WORKMEN'S COMPENSATION COMMISSION. 215 
 
 The Commissioner: What is the highest, Mr. Neely, in the case of yard 
 brakemen? 
 
 Mr. Neely: The rate is $27 a year I think for $1,000 of insurance. 
 
 Mr. Meredith : We give $1,500 and pay $24 a year, and we are accumulating 
 
 money. 
 
 The Commissioner : You must take the low in as well. 
 
 Mr. Meredith : Ours are all high. 
 
 The Commissioner: Doesn't it include the conductors? 
 
 Mr. Meredith: No, the conductors have a rate of their own. They pay 
 a little less than the brakemen or switchmen. 
 
 Mr. Neely: A freight conductor would be $15 for $1,000. 
 
 Mr. Meredith : That is something similar. 
 
 Mr. Wegenast: I see the rate under the New York law was $10 for train- 
 men, steam railways. 
 
 Mr. Kingston: It is straight accident insurance. 
 
 Mr. Neely: The passenger conductor I think would be $10. 
 
 Mr. Kingston: Is it true in practice the liability companies do not carry 
 the risk for any steam railway? 
 
 Mr. Neely: For the public? 
 
 Mr. Kingston : For the public, or employees. 
 
 Mr. Neely: I think they carry it themselves, as far as I know. 
 
 Mr. Kingston : So there are practically no statistics on which one could 
 form a conclusion in that business? 
 
 Mr. Neely: No. 
 
 Mr. Meredith: In the Grand Trunk every man is insured, and it varies. 
 Sometimes I am insured in the $500 grade and sometimes it comes down and 
 my monthly payment will be 40 cents. That is the very lowest, but it very 
 rarely goes higher than 80 cents. That is for $500. $1,000 would be of course 
 just about double that, and you can go up as high as $2,000. 
 
 The Commissioner: What would you think, Mr. Bancroft, of the Italian 
 scale of remuneration, $400 isn't it, 
 
 Mr. Bancroft : Of course, your Lordship, in assessing all these payments 
 of the different countries we have to recognize the fact that the wages and cost of 
 living vary considerably. 
 
 The Commissioner : The scale of living is perhaps more in some countries. 
 
 Mr. Bancroft : And you know the wages vary. Wouldn't that be true, Mr. 
 Neely, where you have information about insurance in the various countries, you 
 find the wages of the workmen are considerably different. 
 
 Mr. Neely : Yes, it makes a great difference. 
 
 Mr. Bancroft : I was looking up some months ago the telephone wiremen, 
 and their wages in Sweden, I believe, are only about one-third, I think, of what 
 they are in Canada. It would make a tremendous difference in Sweden. 
 
 Mr. Wegenast : The insurance would be so much higher. 
 
 The Commissioner: Are you able off-hand to sa} r , Mr. Neely, how the 
 wages in England compare with the wages in Ontario? 
 
 Mr. Neely : I could hardly answer that. I have had nothing to do with 
 the English insurance except as I would have it from our people. 
 
 Mr. Wegenast : The higher the wages the lower the premium rate. 
 
 Mr. Neely : Of course the premium rate is applied to the wage. The 
 higher the percentage of indemnity of course the higher the rate. In England 
 
246 MINUTES OF EVIDENCE: No. 65 
 
 the scale is half wage, and the maximum is a pound a week. In British Columbia 
 it is half wage, and the maximum is $10 per week. Now, we find in British 
 Columbia a very peculiar condition existing. Most of the workmen in British 
 Columbia receive more than $20 a week in the skilled trades, and a man receiving 
 say $25 a week or $27 a week does not care very much for $10 a week indemnity, 
 and when his first two weeks are eliminated there isn't the same inclination to 
 make a claim under the Workmen's Compensation Act that there would be if he 
 had a fair measure of damage, and that seems to be a hardship in British Columbia, 
 and I think it has militated against the success of the act. If they had a limita- 
 tion that allowed a larger percentage of cases to come within the half wage it 
 would be better. 
 
 The Commissioner: Does that mean that a man goes back to work sooner 
 than he should? 
 
 Mr. Neelt : No, it means he is more inclined to take his chances at common 
 law or employers' liability. 
 
 Mr. Waldron : I see in one of the European countries that the total indem- 
 nity is fixed as an annuity equal to 30 per cent, of the average savings of the 
 man for his lifetime — the average wages. Would that be a good indemnity? 
 The Commissioner: I don't see how you could work that out. 
 Mr. Waldron : An annuity the value of which would be calculated as 30 
 per cent, of his average wages. 
 
 The Commissioner: That would be an annuity for his probability of life, 
 capitalized ? 
 
 Mr. Waldron: Yes, they capitalize it apparently. They might capitalize 
 it as 30 per cent, of his wages during his expected life. 
 
 Mr. Kingston: The Washington system would be an improvement on that, 
 where they put $4,000 as a maximum, but it is based upon the American table 
 of mortality as adopted by the insurance companies, the amount being ascertained 
 by taking $20 a month and capitalizing it. Of course the amount would be greatly 
 lessened as the age of the injured or deceased was greater. 
 
 Mr. Wegenast: The capitalized value is arbitrarily fixed at the age of 30 
 years. They take the capitalized value of an annuity of $20 of a person aged 30 
 years. Then they take their chance of the age being higher. 
 
 Mr. Kingston: If a person was killed who was under 30 years of age there 
 would be a possibility of getting $4,000 ? 
 
 Mr. Wegenast: Yes, a little more than $4,000, and a diminution if the 
 man was 50 years old. 
 
 Mr. Kingston: Then it would probably not amount to more than $1,500 or 
 $2,000. 
 
 Under the British Columbia Act which Mr. Neely has spoken so much about, 
 the system there is that an action is a sort of drag net action. They can claim in 
 one writ under all three systems, and if they fail on the one which gives the great- 
 est remedy possible, they can hang on to the next one, and if they fail on that one 
 they are sure to stick on the Compensation Act which gives a certain remedy. 
 
 Mr. Wegenast: That is practically the English Act under which if a man 
 sues at common law he can still have his compensation assessed under the Act, 
 with some penalty in the matter of costs. 
 
 Mr. Kingston: In British Columbia it goes further than that. You SHe 
 under one action, claiming under the common law, but if you fail under that you 
 can claim under the original workmen's Compensation Act which is similar to 
 
1912 WORKMEN'S COMPENSATION" COMMISSION. 247 
 
 our present act, and if you still fail in that then you can come under the new 
 Compensation Act. 
 
 Me. Wegenast: I think that is the same as in England. 
 
 The Commissioner: Under our law the dependants in the case of a fatal 
 accident would not be limited as they are here, in the Washington Act. If 
 a widow or an invalid widower survive, a monthly payment of $20 shall be 
 made throughout the life of the surviving spouse to cease at the end of the month 
 at which remarriage shall occur, and the surviving spouse shall also receive $5 a 
 month for each child until the child reaches the age of 16, but the total monthly 
 payments under this paragraph shall not exceed $35. Now, under our law they 
 might get a great deal more than that. 
 
 Me. Wegenast: Not more than $20 to $35 a month. 
 
 The Commissioner: They might. 
 
 Me. Kingston: Capitalize that and you get a good deal more than our law 
 would give. 
 
 The Commissionee : That would depend on the age of the surviving spouse. 
 
 Me. Kingston: Does it? 
 
 The Commissionee : No, but it would in this country under a fatal accident. 
 The capital amount she would get as a dependant would be less the older she was, 
 of course. 
 
 Me. Neely: The point that the insurance companies, and apparently the 
 legislators, overlooked in dealing with the Quebec Act, and I may say with the 
 French Act, was the actual value of these annuities. They did not realize that the 
 small sum, $5 a week, on a person say under $30, being capitalized, amounts to a 
 very large figure. The $5 a week in itself seemed to be very small, but when 
 you capitalize these sums and pay them off the total cost of the compensation is 
 enormous. Our company started to do business in France at the time that the 
 French Act became effective, and the rates were advanced very radically, three 
 times, and to-day no insurance company is doing business in France, it has become 
 such a burden. 
 
 Me. Waldeon: The State does everything? 
 
 Me. Neely : Yes. In Quebec the same thing occurred, although we have 
 not seen the outcome of it ; we have only been doing it for a year. 
 
 Me. Wegenast : As to the Quebec Act there is some doubt as to whether the 
 payments cease when you reach the limit of $2,000, or whether they still continue? 
 Is that not the case? 
 
 Me. Neely: There is doubt on the subject because the matter has never 
 been decided by the courts. 
 
 Mr. Kingston : Does that doubt arise under that section which says under 
 certain conditions of gross negligence on the part of the employer the $2,000 may 
 be increased. 
 
 Me. Neely : That was one clause which rendered it doubtful, but there is 
 another clause whioh makes it still more doubtful. The basis of the act is an 
 annuity. It speaks of annuities throughout. Then it speaks of the capital of the 
 annuities and it is so inconsistent to say a person shall be entitled to an annuity 
 of a certain percentage of the wage, meaning for the rest of their lives, for annuity 
 means for the lifetime, and then say it should be capitalized at $2,000. There are 
 several ways of looking at it. One is if the annuity, we will say, was $10 a week, 
 or say $500 a year, it would take a very few years to consume $2,000. Then we 
 must either say that the annuity is to be reduced to a sum which applied to the 
 
248 MINUTES OF EVIDENCE: No. 65 
 
 expectancy of the life of the man will equal $2,000, which is a contradiction in 
 itself, or we might say it is not an annuity at all, that it is a simple payment last- 
 ing for a limited number of years until that $2,000 is exhausted. 
 
 The Commissioner : Could it be intended to give to the workman the right 
 to elect to take the $2,000 in lieu of the annuity? 
 
 Me. Neely: There is nothing in the act to permit the workman to accept 
 the capital sum. The workman may in case of permanent disability apply to the 
 court to have a capital sum paid into an assurance company from which he received 
 an annuity. 
 
 Mr. Meredith : He could not get it without applying to the courts ? 
 
 Mr. Neely : He can't get it in any event. 
 
 The Commissioner: In England under the British Act he can by leave 
 of the court, I think. 
 
 Mr. Wegenast : Or by an agreement filed I think he can get the annuity 
 paid to himself personally. 
 
 Mr. Neely: Not the annuity, the capital. 
 
 The Commissioner: I do not think so. I have noticed several applications 
 that were made. 
 
 Mr. Wegenast : That is within the discretion of the County Court judge. 
 
 The Commissioner: Yes. 
 
 Mr. Wegenast : But there is provision for commuting. 
 
 The Commissioner : What do you think, Mr. Neely, would be the best 
 tribunal to determine these cases, for ascertaining the claim, and the amount of it? 
 
 Mr. Neely : I think the courts by all means. 
 
 The Commissioner : That is expensive, is it not? 
 
 Mr. Neely : I think it need not be expensive if the procedure is carefully 
 prescribed and made as simple as possible. 
 
 Mr. Meredith : I would like to say, Sir William, our experience of going 
 to the courts is very bad; what we call taking it to law. I can cite the case of a 
 man down on Adelaide street here, where his son was killed by a car falling on 
 him. He was attending to the air brake under the car, and the engine came along 
 and knocked it over and killed him. It was on the Canadian Pacific railway out 
 at West Toronto Junction. They offered the wife something like $1,500, and 
 the father-in-law thought that was rather a small sum for the way in which it 
 occurred, on account of no fault whatever on the part of his son, and he took it 
 to law. I was talking to him the other day, and I think the widow and child 
 got something like $500 or $600 after everything was paid. That shows what it 
 means by taking it to the courts. 
 
 The Commissioner: He should have taken the $1,500. 
 
 Mr. Meredith : I advised these people, take whatever is offered to you, don't 
 go and put it in the courts, because you will get nothing at all the chances 
 are, and if you do get anything it will be very little. 
 
 The Commissioner: I suppose under the British Act ninety-nine cases out 
 of a hundred are tried by the County Court judge without a jury, and there is no 
 appeal on the questions of fact, only on the questions of law, and judging from what 
 Mr. Bancroft said that would suit the workers. 
 
 Mr. Bancroft : But, your Lordship, would it not be right to say that the 
 British Act so clearly specified what the county judge can do, he can do very little 
 but what the law specifies, and there are very few appeals. 
 
 The Commission i:k : I think you will find nearly half the cases in the House 
 
1912 WORKMEN'S COMPENSATION COMMISSION. 249 
 
 of Lords have been workmen's compensation cases. Of course it is a new law and 
 they are getting the points settled, but it is surprising the number of cases that 
 go up on the questions of law. It is a question of law whether there is any evidence 
 at all, and sometimes a judge goes wrong in determining that there is evidence 
 to show that the accident was within the act. 
 
 Mi;. Wegenast: Have you any experience, Mr. Neety, under the British 
 Act? Do you know anything of the working out of it under the British Act — 
 arbitration, and so on? 
 
 Mk. Neely : Not more than having heard it discussed. 
 
 Me. Wegenast: You haven't heard the strictures of Mr. Logie, who, I 
 believe, is your solicitor? You haven't seen his article on the pit-falls of law for 
 the litigant? 
 
 Mr. Neely : I have seen them. 
 
 Mr. Wegenast : Your solicitor then, in England, who is perhaps more 
 familiar with the working of the act than anybody else, is not sparing in his 
 condemnation of the adjudication features of the act. He does not condemn the 
 courts: he condemns the act and what is made necessary by the complexity of the 
 act. 
 
 Mr. Waldron: The Italians propose in regard to agricultural insurance — 
 they extend it to infectious diseases, that is death caused by these, contracted by 
 contact with the animals and soil, and sun strokes and thunder bolts, etc., classi- 
 fied as risks of occupation. 
 
 The Commissioner : For which the employee has to be compensated ? 
 Mr. Waldron : I presume so. 
 
 Mr. Wegenast: That is a State insurance system. State insurance fixes it 
 upon the employer. The employer pays the premiums which cover these risks. 
 Mr. Neely : Those are called occupational diseases. 
 
 Mr. Kingston: The Germans have worked that out in a satisfactory way 
 so far only as the first two weeks are concerned. The fund from which compensa- 
 tion for those first two weeks is taken is collected by a contribution of, I think 
 it is, two-thirds from the workmen and one-third from the employer. That is for 
 the first two weeks only. 
 
 Mr. Bancroft : The first thirteen weeks. 
 
 Mr. Kingston: Yes. After that they automatically switch over to the other 
 fund which is contributed to entirely by the employer. 
 
 The Commissioner : There is nothing in case it does not last for more than 
 two weeks? 
 
 Mr. Kingston : Yes. That feature is introduced into nearly all the Acts 
 which are modelled after the British Act. In British Columbia, Alberta, Manitoba, 
 Newfoundland and New Brunswick there is no compensation for in some cases the 
 first week and in some cases two weeks or ten days. 
 
 Mr. Neely: In arranging for the practical working out of such an Act it 
 seems absolutely necessary that there should be some short period during which 
 there should be no compensation, to prevent malingering, or prevent taking holidays 
 at the expense of someone else, or anything of that sort. It must be a more serious 
 case to require a man to give up his employment for two weeks. There is not so 
 much chance of affecting an accident. 
 
 The Commissioner: I understood from Mr. Bancroft there was no such 
 thing as malingering, that it did not exist in the industrial army. 
 Mr. Bancroft: No, I think not, your Lordship. 
 Mr. Mi^iedith : In soldiering we have known a man to cut off his front 
 
250 MINUTES OF EVIDENCE: No. 65 
 
 finger. That is a fact. He has actually chopped off that finger himself, so that 
 he would not be able to pull the trigger of his rifle. Now, that is malingering. 
 Now, I haven't met any of that kind of thing in the industrial army. To say a 
 man will go and put himself in a position to lose his hand or his foot for the sake 
 of getting insurance. I think it is a slander on mankind. 
 
 Mr. Bancroft: I think Mr. Neely could tell us in Great Britain, in the act, 
 that there is a time specified in which a man shall not receive compensation, but if 
 his injury goes over that time it dates to the first day. 
 
 The Commissioner: Yes, there is no doubt about that. 
 
 Mr. Neely: That is not objectionable. 
 
 Mr. Wegenast: Would it from the accident insurance standpoint do equally 
 well if there were during that period of two weeks, or whatever it is, a fund to which 
 the workmen contributed to take care of the injured man so as to bring home to the 
 workmen himself pecuniarily the burden of malingering. Under the act of the 
 State of Washington as originally brought in there was what was regarded as a 
 penal fund for the first two weeks to which the employers and employees contri- 
 buted at the rate of two cents a week each. They fixed that arbitrarily for all 
 occupations, and this fund was supposed to take care of the injured man for the 
 first two weeks. Would that from the insurance standpoint be as effective in pre- 
 venting malingering as the cutting of the workmen out of all compensation during 
 those two weeks? 
 
 Mr. Neely : I think it would be very effective, because then the fund would 
 have the moral protection of all the other workmen. The main difference in the 
 experience of stock insurance and mutual insurance is in that one fact. 
 
 Mr. Wegenast : That is the feature to which you attribute the success of 
 mutual insurance as against stock insurance? 
 
 Mr. Neely: That is one of the great differences, yes, the moral protection 
 of all workmen against the man who attempts to impose on the fund. The fund is 
 safeguarded. The stock insurance company, or the employer, has not that support. 
 
 The Commissioner: That is only one of the things. The way they are 
 managed has a good deal to do with it. 
 
 Mr. Neely: The cost of getting business. 
 
 Mr. Wegenast: And also the success in contesting claims, of course. 
 
 The Commissioner: The British Act is, if incapacitated less than two 
 weeks no compensation shall be paid in respect c»f the first week. 
 
 Mr. Kingston : I think one or two of the provincial acts adopt that same 
 provision. I am under the impression that either Alberta or British Columbia, 
 or both, have it, absolutely eliminating the first two weeks. 
 
 Mr. Neely : No; Quebec eliminates the first week. 
 
 Mr. Wegenast: That again would have considerable effect on the rate be- 
 cause a large proportion of the accidents are for only temporary injuries. 
 
 Mr. Neely: Of short duration, yes. 
 
 The Commissioner: Surely there would be no justice if the incapacity lasts 
 for ten weeks if at the end of the time he should not be paid for it. 
 
 Mr. Neely: It would be perfectly reasonable to pay from the beginning if 
 it lasts. It is to prevent a three or four or five days claim of a man taking a 
 short holiday, and he can afford to lose half his wage, and the employer has to pay 
 the cost, when he is suffering from no real serious injury. 
 
 Mr. Wegenast: There would be this inducement, that a man who was legi- 
 timately ten days off would stay in bed for two weeks or more in order to get the 
 whole amount. 
 
1912 WORKMEN'S COMPENSATION COMMISSION. 251 
 
 The Commissioner: Why would lie stay in bed, unless he was a lazy man? 
 
 Me. Kingston: With reference to this question there is a point comes up, as 
 to the wisdom or otherwise of eliminating the right of foreign relatives of a 
 deceased man to make any claim upon the compensation fund. The system has 
 grown up in this country, and there are several gentlemen in Montreal who thrive 
 greatly on it, of taking up these cases. They represent the foreign element in the 
 whole of Canada, consuls of some of those European countries, and they succeed 
 usually in finding out a dependent relative in the Old Country. No doubt in many 
 cases there may be foundation for the claim, but I should not think that there 
 should be a great deal of sympathy displayed in a Compensation Act for foreign 
 relatives. I am not now referring to relatives who are British subjects, but for 
 instance in Eoumania and Bulgaria and Turkey. 
 
 The Commissioner: Your idea, Mr. Kingston, would be, let them starve if 
 you don't see them starve? 
 
 Mr. Kingston : These people do not contribute anything to these people in 
 the Old Country while they are working here, but as soon as they are killed then a 
 claim is bolstered up by some of these gentlemen who pretend to represent the 
 father or mother in the Old Country. 
 
 The Commissioner : Still there are very many cases where these poor 
 Italians are working here and sending money home to their wives and families, 
 and it would be pretty hard where they are killed to refuse any compensation. 
 
 Mr. Kingston : I would limit that to a case of that kind where the wife 
 and dependent children are living in Italy. That might be an exception that would 
 be all right. 
 
 Mr. Wegenast: Under the Quebec Act they do not get any compensation 
 unless they live in Canada. 
 
 The Commissioner: I think that is so also in British Columbia. I do not 
 like the look of that kind of legislation. 
 
 Mr. Bancroft: The danger that has arisen from that part of the act in 
 British Columbia is that it has been decided that a man's dependants living in 
 Manitoba, and the father or husband living in British Columbia, are not entitled to 
 compensation. 
 
 Mr. Kingston: That is the Manitoba Act, I think? 
 
 Mr. Wegenast: In Europe it has been found better to deal with that by 
 treaty, because if you give the dependants of an Italian compensation and the 
 Italian law does not give it to the injured Canadian that would be unfair. Of 
 course that is an extreme case. It would not arise between Canada and Italy, 
 but it illustrates my point. It is considered a matter of treaty amongst nations, and 
 a matter of getting reciprocal rights. 
 
 Mr. Doggett : There is a matter of $30,000 of claims in dispute which is 
 being taken to the Privy Council by the workers whose relatives are living outside of 
 the Province. 
 
 Mr. Wegenast : If the Manitoba law does not allow similar rights to the 
 residents of British Columbia there is no reason why the British Columbia law 
 should allow it to residents of Manitoba. • 
 
 The Commissioned : Except to set them a good example so that they will 
 repeal their law. 
 
 Mr. Bancroft : It is a hardship, because they go long distances in the west. 
 It is a distinct hardship. 
 
 Mr. Kingston : I think it is very provincial to restrict it as far as Canadians 
 
252 MINUTES OF EVIDENCE: No. 65 
 
 are concerned, or even British subjects the world over. The point I raise is entirely 
 with respect to those Southern European countries. 
 
 Mr. Doggett : They might become naturalized subjects in the meantime. 
 
 Me. Bancroft : I believe the gentleman is referring to the danger of inter- 
 ested parties exploiting it for profit. 
 
 The Commissioner : They do that on the home ground. 
 
 Mr. Bancroft : It is alleged or supposed relations in these places, and they 
 lay a claim to compensation. 
 
 The Commissioner: It is very difficult to test the honesty of these claims, 
 and very expensive to search it up, no doubt about that. 
 
 Mr. Bancroft : Don't you think with the view that is being taken over this 
 country by the workers that if a man has come here to work and is employed and 
 following his legitimate occupation, if he has dependants, they should be given com- 
 pensation just like anyone else ? 
 
 Mr. Kingston: If they reside in Canada. 
 
 The Commissioner : I do not see why there should be any limit of that kind 
 at all at present. 
 
 Mr. Bruce : The compensation is simply to take the place of some revenue. 
 
 The Commissioner : Of course that is the basis on which we are discussing it. 
 
 Mr. Wegenast : Then the idea would not be to simply set an amount of 
 money as the price of a man's life and give it to his nearest relatives, but to give 
 it to those who were really dependent on him. 
 
 The Commissioner: The Washington Act is a little different from that. 
 
 Mr. Wegenast : That makes it clearly contingent upon a real dependency. 
 A case arose there where a boy was killed, and the father and brother were earning 
 good wages and they were in no sense dependent upon his earnings. The boy was 
 18 or 20 years old, and, of course, there was no compensation whatever. It is a 
 matter I propose to deal with in the statement I hope to submit to your Lordship. 
 It makes a difference in the whole aspect of the question, whether you view it 
 from the standpoint of having a certain amount of money as a commutation for 
 the injury that is done, or whether you place the whole scheme on relieving want 
 and providing for dependants. 
 
 The Commissioner : I do not understand this Washington Act as you state 
 it. There is nothing about dependency in the section. If a widow, or an invalid 
 widower survive, a monthly payment of $20 should be made throughout 
 the life of the surviving spouse to cease at the end of the month at which re- 
 marriage shall occur, and the surviving spouse shall also receive $5 per month for 
 each child of the deceased under the age of 16 years. 
 
 Mr. Wegenast : I was speaking of the case of other dependants. This was a 
 son of 19 or 20 years. 
 
 The Commissioner: She gets $5 a month up to 16. 
 
 Mr. Wegenast: Not for the killing of a child. Suppose under that system 
 a young man is killed on whom no one is dependent, or a man with distant relatives 
 is killed. 
 
 Mr. Bancroft: T think then the act provides for his funeral. 
 
 The Commissioner: It is better if he has no relatives if they are going to 
 do harm to the man to kill him. 
 
 Prof. Keys. I have had some experience in Germany in the matter of insur- 
 ing domestias. I had a nursery governess there and I had to insure her to the 
 extent I think of about 15 cents a week, a very small sum, but on leaving Leipsic 
 
1912 WORKMEN'S COMPENSATION COMMISSION. 253 
 
 .and going up to Nuremburg I did not pay attention to the fact that she was in- 
 sured, and the German government charged me about $5 in, I suppose it-would be, 
 a police case such as you referred to a little while ago, because I neglected to tell 
 the Leipsic authorities I was leaving. Of course I didn't know the law. The law 
 is very severe against employers of domestic servants, as well as against employers 
 of labour generally. I have read that pamphlet of Professor Friedensburg. He 
 was the head of the Insurance Department in Germany for about 20 years. You 
 doubtless know the pamphlet? 
 
 The Commissioner: Yes, I have read it. 
 
 Prof. Keys : That made a great sensation while I was in Germany last year. 
 It was viewed from very many different points of view by the Conservatives and 
 by the Labour Parties, the latter casting all manner of contumacy upon it, while 
 the Conservatives seemed to think it was a true representation of the case. 
 
 As to the difference in the cost of living there, and in labour, I suppose a good 
 illustration would be that the street car men in Munich get about $1.10 a day, and 
 the women who sweep the streets get about, I think, 70 cents a day. They sweep 
 the streets there every night carefully. That represents a living wage, and it would 
 hardly be so considered here. 
 
 Mr. Wegenast: The compensation is based on a percentage on that? 
 Prof. Keys: Yes. 
 
 The Commissioner : Does that wage provide for the man or woman on as 
 good a scale as the wage paid here would? 
 
 Prof. Keys : No, those people do not eat beef as a rule. They have to live 
 on cheese. 
 
 Mr. Wegenast : They do not have bathrooms in their houses. 
 Prof. Keys : They have free baths, of course, at the public expense, or given 
 by public citizens. 
 
 Mr. Meredith: That would be supported by the government. 
 The Commissioner: I do not think we always appreciate what it means 
 when we say "supported by the Government." That means supported by us, and 
 if everything depends upon labour, then it is supported by labour in the last 
 analysis. 
 
 Mr. Waldron: No, everything depends on the producers. 
 Mr. Meredith : I think you all know how this matter of insurance first 
 came up. It came up about 30 years ago. On the Grand Trunk we used to have 
 men hurt continually, and every time that I would go and get my pay and other 
 men would go and get their pay at the pay car, there would be some men around 
 with a subscription for this widow, or a subscription for this man who was hurt, 
 and by the time you gave a little to everybody you would scale your pay down 
 pretty low; and then we found out that certain men would not give anything at 
 all, and the generous ones contributed everything that was going. So then we 
 really put pressure on the Grand Trunk to start the insurance scheme, and from 
 that time it has gone on. Then we started the Trainmen's, and the Order of 
 Eailroad Conductors. We started them as mutual concerns, and really you would 
 be surprised how hard it is to get a man to pay a few cents in to help himself. 
 
 The Commissioner: It is hard to get him to make the other fellow put 
 in a few cents to help him? 
 
 Mr. Meredith: It is. It is a battle all the way through. We are battling 
 here to get something that will benefit everybody, as far as we can. That is a 
 pretty hard proposition. In Cleveland, a city of 600,000, the charities are kept 
 up by about a few hundreds of those who really do anything. That is the generous 
 
254 MINUTES OF EVIDENCE: No. 6S 
 
 people who keep all these poor are just a select few that have a little kindness of 
 heart to do this thing. 
 
 Mr. Wegenast: But, Mr. Meredith, you don't suppose this workmen's com- 
 pensation is on the basis of charity? 
 
 Mr. Meredith : No, I do not. 
 
 Mr. Wegenast : We want to place it on the basis of insurance and I suppose 
 you simply want a square deal. 
 
 Mr. Meredith: That is right. 
 
 Mr. Wegenast : You want nothing more than is coming to you as your 
 share ? 
 
 Mr. Meredith: I don't expect to get anything personally. 
 
 Mr. Waldron: That is a curious ground to take, to say insurance of that 
 kind is a square deal. I don't know how you will arrive at it. Are you able to- 
 state any principle of philosophy on which you base the act? There are schemes 
 to help distress, and this is one scheme to help it. Then the insurance comes 
 up as old age insurance, or sickness insurance, or the insurance of the farmer who 
 has failed in his business ox is threatened with the poorhouse. You see that is 
 where he is going now. You go to the county of Huron or Middlesex and you 
 find farmers who were well off and who have met with disasters now livinsr in 
 the poorhouse, and have no insurance of any kind because they have never been 
 able to pay it, and have no means to enforce it and have never thought of saying 
 "this is our right." That is what offends the producing class. 
 
 Mr. Wegenast : I must say I agree to a certain extent with Mr. Waldron's 
 point of view, and he misunderstands me when he makes that reflection. It is 
 hased on both principles. It is a matter of relieving distress, of course, but 
 when you come to the means by which the distress is to be relieved I don't know 
 that it is out of the way at all for the workman to say that he wants nothing more 
 than what is really coming to him. 
 
 Mr. Meredith : That is right. 
 
 The Commissioner: Surely, Mr. Waldron, you are overlooking a large part 
 of the principle of this workmen's compensation. The present law simply indemni- 
 fies the employee for the wrong that has been done by his employer. 
 
 Mr. Waldron : Quite so. 
 
 The Commissioner : What is asked is to extend it a little further. The 
 proposition is to protect him from the risks incident to his occupation, and to 
 that extent it may be eleemosynary. 
 
 Mr. Waldron: Whether there is negligence or carelessness? 
 
 The Commissioner: That is the ground on which in some of the States, 
 I suppose, it is unconstitutional? 
 
 Mr. Waldron: Yes. 
 
 Mr. Bancroft: I might say to Mr. Waldron that for years now, T think 
 I would be right in saving, that labour has pointed out to the farmer, practically 
 speaking, that be was hardly an employer, that he was a producer, and liable to 
 the same conditions as are liable to the workmen. The farmer is a producer. 
 
 The Commission kr : You didn't get him to come in? You invited him into 
 partnership and he did n't come. 
 
 Mr. Bancroft: Still we have had a representative at our meetings. We 
 had Bobcrt Owens.. 
 
 Mr. Wegenast: You have no representative of farm labourers, I think? 
 
 Mr. Doggett: There is in Britain. 
 
 Mi;. Waldkon: For instance take me. I am a lawyer and, as I put it 
 
1912 WORKMEN'S COMPENSATION COMMISSION. 255 
 
 earlier in the evening, I meet with an accident, and wife and children fall into 
 anguish and cry out for bread. Where are we to get our rights that we are 
 entitled to from society? You are not bothering your heads about us. 
 
 Mr. Bancroft: We always fancy from our experience, and we have some 
 very good lawyer friends, and some associated in our work, but we always found 
 they were thoroughly capable of taking care of themselves. 
 
 Mr. Waldron : Well, we see statements made to the contrary. You see 
 there is the statement made that lawyers generally over the Province are not 
 getting a thousand dollars above their office expenses, and they are liable to meet 
 with disaster too. 
 
 Mr. Bancroft: Mr. Waldron, I wanted to point out the great difference 
 that exists now, for instance, from when first the employers' liability law came 
 into force. There was a different state in society than there is now. You know 
 probably better than I do the development of machinery in the last 50 years all 
 over the world. There was a time when a man used his own tools and did his 
 own work. 
 
 Mr. Waldron: Take the farmer for example. 
 
 Mr. Bancroft : Just a moment. We still have the old law where a man 
 can claim for damages, but now in the complex industries, where there are big 
 machines and the risks are so great, we claim it is a right that the workmen have 
 to protection by legislation, and if not protection by prevention of accidents then 
 for some measure of relief to the dependants of those injured in industries. 
 
 Mr. Waldron : You would get that by making your legislation a personal 
 obligation on the employer and the owner of the machines, so that he does not 
 become guilty of what society considers negligence towards those he employs. 
 
 The Commissioner : I think statistics show that something over 30 per 
 cent, of the accidents are due to the fault of nobod}^ or perhaps nearly 40 per cent. 
 
 Mr. Waldron: The statistics show that 27-1 people, I think, die on the farms 
 from injuries. I don't know how they are classified. There would be the goring 
 of bulls and slipping on the ice and falling limbs of trees, and runaway horses, 
 and automobiles, and so on. Now, these people surely are in your words incurring 
 these risks ? They are the owners of farms with small equities, it may be. They are 
 getting no reward from society, and they are making no claim, and they are 
 listening to you making this demand of a right that you are entitled to. You 
 say " We are demanding our rights." 
 
 Mr. Bancroft : Sure. 
 
 Mr. Waldron: That is an important part. 
 
 Mr. Bancroft : I think in the State of Washington Act every employee on 
 the pay-roll is covered. It is on the yearly pay-roll I understand in Washington. 
 
 Mr. Wegenast: On the farm? 
 
 Mr. Bancroft : No, not a farmer. The total wage-roll is taxed and it doesn't 
 matter what the man's salary is. 
 
 The Commissioner : It says an individual employer or any member or 
 officer of any corporate employer who shall be carried on the pay-roll at a salary 
 or wage not less than the average salary or wage named in such pay-roll and 
 who shall be injured shall be entitled to the benefit of this act as and under the 
 same circumstances and subject to the same obligations as the workman. 
 
 Mr. Bancroft : If the farmer who is really a working employer has to pay 
 any measure of taxes then he should come under the Compensation Act just the 
 same. 
 
256 MINUTES OF EVIDENCE: No. 65 
 
 Me. Waldron : That is to say he should be indemnified out of the State 
 funds, collected from himself and other farmers. 
 
 Me. Bancroft: Why not? 
 
 Me. Wegenast: The point I wanted to emphasize is that Mr. Waldron's 
 argument goes to the root of the whole scheme of workmen's compensation. 
 
 Me. Waldeon : No, it doesn't. I am not arguing. I am getting enlighten- 
 ment. 
 
 Me. Wegenast: Assuming the worker in industrial pursuits has a right, 
 morally or whatever it may be, to be indemnified when he is injured — 
 
 Me. Waldeon: He has a right to invoke the law. 
 
 Me. Wegenast : That would only provide for a small percentage of the 
 accidents that happen. Forty or fifty per cent, are purely accidental and are not 
 due to any one's negligence, and you can't cover those by anything short of a work- 
 men's compensation law. 
 
 Me. Waldeon: You can't cover them at all. We are not indemnified. 
 
 Me. Wegenast : Assuming that a Workmen's Compensation Act is right in 
 principle you would not surely make a distinction between the farm. worker and 
 the worker in any other occupation. For instance, two immigrants come to this 
 country and one takes a position in a factory and the other a job on the farm. 
 One is injured by a machine and the other is gored by a bull on the farm. Is 
 there any reason why the man who is gored by the bull should not be indemnified 
 any more than there is that the man who is hurt by the machine should not? 
 On the assumption that workmen's compensation is correct the farmer should be 
 included. . ; ,-" s ]|| 
 
 Me. Waldron : What do you mean by a farmer ? 
 
 Me. Wegenast : A farm labourer. 
 
 Me. Waldeon : It is the principle on which these gentlemen are going. 
 
 Me. Wegenast : Would you assent to my proposition that if the industrial 
 worker is compensated the farmer should be compensated? 
 
 Me. Waldeon : I admit without any hesitation at all that there are accidents 
 of life occurring, not only to the labourers in factories and the labourers represented 
 by you gentlemen here, but in every profession and every walk in life, with no 
 relief, and nobody here advocating redress for them, but you are advocating for 
 these gentlemen redress. 
 
 Me. Wegenast: The distinction that Mr. Waldron fails to observe is in 
 the position of the wage earner, and what the French call entrepreneur, — a man 
 who is running a business for himself. 
 
 Mb. Waldron : If a man directs his employee to work at a machine that is 
 dangerous or is not properly equipped then the entrepreneur ought to be liable. 
 Of course one sees that readily. 
 
 The Commissionee : If you have a system of State insurance what possible 
 defence is there for not putting in the employer if he is working on the same foot- 
 ing as the employee. 
 
 Me. Wegenast : Because he is in a position to take the profits. 
 
 The Commissioner: What difference does that make? 
 
 Mr. Meredith : He makes the difference. 
 
 The Commissioner: If there is no negligence upon his part the workman 
 is compensated. If you look at it logically why should not the employer be com- 
 pensated? Why should not the State pay him? 
 
 "Mi;. Wi<;i:\\st: If it is a matter of State insurance. 
 
1912 WORKMEN'S COMPENSATION COMMISSION. 257 
 
 The Commissioner : He is going about his business and a wheel breaks and 
 strikes him and kills him. Has he not got just as good a moral claim? 
 
 Mr. Wegenast: On the grounds of State indemnity. 
 
 Me. Waldkon: You see socialistic ideas are propagated and they work 
 out in these assertions which you gentlemen make in a way which shocks me, not 
 only as a representative of the farmers but as a member of society. I saw it in 
 the papers and I was amazed that Ontario was listening to statements such as 
 these. We have heard them made by socialists in Paris and in Berlin, but to find 
 here in Ontario men are saying that they demand to be relieved of what everybody 
 else must put up with, is surprising., 
 
 Me. Banceoft: I don't think that would be a right inference for you to 
 draw from anything that has been presented to his Lordship in Toronto. If you 
 refer to something else that is a different matter. If you search the records of 
 what we have placed before his Lordship in Toronto as to the evidence of the 
 legislation in other countries, irrespective, mind you, of the opinions that we may 
 otherwise hold, I think his Lordship will agree with me that the words you have 
 used do not apply to any representations that have been made here. We have 
 stated the case clearly, and pointed out the truth and everything else in accordance 
 with what we consider fair play to the workers. That is right, your Lordship ? 
 
 The Commissioner: I think so. 
 
 Mr. Waldron: I find that public opinion has gone a long way in passing 
 legislation of this kind. If I found Sir William Meredith giving countenance to 
 your assertion that would be influential. If you appealed to my feelings they 
 would be influential, but that is not good reasoning. 
 
 Mr. Meredith: That is from your standpoint. 
 
 Mr. Waldron : As a thinking man it does not convince me. 
 
 Prof. Keys: The German point of view is that it makes for the efficiency 
 of the nation. 
 
 Mr. Waldron : I am not touching that. It might be a good thing to devote 
 all my attention and for all of us to contribute to labour and answer the demands 
 that are made here; it may be right to contribute to the welfare of this nation, 
 but you make economic conditions so unbalanced that people leave the land. 
 
 Prof. Keys : In Germany, of course, agricultural labour has the same right. 
 
 Mr. Kingston: Would you consider it right, Mr. Waldron, that 30 or 40 
 per cent of the industrial workers who meet with accidents for which nobody is 
 to blame under the principles of law as we understand them now should be made 
 the subjects of charity, as must necessarily be the case if they have not been able 
 to lay anything aside for themselves, rather than the opposite view that the cost 
 of these occupational accidents, including those that happen as a result of no man's 
 fault, should not fairly enter into the other costs, or be placed alongside of the 
 other costs so that the product will bear the whole cost? 
 
 Mr. Waldron : Should be distributed over everything. If you come to me 
 saying hitherto you have been calling it charity. You have poorhouses to take 
 the most hopeless of us, you have homes, and you have institutions, and associations 
 of charity and kindness, and so on, but we propose to eliminate that now and put 
 it in an orderly way; we propose to shoulder upon industry and distribute evenly 
 over industry a regular charge for that purpose — if you say that, I say, well, the 
 only objection is that I don't see why you are specially entitled to that when I 
 see about me all sorts of people who are suffering the same wrongs, whose accidents 
 are undiscovered and the causes are undiscovered, and there is no remedy. You see 
 it. We all know it. So if you say not that we demand it, but you say give us 
 
 17 L. 
 
258 MINUTES OF EVIDENCE: No. 65 
 
 this now and we will give to the lawyer, to the poor widow, to the poor unmarried 
 woman who takes consumption, and to all the rest of the unfortunates and derelicts 
 and injured persons, and give them the same thing — shoulder them all, you arrive 
 logically at a state of socialism, which you acknowledge now. 
 
 The Commissioner: Haven't we got a little way off the track? Would you 
 not logically make it improper to make me pay as I do $120 school tax when I 
 don't have any children? 
 
 Mr. Waldron: Put that on Mr. Keys' grounds, the welfare of the nation. 
 My objection is to the principle involved. 
 
 The Commissioner: Does it matter very much whether it answers logic or 
 not, or what you call it, if the thing is right. 
 
 Mr. S. Harris : Why should a man owning a farm, if he is hurt, get com- 
 pensated? He owns it, and yet he is working on it? That would apply to the 
 manufacturer. I am an employer and I was just thinking the only place the 
 money was coming from was the manufacturer. I see now some chance of getting 
 a little of it. 
 
 The Commissioner : The manufacturer is the moneyed man : he is milking 
 the cow all the time. As long as you do not make it too burdensome upon industry 
 why shouldn't you bear these burdens? If the general public have got to pay it 
 you will pay it- 
 
 Mr. Kingston : In the last analysis they must pay it. 
 
 The Commissioner: There are some exceptional cases perhaps where it 
 does not. 
 
 Mr. Meredith : The under dog is always the small part of the community. 
 Now, I belong to, I suppose, perhaps a dozen different organizations that I have 
 paid money into and never got anything out of yet, and whether I ever will before 
 I die is a question. I applied to the Grand Trunk to commute my insurance, and 
 while I was nearly 70 years old they told me I was in perfect condition to work, 
 and they refused it. 
 
 The Commissioner: Then it may be possible to have some evening sittings 
 next week- 
 
 Mr. Wegenast: I understood we could not go on next week, and I am not 
 prepared. 
 
 The Commissioner: I was in hopes we would be able to have some sittings 
 next week when we could hear Mr. Wegenast and those whom he wants to have 
 heard, but he says he will not be ready until later on in the month. I have to go 
 to London on the week commencing January 8th, and I will not be able to take 
 the matter up again until after that. If there is any branch of the enquiry that 
 could be facilitated by holding meetings next week, we will do so. 
 
 Mr. Meredith : I tried to get Mr. Love who used to be the superintendent 
 of the Massey-Harris Company here, but he has lost his memory somewhat and 
 does not think it would be wise for him to come- They had a system in there. 
 
 The Commissioner: We have got a statement of what their system is. 
 
 Mr. Doggett: There was a question raised as to what the organized trades 
 unions did where State compensation was paid, and I have a book here. I might 
 state we had this last year to change our constitution in more ways than 
 one. We have had to change it even to the amount of contribution or the amount 
 of dues. We have had to change our Australian and New Zealand sections to 
 comply with the laws of those countries. I think it has made a change of six- 
 pence a week. 
 
1912 WORKMEN'S COMPENSATION COMMISSION. 259 
 
 The Commissioner: Does anybody know of any country where there is a 
 system by which the workmen can contribute to the funds and receive a larger an- 
 nuity or compensation? 
 
 Mr- Bancroft : I think Switzerland is one of the places where there is a 
 contribution. In Switzerland it is compulsory insurance. No insurance law in 
 operation, but workmen in all industries are covered and the State pays for insur- 
 ance. 
 
 Mr. Waldron: That is in the case of sickness and old age. 
 
 Mr. Bancroft: No, it is accident insurance purely. 
 
 The Commissioner: That is a straight contribution? 
 
 Mr. Bancroft: In Austria there is compulsory contribution, and employers 
 pay 90 per cent, and workmen 10 per cent., but I don't see that they pay any 
 more in benefits than the other places where the employers bear the burden. 
 
 The Commissioner : If you could have a system by which the workmen would 
 get larger compensation, paying a reasonable sum into the funds, it would have the 
 advantage of doing away with this objection Mr. Neely refers to, of not being a 
 partner in the concern. 
 
 Mr. Bancroft: You see in Germany they first of all brought in an act 
 Which covered invalidity and old age. Then they brought in an act that covered 
 sickness and death. Then they found out they had no compensation for a straight 
 injury and they brought in a third piece of legislation which was compensation 
 for injuries, the burden for which is borne by the employer, as it is in pretty near 
 every other country, but for the first thirteen weeks the fund takes care of him, 
 and after thirteen weeks are up the Workmen's Compensation Act takes care of 
 him. 
 
 The Commissioner: During that thirteen weeks he contributed something? 
 
 Mr. Bancroft : Only through the legislation that had gone before. In 
 Great Britain they had no contribution, and necessarily they built it upon the 
 lines of putting the burden upon the employer. It seems to be the tendency all 
 over the world that the burden in Workmen's Compensation should be a direct 
 burden upon the industry. Social insurance, sickness, death, invalidity and old 
 age seem a different matter, and everybody seems to look at it from the stand- 
 point of contribution. 
 
 The Commissioner : What do you mean by social insurance ? 
 
 Mr. Bancroft : When they speak of social insurance they speak of it more 
 as a means whereby the workman is covered for sickness, death and old age as 
 well as accident, and workmen's compensation deals directly with accidents arising 
 out of and in the course of employment. I understand that is what we are consider- 
 ing in Ontario. 
 
 The Commissioner : Now, under this new law that has just been passed what 
 effect will that have upon Workmen's Compensation? 
 
 Mr. Bancroft: Under this last act in England? 
 
 The Commissioner: Yes. I understand that everybody is insured practi- 
 cally in certain trades. 
 
 Mr. Bancroft: Well, it has this effect, your Lordship, and we had this 
 same thing when we were preparing our case, that to leave anyone out or dream 
 of leaving any worker out on our part was distinctly unfair in principle. 
 
 . The Commissioner : Why do you say worker ? Why is not anybody that is 
 liable to meet with an accident just as deserving of consideration as a man that 
 works with his hands? Here is a Professor from the University and he works 
 
260 MINUTES OF EVIDENCE: No. 65 
 
 with his head, and if he in the course of his employment meets with an accident 
 why should he be out in the cold? If you are logical why should that be so? 
 
 Mr. Bancroft: There is no reason why the working manufacturer should 
 be outside of the Workmen's Compensation Act provided it is State insurance. 
 I see no reason whatever, but if it is not State insurance it is different. The 
 social insurance you speak of in Great Britain, the recent legislation, that is 
 practically for the purpose of insurance against sickness and death, of 
 people, particularly workers, who are not members of trades organizations. You 
 pointed out at one of the sessions that members of trades organizations got 
 sick benefits and death benefits, and so on, and this act covers everybody and 
 covers those people who are unfortunate in not having a real strong organization 
 and who do not get sickness and death benefits. 
 
 The Commissioner: Is that not going to be a blow to the trades unions? 
 
 Mr. Bancroft : No, that was sought in Germany, and it is not the case. 
 
 Mr. Doggett : Those trade organizations that already pay out sick benefits 
 and so on, under the insurance bill of Britain, the government is making arrange- 
 ments with them to pay out also the government amount for sickness and benefits. 
 
 Mr. Bancroft: There was a committee went over to Germany and they in- 
 vestigated the whole matter of social insurance before this legislation was brought 
 into existence, and evidently from their report it is a good thing all round. I 
 think I heard Professor Keys mention the fact that it made for the utmost 
 efficiency in Germany. 
 
 Prof- Keys: That is the common argument in Germany, but an article by 
 Prof. Eriedensburg, a gentleman who has been twenty years at the head of the 
 system, casts very great doubt on it. 
 
 The Commissioner: A pessimist would say that would be the very thing 
 to make him go easy; the State would look after those he left behind. 
 
 SIXTH SITTING. 
 
 Council Chamber, City Hall, London. 
 
 Saturday, 13th January, 1913, 3 p.m. 
 
 The Commissioner : I will be very glad to hear anything that you gentlemen 
 have to say on this subject. Be kind enough, when you get up to speak, to 
 mention your name, and if you represent any organization, say so. 
 
 Mr. John Jones, (Builders Exchange) : Just the builders are here at present, 
 sir. 
 
 The Commissioner: Are there any persons representing the labour body? 
 
 Mr. Jones: I don't think so, sir. I have not much to say. "We came up to 
 get information. We have not very much to offer. We are waiting to see what 
 is being done and then we might make a suggestion. 
 
 The Commissioner: But that is what I want to hear, what your views are 
 as to the present law and as to any changes that should be made, if you are in 
 
1912 WORKMEN'S COMPENSATION COMMISSION. 261 
 
 favor of any. What is asked for by the labour organization is that the British Act be 
 introduced, which makes the employer liable for all accidents happening in the 
 course of the employment or arising out of it, unless the accident is due to the 
 wilful and serious misconduct of the person injured, and even in that case it 
 does not disentitle the dependants to compensation if he is killed. As the law 
 now stands the liability of the employer is limited ; some breach of duty, negligence 
 or want of sufficient appliances must be shown. Under the British law the em- 
 plover is liable where the accident happens in the course of the employment and 
 arising out of it, the theory being that in a great many cases these accidents 
 are incidental to the industry and that the industry ought to bear the cost of 
 them, which means that the public ultimately would bear it, or so it is said. 
 
 Then they want also this; in the State of Washington a law has been passed, 
 and it is the only one of this kind that I know of, where the employers in certain 
 hazardous enterprises contribute a stated, proportion of the percentage of the wage 
 bill of the year to the State, and the State insures against accidents. 
 
 Mr. Martin: That is in the nature of State insurance is it, sir? 
 
 The Commissioner: State insurance at the cost of the employer. 
 
 In the building trade here, have there been many accidents in the last year 
 or two? 
 
 Mr- Jones: There have been a few, but we have not been any of the un- 
 fortunate ones. 
 
 The Commissioner : There have been some. Are they due generally to 
 scaffold troubles? Injuries arising from scaffolds falling? 
 
 Mr. Jones : Yes, principally so. 
 
 Mr. Nutejns : That is inside scaffolds, sir. 
 
 Mr. Jones: Of both. 
 
 Mr. Nutkins: The percentage is smaller. 
 
 The Commissioner: Have the builders here pretty well observed the law 
 of last season about scaffolds? 
 
 Mr. Nutkins: We have had a stringent by-law in the last few years. 
 
 The Commissioner: An act was passed last session which is supplementary 
 to the municipal regulation, although the municipal regulation may go further 
 than the act. 
 
 Mr. Nutkins : The way I take it to-day, sir, is that the employee looks to be 
 insured; that you pay your insurance pro rata, the bricklayer pays so much 
 and the plasterer so much, each trade is different in the amount to be paid. 
 
 The Commissioner: Do the builders generally insure against accidents? 
 
 Mr. Nutkins: As a general rule, sir. 
 
 The Commissioner: The men that have shops? 
 
 Mr. Nutkins : I could not say about the shops. I am not interested in the 
 shops. 
 
 The Commissioner : I mean builders who have shops. I suppose all of 
 them have more or less shops, some with considerable machinery in them, turning 
 out stuff for their buildings. Do you think they generally insure? 
 
 Mr. Jones : I think so. 
 
 Mr. Nutkins : Yes, sir. 
 
 The Commissioner: What do you pay as a premium? 
 
 Mr. Jones : It is different. 
 
 The Commissioner: For outside work you pay more than for inside? 
 
 Mr. Jones: They charge more for a plasterer than for a bricklayer. 
 
262 MINUTES OF EVIDENCE: No. 65 
 
 Mr. Nutkins: One per cent, for a plasterer, and it runs from 1.32 to 1.36 
 for a bricklayer. 
 
 The Commissioner: How much for a carpenter? 
 
 Mr. Nutkins: That is graded. 
 
 The Commissioner: Outside and inside? 
 
 Mr. Nutkins: Yes, the millmen are graded from the outside. There are 
 carpenters here. 
 
 Mr. Martin : I think it is forty cents for a millman. 
 
 The Commissioner: They pay more than that in Toronto. I have a state- 
 ment from Mr. Dillon there. I think they pay 40 cents for inside men and for 
 the outside men nearly four or five times that, that is, men working on scaffolds 
 and that kind of thing. 
 
 Do you think a law which made the employer liable, regardless of his negli- 
 gence or want of proper appliances, a reasonable law? 
 
 Mr. Nutkins: The way I look at it is this: you insure the man, and sup- 
 posing the man meets with an accident on a building, if you are human you 
 would send him to the hospital and get a doctor. You pay his insurance, and 
 when it comes to you you fill out a form. Then they turn round and say, if he 
 sues you we will defend it. You don't get anything for the man that is hurt. You 
 pay the doctor's bills and the hospital's fees and at the same time you are paying 
 insurance rates. 
 
 The Commissioner : Yes, I suppose that is often so. They won't pay any- 
 thing until they are made to. 
 
 Mr. Nutkins: I don't think that is square. The employee expects to be in- 
 sured to-day. 
 
 The Commissioner: Then your difficulty about insurance is that they do 
 not pay promptly and it does not get to the right quarter quickly enough? 
 
 Mr. Nutkins : If an employer insures a man, I claim he should get what 
 he pays for. 
 
 The Commissioner : Surely they do not all insist upon a suit being brought ? 
 
 Mr. Nutkins : As a general rule the settlement don't come about unless they 
 force it. I myself am in favour of Provincial or Government insurance. Then 
 there is this point, a big corporation takes so much per cent, off the man's wages; 
 a small firm can't do that. 
 
 The Commissioner: Their proposition is not to take anything out of the 
 men's wages. It all comes out of the emploj^er. 
 
 Mr. Nutkins: Still, that is where the corporation has it on the small firm. 
 
 Mr. Stratfold: I think the law as it stands is not unreasonable. I pay so 
 much money myself for wages during the year. I think it is 50 cents or what- 
 ever it is for $3,000. I couldn't say exactly what it is. I saw a case here a 
 short time ago where a man pinched his finger. He should never have got any- 
 thing for it, but he wanted something. I think the way it stands now is that a per- 
 son furnishing proper appliances has no trouble at all. 
 
 The Commissioner: They say that 35 per cent, of the accidents at least are 
 non-preventable; that those aro incident to the rapidity with which work is done 
 nowadays. That is taking all the industries together. A man has to work under 
 a good deal of stress in these factories. Then the difficulty about the present 
 system is that there is always a contest as to whether the workman contributed to 
 the accident. Nearly all the litigation is about that. They propose to eliminate 
 
1912 WORKMEN'S COMPENSATION COMMISSION. 263 
 
 that difficulty, and say although the workman has been careless he should never- 
 theless be compensated for the injuries. That is their proposition. 
 
 Have you met the same difficulty about insurance companies not being 
 prompt in settlement of losses? 
 
 Mr. Stratfold: Well, I have never had any accidents owing to myself. 
 
 Me. Charles Gould: Then, sir, no matter how careful we are with our 
 sea Holding, we may pick the scaffolding over very carefully and send it to the 
 building and some other trade may use our scaffolding and possibly throw it 
 down instead of lowering it, and crack a plank and our men use that plank and 
 walk on it, and we are responsible. 
 
 The Commissioner: Under the law as proposed you would be. Of course 
 what is said is that to insure against these losses is not a very heavy tax upon 
 the industry; but it is a very serious thing if a man is injured, to him and his 
 family. 
 
 Mr. Martin : The great trouble with the present law is that while we are 
 paying for protection, and we are entitled to get it, we also want our employees to 
 be protected. That is, that if a man is entitled to anything if he has met with 
 an accident, there is no way for him to get anything unless he sues the com- 
 pany, and, as Mr. Nutkins says, in the case of an accident we must use first aid 
 and help the man out and to a certain extent that has been construed as an ac- 
 cessory. 
 
 The Commissioner: An admission of liability? 
 
 Mr. Martin : Yes. I don't think that that is the proper thing, but that is 
 one of the biggest difficulties to my mind. 
 
 The Commissioner: Is your experience the same as Mr. Nutkins, that 
 nearly always these claims are resisted? 
 
 Mr. Martin: I think that in over 50 per cent, of them they are. 
 
 The Commissioner: The difficulty about the State insuring at the expense 
 of the employers would be the machinery for collecting the premiums. I do not 
 know whether it would be possible to devise a scheme that would not involve an 
 army of tax collectors. As they propose it, it applies to the man who has one 
 employee. It is not confined to the large factory. Applying it to this city, to go 
 around and collect from everybody employing from one man up would be a 
 pretty serious business. 
 
 Mr. Martin : Still the insurance companies employ the same means. 
 
 The Commissioner: But you go to the insurance companies. 
 
 Mr. Martin: No, sir; they send a man around and inspect the pay-roll every 
 year. 
 
 The Commissioner: I do not suppose they bother themselves with a little 
 one. 
 
 Mr. Gould: That is where the trouble is to-day, I think, where the work- 
 man is really not insured in the majority of cases. The smaller employer does 
 not insure and in very many instances he is not worth suing and the employee 
 has no chance of getting anything, so that really the law is of practically very 
 little use to the employee, as well as a burden to the employer. 
 
 The Commissioner: The British law would not help at all because it 
 leaves you individually liable. The law by which the State insured would be a 
 different thing. 
 
 Mr. Gould: The only way to help that would be to compel every employer 
 to insure his men, make it compulsory. 
 
264 MINUTES OF EVIDENCE: No. 65 
 
 The Commissioner: What would you do with a man that is not worth any- 
 thing, that you could not collect the premium from? 
 
 Mr. Gould: He should not he in business. 
 
 The Commissioner: You would have to put him out of business. 
 
 Mr. George Gould: Could not the onus of collecting be put on the opera- 
 tive? 
 
 The Commissioner: I do not know. I would not want to be an operative 
 and have to go and collect the premium from my employer. 
 
 Mr. G. Gould: Make it compulsory that a certain percentage of his wages 
 should apply to insurance. 
 
 The Commissioner: They do not want that. They do not want to con- 
 tribute a cent. 
 
 Mr. Gould: They want to be insured but do not want to pay for it. 
 
 The Commissioner: They do not want to pay for anything; they want the 
 whole burden to be on the industry. 
 
 Mr. G. Gould: Could not the employer pay it and add it to their envelope? 
 
 The Commissioner : Don't you think there would be a little friction if they 
 did not find their money in the envelope. 
 
 Mr. Gould: If they did not find their wages there, what could they do? 
 
 The Commissioner: Wages are a different thing. Do you think it would 
 be practical through the municipal organization, through the tax collector, to 
 put the burden upon the municipality of collecting the taxes? Do you think that 
 could be worked? 
 
 Mr. G. Gould: How does the Washington Act work? 
 
 The Commissioner: It is experimental. It has only been in force since 
 October and they have a Board appointed. Apparently that Board collects 
 throughout the State, but it is not known how that will work. There they had a 
 Commission composed of employers and employees, and this is a measure that they 
 unanimously agreed upon. There is a schedule of the rates. It does not cover 
 all trades. 
 
 Mr. Martin: That is really insurance, of course? 
 
 The Commissioner: That is State insurance. The man looks to the State 
 for his money. 
 
 Mr. Martin : To my mind that is the proper thing. It is insurance we want. 
 
 The Commissioner : The trades run all the way up from powder works. 
 
 Mr. G. Gould: Another thing the builders object to, sir, is that the expense 
 of litigation is too much, and that actions arising from accidents should be tried 
 by a judge without a jury. 
 
 Mr. Martin : That leads up to another question, that many actions are taken 
 by irresponsible people against contractors, and the contractors are generally 
 soaked for the law costs. 
 
 The Commissioner: What has been the experience of the gentlemen here? 
 How many times is the most that anybody has been sued or had a claim made? 
 Is there anybody here who has had half a dozen claims made? 
 
 Mi;. Martin: I have had two or three. Two went to court. 
 
 The Commissioner: With what result? 
 
 Mr. Martin: In both cases the plaintiff lost. In one case it cost this poor 
 fellow about $175 to pay the costs of it. 
 
 The Commissioner: The costs of the employer? 
 
1912 WORKMEN'S COMPENSATION COMMISSION'. 265 
 
 Mr. Martin: Yes. In the other case the insurance company defended the 
 suit. 
 
 The Commissioner: Under this law a great many of these difficulties would 
 be avoided. Because at present it is only in a limited number of cases that the 
 employer is liable. They would make him liable in almost every case, under the 
 British law, so that practically it would mean if an accident happened that there 
 is a claim. 
 
 Mr. Martin: There has been considerable in the paper with regard to this 
 British law and I suppose lots of it has been caricature, and one thing and another, 
 in regard to servants and everyone else. Are they all affected? 
 
 The Commissioner: It applies to domestic servants and agricultural 
 labourers. Our present law does not, nor did the law as the Bill was introduced 
 into the House by Mr. Gladstone — that is the younger Gladstone — it had the same 
 exception, but the House apparently struck that out and made it general. 
 
 Mr. Martin : That is only an experiment, practically speaking, over there I 
 presume ? 
 
 The Commissioner: Since 1906. It is founded on the old law, extending 
 the liability of the employer. 
 
 A great many of the States have employers' liability and compulsory insurance, 
 compelling every employer to insure, either in some cases with the State insurance 
 organization or with a private corporation if he so elects. 
 
 Mr. Martin: What kind of insurance is that? Accident insurance? 
 
 The Commissioner : Accident insurance. Of course the rates would go up 
 a good deal if the liability was extended. The representative of the Ocean Accident 
 and Guarantee Company, one of the largest English companies, was examined and 
 he said the result has been in the Provinces in winch they have increased the lia- 
 bility of the employer that the rates have gone up very considerably. 
 
 What do you think of the theory that it is not the employer that pays, it is the 
 consumer that ultimately pays all these things? I suppose if you have to pay 
 $50.00 or $100.00 a year for insurance you have to get so much more money out 
 of the people, have you not? 
 
 Mr. Martin : That would not be so bad if that is all we have to pay, but when 
 we have to pay out a couple of thousand dollars besides that, it comes pretty heavy. 
 
 The Commissioner : If you had proper insurance why would you have to 
 pay that ? 
 
 Mr. Martin: There is no reason why we should if we had proper insurance. 
 
 The Commissioner: I understand that these companies do not on the 
 ordinary rates insure more than $1,500 upon a single life, a single case and they will 
 not insure more than — if I have not forgotten the number — ten in the one accident. 
 
 Mr. Martin : Yes, sir, $10,000. 
 
 The Commissioner : And is $1,500 the limit in each case ? 
 
 Mr. Martin : I think it is. 
 
 The Commissioner : There are to be some meetings in Toronto next week, 
 and the Manufacturers' Association, which is a very large and powerful organization, 
 apparently has gone to a good deal of trouble and expense in getting people of 
 eminence to appear and give evidence before the Commission. You will have the 
 benefit of seeing what they say. I suppose it will be reported in the newspapers. 
 
 What kind of feeling is there between the labour organizations and the em- 
 ployers in this locality? Is it friendly or hostile? 
 
 Mr. G. Gould: Friendly. 
 
266 MINUTES OF EVIDENCE: No. 65 
 
 Mr. Martin : Very friendly. That is as far as the building trade is con- 
 cerned. 
 
 The Commissioner : That is the way it ought to be. 
 
 Mr. Chas. Gould: One trouble is, if there were three accidents in the city 
 during the year, those three accidents might fall on one man. If it was distributed 
 over the whole of the building trade it would not come so heavy, and we would not 
 be in so much fear. At present we may have a load to carry and no one else carry 
 anything. 
 
 The Commissioner: If you were properly insured that would not occur. 
 
 Mr. Gould: Even then there is a certain amount of incidental expense that 
 you cannot get away from. 
 
 The Commissioner: One of the things that is said to be a defect in the 
 insurance scheme is that the man who has the best machinery and appliances, and 
 takes the greatest care to prevent accidents, pays as much as the man who is careless. 
 No doubt there is something in that. 
 
 Mr. Simpson : Seeing that the insurance man will only pay a certain limit, 
 is the law limited with regard to these accidents? 
 
 The Commissioner: The amount is limited under the act. It is not limited 
 if there is what is called common law liability. The law now is three years' wages 
 in the same employment that the man is in at the time of injury, of $1,500, which- 
 ever is the larger sum. That is the maximum that can be recovered. 
 
 Are there any gentlemen here now representing the artisans, the labour 
 organizations ? 
 
 Mr. James A. Bastle: Yes, sir, I am President of the Trade and Labour 
 Council. I am not well versed in the Compensation Act. I have heard what these 
 gentlemen have said. They seem very fair in their remarks, towards the labour 
 men. 
 
 The Commissioner : Do you represent the District Labour Council ? 
 
 Mr. Bastle : The city. 
 
 The Commissioner: Have you ever thought of getting the employers and 
 employees together, the representative bodies and discussing this matter? 
 
 Mr. Bastle : We have not. It would be a good idea though. 
 
 The Commissioner : What the labour men in Toronto are saying is that they 
 are very anxious to have the law passed in the coming session ; so that they are 
 opposed to anything that might mean delay. I would be very glad if the two sides 
 would get together, and if they could agree upon something that they thought 
 desirable it might be a help. 
 
 Mr. Bastle: As soon as we get well posted on what this act is to be. 
 
 The Commissioner : We do not know what it is to be yet. What is asked by 
 the labour men in Toronto is the British Act. That practically means that if a 
 man is injured in the course of his employment, from something caused by his 
 employment, regardless of his own negligence he shall be compensated, with a limit 
 as to the amount. They have not suggested the limit. Also they would eliminate 
 what is in the British Act, that where the accident arises from the wilful and 
 serious misconduct of the man who is injured that there should be no recovery by 
 him. The British Act has two exceptions to that; if he is killed or seriously and 
 permanently disabled his family are entitled to be compensated although the accident 
 was caused by him. It is difficult to say how one can justify compensating a man 
 in a case like this: take a railway engineer who deliberately disregards a signal; 
 he sees it and passes it with his eyes open, and the result is the train is wrecked 
 and hundreds of thousands of dollars damage done, and perhaps lives lost, that he 
 
1912 WOKKMEN'S COMPENSATION COMMISSION. -'tu- 
 
 sh mi Id be entitled to say to the railway company, "Pay me because I broke my 
 leg." That does not seem very just, but the answer they make is that his family 
 is not to blame. 
 
 Mr. Bastle: I should think where a man is the cause of an accident him- 
 self he should not be paid for it. 
 
 Mr. Marks : I think in the case of a railroad it is known by railroad men that 
 when a railroad engineer dies in a collision, the blame goes on him, where if he 
 could be heard in his own defence a different story would be told. My father was a 
 railway engineer for years and I have had communication with railway men, and 
 my belief is that if an engineer were to live up to the regulations he would be told 
 to take his walking papers. In fact railroad men believe that rules are put in the 
 rule book on purpose to catch them in times of accident. I have heard my father — 
 and I had every confidence in him — discuss these things and say that he had been 
 in collisions where the only thing that saved him from being blamed was that he 
 happened to be alive; if he had been killed he would have been brought into it. 
 
 The Commissioner: What was his name? 
 
 Mr. Marks: George Marks. 
 
 The Commissioner: He got his leg broken two or three times did he not? 
 
 Mr. Marks: Yes. 
 
 The Commissioner: You hardly mean that the railway companies deliber- 
 ately put these things in to catch the men ? They do not do that ? 
 
 Mr. Marks : I believe they do, some of them. I believe that officials of the 
 railroads, to save the company, they go as far as they can. If a man is killed and 
 there is any way of getting out of the responsibility by blaming him, they are going 
 to get out of it. Not only that but dozens of railway men have told me they have 
 had to appear as witnesses in cases where suits are brought, and those men them- 
 selves would tell you they dare not say what they would like to say or really should 
 say. 
 
 The Commissioner : If such a man belonged to the order of trainmen, ought 
 he not to be expelled if he were not man enough to tell the truth ? 
 
 Mr. Marks: That is a pretty hard thing to say. 
 
 The Commissioner: I think the Order of Trainmen is strong enough to back 
 its men up. 
 
 Mr. Marks : The trouble is this, your Lordship, that while a man cannot be 
 discharged for giving testimony or anything of that kind, still a man who testifies 
 against a railway corporation will not be discharged for that specific thing, but the 
 company will soon have an excuse a little later on for something or other and he 
 will pay for it. Whether it is true or whether it is false that idea is in the minds of 
 the men. 
 
 The Commissioner: I have no doubt that is so. 
 
 Mr. Marks : And that influences them when they come into a court of law 
 to give their evidence. 
 
 The Commissioner : In the British Act the only exception is serious and 
 wilful misconduct. That means a good deal. 
 
 Mr. Marks: I am satisfied that in the city of London here, they are prac- 
 tically of the same opinion as in the city of Toronto ; they believe that the British 
 law is about the best law that has been enacted so far. Personally I believe that a 
 business should carry the risks. Now I believe that as a rule the employers and 
 employees want to act fair and they want to get down to some fair basis where 
 injuries occur and that the compensation should not come too heavy on the 
 employers or employees. Now there is no doubt you are pretty well versed in these 
 
268 MINUTES OF EVIDENCE: No. 65 
 
 matters and know that a large number of the countries of Europe, that is Norway, 
 Sweden, Great Britain, Germany, Holland, Belgium, Italy and those places, there 
 are 51,900,000 men come under these Compensation Acts and in the majority of 
 those places the law is something like Great Britain, that is in regard to insurance, 
 voluntary to a great extent, but in one or two of these places it is compulsory on 
 the part of the State that the employers must insure. Now if we take into account 
 the large amount of money expended in litigation, a good deal of that money could 
 go towards paying the injuries of the men without litigation. Mr. Eoberts, an 
 English member of Parliament, in this neighborhood a short time ago, said that 
 when the English law first came into vogue there was a great deal of litigation, a 
 large amount eaten up in that way, but after the amendments were made the way 
 the law is at present, he said there was practically no litigation in Great Britain 
 at all. That is all saved. 
 
 The Commissioner: That is a little optimistic. There is a good deal of 
 litigation yet but not nearly as much as there was under the old system. 
 
 They might get in this country a system such as the British Act seems to 
 contemplate as existing there; that in, say the building trade, the carpenters or 
 bricklayers or whatever it is, that they have a joint committee to which is submitted 
 any claim of this kind. Why would not that be feasible here instead of having 
 all this trouble? I do not overlook the fact that you have the insurance company 
 to reckon with, but the first thing there is this kind of conciliation committee of the 
 employer and employed in the particular trade. Then if that fails, arbitration; 
 then finally the decision by a County Court judge without a jury. 
 
 Mr. Marks : I believe in a great many cases if the employers and employees 
 got together more frequently than what they do and discussed these questions, they 
 could come to a better understanding than the present way, where they keep so far 
 apart as a rule. 
 
 The Commissioner: One trouble in this country is that there are some 
 men — and I think they are the worst for the country and its artisans — who have 
 the idea that the proper condition of things between employer and employed is war, 
 that it must be eternal war. That is a very bad starting point. 
 
 Mr. Marks : It certainly is. 
 
 The Commissioner: I had one man — I will not say where it was — who 
 thought that was a fine thing; he only wanted the law as the thin end of the 
 wedge. He was a socialist, he said, and he thought wars generally were not bad, 
 they generally did a good deal of good, a kind of clearing-house. However, 
 fortunately, that is not what I find to be the general opinion. I think I ought to 
 say to you that here you seem to be in a much more — I do not mean rational — but 
 a more satisfactory state of mind at all events, the employers and employed, than I 
 have found anywhere else. 
 
 Mr. Marks: I think I may say, your Lordship, that there are a great many 
 employers of the city of London that the artisans think a great deal of. We have 
 found a great many of them that are very fair and liberal-minded men, men very 
 easy to get along with and willing to listen at all times. I believe, take it as a 
 rule, that relations are on a friendly basis in the city of London. 
 
 The Commissioner: That is a good thing. 
 
 What do you think of an effort being made to get the employers and employed 
 together and discuss the lines upon which a measure should be framed? Not 
 getting down to the minor details but the broad, general lines. 
 
 Mr. Marks: Personallv I do not think that is a bad idea at all. 
 
1912 WORKMEN'S COMPENSATION COMMISSION. 269 
 
 The Commissioner: You have a paper that addresses the community, have 
 you not? 
 
 Mr. Marks: Yes. 
 
 The Commissioner: If that sounds reasonable, I wish that someone would 
 try to start it. 
 
 Mr. Bastle : I will take that under consideration and in the near future 
 call the employers and employees together at a special meeting. I tnink that would 
 be a good thing for their benefit and ours. 
 
 Mr. Gould: Have it include all employers, manufacturers and so on. 
 
 Mr. Bastle : Issue a general invitation. The Trades and Labour Council 
 represents all trades, and the different employers could express their opinions and 
 get our opinions, and come to some general idea or some good feeling among 
 ourselves. 
 
 The Commissioner: There is some talk of starting a mutual insurance 
 company of all the manufacturers. I do not know whether that is going on or not, 
 but that was mentioned at one of the meetings. Of course if they had a mutual 
 insurance company they would get rid of a good many of the difficulties that have 
 been spoken of here. 
 
 Mr. Gould : Has any action been taken by the provincial authorities ? 
 
 The Commissioner: No, it was the manufacturers uniting and forming a 
 mutual insurance company to insure themselves. 
 
 Mr. Gould: Has there been any conference between the employers and 
 employed provincially. 
 
 The Commissioner : There is not time for that. The next best thing would 
 be to do it locally. You could do it more quickly. I do not know whether it will 
 be possible to have a bill ready for the House, which will meet sometime next month, 
 but I am anxious to do it if I can. 
 
 Mr. C Gould : Would it be possible to get all the employers together ? Would 
 not the building trade need to follow a different line from the manufacturers? 
 Could they work together? Would their interests clash? 
 
 The Commissioner : I do not know how that is. There is a manufacturers' 
 association in Toronto. Is there here? 
 
 Mr. C. Gould: Mr. Gartshore is here, he can tell you. 
 
 Mr. Gartshore : There is no association here, sir. 
 
 The Commissioner: Do the building trades belong to the Canadian 
 association ? 
 
 Mr. Gartshore: I think not, sir. 
 
 Mr. Martin : We have a national association of our own, sir. A national 
 builders association. 
 
 The Commissioner: But your interests are common are they not? All 
 employers and employed, their interests must be about the same? 
 
 Mr. Martin: I would think they run very nearly alike. 
 
 The Commissioner: Well, Mr. Gartshore, can you give me any light upon 
 this difficult subject? 
 
 Mr. Gartshore : I have had a good deal of experience, I am sorry to say, in 
 accidents. I have some ideas on the subject too. 
 
 The Commissioner : I shall be glad to hear them. 
 
 Mr. Gartshore : I think the conditions as they are now are not satisfactory 
 to either the employer or the workman. If a man is injured he goes home and 
 remains there until he gets well, which rfiay extend over a period of weeks or months. 
 During that time the manufacturer cannot approach him without prejudicing his 
 
270 MINUTES OF EVIDENCE: No. 65 
 
 own case. The consequence is he is out of work and out of money, and his family 
 is suffering. 
 
 It seems to me that if any act is passed it should provide that the man should 
 have instant revenue of some kind coming in. 
 
 If the employer approaches the man with a view of settlement, it may prejudice 
 his case. At the same time, as a rule the insurance companies do not authorize 
 you to take action. I could cite cases where men would have been glad to settle 
 in a short time and it would have been much to their advantage, but the matter 
 dragged on for months, the case came into court and was tried, and then carried 
 to another court, and meantime the family was suffering. 
 
 I have taken a few notes of suggestions that I have. I do not know whether 
 they will meet with approval or not. 
 
 I agree that the men should be compensated. Also that they should pay no 
 fee towards their insurance. 
 
 As it is now the only recourse we have is to insure and leave the onus on the 
 insurance company. I think that immediately a man is injured he should receive 
 part pay, part of his wages. I would not like to say how much, because nearly all 
 men are insured in some society or benefit organization. To give a man all his 
 pay would put a premium on dishonesty, because he might be receiving more when 
 he was sick than when he was well. He might receive say half his pay from the 
 time of his injury and it should be paid weekly to him, and not to exceed a period 
 of say three months. Medical attendance and medicines meantime free. 
 
 He should be examined by a doctor from time to time in the interests of the 
 company, and should be required to return to work immediately the doctor reports 
 him fit. 
 
 Fixed compensation should be determined on his report to duty; based on per- 
 manent injury if any, and the effects if any on his earning capacity, and any effect 
 on his constitution if the direct result of the injury. 
 
 Compensation should not be in a bulk sum, but in regular payments properly 
 secured. My experience has been in many cases that where a man received a bulk 
 sum it was frittered away and was of very little use to him, and he was shortly in 
 as bad shape as ever, and not able to work. 
 
 The compensation should be such as will preserve the harmonious relations 
 between employer and employed. Such relief systems as are at present in force 
 should be preserved and the creation of a further voluntary system should be 
 encouraged. 
 
 You are aware, Sir William, that some companies have already an arrange- 
 ment whereby they effect a settlement with their own men and do not insure. I 
 have had ideas in that line but have deferred taking any action because of the 
 legislation that is suggested. 
 
 The Commissioner: Let me interrupt you there. The British Act provides 
 thai where there is an arrangement between an employer and his employees, which is 
 approved by the registrar of friendly societies as a reasonable one, that that takes 
 the place of the compensation provided by the act. 
 
 Mr. Gartstiore: I think that would be very proper. I can cite a case in 
 which a man was injured comparatively slightly, but an artery was cut. If he had 
 not received first aid and intelligent attendance he might have died from loss of 
 blood. Receiving that promptly and being bandaged properly, he was able to go 
 back to work immediately. I think where companies make these provisions and 
 where the employees are willing that settlement should be affected, as you say 
 subject to the approval of the department, that it would be wise to provide for that 
 in ilio act. 
 
1912 WORKMEN'S COMPENSATION" COMMISSION. 271 
 
 The Commissioner: Who is the representative of the St. John Ambulance 
 Corps ? 
 
 Mr. )Gartshore: We have a branch in the city. 
 
 The Commissioner: Is he a member in your employment? 
 
 Mr. Gartshore: We have several of them. We encourage every man to 
 take that course. 
 
 The Commissioner: An unfortunate man was killed the other day, and a 
 charge of murder has arisen out of it. An artery was severed and no one was able 
 to attend to him and he died. His injury might not have been very serious if 
 promptly attended. 
 
 Mr. Gartshore : A qualified person can stop the flow of blood until a doctor 
 arrives. 
 
 The Commissioner : The great difficulty of the present system, everyone 
 seems to agree, is the large amount that is wasted between the insurance company 
 and the man that is hurt. So much of it is spent one way or another. First the 
 expense of getting the insurance, which is very considerable. Then the amount 
 expended in litigation. 
 
 Mr. Gartshore: If we paid the amount into a fund that we pay the insur- 
 ance companies, we could compensate every man who is injured, and he would 
 receive double the amount he does now, on an average. And the expense of 
 insurance and legal proceedings would be avoided. It is plain that I am not here 
 in the interests of the legal profession. 
 
 The Commissioner: They will always take care of themselves. Would it 
 be practicable in a large establishment like yours for a committee of the employees 
 and a representative on your side to adjust disputes as well as compensation? 
 
 Mr. Gartshore : I think there may be disputes that could not be settled and 
 that there might be some court to which these could be referred as a last resort. 
 But nine-tenths of the actions could be settled in that way to the satisfaction of all 
 concerned. 
 
 The Commissioner: Then you do not see any objection, as I understand 
 you, Mr. Gartshore, to making the industry bear the burden of the accidents 
 incidental to it? 
 
 Mr. Gartshore : No, none. 
 
 The Commissioner : Is anyone with you or representing the same phase of 
 the question? 
 
 Mr. Gartshore: I have not consulted anybody on the subject, Sir William. 
 The Chairman of the Board of Trade is here. 
 
 Mr. Eeesor, (Chairman, Board of Trade) : Speaking for a good many of the 
 members of the Board of Trade, I think the conference that has been spoken of 
 would be a splendid way to arrive at some conclusion. The trouble up to now 
 has been that we have not had very much to work on. 
 
 The Commissioner: I will be very glad to send a copy of this Washington 
 Act, and copies of the British Act will be available for you here. 
 
 Mr. Eeesor: I think we have copies of the Washington Act. 
 
 The Commissioner : The Washington Act, I think, will require a little con- 
 sideration. There is a good deal of pressure to introduce that here supplementary 
 to Workmen's Compensation. State insurance will have to be thought out very 
 carefully before it is adopted. 
 
 Mr. Eeesor : A great many of our members feel that the present method is 
 rather cumbersome and leads to antagonism between employers and employed when 
 
272 MINUTES OP EVIDENCE: No. G5 
 
 there should be no occasion for it. Because the insurance companies will always 
 fight a case under the present system. 
 
 The Commissioner: May I ask you Mr. Marks, or you Mr. President, 
 whether when a man is injured the labour organization to which he belongs does 
 anything to help him in his case? To assist him in getting his case presented and 
 getting it satisfactorily settled? Or do they leave it to himself? 
 
 Mr. Bastle : That is a point that I have never heard discussed before. Some 
 organizations have an insurance for their own men. 
 
 The Commissioner: Yes, but I mean this: a man is injured; he belongs to 
 the carpenters' union. 
 
 Mr. Archer : I do not think that is done, sir. 
 
 The Commissioner : Why should it not be done ? 
 
 Mr. Archer: I do not know. The feeling seems to be that it is a case of 
 antagonism existing between the employer and the union to which this man belongs. 
 I do not think it is that at all ; I don't think the union desires to get something 
 out of the employer, which he does not think the man who is injured should receive. 
 I think it is purely a question between the person who is hurt and the man he 
 works for, to tide him over or give him assistance during the time he is incapacitated. 
 I think it would be a deplorable state of affairs if the union took his case up, 
 because there would be that feeling of fighting and goodness knows there is enough 
 trouble between labor organizations and employers now. 
 
 The Commissioner: I would have thought they might advise him to be 
 reasonable. He might get bad advice outside the organization. 
 
 Mr. Archer: It might be but I hardly think so. It would be a continual 
 source of strife all the time, that the labour organization is getting this, and the 
 other side might say the man did not want it but it was a chance for the labour 
 organization to fight the employer, which they don't want to do, and it would keep 
 that thing going all the time. 
 
 Mr. Marks : I believe there have been instances in which organizations have 
 come forward and assisted the man when they thought it necessary in bringing the 
 case before the law. But different organizations have different rules and a man is 
 not competent to speak for more than the organization he belongs to himself. Of 
 course the men in these organizations have sick and disability benefits, and they 
 come under them. 
 
 The Commissioner: Why could not the bricklayers union have a committee 
 that would meet with a committee of the builders or master bricklayers and deal with 
 a case of a claim for compensation, say whether it was right and how much should 
 be paid ? 
 
 Mr. Marks: I cannot see anything to stop them. I think that could have 
 taken place years ago but apparently they have never come together on those lines 
 as yet. 
 
 Mr. Martin : I think, Sir William, the biggest reason why that is not done is 
 because some lawyer gets after them too quick. 
 
 Mr. Nutkins: I think it is feasible enough, but the employee really expects 
 to be insured. I have heard of cases where a man has asked the question, " Have 
 you got me insured?" as soon as he met with a little accident. Of course if you 
 pay for a man's insurance he should get what you pay for. If you go to a grocery 
 store and buy a barrel of apples and they give you a peck, I know I would kick 
 about it. We all would. If we pay for insurance we should get it. 
 
 Mh. Mabtin: We are getting mixed up on that expression. We are not pay- 
 
1912 WORKMEN'S COMPENSATION COMMISSION. 273 
 
 ing for insurance. It is protection we are paying for- Insurance is really what 
 we ought to have, but at present we are just protected from lawsuits. 
 The Commissioner: You are indemnified against paying. 
 Mr. Martin: Personally I would like to see a mutual insurance company 
 society. I mean both as employers and employees. 
 
 The Commissioner: A case occurs to one, such as this. A prospector in the 
 Cobalt region goes out and takes two men with him. An accident happens, an 
 explosion or something. If the two men are injured they have a claim against the 
 employer under the act. The employer is injured in the same accident a great 
 deal more than they are but has no claim against anyone, he is the sufferer all 
 around. It is pretty hard to get a system that works evenly. 
 
 Mr. Martin : There is another case which happened recently. You may 
 have noticed a report of it in the paper. A contractor putting in stairways in a 
 new building. His own men are insured against accidents or against his own 
 negligence. One of his men was injured very seriously by a workman under 
 another contractor. The employer of the injured man had him conveyed im- 
 mediately to the hospital and agreed to be responsible for the bills there, contrary 
 to the provisions of the insurance of course. The only person the man could 
 recover any damages from was his own employer, and his employer would have 
 to be out certainly, the hospital fees, and he has no insurance; he cannot come on 
 the insurance company because his employee was not injured by a fellow employee 
 but by someone else. There is something there that does not appear straight to me. 
 
 The Commissioner: It may be that he is not liable in that case. There 
 was a case something like that disposed of within a year or two. A bricklayer and 
 a carpenter. The bricklayer had put up his gangway to go into a building safely. 
 The carpenter had moved it for some purpose. The workman going in in the 
 morning thought it was all right, just as it was the night before- The first thing 
 he knew he was down in the basement and pretty badly injured. He sued his 
 employer but failed. The employer had put a proper gangway there and someone 
 else had interfered with it. 
 
 Mr. Martin : That was a hardship for the man ; he had no rights. 
 
 The Commissioner: It was very hard, undoubtedly. 
 
 Mr. C. Gould : At the same time, I suppose it cost the employer quite a bit 
 to find that out? 
 
 The Commissioner: No doubt it did. He had to get up to the second- 
 court before he ascertained that. However, there is always the consolation that 
 we, the great consumers, pay all this. It is not the builder that pays in the 
 long run. 
 
 Mr. C Gould: The individual builder does. The trade as a whole may not. 
 
 The Commissioner: He has got to make ends meet; make someone pay. 
 
 Mr. C. Gould: He may go to the wall. 
 
 Mr. Murray: And then someone pays. 
 
 Mr. C. Gould: When will this be presented to the House? 
 
 The Commissioner: I do not know. It cannot be presented until I get 
 ready, but they want it to be ready very quickly. My own idea is, if we could 
 persuade the workmen to wait a little longer, it would be better to wait and get 
 a better measure, rather than to have something half-baked. 
 
 Mr. Martin: It would be better to have a measure agreeable to all parties 
 rather than to have the thing fought out. 
 
 The Commissioner: What ought to be swept away as quickly cs possible is 
 18 l. 
 
274 MINUTES OF EVIDENCE: No. 65 
 
 the doctrine of common employment. That is a relic of barbarism. And there 
 ought to be a modification of the doctrine of contributory negligence on the part 
 of the workman. I am very glad to hear Mr. Gartshore's broad view of what 
 ought to be done. What is required is, not to hurt the employer too much, and 
 to give the employee as much as possible. That is the great desideratum. Have 
 you considered such a scheme as this Washington Act, Mr. Gartshore ? 
 
 Mr. Gartshore: I have read it over. 
 
 The Commissioner : How does it strike you as a first impression ? Would 
 it be practicable to work a measure of that kind here, the State undertaking to 
 collect the tax? 
 
 Mr. Gartshore: I think all questions of this kind, whether concerning 
 operatives, domestics or farm labourers, no matter what class, should be all under 
 the same act and the employer liable in the same way. I do not see why a man 
 running a threshing machine should not be protected as well as a man running 
 a planing machine. 
 
 The Commissioner: Is there not something to be said on the other side 
 there? The theory in the first place was that this was to protect workmen in 
 hazardous trades. There is not much hazard in the occupation of a domestic 
 servant. 
 
 Mr. Gartshore: No, and there is not much liability. There are not many 
 accidents. But as far as agricultural labour is concerned it is getting to be 
 largely mechanical. 
 
 The Commissioner: The farmers of this country would raise an awful row 
 if you attempt to tax them in this proposed measure. 
 
 Mr. Gartshore: No doubt; and the average politician is catering for their 
 
 vote. 
 
 The Commissioner: I have noticed a tendency on the part of the manufac- 
 turers' association to try to make up to the farmer. 
 
 Mr. Gartshore: I am told that 40 per cent, of the accidents happen on 
 
 farms. 
 
 The Commissioner: Mr. Waldron made a statement about that. I should 
 doubt those figures. I do not know where he was reading from. It is a very 
 large number. 
 
 Mr. Gartshore: They have traction engines, and nearly all their machinery 
 is now run by power. 
 
 The Commissioner: What do you think of this case: A farmer employs a 
 man and pays him good wages. The man is in the stable attending to a quiet horse. 
 Something happens and the horse throws out its heels, hits the man and breaks 
 his leg. If you ask a farmer to pay compensation for that he would think you 
 were mad. It is no fault of his. Perhaps it would ruin him if he had to pay it. 
 That is the way they look at it. 
 
 Mr. Gartshore : If the man were working for a builder, he would be liable. 
 
 The Commissioner: But you see the farmer cannot stick it on to anybody. 
 His market is fixed. With the manufacturer it is just one of the expenses of the 
 industry. 
 
 Mr. Reesor: What about the victim of this farm accident? It is just as 
 painful for him to be kicked on a farm as anywhere else. 
 
 The Commissioner: Logically that is so, but logic does not always prevail 
 in this world. There is a good deal of opportunism instead. We have to pro- 
 pose a measure that will pass. There is no use proposing a measure that will be 
 
1912 WORKMEN'S COMPENSATION COMMISSION. 275 
 
 sure to be defeated. I recollect when this employers' liability was introduced a 
 good many years ago, the representatives of farming communities were very 
 strong about keeping the farmers out. They would not listen to it at all. Then 
 you see in nine cases out of ten they do not need an act of that kind because 
 the farmer is generally the boss, superintending the operation, and if there is 
 any negligence it is his negligence, and this doctrine of common employment is 
 out of it altogether. 
 
 Mr. Reesor: Are the Provinces of Canada dealing with this measure in- 
 dividually? 
 
 The Chairman: Yes. 
 
 Mr. Reesor : Is there no Dominion measure ? 
 
 The Commissioner: I do not know whether it would be competent for the 
 Dominion to pass a measure of that kind. I had a circular sent to me by the 
 Secretary for the Colonies — the Colonial Secretary — expressing the wish of the 
 British Government that if possible all the British Dominions should be under 
 similar laws with regard to questions of this kind. That is a very big proposition. 
 They have different laws in all the Provinces. The law of Quebec is modelled 
 somewhat on the French law. Manitoba, I think, has something like the British 
 law. British Columbia also. That is one of the difficulties. The manufacturers 
 say if you have an onerous law in one Province it handicaps to that extent the 
 manufacturer with his competitors in the other Province. 
 
 Mr. Gartshore: Provision should be made, I think, so that automatically 
 a man will receive some remuneration promptly before the case is dealt with; 
 otherwise he is in great distress. And provision should be made for settlement 
 between employer and employees. I think that ought to be encouraged. 
 
 The Commissioner: You have had a little experience. What do you find 
 when you have a lawsuit; how does it come out generally? Is it some lawyer 
 getting hold of the man? 
 
 Mr. Gartshore : Practically as soon as an accident happens the man is fol- 
 lowed by one or more lawyers, and his case taken, I am informed, without any 
 liability to himself. I do not know whether that is the case or not. I know a 
 great many of these parties have no money to pay anybody, so that the lawyer 
 could not collect anything. 
 
 The. Commissioner: You see that is the humanity in the lawyer who takes 
 up the poor man's case. 
 
 Mr. Gartshore : Then, again, after the costs are paid there is very little 
 coming to the injured man. 
 
 The Commissioner: No doubt. There is a case tried at this court where 
 when they have got through fighting over the amount, there will be very little 
 left for the man if he succeeds. Are the working men here very much enamoured 
 of having their cases tried by a jury? In the British law there is no jury. 
 
 Wr. Rastle: In my opinion, if tried by a jury the jury would be in favour 
 of the working man. That is, not in favour of the employer. Whereas, if tried 
 by a judge, the judge will be fair and just to everybody; he will take the opinions 
 of both sides, and I think his opinion will be fairer than a jury's opinion. 
 
 The Commissioner: In England it is tried before the County Court judge, 
 and there is no appeal from him except on questions of law. When he settles 
 the facts that is an end as far as the facts are concerned. What do you think of 
 that, Mr. Gartshore? 
 
276 MINUTES OF EVIDENCE: No. 65 
 
 Mr- Gartshore: I think that should be satisfactory to both parties. 
 
 The Commissioner: I think you are right, that the sympathies of the jury, 
 nine times out of ten, are with the workman. 
 
 Mr. Bastle : The unions are always in favour of having things fair between 
 employers and employed. We would like to see good fellowship between them 
 instead of this continual strife that you say the socialists look for. That is one 
 thing the unions are very much against. 
 
 The Commissioner: Have you many socialists in London? 
 
 Mr. Bastle: No, sir, we do not deal with them. We think they are bad 
 people. There are two or three here, but they are not interested in unionism. 
 
 The Commissioner : There are two kinds of socialists. There is a very bad 
 kind, and another kind not quite so bad. 
 
 Mr. Jones: We have one very good one right here, Mr. Gould. He is a 
 very good one. 
 
 The Commissioner: Are you sure you mean a socialist, or do you mean a 
 single taxer? That is a very different story. 
 
 Mr. Beesor: We had a case last month where a teamster was driving along 
 a street that was torn up. A box fell off his load and struck a third party who 
 was on the sidewalk. The third party sued the owner of the team, and the jury, 
 an ordinary jury of twelve men, brought in a verdict that the owner of the team 
 was not to blame in any way, but that the plaintiff should get $150. The judge 
 said that is rather strange, you must say what you mean. Well, they said, we give 
 him $150. The defendant, who knew some of the jurymen, said that was hardly 
 fair to him. In their finding they said it was caused by the condition of the 
 streets, and therefore the defendant is in no way to blame, but we will give the 
 man $150. So they were sent back and they gave the man $150 in another form. 
 Afterwards the jury told the defendant, well we gave him $150 because it is the 
 city's affair, and not yours anyhow. That leads up to this question, that this 
 proposed law would not cover a third party. 
 
 The Commissioner: No, it is only between employer and employed. 
 
 Mr. Beesor: It would be open for litigation on that point. 
 
 The Commissioner: Yes. The only ground on which that man could have 
 been made liable was that the driver was negligent. 
 
 Mr. Beesor: It was proved that he was not. And of course the driver was 
 not worth it if he had been sued. 
 
 The Commissioner: Well, gentlemen, is there any more light I can get 
 from you? I am here to stay as long as I can be of use. I am very much 
 obliged to you, and I am very glad to see the spirit that prevails and I hope the 
 result of further deliberation will lead to your agreeing upon something to re- 
 commend to me. 
 
1912 WORKMEN'S COMPENSATION COMMISSION. 277 
 
 SEVENTH SITTING. 
 
 Legislative Assembly, Toronto. 
 
 Thursday, 18th January, 1912, 10.30 a.m. 
 
 Present: Sir William R. Meredith, Commissioner. 
 Mr. W. B. Wilkinson, Law Clerk. 
 
 The Commissioner: Mr. Wegenast, if you are calling witnesses as to facts 
 they had better be sworn, but if it is simply opinion evidence they need not be 
 sworn. 
 
 Canadian Manufacturers' Case. 
 
 Mr. Wegenast: My intention was to first outline our position by way of a 
 preliminary statement, and to support that by a brief that is not yet quite complete. 
 I will hand you the brief subject to some additions which I would like to make 
 later. 
 
 The Commissioner: A suggestion has been made to me that the manu- 
 facturers of Hamilton wish to be heard separately. 
 
 Mr. Wegenast: I had a communication from one of the manufacturers in 
 Hamilton, who thought it would be more convenient for some of them if they 
 could be heard at that city. It is not entirely essential, so far as we are concerned, 
 but it would be merely a matter of convenience. 
 
 The Commissioner : I will arrange for a meeting there. 
 
 Mr. Wegenast : There are a number of members of the committee who have 
 been in charge of this matter for the Manufacturers' Association in different parts 
 of the Province, who have found it difficult to appear here at the times fixed for 
 hearings, and I think it would be convenient if a meeting could be held either at 
 Brantford or Hamilton. 
 
 The Commissioner: Hamilton will be the place. 
 
 Mr. Wegenast: I may say that our Association represents in the neighbour- 
 hood of eighty or ninety per cent, of the manufacturers of the whole Dominion. 
 
 The Commissioner: That is the large manufacturers, I suppose. 
 
 Mr. Wegenast: Those who come within the qualifications necessary for 
 membership. It is necessary for a manufacturer to employ at least five persons in 
 some branch of actual manufacturing in this country. 
 
 The Commissioner: What do you include in manufacturing? 
 
 Mr. Wegenast: Well, I suppose everything that would be included under 
 that term as used in the popular sense. 
 
 The Commissioner: Is a man constructing a sewer a manufacturer? 
 
 Mr. Wegenast : No, and of course we do not include, to any extent at all 
 events, manufacturers whose scope is merely local, such as sash and door factories, 
 and local brick yards, and industries of a like nature; but of those who are 
 eligible for membership in the Association we include somewhere in the neighbour- 
 hood of 80 or 90 per cent. I think the percentage numerically would be about 75, 
 but on the basis of the number of employees and the amount of capital employed 
 it would be nearly 90 per cent. The Association presents an aggregate pay-roll 
 
278 MINUTES OF EVIDENCE: No. 65 
 
 of in the neighborhood of $250,000,000 annually, and of that about $150,000,000 
 is in the Province of Ontario. 
 
 The Commissioner: Would that be calculated to shrink if the Washington 
 law were applied? 
 
 Mr. Wegenast : I do not exactly see the point, your Lordship ? 
 
 The Commissioner: If you had to pay on the amount would you give us a 
 much less view of what your pay-roll was ? 
 
 Mr. Wegenast: I think possibly the proportions might suffer to the pre- 
 judice of the Province of Ontario in that event. I mean to say that the matter is 
 one of very serious import to the manufacturers of Ontario, and that we have given 
 the matter consideration corresponding to its importance. We view the matter, 
 not only from the standpoint of the employers of the Province of Ontario, but from 
 the standpoint of the influence of whatever legislation is adopted upon the other 
 Provinces. So far as the desirability of a change in the law is concerned I do not 
 know that there would be anything gained by my taking up the time of the Com- 
 missioner in supporting what has already been said on behalf of the labour interests. 
 We agree entirely with them when they say a change is necessary. Without going 
 into that any further, I may say that so far as we are concerned the discussion 
 assumes the form rather of a discussion of means than a discussion of the de- 
 sirability of some compensation system. When we come to outline our 
 views and propositions I have very little doubt that they will be con- 
 sidered as somewhat advanced, and I have very little doubt that there may be 
 objections on the part of manufacturers, and possibly of members of our Asso- 
 ciation, to the breadth of our propositions, but they have been the subject of the 
 most careful consideration by a very strong committee of prominent business men. 
 They have been, also, unanimously approved by the executive council of the 
 Association, a body consisting of several hundreds of the most prominent business 
 men of Canada, and they represent the results of very careful study of the different 
 phases of the problem. 
 
 We would regard it as most unfortunate if at this stage in the history of the 
 Province legislation were adopted which did not represent the accumulated exper- 
 ience of other jurisdictions, as well as the wisdom and ingenuity of our own 
 Province, and in view of the fact that the Province of Ontario has been a pioneer 
 in many excellent types of legislation which have afterwards been adopted by the 
 other Provinces, we have made this the occasion of the most careful consideration 
 of the whole subject from a national, rather than a provincial, standpoint. 
 
 It means to our Association an increase in the annual cost of between $4,000,- 
 000 and $6,000,000 to adopt almost any form of modern Compensation Act, and 
 from a study of the different systems we find that it will make a difference of 
 several million dollars in the efficiency of the administration of compensation, 
 whether a certain type of system is adopted in preference to other types or systems. 
 
 The Commissioner: If your figures of $4,000,000 to $6,000,000 are right 
 is the Washington proposition not an absurd one? What percentage would that 
 be on your wage-roll? 
 
 Mr. Wegenast: The wage-roll represented by the Province of Ontario? I 
 am speaking now simply from the provincial standpoint. 
 
 The Commissioner: So I understand, but if you have $250,000,000 of wages 
 and from $4,000,000 to $6,000,000 to be paid out in compensation, that is one- 
 sixtieth of your whole wage-bill. Is there not some mistake about that? 
 
 Mr. Wegenast : No, I was speaking now only on the basis of the $150,000,000, 
 not the $250,000,000. It is on the basis of $150,000,000, taking the percentage 
 
1912 WORKMEN'S COMPENSATION COMMISSION. 279 
 
 as an average on the rates now quoted and charged by liability companies. 
 
 The Commissioner: What is the average rate? 
 
 Me. Wegenast: I propose to discuss that at a later stage, but I may as well 
 now refer to the figures in the brief. 
 
 The Commissioner: I only wanted it roughly now, not to go into the detail 
 of it. 
 
 Mr. Wegenast: Between two and three per cent., or possibly higher. The 
 lowest rate under the Washington Act is two and a half per cent. I think, and the 
 highest rate is ten per cent., which is, of course, very high. Under the Washington 
 Act I think a rough guess would place the average rate at three and a half to four 
 per cent. I am assuming a somewhat lower rate because I do not think anybody 
 seriously contemplates such an elaborate scale of benefits as that provided by the 
 Washington Act. I have figured it out on what I would consider a fair average 
 basis. 
 
 The Commissioner : That does not produce on $150,000,000 anything like 
 two and a half per cent., does it? 
 
 Mr. Wegenast: Two per cent, would give $3,000,000 on $150,000,000. 
 
 The Commissioner: Yes. 
 
 Mr. Wegenast : I am not at all at this stage attempting to calculate the 
 figures accurately. I am merely saying that for the purpose of illustration, and 
 what I was referring to was that certain forms of compensation acts show results 
 in which a large proportion of waste appears. 
 
 The Commissioner : May I ask you are there any statistics of the amounts 
 paid out under our law? 
 
 Mr. Wegenast : ' I have not found any, your Lordship. 
 
 The Commissioner : Because these figures seem to me to be startling. I 
 did not believe there were as many hundred thousands of dollars as this, or any- 
 thing like it, paid out. 
 
 Mr. Wegenast : I think probably not, but I didn't -think it was necessary 
 to go into that because I have calculated everything on the assumption that there 
 would, of course, be an act of much larger scope than anything we have at present. 
 I do not imagine there is anything like that amount paid out, and I merely wished 
 to make that remark to emphasize the importance of the matter to us, and to give 
 point to the proposal that we have to make, particularly in view of the feature which 
 I have just pointed out, that under some systems a very large proportion of the 
 money that is paid out by way of insurance premiums, by employers, is w r asted 
 in the course of being transferred to the workmen. 
 
 The Commissioner: Rather is it not being kept away from them? 
 
 Mr. Wegenast : I am speaking of the systems of compensation. I am not 
 speaking of our own system, because I quite appreciate that it cannot be considered 
 a system of workmen's compensation at all. I do not know who happens to be 
 responsible for the name which is appended to the present act on our statute books, 
 and it may not perhaps be amiss to say that it is not a Workmen's Compensation 
 Act, but an Employers' Liability Act. I may say the British Act in its present 
 form is not a AYorkmen's Compensation Act, but an Employers' Liability Act, in the 
 modern sense of the term. 
 
 We have considered rather carefully a good many of the details of our pro- 
 posals, and are prepared at the proper time to discuss them, but the brief which I 
 am presenting, and the statement which I desire to make, are confined almost solely 
 to general principles and any references to any act or proposed act are only by 
 
280 MINUTES OF EVIDENCE: No. 65 
 
 way of illustration. If our proposals should appear drastic and should appear ad- 
 vanced, or should be called even socialistic, it must be remembered that they are 
 supported, as I have said, by the opinion of the solid business community of this 
 Province, and in fact of Canada. They are also supported by the unanimous offi- 
 cial opinion of the manufacturing bodies of the United States. 
 
 I would like to refer just for a moment to the work of Messrs. Schwedtman and 
 Emery, who were commissioned by the National Manufacturers' Association of the 
 United States to investigate the systems of Europe, with a view to formulating a 
 policy for that body on the subject of workmen's compensation. These gentlemen 
 spent four months in Europe, and the Association spent on the whole investigation 
 some $20,000. I was in New York at the meeting of the National Association 
 when the report of these gentlemen was brought in. The report was received with 
 feelings not far short of amazement. Up to the time that the National Association 
 took the matter up the writings upon the subject had been very largely from the 
 labour standpoint, or from the academic standpoint, and it was nothing short of 
 startling to the manufacturers to find that their commissioners, one of whom was 
 himself a manufacturer and a practical engineer, and the other an attorney, sup- 
 ported by the unanimous vote of the committee, bore out almost in its entirety, 
 or in their entirety, the opinions which had been formulated in late years by the 
 expert investigators on behalf of the labour interests and the academic bodies. There 
 are one or two points in which their findings differ, but in the main they are in 
 accord, as I have stated, with the opinions of those representing the labor interests 
 and of those who have investigated the subject for the educational institutions of 
 the United States; and I may say right here that our views upon the subject, and 
 the proposals that we will make are not less advanced, but are, if anything, more 
 advanced than those made in the statement presented by the repesentatives of the 
 Trades and Labour Congress of Canada. 
 
 Without saying anything more by way of preliminary remarks I would like 
 to refer to the first portion of the brief which I have placed in your Lordship's hands. 
 The first few pages of the brief contain an outline of our proposition, which is 
 further elaborated in the latter part of the brief. For purposes of outline it is 
 necessary to refer only to the first half dozen pages. I have already referred to and 
 placed on record the resolution passed at our annual meeting under which the com- 
 mittee in charge of this matter have acted, and I would like to point out that the 
 matter was approached there, and is being approached by our Association, from 
 the standpoint first and foremost of conservation. 
 
 A good deal is being said in late years about the conservation of our natural 
 resources, and I need not enforce by elaborate argument the obvious inference 
 that it is equally important, and in fact more important, that every effort should 
 be made even in a young country like ours to conserve the industrial efficiency of 
 our workmen. The first paragraph of the resolution refers to that feature, and that 
 is the feature we have kept most prominently in view in considering the question. 
 "Resolved tbat conservation of industrial efficiency by organized and systematic 
 means for the protection of the life and health of wage-workers, and compensation 
 for the results of industrial accidents is a matter which demands the careful atten- 
 tion of this Association." 
 
 In the statement of principles which appears on page "4," I think, of the 
 brief, we have placed first of all the clauses emphasizing the importance of this 
 feature of conservation of industrial efficiency by organized and systematic effort 
 in the direction of the prevention of accidents. The first principle reads as follows: 
 
1912 WORKMEN'S COMPENSATION COMMISSION. 281 
 
 "For reasons both humanitarian and economic the prevention of accidents 
 should be a prime consideration in any scheme of workmen's compensation, and no 
 systems can be satisfactory which will not tend to produce the maximum of effort 
 and result in conserving the life, health, and industrial efficiency of the workman." 
 
 I do not propose at this stage to comment further upon these principles than 
 simply to give some brief explanation where necessary as to the meaning. I find 
 that the meaning of our committee, and the meaning which I had attached to 
 the second principle, has been misapprehended by some of the representatives of 
 the labour interests who have read it, and the only comment which I desire to make 
 upon it is by way of enforcing this view, that the second principle is intended to 
 enunciate in its broadest form the principle of professional risk. That is the theory 
 that the cost of industrial accidents, the cost of compensating workmen for the 
 results of industrial accidents, should be thrown upon the industry and included 
 in the price of the product and charged to the consumer. It is not intended to 
 embody anything in the shape of the doctrine of contributory negligence, and if 
 such a view is gathered from that statement then the statement has been wrongly 
 worded ; it reads as follows : 
 
 " Relief should be provided in every case of injury arising out of industrial 
 accident. Such relief should not be contingent upon proof of fault on the part 
 of the employer but gross carelessness, drunkenness or intentional wrong on the part 
 of the workmen should be penalized in some way." 
 
 The Commissioner: Do I understand these are elaborated later on? 
 
 Mr. Wegenast:. Yes. 
 
 The Commissioner : And an explanation of what you mean by " penalized " 
 given ? 
 
 Mr- Wegenast: Not very much of an explanation of that, your Lordship. 
 I am personally very much in doubt as to what form the penalty should take, and 
 there is the obvious difficulty always arising that any penalty which is inflicted 
 falls to a very large extent on the innocent dependants. Still there is the vital 
 consideration that there must be some way of bringing home to the workman the 
 result of misconduct. I am not wedded at all to any form of words. I know there 
 has been a good deal of criticism of the words " gross carelessness," and I am 
 quite willing to have that principle read in any other form which embodies the 
 general idea that misconduct on the part of the workman must be brought home 
 to him in some way. 
 
 The third principle is : " The system of relief should be adapted to cover 
 wage-workers in every industry or calling involving any occupational risk and 
 should not be confined to such industries as rail-roading, manufacturing, build- 
 ing, etc." 
 
 The Commissioner: Why didn't you put what you meant, that it should 
 extend to farmers and domestic servants? 
 
 Mr. Wegenast: We did not mean that, your Lordship. We mean exactly 
 what is stated there. I do not know that there is any reason for, and there may 
 be many reasons against, our exhibiting undue solicitude for the welfare of the 
 farming community or the class of domestic servants. We are concerned primarily 
 with the interests of our own members, and with the establishment of a scheme 
 which shall represent a permanent and satisfactory solution of this problem. At 
 the same time we realize that any scheme which is adopted will in all probability 
 be ultimately extended to cover all classes of wage-workers. 
 
 The Commissioner: Now, is there any design in this? Are you proposing 
 
282 MINUTES OF EVIDENCE: No. 65 
 
 a Bill that will be defeated because it is loaded down with clauses that will be un- 
 popular with the farming community and the general public ? 
 
 Mr. Wegenast: No. Perhaps I may take this opportunity to express as 
 strongly as I may, and as strongly as I can, this feature of the attitude of the 
 Manufacturers' Association. We have approached the subject — and I am speaking 
 for the Committee in charge of this matter and for myself — with a view not to 
 gaining any narrow advantage for ourselves, although I do not want to claim for us 
 any superiority over the ordinary run of humankind. We have endeavoured to 
 approach this subject from the broad standpoint of the desirability of a satisfac- 
 tory solution, a solution satisfactory to the employers, to the employees and to the 
 community at large. We think we have everything to gain by such a solution 
 and by permanent conditions, and if there is any particular advantage to be gained 
 by our Association, and the employing interests generally throughout the country, 
 it will consist rather in the establishment of a permanently satisfactory condition. 
 We have more to lose by unstable and unsatisfactory economic conditions than we 
 have by the imposition of the burden of compensating the workmen who are 
 injured. I want to say this about all these principles, that they are drawn and have 
 been adopted with that in view. We do not want to meddle with the affairs of the 
 farmer any more than to consider that in a general scheme which is adopted it 
 must be taken into account that this scheme will in all probability be ultimately 
 extended to farm labourers and to domestic servants, and it should be such a 
 scheme as is fairly adapted for extension to these classes. 
 
 The fourth principle is : " The relief should be as far as practicable by way 
 of substitution for the wages of which the injured workman and his dependants 
 are deprived by the injury. It should as a rule be periodical and not in a lump 
 sum." 
 
 The fifth principle is : " The relief should be certain. It should not depend 
 upon the continued solvency of the employer in whose service the injury was sus- 
 tained." 
 
 The Commissioner: Do you suggest in regard to that in your brief how that 
 is to be secured ? 
 
 Mr. Wegenast : Yes, we have gone into that 'quite thoroughly. 
 
 The sixth principle is : "The amount of compensation should be definite and 
 ascertainable both to the workman and the employer. The system should entirely 
 displace the present method of compensation by an action for damages, and the 
 employer should not be subjected to any further or other liability except in cases 
 of gross carelessness or intentional wrong on the part of the employer." 
 
 The Commissioner: I see you eliminate drunkenness there. 
 
 Mr. Wegenast: That has been pointed out to me. I am quite ready to 
 have it included. 
 
 The Commissioner : It is an invidious distinction, I suppose : that is all. 
 
 Mr. Wegenast: I may remark that it is intended for the statement to em- 
 body the broad principle that while a scheme of compensation would take the place 
 of the present remedies at law, for reasons which I need not go into here, there 
 should be some way of bringing home to the individual employer as well as the 
 individual employee the responsibility of misconduct. 
 
 The Commissioner: There is a great deal of trouble involved in that. 
 That will raise again all these questions: You say "The employer." Take a 
 joint stock company. Does that include the vice-principal, as they call him, the 
 superintendent, or just the man who owns the concern? 
 
1912 WORKMEN'S COMPENSATION COMMISSION. 283 
 
 Mr. Wegenast : I am not speaking there, your Lordship, of the cases which 
 are covered by the general term employed in our present law. 
 
 The Commissioner : Do not misunderstand me. You are proposing to do 
 away entirely with the common law liability? 
 
 Mr. Wegenast: Yes. 
 
 The Commissioner: Except in the case of gross carelessness or intentional 
 wrong on the part of the employer. 
 
 Mr. Wegenast: No, that is not the intention. The intention of that prin- 
 ciple or statement is that there should lie some way of penalizing the employer, not 
 necessarily by making him subject to a common law action, because on the whole 
 I think the bulk of opinion is against the retention of that remedy, but possibly, as 
 under the Washington Act, by the imposition of a fine or a penalty which will go 
 to the general insurance fund. 
 
 The Commissioner: It would still leave that difficulty that I have sug- 
 gested. Would it be misconduct on the part of the owner of the business, which 
 in a great many cases would be a joint stock companj^, or would it be the men who 
 are in direct or immediate charge of the operation? 
 
 Mr. Wegenast: I have not considered that phase of it particularly, and our 
 committee did not consider it, but I should think, speaking offhand, there is 
 no reason why misconduct on the part of the representative of a company, if he 
 is the representative of the company, in its capacity as employer, should not be 
 penalized — if he happens to be the representative of an incorporated company. For 
 instance, supposing it is found an incorporated company, acting as employer, 
 omits to provide proper safeguards, or omits a statutory duty of any other nature, 
 I do not see why the company should not be penalized as well as an individual; 
 and speaking for the manufacturers, I think I can state that we certainly would 
 not feel like drawing any distinction. 
 
 The Commissioner : The Washington Act is considerably limited. " If 
 any workman shall be injured because of the absence of any safeguard or protection 
 required to be provided or maintained by or pursuant to any law or ordinance or 
 any departmental regulation under a Statute .... the employer shall within 
 ten days after demand therefor pay into the accident fund, in addition to the sum 
 required by section ' 4 ' to be paid," and then the sums are stated. Yours would 
 be broader than that, apparently. 
 
 Mr. Wegenast: Well, I am not wedded to any form of words. I am not 
 thinking of the cases that come under the ordinary term, " negligence." I do not 
 know but that the Washington Act may be too narrow. I wouldn't like to say that. 
 We have been considering the matter simply from the broad general standpoint, 
 and it is a matter of general expediency how far these different clauses should go 
 when it comes to the drafting of an act. The details of the working, and the 
 details of the scope of such penalizing sections are, I presume, a matter for sub- 
 sequent consideration. 
 
 The seventh principle is : " The funds for relief should be provided by joint 
 contributions from employers, workmen and the State. Employers and workmen 
 should pay in such proportion as represent the number of accidents occurring by 
 reason of the hazard of the industry and the fault of the employer on the one hand 
 and the fault of the workman on the other." 
 
 The Commissioner : Is that not exhaustive of the whole range of accidents ? 
 
 Mr. Wegenast: Yes. 
 
 The Commissioner : Then what would vou leave for the State ? 
 
284 MINUTES OF EVIDENCE: No. 65 
 
 Mr. Wegenast : The State should bear, we submit, the cost of administering 
 the system, and the arguments in favour of that I propose to go into later. 
 The Commissioner: That is elaborated later on? 
 
 Mr. Wegenast : Yes, but I point out that the State now pays for the expense 
 of litigation to a considerable extent, and that the general community would 
 greatly benefit by having the dependants of injured workmen, and the workmen 
 themselves, taken care of by this method, rather than being thrown upon the com- 
 munity at large, either upon the Poor-Law system or upon public charity. 
 
 The eighth principle is : "The system of relief should be such as to secure in 
 its administration a maximum of efficiency and economy, and as large a proportion 
 as possible of the money contributed should be actually paid out in compensation." 
 That is, of course, so obvious that it needs no explanation and almost no sup- 
 port, but at the same time is a very vital element for consideration. 
 
 The ninth principle is : " The procedure for the adjustment of claims should 
 be as far as possible dissociated from the regular courts of law. It should be 
 simple, and calculated to involve in its operation a minimum of friction between 
 employer and employee." 
 
 The Commissioner : Do you want the Juvenile Court brought in ? 
 Mr. Wegenast : Well, I would have to look into that. 
 The Commissioner: Of course, I am only joking. 
 
 Mr. Wegenast: The idea is a body should be appointed for the purpose of 
 adjudicating claims, with an appeal only on questions of law — a body similar in 
 its scope or intention to the Eailway Board. 
 
 Then the tenth principle is : " The system of compensation should be directly 
 associated with a system of inspection with a view to the prevention of accidents 
 and a system of prompt and expert medical attendance to mitigate the effect of 
 the injuries." 
 
 That is in a sense included in the first clause, but is repeated here for the pur- 
 pose of discussing some other aspects. 
 
 Then the eleventh principle is : " The system should be such as to secure as 
 liberal a measure of relief as possible without undue strain upon industry." 
 
 The twelfth is : " The system should be such as to afford some promise of per- 
 manency." 
 
 The Commissioner: There is nothing can be permanent in this world. If 
 you had said " a promise of some degree of permanency " it might have been all 
 right. 
 
 Mr. Wegenast: I think probably I should have put it in that way. I am 
 glad to have your Lordship's suggestion. 
 
 The next portion is a brief analysis of the systems in the different countries 
 of the world, which I may as well read. 
 
 " Practically all workmen's compensation legislation is an effort to embody 
 in some form and in some degree the second of the principles above laid down, 
 namely, that a wage-worker should receive compensation or relief in case of injury 
 occurring in the course of his employment regardless of questions of fault on the 
 part of the workman. This has been called the principle of 'professional risk/ 
 It is based upon the theory that the cost of human wear and tear should be thrown 
 largely, if not wholly, upon the industry and included in the price charged to the 
 consumer for the product of the industry. To what extent this theory is equitable 
 and economically sound, and to what extent it conflicts with the legal doctrine 
 
1912 WORKMEN'S COMPENSATION COMMISSION. 285 
 
 that no man should be responsible for something not his fault need not be dis- 
 cussed here. The theory is the basis of all workmen's compensation legislation." 
 
 " The different compensation systems of the world exhibit three distinct 
 methods of applying the theory of professional risk. These methods may be 
 respectively termed the individual liability method, the collective liability method 
 and the state liability or state insurance method. Every system in the world can 
 be classified under one or other of these heads." 
 
 Mr. Bancroft: May I ask a question? The statement here says, "It is 
 based upon the theory that the cost of human wear and tear should be thrown 
 largely, if not wholly, upon the industry and included in the price charged to the 
 consumer for the product of the industry." Would it be right? If the workmen 
 have got to contribute, according to their proposal, and the ultimate cost is upon 
 the consumer, they are making the workmen pay at both ends. 
 
 The Commissioner: So does the manufacturer. Both pay at both ends. 
 
 Mr. Wegenast: And the employer, of course, pays it by way of wages. 
 The question of the power of the workman to pay, and the question of his paying 
 at all, is largely involved in the question of the amount of his wages and his get- 
 ting wages at all. 
 
 The Commissioner: Let me ask you a question there. It is stated in some 
 quarters that the cost involved in such a law as is suggested cannot in certain 
 industries be put upon the consumer, that the price is a world's price, and not 
 subject to control by the industry in a particular country. 
 
 Mr. Wegenast: I think that is correct, your Lordship, and it is one of the 
 difficulties that we have to reckon with, but the difficulty does not go deeply 
 enough to abrogate the general principle. There is no doubt at all that the manu- 
 facturers of this Province will be prejudiced in competition with jurisdictions where 
 no compensation system exists, corresponding to ours. 
 
 The Commissioner: I was speaking rather of a different class. I was 
 speaking of the producers of mineral wealth or producers from the forest or the 
 farm? How can they regulate prices? How can they add to their price? 
 
 Mr. Wegenast: Well, the distinction is more a distinction of degree than 
 of kind, because after all the manufacturer is a producer in very much the same 
 sense as the farmer. 
 
 The Commissioner : He can add it on to his price, within certain limits ? 
 
 Mr. Wegenast: Of course. 
 
 The Commissioner: Take the people who are producing silver. They can- 
 not change the price of silver, and it might work out to be unjust in their case. 
 
 Mr. Wegenast: And the same thing is true of wheat, of course. 
 
 The Commissioner: And probably so of the product of the forest. 
 
 Mr. Wegenast: And certainly so of gold, the standard of exchange. In 
 those cases it creates a disadvantage, but there can be no doubt the whole idea of 
 workmen's compensation is founded upon that general principle that the employer 
 as the entrepreneur, which is the French term — and the translated term has, how- 
 ever, another shade of meaning — the undertaker of the industry is in a position to 
 place the charge of human wear and tear against the product, and get it out of 
 the consumer. 
 
 The Commissioner: Apparently your view is that it is anomalous that the 
 manufacturer bears the burden of any wear and tear of his machinery ordinarily, 
 but not the burden of the wear and tear of his human machinery. 
 
 Mr. Wegenast: We do not quarrel with the theory at all. I do not know 
 
286 MINUTES OF EVIDENCE: No. 65 
 
 that it is necessary for my purposes at present to affirm or deny. All I am saying 
 is that that is the general theory upon which all workmen's compensation legisla- 
 tion is based, and probably later on I shall be able to show that it is regarded in 
 that way by all the writers and authorities on the subject. 
 
 Then I continue : " Under an individual liability system the obligation to 
 compensate workmen is thrown upon the individual employer as an element of the 
 relationship of employer and employee. The law includes a term in every contract 
 of employment by which the employer assumes an obligation more or less extensive 
 to indemnify the workmen for injuries received in the course of, or in connection 
 with., the employment. The injured employee looks for his relief to his employer, 
 who thus becomes an individual insurer of the workman against accidents. The 
 principle of individual liability is illustrated in the English Workmen's Compen- 
 sation Act, and in the acts in force in some of the Provinces of Canada. Under 
 these acts employers are required, regardless of questions of fault, to compensate 
 their workmen for injuries arising out of, or in the course of, the employment. 
 Employers are, of course, encouraged and permitted to insure themselves against 
 the liability under the act by some form of insurance, but the initial liability rests 
 upon the individual employer, and the insurance effected is uniformly for the pur- 
 pose of protecting the employer against this liability and not for the purpose of 
 insuring the workman against accidents." 
 
 That is a distinction which I wish to emphasize particularly later on, the dis- 
 tinction between employers' liability insurance and real accident insurance. In a 
 system of employers' liability insurance it is the employer who is insured. In 
 accident insurance and in a real system of workmen's compensation it is the work- 
 man who is insured. 
 
 The Commissioner: There would be no difficulty under the present system 
 if the employer insured his workmen against the accident within the scope of the 
 Workmen's Compensation Act? 
 
 Mr. Wegenast : But he does not do it, and as soon as you compel him to do 
 it you have a compensation system. 
 
 Then I continue : Collective liability : 
 
 " Under this method the liability to compensate the workman is thrown upon 
 employers, collectively in groups, according to the hazard of the industry. 
 Employers are encouraged or compelled to combine in associations for the purpose 
 of insuring their workmen against accidents and providing the funds for the 
 purpose. The injured workman looks for his compensation, not to the individual 
 employer, but to the association or the fund. The principle of collective liability 
 is illustrated in the German system under which employers are grouped by indus- 
 tries under State compulsion and supervision, and are required to provide funds 
 for compensation or relief for injuries arising in their respective groups. The 
 collective liability system has been adopted by a majority of the countries of Europe 
 and some of the States of the American Union, but the German system being the 
 oldest and the most scientifically developed is usually cited as the type. 
 
 State Insurance. — Under this method the State itself assumes the obligation 
 to pay compensation, the cost being levied upon employers or employers and 
 workmen, through the agency of a State Insurance Department. The workman 
 looks for his compensation directly to the State Department and the compensation 
 
 rovided out of a fund levied in the form of insurance premiums upon the pay- 
 roll of industries. This method is illustrated in the acts recently adopted by the 
 States of Washington and Ohio." 
 
1912 WORKMEN'S COMPENSATION COMMISSION. 287 
 
 The Commissioner : Is that so in the case of Ohio ? It is very different from 
 the Washington Act. 
 
 Mr. Wegenast: The difference arises out of a different view of the consti- 
 tutional problem. It is in the form of being elective, but is in effect compulsive. 
 The elective feature is intended to get around the difficulty which the American 
 States all face, that they are not allowed by the Constitution to deprive any man 
 of property or liberty (I forget the exact term) without due process of law, and by 
 putting the matter in the form of an election, and making it as difficult to elect 
 one thing as possible and as easy to elect the other as possible, they escape the 
 constitutional difficulty. It has been pointed out to me, however, by Mr. Preston, 
 who drafted the Washington Act, that the Act of the State of Washington, and per- 
 haps the same remark would apply to the State of Ohio, that it is rather a 
 collective liability system under State administration. Mr. Preston points out 
 that while the State does administer the compensation system through the State 
 Department it does not guarantee anything. It does not guarantee solvency, and 
 is in fact prevented by the Constitution of the State from doing so. Mr. Preston 
 stated to me that his original idea was to have the State guarantee the compensa- 
 tion, but on account of the constitutional doubt he eliminated that feature. 
 
 The Commissioner: Does he not whip the devil round the stump? Does 
 the State not contribute so much? 
 
 The Commissioner: Simply towards the management of the fund. There 
 is a fund set apart. It is $150,000 to start the Department, but the system is 
 really a collective system, and he points out there is nothing further to guarantee 
 the solvency than the size of the classes created by this act. 
 
 The Commissioner : They are not divided into different classes in one sense ; 
 they pay in different proportions. 
 
 Mr.- Wegenast : Yes, they pay different rates. 
 
 The Commissioner: I suppose that would be a difficulty. Why did they 
 not provide as they do in mutual insurance companies, tha,t if the fund was 
 insufficient to pay the claims an assessment should be made upon all the persons 
 according to these rates ? 
 
 Mr. Wegenast: There is a provision of that kind. It is not put in that 
 specific way, but there is a provision under which that could be done. 
 
 The Commissioner: I suppose they had to touch that gingerly because of 
 the constitutional question. 
 
 Mr. Wegenast: Now, as to the advantages and disadvantages of the three 
 systems, the individual liability, the collective liability and State liability, and this 
 is only of course a rough outline which I have extended in the brief : " The method 
 of individual liability has been pronounced with singular unanimity by those who 
 have investigated the operation of the different systems as a failure. It involves 
 the violation of almost all the twelve principles above laid down as representing 
 the chief elements of a satisfactory compensation system. The individual liability 
 systems have not tended to any appreciable degree to reduce the number of indus- 
 trial accidents or to conserve the life, health and efficiency of the workman." 
 
 I would rather that sentence had not so much the appearance of an attempt at 
 rhetorical effect that it might better emphasize the fact intended to be brought 
 out, of which there is not the slightest question. " They operate with peculiar 
 hardship upon small employers, and older and partially disabled workmen. They 
 cannot be well operated so as to secure periodical payments as opposed to lump 
 sum payments of compensation." 
 
 The Commissioner : I don't quite understand what that means. " They 
 
288 MINUTES OF EVIDENCE: No. 65 
 
 operate with peculiar hardship upon small employers, and older and partially dis- 
 abled workmen." 
 
 Mr. Wegenast : That was referred to by Mr. Stewart here, and is illustrated 
 by the departmental reports. 
 
 The Commissioner: Under the system you propose would it not be to the 
 interests of the employer not to have old men who are more subject to accidents? 
 
 Mr. Wegenast : No ; it would be to his interest, but he would not be allowed 
 to discriminate. The humanitarian element would stand in the way of any rule 
 being made discriminating against the older and disabled workmen. 
 
 The Commissioner: You cannot compel a man to take John Smith, 60 
 years of age, into his employment. 
 
 Mr. Wegenast: You cannot compel him, but he would be under no direct 
 personal disadvantage by engaging him. 
 
 The Commissioner: Would you not have a wholesale barrier set up by all 
 the employers? 
 
 Mr. Wegenast: No, the employers could not justify themselves in face of 
 the general community by making a rule of that kind. An employee can justify 
 himself in the eyes of the general community by making the strictest kind of 
 regulations with respect to safeguards and rules for the prevention of accidents. 
 
 The Commissioner : Some of them do not care very much about justifying 
 themselves to anybody. 
 
 Mr. Wegenast : That may be, hut that is the point your Lordship is raising, 
 that they would perhaps discriminate against the older workmen; but they would 
 not be justified. Individually it costs them so little that there is no particular 
 advantage concerned. They would have' to be justified in the eyes of the general 
 community in making rules discriminating against the employment of older and 
 incapacitated workmen. I may go into that a little more in detail later. 
 
 ' They cannot be well operated so as to secure periodical payments as opposed 
 to lump sum payments of compensation." The statistics of the investigating 
 committees of (the British House of Commons bore that out fully, and all the text- 
 book writers upon the subject support it. 
 
 The Commissioner : Apparently you propose a cast-iron provision, that there 
 shall be no lump payments. I can imagine there might be many cases in which 
 it would be most desirable that there should be. 
 
 Mr. Wegenast : I have stated ft almost in those words. I have said as a 
 general rule it should not be in a lump sum, but there are many cases where it 
 would doubtless be desirable. I will read the paragraph dealing with that. 
 
 '* In some cases, as for example where an artificial limb or other device is 
 required facilities for a lump sum payment should be left open; and these facilities 
 might be extended to other cases where the lump sum payment is found in the 
 exercise of the wise discretion of some supervising body, to afford superior advan- 
 tages to the compensation plan, but as a general rule a pension on the basis of a 
 percentage of former wages is found most satisfactory." 
 
 That is supported by voluminous evidence both in England and other countries, 
 and by the text writers. 
 
 Then I go on : " They do not afford any assurance that the compensation 
 payments will he made, or continue to be made, there being no guarantee of 
 solvency on the part of those charged with payment. They have been proven to be 
 wasteful in the extreme, a large percentage of the money paid out in contributions 
 by way of employers' liability insurance premiums being taken up by commissions, 
 expenses of litigation, profits, etc. The workman is obliged to resort to legal or 
 
1912 WORKMEN'S COMPENSATION COMMISSION. 289 
 
 quasi-legal process to enforce his claim against the employer. The settlement of 
 each claim involves a direct contest 'between workman and employer, the latter 
 being supported by the employers' liability insurance companies with its superior 
 facilities for contesting claims." 
 
 The Commissioner: Would that not be a great deal mitigated if the lia- 
 bility of the employer were extended, as you seem to agree with those representing 
 the labour interests that they should be extended? There would not be the same 
 occasion for dispute. 
 
 Mr. Wegenast: That is true. It does eliminate the expense of litigation 
 to some extent perhaps by simply stripping the employer of all his defences. He 
 simply has to throw up his hands and say I can't do anything. Still the statistics 
 in England show that there are still a considerable number of points upon which 
 litigation does arise, and in any event there is the inevitable contest over the amount 
 of the claims, and other features of compensation, the contest being directly 
 between the employer and the employee, with the employer supported by the 
 liability insurance company. 
 
 The Commissioxee : If you had a supplementary British Act, requiring 
 compulsory insurance by employers and giving the workman the right, when he was 
 injured, to subrogate to the rights of the employer against the company, would 
 that not protect him to a considerable extent? 
 
 Mr. Wegenast: Well, I would not like to speak of all the features of that 
 offhand. 
 
 The Commissioner: Have you considered that aspect of it? 
 
 Mr. Wegenast: No, but I would be prepared to say this offhand, that it 
 would simply add another factor in the circuity of liability which must exist under 
 any individual liability system, and would raise more litigation. I would be 
 prepared to say that offhand. I have not considered all the bearings of the sug- 
 gestion. 
 
 The Commissioner: What is involved in my question is this: A man meets 
 with an accident : the employer is insured. Now, the British Act provides in the 
 case of the insolvency of the employer there is a preferred claim. Why shouldn't 
 the employee when injured, if this system were adopted, have a right to say to the 
 insurance company, I have a lien upon this fund, do not pay it to the employer, 
 and when he has established his claim get it instead of the employer getting it 
 from the insurance company? However, I do not ask you to express any opinion 
 upon that offhand. 
 
 Mr. Wegenast : Then I continue : " The individual liability systems 
 represent the greatest and most direct strain upon the industries." The meaning 
 of that is not apparent on the face of it, but I will go into that later. " They are 
 admitted by nearly all observers to represent merely a stage in the development 
 of a satisfactory compensation system and involve in the meantime unsatisfactory 
 relations between employers and workmen, and unsatisfactory economic conditions 
 to the community at large. 
 
 " The collective liability method as applied in Germany and other countries of 
 Europe, as well as some of the American States, is generally regarded as a success 
 in its practical working out. The systems of these jurisdictions are found to 
 embody in a large measure the elements above outlined as constituting a satisfactory 
 compensation system. The type system, that of Germany, is the outstanding 
 example of a successful solution of the problem; and the criticisms upon it are 
 attributable solely to defects in the details and administration of the svstem." 
 19 L. 
 
290 
 
 MINUTES OF EVIDENCE: No. 65 
 
 The Commissioner: Does that mean you are expressing the view that this 
 •man system might be transplanted here and survive, under our conditions? 
 Me. Wegex.ast: Not in its present form in Germany, but the same principle 
 might be adopted to the conditions here. 
 
 Tin: ( ommissioner : We have no such thing as these trade organizations as 
 an instrument of working it out. 
 
 Me. Wegenast: At a later stage I propose to indicate the opinion of the 
 committee, and what I believe is the general opinion of the business employing 
 interests of the Province, that there is a way of working out a system on the 
 German principles. The Washington Act in one sense is an embodiment of the 
 German principles, and the practicability of adopting it has been a matter of 
 very grave consideration amongst the members of our Association. We sent 
 out circulars to all the members, and the answers to these circulars 'showed 
 a remarkable body of opinion in favour of something in the nature of the German 
 system, the Washington system, or at any rate of the system of government 
 administration. 
 
 "The State insurance system as applied in the State of Washington and other 
 States, as well as a number of other European' countries, has the approval of a 
 large majority of investigators and writers upon the subject. Constitutional and 
 other practical difficulties have interfered with the introduction of such a system 
 in many jurisdictions where it was otherwise regarded as desirable. The exper- 
 ience of those jurisdictions which have adopted the system has called forth 
 enthusiastic commendation from employers and workmen as well as the general 
 public, and has given every reason to believe that such a system affords a satisfactory 
 solution of the problem." 
 
 I propose to add to your Lordship's brief copies of letters and expressions 
 of opinion from various interests in the State of Washington, and in the adjacent 
 Province of British Columbia, upon the working of the Washington Act. 
 
 The Commissioner: Is it not somewhat early to prophesy in that regard? 
 Mr. Wegenast : It is somewhat early, but the remarkable unanimity of 
 employers and employees does indicate something, whatever it may be. Experience 
 will, no doubt, expose defects and disadvantages that do not now appear. 
 
 The Commissioner: Have you learned how the payments for the initial 
 contributions were made? 
 
 Me. Wegenast: I had a letter just the other day from Mr. Higday, the 
 active commissioner, and it might not be out of place to refer to an incident that 
 is rather interest in, g in this connection. I had some correspondence with the 
 airman of the Michigan commission, which is reporting now in favour of an 
 similar to the Ad of Massachusetts, which is by the way as close a replica 
 of the German system as is thought possible in that State. Mr. Smith, the Chair- 
 mar of the Michigan Commission, called my attention to the fact that one of their 
 commissioners had gone to the State of Washington and had found there what he 
 called a lamentable state of affairs, and referred particularly to a large accident 
 which bad happened there just a few days before I was in Seattle, in some powder 
 works, in which there were claims involving many thousands of dollars, and 
 referred to the fad that there was only $270 in the treasury. I quoted Mr. 
 Smith's commenl in a letter to Mr. Eigday, the Commissioner of the State of 
 Washington, and he immediately sent a letter to the Governor of the State of 
 Michigan repudiating the statemenl and giving the real facts. I have a copy 
 i f M here. I do not know thai it is prudent now to put this in, but I thought 
 I miffhl mention it. 
 
1912 WORKMEN'S COMPENSATION COMMISSION. 291 
 
 "The greatest difficulty in the way of an introduction of an act like that of 
 the State of Washington is the immediate additional expense to the employer 
 represented by a probable rise of from 100 to 1,000 per cent, over the cost under 
 existing conditions." 
 
 I have already referred to the probable rise, and Mr. Neely stated to us the 
 other night that it was not improbable that the rate would be quadrupled. 
 
 "Most large employers cover their risk under the present laws by employers 
 liability insurance. While the rates for this insurance are very high relatively 
 to the benefits conferred by it upon injured employees the introduction of a system 
 like that of Washington would involve a considerable disturbance of economic con- 
 ditions to the prejudice of both employers and workmen. The same result would 
 of course follow the introduction of an individual liability system such as that 
 of England, in which latter case the expense of conferring corresponding benefits 
 would be much larger owing to the large percentage of waste. 
 
 That is, if we wanted to introduce an act along the lines of the British Act, 
 with benefits corresponding to the Washington Act, the rates would be practically 
 twice as high. 
 
 "There is a plan under which a collective or State insurance system could 
 be established at an immediate annual cost not greater than., and in fact in many 
 industries considerably less than, that of the present liability insurance rates- 
 This plan may be called the current cost plan." The emphasis there is on the 
 word "immediate." "Under it instead of capitalizing the periodical payments 
 due to the injured workman or his dependants and setting aside at the time of the 
 accident a lump sum to provide for all future payments, only the current cost 
 of meeting the annual payments would be assessed each "year with a small margin 
 for an emergency reserve fund. The annual assessment should increase as the 
 number of dependants increased, and the annual rate would only reach its maxi- 
 mum after a period of twenty- five or thirty years." This was the actuarial plan 
 adopted in Germany. It represents a minimum strain upon present industry and 
 does not involve the shock to the economic system which would be incidental to 
 the adoption of an extensive scheme of immediate capitalization." 
 
 That is a feature that we have considered very seriously. 
 
 The Commissioner: That would involve this, no doubt, the man who would 
 drop out of business would escape, and the burden would fall upon those who 
 sacceeded him- 
 
 Mr. Wegenast: Yes. 
 
 The Commissioner: That, of course, you recognize. 
 
 Mr- Wegenast: Yes, I recognize that. 
 
 The Commissioner: Was that not an objection? 
 
 Mr. Wegenast: It was thought a slight objection, but it does not weigh 
 at all against the advantages of the system. I am prepared to meet some initial 
 scepticism on the advantages of that system. 
 
 The Commissioner: What you are practically doing is to assimilate it to 
 a mutual life insurance system? 
 
 Mb. Wegenast: To an assessment life insurance, but the objections that 
 strike one at first are not the objections which exist in the assessment life plan. 
 In the first place the rate would never rise above the normal rate. If the rate 
 reaches the normal figure at the end of thirty years it ought never to rise above it, 
 because the rate then of those coming on the fund will be off-set by those dying 
 off, and the normal rate will then go on just as if the normal rate had started 
 from the beginning- There is one feature of the system which is more important 
 
MINUTES OF EVIDENCE: No. 65 
 
 even than the most economic feature, and that is brought out by Mr. Dawson, the 
 w York actuary, who I hope to have here before your Lordship on Tuesday even- 
 next. In his brief and in his address to the Federal Commission of the United 
 States he showed by statistics that are of course incontrovertible^ 
 
 The Commissioner: All statistics are, no matter where they come from. 
 
 Mr. YVegexast: That is a characteristic statistics have. They are incon- 
 trovertible to me at all events, that the result of the current cost plan of insurance 
 was an immense impetus to activity in the direction of accident prevention. He 
 showed that in a number of industries in Germany, in fact in most industries, the 
 normal rate had been reached after a period of about fifteen years, instead of 
 taking as it should according to the actuarial tables thirty years or more, and the 
 reason was this, the rapid rise in the rates for the first few years empha- 
 sized and kept constantly rubbing it in, as it were, upon the employer, 
 the necessity of accident prevention. It is quite easy to see when one 
 comes to think of it how that would be so in the number of industries spoken 
 of by Mr. Dawson, and the same remark applied I believe universally in Germany, 
 that the normal compensation rate was reached in twelve or fifteen years. I 
 would like to refer to a passage from Mr. Dawson's remarks at this stage. He says, 
 "Id the course of my work for the Bureau of Labour last year" — and he is one of the 
 active members of the United States Bureau of Labour — "I went abroad to ascertain 
 what workmen's compensation is costing in the various countries — that is, the 
 rates of premium which are paid in the various industries — information which has 
 never been collected before, in many cases not even in their own countries. I 
 also employed one of the very best men in the actuarial profession in Germany on 
 this subject to make this investigation for me as regards Germany. I think I am 
 the only person, outside of the Bureau of Labour, because we have not published 
 it, that possesses knowledge of what those durations have proved to be in Germany. 
 
 Then he goes on to speak of the particular industries at page 76. He 
 states, "They found it in Germany tremendously effectual, keeping the rate from 
 increasing for fifteen years past, for a long time actually reducing it, notwith- 
 standing the increasing burden because of previous years' accidents." 
 
 At the bottom of page 71 and on page 72 he says, "The German system is 
 what I have described to you, the rational, common-sense system of collecting each 
 year under a compulsory tax only that which is necessary to meet the require- 
 ments of the year with which to pay the incomes that must be paid that year on 
 account of the accidents that happened that year or previous thereto, started in 
 
 that way, we would collect just enough the first year to pay the incomes 
 
 required to be paid on account of the accidents of that year- The German system 
 
 rted at aboul 20 per cent, of its ultimate cost. According to the estimates of 
 
 will take in the natural process of events, if there were no change 
 
 danger of the industries— if they did not become more dangerous or 
 
 would take fifty years before it reached its absolutelv full 
 
 and when n reached that absolutely full figure it would be the' same 
 
 average which the insurance company would want to charge from the beginning 
 
 Ultl1 ,l "' 3° le exception that you would not have taken into account the powerful 
 
 influence in favour of prevention which 1 am about to describe." 
 
 Then the Chairman says: "Do you mean by that the full cost would be in- 
 
 ed year by year for fifty years?" 
 
 "Mb. Dawson: I do; hut practically it reallv reaches half its maximum in 
 ten to fifteen year-, and almost its maximum in twenty-five years; and if the 
 industry ha. I learned its lesson and reduced the hazard it may reach its maximum 
 
1912 WORKMEN'S COMPENSATION COMMISSION. 393 
 
 in ten or fifteen years and after that actually decline. Tims in Germany steam 
 railways paid the first year. 1886, thirty-nine one-hundredths of one per cent, on 
 the pay-roll, the nexl year seventy-nine one-hundredths of one per cent., the third 
 1.25, the fourth 1.38, rising to 1.80 the eighth; then prevention began to affect 
 it markedly and it declined in a few years, notwithstanding the burden because 
 of accidents in previous years, to as low as 1.26, and shows no signs after twenty- 
 four years of rising beyond about 1.80 per cent, which it reached in eight years." 
 Then he speaks of the beer bottling industry and the agricultural industry, 
 and goes into the question at some length on pages 72 and 73. 
 
 The Commissioner: Why does he assume that is due to prevention? Is 
 that not a plain assumption? 
 
 Me. Wegenast : Well, I would think not, but I would prefer not to speak 
 from assumption myself. Mr. Dawson will he here on Tuesday night, and I would 
 he very glad to hear him go into that- It strikes me as generally reasonable that 
 that would have an effect. 
 
 The Commissioner: It may be so, but why does he assume it? May there 
 not be other causes? 
 
 Mtc. Wegenast-: He says he has statistics which have never been gathered 
 before. 
 
 The Commissioner: That would be only to show the number of accidents. 
 
 Mr. Wegenast: He is speaking at large. His brief is in a subsequent 
 part of the report and I will refer to it later- 
 
 Xow, the last page of the sketch or outline gives the recommendation of 
 our Association. 
 
 "We recommend the establishment of either a collective liability or a State 
 insurance system. An individual liability system will not be acceptable to the 
 manufacturing interests of the Province." 
 
 If there is any one sentence that is the crux of the whole brief that is the 
 sentence. 
 
 "We are prepared to lend every assistance to the organizations of an inde- 
 pendent collective system, but we believe that under all the circumstances the 
 most economical and satisfactory plan for the Province of Ontario is a collective 
 system under provincial administration and control." 
 
 I may say we considered long and seriously, and in fact the policy of the 
 Association was, as expressed in the Annual Eeport of 1010, the project of forming 
 a mutual insurance company amongst the members of the Manufacturers' Associa- 
 tion along the lines of the Mutual Insurance Company now forming in the State 
 of Massachusetts, and forming under the acts of some of the other States in the 
 United States. The difficulties of that plan are apparent- The first difficulty, of 
 course, would be to get the different employees to join, and there would be no way 
 of compelling them to join the Mutual Association, and those who remained out 
 would remain outside the benefits. I was rather startled to find that the represent- 
 atives of the industries which have been most progressive in adopting preventive 
 measures are quite willing to forego the advantage which their individual concern 
 would derive from their superior preventive facilities for the sake of bringing into 
 line their weaker competitors who, after all are competing with them in the general 
 market. Thus, for instance, a prominent firm of manufacturers of agricultural 
 implements in Hamilton are known not only throughout Canada but the United 
 States for the excellence of their preventive facilities and the low rate at which 
 they carry their compensation, and the representative of that concern was quite 
 willing to pay the higher rate and to join in a system in which all other manu- 
 
294 MINUTES OF EVIDENCE: No. 65 
 
 facturers of agricultural implements were included and pay the higher rate. 
 
 "• We recommend the creation of an independent non-political provincial 
 insurance department administered by a Board of three Commissioners. This 
 Board should provide for the payment of all claims for compensation out of a fund 
 to be raised by premiums levied upon the pay-roll of industries classified according 
 to hazard." 
 
 The Commissioner: Is that not a little contradictory of one of your prin- 
 ciples? That leaves out the workmen's contribution. 
 
 Mr. Wegenast: That is dealt with later. 
 
 The Commissioner: You by accident struck the truth? You provide for 
 all claims out of a fund to be raised by premiums levied upon the pay-roll? 
 
 Mr. Wegenast: Yes, classified according to the hazard. 
 
 The Commissioner: Does that not contradict your other proposition? 
 
 Mr. Wegenast: No. 
 
 The Commissioner: There would be no room for the workmen's contribu- 
 tion, would there? 
 
 Me. Wegenast : The Ohio Act makes provision for that. I do not see any 
 contradiction. I am quite willing to go into that later. 
 
 " The Board should be vested with full jurisdiction to adjust all claims for 
 compensation upon sworn reports of the different parties interested. It should 
 have power to take evidence, to make independent investigations, and to re-hear 
 and re-adjust, its decisions being final upon questions of fact and subject to appeal 
 only in questions of law." 
 
 The sole object, of course, in that is to have the adjudication as prompt and 
 inexpensive as possible. If it is necessary ot have further appellate courts in the 
 interests of justice there would be no objection, but where the matter of adjust- 
 ment is merely a matter of establishing a claim to a fund there should be no more 
 difficulty in making it out than there is at present in adjusting a loss by fire. 
 There is an occasional action in the courts, but usually the action is not over the 
 adjustment of the claim but over legal questions arising out of the contract of 
 
 insurance." 
 
 ' The Board should also have power to enforce preventive regulations, and pro- 
 vision should be made for the advisory co-operation of representatives of different 
 classes of industries in the framing of such regulations." 
 
 The Commissioner: I suppose that means employers and workmen. 
 
 Mi;. Wegenast: That would depend perhaps upon the question of contribu- 
 tion. 
 
 'I'm: Commissioner: I should think they were pretty largely interested in 
 advising as to preventive measures. 
 
 Mit. Wegenast: Quite so. 
 
 The Commissioner: Was that intended simply to apply to the employer? 
 
 Mi:. \\ egenast: Well, that, as I say, would depend to a considerable extent 
 upon the <|iiestion of contribution. 
 
 The Commissioner: Why should that make any difference? Why should 
 a man not have a voice in recommending something to be done to safeguard him 
 Prom accidenl ? 
 
 Mr. Wegenast: That, of course, is entirely right, but take as an illustration 
 the system of Germany, where the funds for the compensation are managed entirely 
 h .v the employers' associations, li is only when it comes to the point of litigation 
 that the representatives of the employees come in. 
 
1912 WORKMEN'S COMPENSATION COMMISSION. 295 
 
 The Commissioner: 1 think you are misunderstanding me. This para- 
 graph is dealing with the power of the Board to direct preventive measures being 
 taken. I suppose it means for the prevention of accidents? 
 
 Mi;. Wegenast: Yes. 
 
 The Commissioner : It says " provision should be made for advisory co-op- 
 eration in the framing of the regulations." Now, why should the artisans not 
 have a voice in that as well as the employer, whether he contributes or not? 
 
 Me. Wegenast: It is a matter of practical working out. It is not so much 
 a principle as the practical working out. 
 
 The Commissioner: It is only advisory. 
 
 Mi;. Wegenast: There is no reason in the world why the labour unions even 
 should not make representations to the Board, and have a large share in it. 
 
 The Commissioner: How will this and the Factory Act stand together? 
 
 Mr. Wegenast : Well, my own idea has been that it is probable there would 
 be an ultimate merging of some of the functions of the factory inspection system 
 in the compensation system, so that the inspection would be impelled from within, 
 and would be conducted with a view to the reduction of the accident rate and the 
 rate of the insurance premium, thus affording the advantages of voluntary action 
 as against compulsion from without. But that, I thought, was a matter for sub- 
 sequent consideration and a matter of detail. 
 
 The Commissioner : I should think a Board such as you suggest for the 
 management and settlement of these claims would not be the Board best qualified 
 to deal with the preventive measures in a factory. 
 
 Mr. Wegenast: Well, the practical way of looking at it comes down to that. 
 What I thought would happen is this: Supposing you went even only to the 
 extent of the Washington Act, and created only certain classes, there would be 
 means found inevitably for getting the employers in those classes together to take 
 united action. The Act might well afford facilities for doing that; but whether 
 the Act did or not these employers would get together and frame preventive regula- 
 tions and make their wishes felt in the department in charge of the insurance. 
 For instance, supposing the manufacturers of agricultural implements thought an 
 expert draftsman of machinery would reduce their insurance rate, I have no doubt 
 they would get together in some way and employ such a man at their own expense. 
 I think the act might well afford facilities for appointing such a man at the expense 
 of the employers, or the employers and employees jointly, or whatever the method 
 might be, with the consent of the Board. But with regard to the general principle 
 1 think there can be no doubt. I think it would work out in that way voluntarily 
 if facilities were not afforded by the act. 
 
 Mr. Bancroft : I think in the mutual associations in Germany the employ- 
 ers do that. 
 
 Mr. Wegenast: Yes, the employers do that. 
 
 The Commissioner: That is all right. I was talking about State in- 
 spection. It would not do to abandon the State inspection. 
 
 Mr. Wegenast: I think not; at all events not at present. I would think 
 it very probable, however, that ultimately that the factory inspection end that is 
 now handled by the department here would be obsolete. 
 
 The Commissioner : You must be one of these men who are looking for the 
 millennium very soon. 
 
 Mr. Wegenast: Whether I am or not, the committee with whom I have 
 been associated, I think, would probably resent such an implication. With us it 
 is a matter of business, and is looked at very largely from a business standpoint. 
 
296 
 
 MINUTES OF EVIDENCE: No. 65 
 
 " The Board should also have charge of the adjustment of insurance rates and 
 the classification of industries." 
 
 Many questions might be raised there, but they are questions of detail winch 
 would be subject to adjustment and working out. 
 
 ■ The annual assessments of insurance premiums should be levied upon the 
 basis of the current cost of compensation payments with a margin for an emer- 
 gency fund." 5j 
 
 The Commissioner : What does that mean, "Current cost of payments ? 
 
 Mr. YYecexast: Paying only what is required for the particular year under 
 the plan that was adopted by Germany, and the plan which is expounded by Mr. 
 
 Dawson. 
 
 " A percentage of the premium rates representing the proportion of the acci- 
 dents due to the fault of the workman should be chargeable at the option of the 
 employers, and, upon due notice to the workmen, and deducted by employers from 
 the wages of the workmen." 
 
 The Commissioner: I do not understand that. You have nowhere sug- 
 gested that the workman should pay for an accident that he causes. You have said 
 he should be disentitled to recover. 
 
 Mr. Wegenast: No. If I have seemed to say that I did not intend it so. 
 
 The Commissioner : Do you mean to say the idea is if the workman through 
 these causes that are mentioned in the earlier part injures the machinery, or injures 
 another workman, that he has to pay for that? 
 
 Mr. Wegenast: Oh, no, the idea is that the workmen collectively shall con- 
 tribute a portion of the insurance premium. Possibly the Ohio Act will illustrate 
 it, where ten per cent, of the amount of the insurance premium paid on behalf of 
 the workman may be deducted from the wages of the workman. 
 
 The Commissioner: Ten per cent, of what? 
 
 Mr. Wegenast: Ten per cent, of the insurance premium paid on behalf of 
 the workmen. Under the Austrian Act ten per cent, is deducted. Under the 
 Swiss Act 25 per cent, is deducted. The whole question of contribution by the 
 workmen, is, as I have stated before, largely a matter of detail. In one sense it 
 is a matter of principle, and so far as the Manufacturers' Association are concerned 
 they are prepared to lay their arguments and their principles before not only your 
 Lordship, but before the labour people, and leave the issue. On the general principle 
 we could not conscientiously give way. There are different methods, of course, of 
 contributing. The method under the German Act is a waiting period of thirteen 
 
 WCei 
 
 Mr. Bancroft: Do the workmen contribute to workmen's compensation in 
 Germai 
 
 Mi;. Wegenast: The system of having the burden of the accidents thrown 
 upon the employees themselves for thirteen weeks is estimated to throw approxi- 
 mately 17 per cent, of the total cost of accidents upon the workmen. 
 
 .Mi;. I'.axoroft: That was only due to the social insurance being in existence 
 before the compensation. 
 
 Mi;. Wegenast: I am not speaking of the cause of it. 
 
 Mb. Bancroft: The mutual associations of Germany have full administra- 
 tion of workmen's compensation just as you point out here, and they take their own 
 measures for the enforcement of preventing accidents because they bear the whole 
 cost, and wherever the workmen contribute to either sickness or social insurance, 
 or anything else, they have the full representation they are entitled to. They have 
 
1912 WORKMEN'S COMPENSATION COMMISSION. 297 
 
 representation by taxation on the administrative Boards of the social insurance of 
 Germany. Now, another thing, Mr. Wegenast, there is not an act in the British 
 Empire either in existence or proposed, where there is contribution from the work- 
 men. It is retroactive. 
 
 Mr. Wegenast: I can tell you three or four, but I do not want to enter into 
 a discussion of that at present, because we will get involved pretty well if we do so. 
 We arc willing to lay our arguments before your Lordship, and before the labour 
 people. 
 
 The Commissioner : Mr. Dawson's argument that you have just referred to 
 would displace one of the arguments in favour of making the workmen pay a portion 
 of the cost. It was said if he had to pay that he would be more careful and there 
 would not be so many accidents. He does not recognize that at all, the carelessness 
 of the workman. 
 
 Mr. Wegenast : Of course, there are other factors entering into that. 
 
 The Commissioner : My understanding is he does not recognize that. 
 
 Mr. AVegenast: I could quote quite a number of expressions of opinion from 
 the leading authorities in Germany that the fact that the workman bears the burden 
 for the first thirteen weeks in Germany does tend to reduce the number of accidents, 
 and does tend to induce care, and particularly tends to reduce malingering and 
 fraud. However, those are matters that I intend to go into later. 
 
 Mr. Bancroft: Mr. Dawson says that the whole burden of compensation in 
 Germany is upon the employer himself. 
 
 Mr. Wegenast : If Mr. Dawson said that it would be wrong, and it would not 
 alter the fact. 
 
 The Commissioner : I think there is a distinction without a difference there. 
 You are not saying there is any direct contribution in Germany, but an indirect 
 contribution by reason of there being no claim upon the fund for the first thirteen 
 weeks, and in England there is the same thing for the first week, I think. 
 
 Mr. Wegenast : Yes. Let me say, while we are at that point, that the 
 original intention of the British Act was that the workmen should contribute by a 
 waiting period of three weeks, and the whole matter was placed upon that basis 
 expressly by Mr. Chamberlain, who introduced the act. He said the self-respect 
 of the workman would stand in the way otherwise, if he allowed the employer to 
 bear the whole burden, and that this three weeks' waiting period was the contribu- 
 tion of the workmen. I can hardly believe the figures, but it is estimated by Mr. 
 Boyd, I think, that the workmen's taking care of the accidents for the first two 
 weeks will eliminate 41 per cent, numerically of the accidents. Of course that does 
 not eliminate 41 per cent, of the cost, but it reduces the number of accidents 41 per 
 cent., apparently, as 41 per cent, do not last beyond the first two weeks. The 
 figures, as I say. look large to me. However, Mr. Boyd will be here to-morrow. 
 At any rate where there is a waiting period the workman does contribute 
 undoubtedly. 
 
 Mr. Bancroft: In what way? 
 
 Mr. Wegenast: It is surely not necessary to elaborate on that. 
 
 Mr. Bancroft : He does not contribute. 
 
 Mr. Wegenast: Another method of contribution, of course, is by a deduc- 
 tion or by a reduction of the scale of compensation. In some systems it is esti- 
 mated that the workmen should contribute by having the scale of compensation a 
 certain figure. For instance, instead of having the scale of compensation 60 per 
 cent, of the wages the schedule is reduced to 50 per cent., and it is considered 
 
MINUTES OF EVIDENCE: No. 65 
 
 ggg 1U11N U J. JliO WI m>\ ±±jA±i±y^-^ . — — — 
 
 ;he workmen bear that ten per cent., or that ten per cent, along with the 
 
 other 40 per cent, of his loss. 
 
 " A percentage of the premium rates representing the proportion of the acci- 
 dents due to the fault of the workmen should be chargeable at the option of 
 employers, and, upon due notice to the workmen, and deducted by employers from 
 the wages of the workmen." 
 
 I regret exceedingly from a purely tactical standpoint, if nothing else, but 
 it is necessary to insist upon that principle, because it is the only outstanding 
 difference between the employing and the labour interests, and, as I say elsewhere 
 in my brief, while there is a difference of opinion amongst the authorities, and 
 while Mr. Dawson is indifferent as to contribution, neither for nor against, and 
 while some of the other authorities are indifferent, and some opposed to contri- 
 bution, there is a large body of opinion in favor of contribution and of the gene- 
 ral principle. It represents a constant source of irritation, no doubt, but that 
 very irritation may be the means of emphasizing and impressing the necessity 
 of preventive activity on the part of the workmen as well as the employer, and I 
 doubt very much whether the full attainable measure of preventive activity can be 
 got without having a pecuniary responsibility thrown upon the workman. 
 
 The Commissioner : Following up your argument, if you adopted the British 
 plan, which does not give any compensation for the first week in certain cases, 
 would you not get the fund relieved more than it would be by the percentage you 
 are proposing? 
 
 Mr;. Wegenast: Well, I had no idea that an act would be proposed which 
 did not provide for a waiting period of one or two weeks. 
 
 The Commissioner: There has been no suggestion of that yet. 
 Mr. Wegenast: No, but the consensus of opinion is that the amendment 
 of the British Act reducing the period to one week was a mistake, and that two 
 weeks waiting period is necessary if for nothing else than preventing malingering, 
 and the wbole question, of "course, resolves itself into what length the waiting 
 period should be, if you adopt that as a means of workmen's contribution. 
 
 'I'm: Commissioner:. That waiting period is only conditional. If the injury 
 continues for a certain time it is cut down. 
 Mi;. Bancroft: Hear, hear. 
 
 'I'm; COMMISSIONER : What reason would there be for waiting if a man had 
 his hand or his leg cut off? 
 
 Mi;. Wegenast: If that principle is adopted, the contribution by a waiting 
 period, the legislators would at once advance that very idea, why should a man 
 wail if he has gol his hand cut off, forgetting altogether that the intention is to 
 throw a burdeD of the cost upon the workman or allowing him to bear the brunt 
 of his injury. 
 
 Tin: Commissioner : No, that I do not understand to be the principle at all. 
 The principle is to prevent, as you say, malingering. There may be trifling acci- 
 dents that do not seriously interfere with a man's getting back to work, and if 
 he had no incentive to idle he would go back to work. That is the principle I 
 have heard advanced lor it. 
 
 Mi:. Wegenast: Thai was not the intention in the original act, which it 
 rnusl ho remembered was supposed to be based upon the German Act. I have the 
 quotation Prom Mr. Chamberlain's speeches in Iho House of Parliament, and his 
 idea was thai ;i three weeks' wailing period should be there as a preservative to 
 (he -elf reaped of the workman. No says if there was no injury lasting more than 
 three weeks the workman would he well able to take care of it himself. 
 
1912 WOBKMENS COMPENSATION COMMISSION. 299 
 
 I do not want to go into the matter further this morning. I would like to 
 call upon one or two members of the Association to address the Commission. Mr. 
 Atwell Fleming and Mr. Samuel Harris are here. 
 
 The. Commissioner: We will be glad to hear them. 
 
 Me. Wegenast: I regret that I am not able to go on this afternoon. I had 
 intended to have had some of the members here to address the Commission, but 
 the Secretary informed me that the Commission would not sit this afternoon. 
 
 The Commissioner : I do not know how he got that impression. I intended 
 to go on this afternoon. To-morrow the Commission will sit both morning and 
 afternoon, as well as the evening. 
 
 Mr. Atwell Fleming : Your Lordship, I hardly expected to be called on to 
 say anything in connection with this matter. Our case was left almost entirely to 
 Mr. Wegenast to present to you, and anything I could say would possibly be just 
 along the lines of my own experience and my own thought as a small manufac- 
 turer. I have always thought, your Lordship, in connection with this question 
 that I would like to have some scheme whereby, instead of paying money to an 
 insurance company to protect me as against my workmen, that I would prefer to 
 pay even more money, and have some scheme whereby the workmen would receive 
 the benefit. A great many men that I have run against in connection with this 
 matter are of the same opinion. Now, it might be asked, why do you not pay 
 more money and have it entirely for the benefit of the workmen. It is simply 
 because we are afraid that if we have an accident in our shop an action will be 
 entered against us in the courts and we will have to pay what we considered ex- 
 traordinary compensation, or as it is usually expressed, held up for all they can 
 possibly get out of it. If some scheme could he arranged on the lines of what we 
 have suggested whereby we could pay even considerably more money and that the 
 money we do pay would find its way to the workmen without having so much 
 deducted from it, I think that would be in the line of what we think would be 
 right. I was particularly struck the other evening in hearing Mr. Meredith, the 
 representative of the Grand Trunk Kailway Men's Organization, saying in a case 
 where a party was entitled to compensation and they had been offered, I think 
 he stated, $1,000, and lie had advised them to take it, and they had evidently re- 
 ceived a great deal less than the amount of compensation. That seemed to my 
 mind to embody the idea which I wish to convey, that while to-day a great number of 
 employers are spending a great deal of money the workmen are not getting the 
 benefit out of it. If we could pay a fund whereby, instead of antagonizing 
 the workman he would have a call on that fund and get adequate protection 
 through it, I think that is the thing that we would prefer. There seems to be 
 an idea in connection with this matter that the employers wish to be antagonistic 
 to the workmen. I presume that is a condition which has arisen through the 
 state in which the law is; but in meeting on various committees in connection 
 with this matter, I have been struck with the wonderful amount of sympathv that 
 there appears to be in the hearts and minds of the various employers whom I have 
 met in respect to workmen who are injured. I fear they have been compelled 
 to assume an attitude towards the injured workman by the condition of the law 
 that they would not assume as individuals. I mean by that that I have found in 
 discussing the matter — and I can assure you it has been very, very gratifying to 
 me — that men whom I thought were hard-hearted and who would go to almost 
 any length to oppose an action for damages, were really men who would go to 
 almost any length if they could see that the workman was compensated. They 
 
300 MINUTES OF EVIDENCE: Xo. 65 
 
 have been deterred, however, and have had to assume that attitude simply because 
 :heir insurance in employers' liability companies. They are compelled by the 
 employers' liability companies to leave the matter in their hands, and very, very 
 often when claims could be settled, and settled amicably, and where the workman 
 would have received, perhaps not what might be termed adequate compensation, 
 still he would have received generous compensation, if it had been left to the com- 
 ] i.iuv that was interested. But they have been compelled to defend it through the 
 ion of these employers' liability companies, and eventually in order to settle 
 the case, it has cost not only the company insuring, but the liability company, 
 probably double the amount of money which it could have been settled for in the 
 first place. That represents to our minds a very, very great waste of time and 
 a very great waste of money. If a larger proportion of that cost could eventually 
 find its way to the injured workman, that is what we want, and that I think is 
 the gist of what I want to say. That is the main idea, to have that money which 
 it is really costing to-day, instead of being diverted from the injured workman, 
 to get a greater proportion of it to him. 
 
 Mr. Wegenast : You do not see any difficulty as a practical business man in 
 the Government taking this matter up and working it out? 
 
 Mk. Fleming: Well, I am not sufficiently informed on this matter, but I 
 would think that if it is possible for an insurance company to do the amount of 
 business they do, and handle the vast sums of money, and the vast number of 
 applications, and all that sort of thing, which they do, that it would be possible 
 for a Government to institute a department which would handle workmen's com- 
 pensation. As to the cost of it, I am not prepared to say anything on that point, 
 but I presume there is information extant somewhere that could be got and that 
 would be safe to work on- 
 
 Mk. S. Harris : Your Lordship, I have sat at this table with Mr. "Wegenast 
 for some time, and therefore the remarks I would make would only be taking 
 up lime iii going over the same things which he has said, and which Mr. Fleming 
 has said. There is one thing, however, I would like to impress upon the Com- 
 mission, that while we are talking about compensation and prevention, and some- 
 thing along the lines of contribution, if we could get education it would go much 
 towards cutting out the administration of compensation, and I believe that the 
 Government could handle it much better than, or any way as well as, a private 
 corporation can handle liability insurance. There is no question about it that the 
 eminent is handling the railways and the Hydro-Electric- It was the Eailway 
 Commission I was referring to particularly, but we have also a commission running 
 lway in the north country very satisfactorily, and I cannot understand why 
 In- Government could not handle this, and by that means the stability of the 
 would bo, as near as possible, perfect. I want to emphasize what Mr. Flem- 
 and say that I have not met an employer who is not anxious to see 
 'he injured man gets everything that is in it, and everything that is possible 
 for him to L r et. 
 
 THE Commi 3IONER: There was something that came to my attention a 
 
 ihorl time ago. In a large factory where there was a stamp machine, with a 
 
 Dumber of machines practically in the same room or the same department of the 
 
 factory, the evidence was thai all the employees were instructed how to use these 
 
 and were told that after they had gone through the operation of stamp- 
 
 ■ they Tnu-I not on any account keep their foot upon the treadle because they 
 
 Id by involuntary action bring the thing down again. A number of people were 
 
1912 WORKMEN'S COMPENSATION COMMISSION. 301 
 
 . 1 
 
 employed who were not skilled at all. They are sometimes foreigners, I should 
 judge, from what came out, and these people do not realize the danger of dis- 
 obeying instructions they get, and that very often their feet are kept upon the 
 treadles contrary to instructions, with the result that accidents happen- Now, 
 1 do not see why in a case of that kind where the employer of labour knows that 
 these people are likely to disregard the instructions, there could not be somebody 
 moving about among them all the time to see that the instructions are being 
 ohrved. instead of leaving these people to themselves without any inspection, and 
 without any watching or care of them. That is perhaps not germane to what we 
 have been discussing this morning, but it did seem to me that a great many of 
 these accidents could have been prevented at practically a small outlay by having 
 somebody going about superintending these foreigners while they are engaged in 
 those dangerous occupations, because it was dangerous if they failed to regard 
 the instructions they got. 
 
 Me. Fleming : I can easily conceive in a great many factories, where men 
 are at work with very large machinery, and all that sort of thing, that that might 
 be all right, but in a great many of the smaller factories it wouldn't. Your 
 lordship used the word "treadle" when perhaps the word "trip" would be a 
 better word to use. 
 
 The Commissioner: Yes, that is the operation. 
 
 Mr. Fleming : Now, you understand there is a fly-wheel running, and there 
 is. a very sensitive trip down ■ below, and when he wishes the machine to punch 
 he almost involuntarily touches that trip and down the machine comes, and the 
 operation is performed, and the machine will go on operating that way just as 
 long as he keeps his foot on the trip. There are some machines where they have 
 to trip for every operation. That is, for every punch that goes through they 
 will use their foot to trip it. Sometimes they will be talking and they will 
 have their hands here or there and almost anywhere, and while they know abso- 
 lutely that the slightest pressure of their foot on that trip is going to cause that 
 machine to make that performance, and if their finger is in the way it is going 
 to be cut off, still it happens. I have had a man, and even the superintendent 
 of the factory, who was adjusting a machine and knew absolutely that he should 
 be very careful with regard to that, who took off the end of his finger. The very 
 slightest touch of the foot will do that- So that an inspector walking up and 
 down would not prevent these things. You can easily understand how it would 
 be. The moment his back was turned it might happen, or it might happen with 
 him standing right there. 
 
 The Commissioner: I was speaking of a case where there were thirty or 
 forty people standing in close proximity. The evidence in this case was it 
 took a pressure of 35 pounds to trip the machine. Would it take anything like 
 that pressure with the machine you were speaking of? 
 
 Mr. Fleming: No, the slightest touch. I was speaking of a machine where 
 they cut out cardboard, such as index cards. There is a knife comes down with 
 the slightest pressure. 
 
 The Commissioner : Is there no guard that would apply to such a machine ? 
 
 Mr. Fleming: No, the machine has to perform that operation and you have 
 got to put the card in. The machine will not come down unless you touch the 
 trip, but the instant you touch the trip down she comes, and you haven't a second 
 to think, because your finger is off before you can think. 
 
 Mr. Wegenast : The larger consideration that comes up there is perhaps 
 what is in your Lordship's mind. Something more is needed than simply the in- 
 
. 
 
 MINUTES OF EVIDENCE: No. 65 
 
 dividual effort of the employer and the individual care of the employee. It needs 
 to suggest and enforce preventive care that is not enforced now. 
 
 The Commissioner: You could not do anything at all in the case of men 
 working with such machines as I was speaking of, or Mr. Fleming was speaking of, 
 unless it was by close supervision of them while they were at their work. 
 
 Me. Wegenast: My point is that if it was found under a collective system 
 that accidents did happen with undue frequency in cases of that kind the best 
 way would be found, whether by instruction or otherwise, to stop it. but when 
 it i> every man for himself and he is insured in a liability company it is not 
 
 (111! 
 
 Tin: Commissioner: I fancy a very considerable percentage of the accidents 
 where fingers are lost occur in these paper box factories, and tin factories, and 
 places of that kind, where that kind of instrument is used. 
 
 Mr. Fleming: When we met the commissioners from Quebec, when they 
 were trying to frame their law, I was struck with what one gentleman on that 
 commission said. According to the statistics" "which they had, which were gathered 
 from all over the world, they stated that there were a certain percentage of 
 accidents which happened owing to the fault of the employer, a certain percentage 
 of accidents which happened owing to the fault of the employee, but the very great 
 number of accidents which did happen just simply happened, and they couldn't 
 tell how they happened. I may say I very rarely have an accident in my factory, 
 but they do happen. The other day a man who is the superintendent of a depart- 
 ment, was making a form on a Gordon press. There is no particular danger 
 about it unless a person gets their hands caught in the machine, and then of 
 course they will get squeezed inevitably. The superintendent was making ready 
 a form on that press, and he was actually moving the fly-wheel with his hand- 
 The machine was not operating with any speed whatever. He was simply holding 
 a -heel of paper in there with his hand, and he knew absolutely if he kept on 
 moving that wheel he would squeeze his finger and yet he did it. I said, "Bert, 
 you must have been thinking of something else." "No sir," he said, "I w r as think- 
 ing of my business and holding that sheet of paper." He was so ashamed of it ; L 
 !>pose he was more humiliated himself in regard to the matter than you could 
 possibly imagine, and anything that I could say would not add to his discomfiture, 
 because he felt badly enough. Now, those things do happen, and when the accident 
 happens, as it will in connection with almost any industry, we feel of course there 
 oughl to be some provision whereby the man should be compensated. The details 
 of course of it will have to be worked out- 
 
 Mi:. Wegenast: It has been urged here, and I almost hesitate to raise the 
 po qo amount of urging would establish the fact in the mind of any 
 
 reasonabli :i, but it has been urged here that practically no accident happens 
 
 owing to the fault of the workmen, and there is always something about the hazard 
 of the industry or the risk of the premises, or something of that kind, which 
 is responsible for the accident. Now. in your experience, do you know if there are 
 accidents thai happen entirely or almost entirely owing to the fault of the work- 
 
 man ? 
 
 Mi:. FLEMING: Will. I would say in connection with the accidents I have 
 
 ;i I have invariably though! that it was due absolutely to the carelessness of the 
 
 workman. To my mind there was simply no doubt about it. All of you are 
 
 familiar, of course, with the ordinary elevator in a factory. There is an auto- 
 
 natic gate on thai elevator and just as soon as the elevator starts from the 
 
 bottom the automatic gate comes down to prevent anybody walking into the elevator 
 

 1912 YYOKKMK.VS ClLM I'LNSATlOX COMMISSION. 303 
 1 
 
 Well. Last October a man that I had employed with me wanted to go upstairs 
 on the elevator. The shipper and engineer were on the elevator, and had started 
 the elevator just as he ran to jump on. Now, all he had to do was to stand stock- 
 still and say I want to go up, and they would have come back for him, but he 
 thought he was quick enough to get in there ahead of that gate. Now, anyone 
 with any common-sense would not do it, but he did it, and the gate came down and 
 hit him on the nose. I might say, your Lordship, that it is almost invariably, 
 so far as 1 have come across employers, even though they are insured in an 
 Employers' Liability Company, and even though they are compelled by that com- 
 pany to take an attitude as against the workman, they invariably send that man as 
 quickly as possible io the doctor, and they pay the doctor's bill, and as a rule they 
 pay the man's salary while he is off. They are insured however. They must have 
 that protection for fear that that man may be induced to go to court and say that 
 he is injured to the extent of $1,000, or $2,000, as the case may be, and 
 even in defending the case they are put to enormous expense. Now, that man was 
 sent immediately to a doctor. I really didn't think he had any more than the skin 
 knocked off his nose. No, he went to the hospital first, and they could not attend 
 to him, and he went to the doctor. The doctor called me up and said : There has 
 been a man injured in your place, shall I attend to him? I said, certainly, fix 
 him up. The man came back and he had a great lot of plaster and cotton batting, 
 and one thing and another -all over him. I would have thought he had gone 
 through a threshing machine instead of having had a bit of skin knocked off his 
 nose, as it appeared to me. Well, the man left me in three days and didn't come 
 back again. Perhaps it was a little longer than that. However, he was taken 
 away by another employer, and the doctor sent me a bill for $15. I thought it was 
 exorbitant, and I told him so, but I sent him a cheque for $10. Well, the man 
 said it was due to his own carelessness and he thought he ought to pay something 
 but he never did, and that was the end of that. I have said this because you asked 
 me if I thought it was due to the workman's carelessness or not. Well, I have 
 seen quite a number of accidents in my time, and they were always attributable, 
 or at least I thought so, to his carelessness — absolutely downright carelessness, — 
 and if there is anything that the labour men can do they should do it. If they 
 would preach that in their unions, that every man should be careful, it would be a 
 good thing. NTo employer wants a man to risk his hand or leg or foot, or any 
 part of his anatomy, in connection with his business, and if they will only use 
 ordinary horse sense and be careful there is no reason in the world why they should 
 be endangered. That is, with the general run of modern machinery that we have 
 to-day ; but the fact that they do get injured is of course obvious. 
 
 Mr. Miller : I would like to say a few words in connection with the blame 
 that is being attached to the workmen in connection with those factory machines. 
 I have been working since I was a boy fourteen years of age. In connection with 
 the illustration that Mr. Fleming gave us I want to point out how it is possible 
 for the most careful man in a factory to get hurt without taking part in the actual 
 operation. Those machines are performing various operations at the same moment, 
 and that superintendent of Mr. Fleming's, when he was operating that machine 
 only by moving the fly-wheel with his hand, is an illustration. His thoughts were 
 so concentrated on the one portion of the operation that he forgot his fingers were 
 actually in the way of the machine's operation. Now, — under those circumstances, 
 giving the man credit for being careful and trying to do his work at the same time 
 in the best possible manner, it is possible for the most careful man in a factory to 
 be nipped in that way. I have seen it time and again. The man is so careful, 
 
304 
 
 MINUTES OF EVIDENCE: No. 65 
 
 but so concentrated in one portion of the operation that he forgets entirely the 
 other, and it is through his concentration on one portion of the operation that he 
 gets his lingers caught. 
 
 Mr. Harris: My hands show where I have been nipped several times, both 
 when I was working as a workman at the bench, and since when I was a working 
 employer, and when I look back I can say it was my own fault. I remember one 
 time getting nipped with a big load of stone on a truck. I was simply an ass to get 
 into The way. When I was a workman I had this finger torn, and it was my own 
 fault. I foolishly put my hand in a place where I knew there was danger. 
 I couldn't blame the employers though the employers were there, but whenever I 
 did anything like that they were very decent to me, and I have tried to be decent to 
 my own men. I just wanted to refer to a few instances that came under my 
 notice in the way of accidents. At our own factory we had a belt running a couple 
 of feet from the floor, but it was fenced off so that to get in there you would have 
 to deliberately get over the fence. One day one of the lads — I didn't know it, but 
 he had been fooling in some way and got a stick over, and he made a jump to get 
 over the belt. He pulled off the switch to disconnect the electric motor, but the 
 machine was still running, and he made a jump to get over and he missed it, and he 
 hit the belt and his foot went in and it broke his leg. Now, if he went right behind 
 that guard he wouldn't have got into that trouble. That cost me quite a lot 
 of money, for I took care of him and saw that everything was looked after, and I 
 took him back again. I had another case in my mind. There were foremen 
 around the place watching them, but if they are going to do things on the sly they 
 are going to do them. A boy threw some water on a man, and the man ran after 
 him, and the boy ran behind, a machine and the machine was like in the corner of 
 the room so that you would have to run into danger to run into the corner. The 
 boy to get away from the man ran into the corner and the man after him, and they 
 started to wrestle, and he threw his leg up and he caught it into a gear which was 
 guarded on the top but not on the bottom, and that gear ripped down his leg. Well, 
 we fixed him up, and that cost us some money, and took him back. He left me in 
 in a very- mean way, but he had a chance. Then there was another case came before 
 me. He was a feeder on a machine and he was running it, and they were fooling 
 and throwing some joke at somebody else, and as he put his foot on the stand of 
 the press he slipped, and as he slipped he fell over and his hand went under the 
 machine opposite and he had his hand badly hurt. All this goes to show it 
 was the fault of the workmen. There wasn't anything about the machine to injure 
 hi in if they were acting properly. 
 
 The Commissioner: What made him slip? 
 
 Mi;. Harris: He was fooling. He went to make a jump for this stand and 
 miscalculated and slipped. 
 
 The worst accident I ever saw or had anything to do with myself, was 
 
 where a lad lost hi? hand in my own place. He is with me yet and I am trying 
 
 compensate him by teaching him to be a traveller. I am looking after him in 
 
 tv way bo thai his livelihood will be even better as a traveller, his earning power 
 
 would be better, than a mechanic. I cannot give him his hand back but I can do 
 
 what I can to see thai he is not handicapped in life's battle. This lad was a very 
 
 - r '""l boy too. The machine was not running more than 600 revolutions an hour, 
 
 and that is pretty slow. The boy was a good boy and he was getting his form 
 
 idy, and he was feeling very happy in the fact that it was all ready to go ahead, 
 
 ! he took the Efheel "IT with his hand some way. and he was humming some kind 
 
 of a tunc, ot whistling, and he laid his other hand right on the plate, and he 
 
1912 WORKMEN'S COMFENSATIOX COMMISSION. 305 
 
 had put the form clown and was looking at it. and his hand went right off. 
 He didn't do it on purpose. Just like Mr. Miller said he was concentrated. 
 It wasn't like some who are looking always for six o'clock, and pay day to come. 
 I bought him the best hand I could buy and took care of him, and paid his salary, 
 and now I am training him to be a traveller, and I hope by that means to start 
 him off in life in a fair way. But in these cases, and even in my own case, it 
 was carelessness on the part of those who were doing the work. 
 
 Mr. James Smpsox: Will you just bear with me while I give one illustra- 
 tion. When I first came to Canada I went into a tin factory and worked there 
 for three years and three months- There w r as one department in this factory 
 where there was a very good foreman, and his duties were generally to instruct 
 the other fellows how to work with their machines so as not to meet with accidents. 
 One day he was fixing a machine, and it was a case of putting the dies into a 
 •certain press to get it out of a certain amount of tin. He was an exceptionally 
 careful man. He had the belt off the tight pulley on to the loose pulley, but he 
 had got the dies in such a position where they were just about accurate, and 
 he had turned on the belt on to the tight pulley. He had left the hammer on 
 the side where he was placing the dies, and he had let the strip go once or twice, 
 and he felt it had caught a little. He hadn't his foot near the trip at all just at 
 this moment, but for some reason or other he had just put his hand inside the 
 die to kind of give it a little shift over, when the hammer with the vibration 
 of the machine fell on the trip, and the die came down and cut his hand off- 
 It was a clear case of accident. I don't know whether you w r ou!d call that an 
 accident, but he had his foot away from the trip altogether. He never anticipated 
 any clanger, hut he had forgotten all about the hammer, and the vibration of 
 the machine forced the hammer onto the trip and off went his hand. N"ow, some 
 people might say that was carelessness and say, "Why did you leave the hammer 
 on the machine ?" 
 
 Mr. Fleming: It is pretty hard for a man to think and do two things at 
 the same time. Either he may go a little wide, like in a game of curling, or 
 not go far enough- If he gets both things right at the same time he makes the 
 shot. Similarly with a man on a machine, he has got to think of more than one 
 thing at a time, otherwise things are going to happen. I heard of a case the 
 other day. Who would be at fault in a case like this? Of course in all these acci- 
 dents, no matter whether it is the workman's fault or the employer's fault his 
 family suffers all the same, and we want to enunciate the principle that if a man 
 is injured his family is entitled to something, no matter whose fault it is. But 
 here is a man goes into a factory, and he has no business in that particular de- 
 partment at all. There is an electric hammer there, and he picks it up, and these 
 things work very fast. You have heard these hammers rattling when buildings 
 are being riveted. He takes hold of the thing and he looks down the barrel of it — 
 a very foolish thing to do with a gun — and the first thing he touches a spring and 
 the thing shoots out and hits him in the eye, and the eye is gone. Whose fault is 
 it? He had no business touching that tool at all, but he did it, and the accident 
 happened. All these things have to be taken care of. It is just one of these things 
 in the general average of accidents that happened. We as employers think 
 that while we believe that a man should be compensated, still there should be some- 
 thing which will deter a man from being grossly careless or drunk, or doing things 
 on purpose. While we feel his family should be compensated in some way, we feel 
 there should be some penalty whereby you can deter that man. 
 
 Mr. Simpsox : Your Lordship, just let me give you an illustration. Here 
 ?0 L. 
 
306 
 
 MINUTES OF EVIDENCE: No. 65 
 
 is a sheet of tin. In the interests of the economy of production the manufacturer 
 seeks to get as many round pieces out of a given quantity of tin as he 
 possibly can. Of course the action of the press depends upon the trip and the man 
 has his foot generally on the trip, and he touches it every time he wants the die to 
 come down. There is a square piece of tin. When he is cutting over at this side 
 there is no danger because his hand is over here, but when he gets to this end his 
 hand is getting nearer to the die. I have seen half a dozen accidents in 
 factories where the accident has happened in the interests of economy, just getting 
 too close and putting his finger too close, and off comes his finger. 
 
 hi my opinion a system of workmen's compensation will always work 
 out in this way, that the employer who has a machine of that nature, if the most 
 of the accidents result from the involuntary use of the foot on the trip, will devise 
 some other means of operating that machine. Although I am not a mechanic by 
 trade I see no reason why the trip should not be abolished altogether, and the 
 action of putting a piece of sheet iron or a piece of tin into this die, if it was a 
 certain gauge the machine would operate, and it would eliminate entirely the foot 
 action altogether, and it would simply eliminate a great deal of danger to the 
 employee and be a great benefit to the employer. Being a member of the 
 Royal Commission on Industrial Training I have been in a great many factories 
 in Canada, and I have observed, as one factory has been mentioned, the Inter- 
 national Harvester Company — I have observed their system, and it is a good one 
 for the prevention of accidents for this reason, that they are always encouraging 
 the employees by a bonus or some kind of reward to invent some kind of preventive 
 device which will eliminate the risk in their factory, with the result, as you will 
 find, according to the statement of the representative of the employers, that 
 accidents have been to a great extent eliminated, and their premiums are much 
 less than they would be if they were participating in any other kind of insurance 
 scheme. The risk involved in connection with the operation of machinery is 
 bringing a great many manufacturers to substitute the automatic machine for the 
 humanly operated machine, and I was rather surprised to see in a number of manu- 
 facturing establishments five or six machines being operated without a piece of 
 human power attached to them. 
 
 Mr. Wegexast: You wouldn't like that? 
 
 Mi;. Simpson: Never mind, the time will come when this will work out to 
 be a benefit. To-day it is not a benefit, but the day will come when it will be. 
 I .nil merely illustrating that when you place the responsibility upon the employer 
 he tendency is in the direction of prevention. He will see that his factory is 
 run according to (lie best methods, and he will see that the accidents will be 
 dim 
 
 Mi:. Earris: The employee is careful when you give him a bonus? 
 Mi;. on: No, that wasn't the statement I made. My statement was the 
 
 to the employee to invent something that would be to the ad- 
 \ ; " '' the employer in preventing accidents, and it had resulted in some of 
 
 being much improved along that particular line. I have always con- 
 ended, your Lordship, that, so far as the workmen are concerned, in my estim- 
 no workman would be insane enough to purposely be so careless as to cut 
 off a finger or endanger his own life. There must be a great many other factors 
 tering into the cause of such an accidenl if such occur*. Tf he 'is drunk while 
 his occupation and an m ■■■ ml. mi occurs T say the fault rests with the employer 
 for having such an employee in his employ, and the labour movement in this country 
 
1912 WORKMEN'S COMPENSATION COMMISSION. 307 
 
 will strongly condemn any employee who so disregards his own family and per- 
 sonal interests as to go into a factory drunk to his daily occupation. The fact of 
 the matter is to-day you will see that the big railroad corporations will absolutely 
 not employ a man where life is at risk at all who indulges in intoxicating, bever- 
 ages. We are heartily in accord with that, and we strongly condemn a man going 
 into a factory and endangering his own life and the interests of his family who 
 are dependent upon him. 
 
 Mi;. Wegenast: There is one method of penalizing employees for carelessness 
 and misconduct, to make the penalty not contingent upon the accident happening, 
 but to have a penalty in every case where there was carelessness, and to have some 
 method of enforcing the rules, because it is not always the careless man who is 
 injured. 
 
 The Commissioner: You would want another court to enforce that. 
 
 Mr. Fleming : I would not like to leave the statement unchallenged that it 
 is the employer's fault if a man is drunk at his work. Your Lordship, I have on 
 more than one occasion had a man come into the shop where I was superintendent, 
 in the old days, and that man would be perfectly sober when he came to work, 
 .uid he could set type and set type well, and at ten o'clock in the morning I have 
 found him entirely incapacitated at his frame. He had become drunk after he 
 came into the shop. Now, that does happen. It is easily understood that no 
 employer will let a man who is drunk and knows he is drunk go in and go to 
 work, but there are any number of instances where men will come in perfectly 
 sober and will become drunk after they get there. 
 
 EIGHTH SITTING. 
 
 Legislative Building j Toronto. 
 
 Friday, 19th January, 1912, 10.30 a.m. 
 
 Present: Sir William R. Meredith, Commissioner. 
 Mr. W. B. Wilkinson, Law Cleric. 
 
 The Commissioner: Is there anyone who wishes to be heard this morning? 
 
 Mr. Wegenast : Mr. John Ransford is here, and I would like if your Lord- 
 ship would hear what he has to say, as he is anxious to get away. 
 
 Mr. John Ransford : My Lord, I have not come here prepared as I would 
 like to have been had I known that I would have been asked to give any evidence 
 before a meeting of this description. Being in the city. I called on my friend 
 Mr. Wegenast this morning, and he said, I wish you as a man who at one time 
 earlier in life was hired out in the lumber woods in the United States and knows 
 some of the conditions of the workingman, and also as an employer of labour, and 
 as a member of the Manufacturers' Association, but one who has not been con- 
 nected with the committee in any way or shape, would tell the Commissioner 
 briefly your views upon the subject. I have been an employer of labour now for 
 a great many years, and have gone through necessarily the various stages that 
 
308 MINUTES OF EVIDENCE: No. 65 
 
 1 
 
 we have to pass through in this country with regard to the relations between em- 
 ployer and the employed. Of course, as your Lordship is fully aware, many 
 years ago there was little or no legislation upon this subject, and the conditions 
 existing then between the employer and the employed were more satisfactory than 
 they are to-day. 1 mean by that that there was a very faint reflection of the 
 feudal system in this regard, that the employer looked upon his employees with 
 more or less of a protecting aspect, and I think I would be borne out by others 
 in saying that, generally speaking, there was a much better condition of feeling 
 pertaining between the employee and his employer. In other words, if any man 
 got hurt during the time he was acting in that position the employer would 
 almost necessarily do what he could as regards helping him in any trouble that 
 overcame him. That condition of things gradually changed until we were finally 
 face to face with a very objectionable condition, namely, that of the unscrupulous 
 lawyer who, the moment he hears of an accident, no matter where the fault may 
 be, instantly rushes off to the bedside of the employee, and conjures and implores 
 him to let him take up the case and conduct it for him, engaging to charge him 
 nothing unless he gets his costs out of the defendant. That condition of affairs 
 gradually got w r orse and worse until to-day it is almost proverbial, and conse- 
 quently many manufacturers have been more or less against their will driven 
 into the position of taking out an insurance policy with a company, which is 
 detrimental, to a large degree, to the best interests of both employer and 
 employed, and also of that condition of things which allows the friendliness 
 and good fellowship and mutual regard that should exist between employer 
 and employee. In other w r ords, this policy that we take out, as you well 
 know, my Lord, simply transfers the obligations of fighting any and every 
 claim to the insurance company and leaves the employer to a great extent 
 free. A very great objection, of course, to that is that it is not in one way fair 
 upon the employees in that they have to withstand the whole influence and money 
 power and fighting ability in various directions of this insurance company. There- 
 fore, I for one at least, and I am sure I speak for a large number of my fellow 
 employers of labour, say that we would gladly welcome anything in the shape of 
 legislation that would ameliorate that present condition of affairs. As I told you, 
 I have not had the time to give to this that I would have liked, and 
 my ideas consequently are in somewhat of a crude condition, but at the same 
 time I have given it enough consideration to have determined that so far as 
 my nun unimportant individual opinion is concerned I am strongly in favour of 
 legislation whereby all such troubles and accidents to employees should be pro- 
 vided for by an insurance scheme to which the State should lend its aid to a 
 rtain extent, the employer also, and the employee also. As to what actual frac- 
 tion of the whole the employee should pay and the employer should pay, and the 
 should pay, is a matter thai T am not prepared this morning to express my 
 opinion upon. It is more or less to my mind a matter of detail, or can be more 
 ? easily arrived a1 without any needless friction; but that the State shouTct 
 beaT its pan, and thai (lie employer should hoar his part, and that labour should 
 beaT its part, I have net the shadow of a doubt. It would be beneath the dignity 
 or to consent to anything else, in my opinion. It is the manifest duty of 
 'he employers to do likewise. Although horn a Tory, I might say, with more or 
 strong conservative feelings, T am not at all scared by what some people call 
 ocialistic tendency of such a measure as 1 propose. If it is to be socialistic 
 mu-t be, but thai need nol be an insuperable barrier in my mind. I agree 
 
1912 WORKMEN'S COMPENSATION COMMISSION. 309 
 
 fully with cue item that 1 heard my friend Mr. Wegenast speaking of in pre- 
 senting his brief before your Lordship, and abqat which your Lordship also made 
 some remark, namely, that no class of the community should be exempt. If it 
 is necessary, as I think it is, to introduce both domestic servants and farmers, 
 and others who are now outside the pale of this more favoured region, I see no 
 reason why they should not be. I have long been at a loss to understand why as 
 a manufacturer, if I employ a man to work for me I am exposed to certain re- 
 sponsibilities as regards his care, the proper conduct of my work, safeguarding 
 machinery and other apparatus that he has to deal with in his daily work, why 
 I should be responsible for any injury that may come to him — if I am careful in 
 every proper regard, why that condition of things should obtain to me as a sock 
 manufacturer, and the very same day and the very same year as a farmer, which 
 I am, 1 can have my machinery around the farm in any state of disrepair, in any 
 state of danger, it matters not, and the man who is working on my farm may 
 get injured, and I am immune from all responsibility. 
 
 The Commissioner : Perhaps that overlooks the fact, Mr. Ransford, that you 
 would be liable in a case at common law for neglecting to provide proper 
 machinery. The common law liability would remain there. 
 
 Mr. Ransford: I merely stated that, my Lord, because I was under the im- 
 pression that the farming community were immune from responsibility. 
 
 ■ The Commissioner : No, they are immune under our act, and some other 
 acts, and I suppose from what Mr. Boyd has told me they would be in the State 
 of* Ohio, because there are very few farmers employing five men. 
 
 Mr. Boyd: At present they are immune, but in the course of a few years 
 they will be brought under the act too. 
 
 Mr. Ransford : I was very much struck in this regard by a lecture I listened 
 to by a gentleman from the States last Fall. While statistics in North America 
 generally were wanting, yet from Germany he was able to furnish them, and to my 
 utter astonishment he showed us that the statistics in Germany proved that ac- 
 cidents to the working classes on the farm were far more numerous than any other 
 class. 
 
 Mr. Boyd: 43 per cent, of all the accidents. 
 
 Mr. Ransford: Greater than braking on the railroad, greater than tend- 
 ing a buzz-saw, greater than working on a scaffold in bricklaying, or working as 
 a locomotive engineer. Any calling you can mention fell down in comparison 
 to the number of accidents that happen on a farm. Another very surprising 
 thing that struck me was this : that not only was that the case, but the principal 
 source of accident on the farm is not in connection with machinery such as 
 threshing machines, mowers or reapers, as one might expect, but the large per- 
 centage of accidents on the farm arise from the comparatively trifling sources of 
 the falling of ladders, the falling of pitchforks, and such like. I do not know 
 that there is anything else that would warrant my occupying your time. 
 
 The Commissioner: I would like to ask one question. Of course, to get 
 at the bulk of the accidents, the number of accidents is not probably a fair test. 
 It may be that a large majority of the farming accidents are trifling. However, 
 I suppose there are statistics which show how that is. 
 
 Mr. Wegenast : Yes, your Lordship, there are complete statistics. 
 
 Mr. Doggeit: I would like to ask a question. Do you not think the workers 
 would pay enough by being consumers, and also if the State took some part of 
 the burden of insurance that they would also. a~ tax payers, be paying again? 
 
310 
 
 MINUTES OF EVIDENCE: No. 65 
 
 Mb. Kansford: As I told you, I am not at all prepared to say yet what 
 fraction should be borne by the State, what fraction by the employer, and what 
 fraction by the employee, but I do think that labour itself would demand as its 
 right that it should pay a certain percentage. I do not think that it would pay 
 enough under present conditions, without paying something more, however small 
 a part it might be. I think out of self-respect to itself it would demand to pay 
 a certain fraction. I do not say a large one, but I say a certain fraction should 
 be paid by the employee, a certain fraction by the employer, and a certain fraction 
 by the Government. 
 
 The Commissioner: Mr. Doggett, do you not look just at one side of that 
 question? Undoubtedly the workingman to the extent that he is a consumer 
 would pay a proportion of the cost, but so would the manufacturer. Besides 
 paying the tax he would be probably a larger consumer than the employee, and 
 he would pay as a consumer just in the same way that the employee does. Does 
 not that strike you as reasonable? 
 
 Mr. Doggett : Yes, but your Lordship, the number of manufacturers as con- 
 sumers are a very small percentage. 
 
 The Commissioner : That does not make any difference. To each man it 
 would be the same. Upon the hypothesis that we are discussing the matter, he 
 would have added the burden of this tax. You are a carpenter. Now, the master 
 builder pays a tax. For everything he buys from the furniture man, or any other 
 thing that is manufactured, he has to pay his proportion of the tax, just the 
 same as the workingman. That argument does not impress me. I think you 
 want to look a little further before you conclude that it would be unjust for that 
 reason. 
 
 Mr. Doggett: Yes,. but your Lordship, why should not the worker at the pre- 
 sent time pay towards fire insurance individually? 
 
 The Commissioner : That is a different proposition, because the fire insurance 
 does not help him, and this scheme helps the employee. The fire insurance only helps 
 the employer. I do not think that is analogous. I am not expressing any 
 opinion as to whether it is right that the employees should pay any proportion 
 of the tax, but it strikes me that the argument that was suggested yesterday, and 
 I you have repeated, is unsound. Just think that over. 
 
 Mi;. Doggett: I fail to see yet where the workmen make a direct contribu- 
 tion. T admit there is a waiting period under certain acts. 
 
 'I'm Commissioner: We will discount Mr. Wegenast's figures. There is a 
 trillion dollars to be raised every year by a tax upon industry to meet the acci- 
 ba1 happen. The employer contributes to that tax, and the workman con- 
 tributes to that tax. Now, when they come to go into the market to buy what they 
 manufactured article the employer pays his portion over again just as 
 much a- the workman does. Does it not strike you that way? 
 
 M"R- Doggett: Yes, I recognize thai fact, your Lordship. 
 
 FORD: Might I say one thing more before I go which occurs to me 
 
 in connection with whal Mr. Doggetl has said. The matter was brought up yes- 
 
 fche employer to reimburse himself for what he will have to pay 
 
 under Ibis proposed 3cheme, and the idea was mooted that he could increase the 
 
 price ->f his manufactured article, and the public eventually would have to pay 
 
 Well, while thai might be the case in connection with some products of 
 
 mufaeture, I venture as a manufacturer to say it would be an impossibility 
 
 with regard to all. F am confidenl beyond a doubt that, with regard to the pro- 
 
1912 WORKMEN'S COMPENSATION COM. MISSION. 311 
 
 duct that I manufacture, I would not be able to enhance the value of my manu- 
 factured product one iota, and consequently, although I favour this scheme, I 
 wish to call the attention of my friends to this fact, that I am favouring this 
 scheme with the knowledge that it is at the loss and expense of my own individual 
 pocket. I am willing to do this because I consider it is nothing but fair and just 
 between man and man, and under no other consideration do I favour it for a 
 moment. 1 am gladly willing to put my hand in my pocket and pay that extra 
 tax, for the repayment of which I look around me in vain for any source of re- 
 payment, save and excepting the consolation to my mind that I have done what 
 is right, and I have done something to introduce a better condition and better 
 feeling between employer and employee. 
 
 Mr. Wegenast: I do not know that it is necessary for me to say anything by 
 way of introducing Mr. Boyd, except to refer to our attitude in the matter. My 
 attention was first called to Mr. Boyd's name in connection with the report of the 
 hearings before the Federal Commission. I subsequently obtained copies of the 
 reports and the Bill from Ohio, and entered into correspondence with Mr. Boyd, 
 with the result that I asked and he consented to appear before your Lordship 
 in connection with this enquiry. We are bringing Mr. Boyd here in one sense 
 as an expert witness, but not an expert in the character which is common in our 
 courts. We have not brought Mr. Boyd to advocate any particular phase of the 
 question, or to advocate any particular side. We are here to learn from Mr. Boyd 
 just as much as anybody else, but I thought myself, and the committee under 
 whose instructions I am working thought it would be of interest and profit to have 
 a man of Mr. Boyd's experience and capacity to discuss with us these questions 
 before your Lordship. It is Mr. Boyd's misfortune that he is a citizen of the 
 United States, but the questions which arise in the different jurisdictions of the 
 United States are very similar to the questions arising here, with this exception, 
 that we eliminate the constitutional phase which forms so large a factor in the 
 consideration of the subject in the United States. I do not think it is necessary 
 for me to say anything more by way of introducing Mr. Boyd of the Ohio Commis- 
 sion. 
 
 Mr. James Harrington Boyd, (Toledo, Ohio) : I may first say, "your Lord- 
 ship, that the sources of information of which I shall give a brief review will be 
 found published by me in the following publications: In the first place in the 
 report of the Employers' Liability Commission of Ohio, of which I was Chairman, 
 parts 1, 2, and 3 ; in the second place in the Magazine World, under date of July, 
 1911 ; in the third place in the Annals of the American Academy of Political and 
 Social Science of the United States for July, 1911; in the fourth place in the 
 American Journal of Sociology for January, 1912; and in the fifth instance in the 
 record of the Employers' Liability and Workmen's Compensation Commission of 
 the United States, page 718. 
 
 Now, your Lordship, I want to point out the fact generally that there is no 
 paradox in this investigation and the laws that were finally passed in Ohio, and 
 so I will mention these points as I go along. A republican legislature in the 
 spring of 1910 authorized the Governor to appoint a Commission consisting of 
 five individuals, two employers, two representatives of labour organizations and one 
 neutral person, lawyer or otherwise. The Governor appointed on that commission in 
 June, 1910, two representatives of labour; two representatives of emplo} r ers, and my- 
 self. We began our investigations in July, 1910, and I conducted twenty-seven public 
 hearings in different parts of the State, notably in Dayton, Cincinnati, Cleveland, 
 
312 
 
 MINUTES OF EVIDENCE: No. 65 
 
 Tole lo Youngstown and Columbus. We also operated with the Commission of Massa- 
 - and mi her States in bringing about a conference of all the liability corn- 
 miss of the United States, nine in all, including the National Commission, 
 
 the I ommissioner of Labour, Mr. Neill, and we had conferences at eight sessions 
 in Chicago in November, 1910. If your Lordship does not have a copy of the 
 tort of that conference I shall be delighted to make you a present of one. To 
 my mind that is the most remarkable hearing that has been held on this question 
 on this continent. Now, we met together there in Chicago — the Commissions for 
 Massachusetts, Connecticut, New Jersey, Ohio, Illinois, Wisconsin, Montana, Wash- 
 ington, and the United States Commission, and the Commissioner of Labour for 
 
 United States. Everybody was intensely interested. Eor example Mr. Dixon, 
 who was President of the United States Steel Corporation thought he would take 
 a look in at us, and possibly go home in the evening, and before Ave got to the 
 middle of the afternoon he was using the long distance telephone to New York 
 cancelling all appointments, and during the eight hearings of two or three hours 
 each there wasn't a single man left the room from the time he entered until the 
 close of those eight hearings. We closed our hearings on December 1st. 1910. 
 Then we had December, January, February, and March of 1911 in which to 
 write the report and draft a Bill and get it into the legislature, and whip it 
 through the legislature, and finally we got it through in June, 1911. 
 
 Now, these investigations of which I shall give a resume can be put in, and 
 then with your Lordship's permission, at the close we will ask the stenographer 
 to put in this brief which contains a concise resume of all the historical and 
 economic investigations that have been made up to the time of the writing of the 
 brief, with footnotes showing the sources of information. This brief was used by 
 me as special counsel for the State before the Supreme Court in 1911 'in contest- 
 ing the constitutionality of the Ohio Act, about which I shall explain in the course 
 of my talk. Now, as to the manner of procedure in going into this proposition — 
 we recognize from the start that it was a question of abandoning an old remedy 
 more than one hundred years of age, and the establishment of a new remedy entirely 
 different in its nature, and therefore it would require all the fundamental and 
 economic facts gathered together to justify the courts in substantiating a new remedy 
 in place of the" old remedy, because in the end, whether the form of our Government 
 is republic, democratic, limited or absolute monarchy, the remedy itself must be 
 ised upon the solid economic facts, in order to mete out Christian justice. 
 
 Now, first a brief resume of the historical evolution of the problem. In 1837, 
 Priestly v. Fowler decided by Lord Abinger in England, the fellow-servant 
 rule was introduced. That was a case where a butcher had an assistant butcher, 
 and through the negligence of the boy driving the waggon the assistant butcher was 
 iously injured. Then it was for the lord to determine whether it would be most 
 ju-t in t lie course of time, and at that time, to introduce the rule to make the em- 
 ployer Liable for the negligence of the fellow-servant, or to allow the injured person 
 to beaT the hardship. Now, I lay particular stress upon the principle as Lord Abinger 
 discussed it in thai case, for the particular reason that later in my remarks I shall 
 call attention to the fact as to why, in my opinion, looking at it as a scientific inves- 
 tor, regardless of whal political parties may think, the insurance principle is the 
 'v principle whereby you can protect the small employer and furnish the workmen 
 the small employer the same protection at the same cost that, for example, the 
 national Harvester Company or the United States Steel Corporation can fur- 
 
 i compensation to it- injured workmen. So his Lordship held that it would be 
 
 t jusi not to burden the employer with that liability. 
 
1912 WOEKMEN'S COMPENSATION COMMISSION. 313 
 
 In Ohio 50 per cent, of our employers employ less than twenty men, and 
 it is the hope of every workman that lie ultimately will become an employer, and 
 his total capital may be $1,000, $2,000, $5,000 or $10,000. If he can insure 
 himself against liability by paying his pro rata share and protect himself, and furn- 
 ish his workmen the same protection that the United States Steel Corporation has, 
 that is what he wants. 
 
 In 1838 Prussia abolished not only the fellow-servant rule, but also in- 
 troduced the rule of the assumption of risk by all railroad employers. In 1842 
 Justice Shaw, of Massachusetts, introduced the rule of the assumption of risk, after 
 Prussia abolished it. Now, the social philosophers, beginning with Fichte in 1790, 
 and Marx. Sismondi, Winkleblech, Schmoller, and Wagner — all these social phil- 
 osophers kept up the constant agitation that owing to the evolution of manufactur- 
 ing industries the State owed a greater duty as to the protection of the weak as 
 against the strong. So that Prussia in 1854 made it obligatory upon employers 
 who had among his employees members of a mutual employees association (and 
 they existed at that time), to contribute half of the cost of their benefits. That 
 continued in operation until 1869 when that rule was relaxed. Then in 1871 
 Prussia took away all the common law defences in all mining operations, and in 
 1880. your Lordship, the first English Liability laws were introduced in England 
 with the object of tending to modifying the rigours of the defences of the common 
 law. Then came Asquith's Bill in 1893, modifying the rigours of the common 
 employment rules. Then came Chamberlain's Act in 1898, the first English Com- 
 pensation Act, which makes the employer personally liable, with the hope that he 
 will insure against that liability, without regard to negligence on the part of the 
 employer or on the part of the employee, except as to malicious negligence on the 
 part of both. Then came the modifying Act in 1906, and finally the Lloyd-George 
 Act a few weeks ago, and I understand, your Lordship, that is the law now in 
 England. That act covers insurance against sickness, accident, old age, and out 
 of work. The employer contributes one-third to the cost of the fund, the employees 
 one-third, and the State one-third. I will not venture to state what has happened 
 in the Dominion of Canada, but in the United States during the last ten years, 
 and particularly during the last five years, various states have been modifying these 
 common law defences, one state cutting out one and another cutting out two, and 
 some modifying all three. For example, three years ago in Ohio we passed what is 
 called the Norris Bill modifying all three common law defences. So that historic- 
 ally the evolution is to get rid of and eliminate the common law defences and the 
 common law remedies all over the world. 
 
 Now, as to the statistical investigations in the United States. Beginning 
 first with Germany prior to the passing of the German Insurance Act, which all 
 European countries adopted in more or less modified form. I want to call your 
 Lordship's attention to this, that in Bismarck's debates in the Peichstag he did not 
 ask Tom, Dick and Harry to debate it, he debated it himself, and he said he 
 regarded it as his calling that this act should be made a law. I give your Lord- 
 ship in this brief among the historical statements the Emperor's speech which 
 formulates the problem from their standpoint. In New York State the 
 investigations of the New York commission showed two facts, that while the 
 liability insurance companies collected about $24,000,000 they paid out about 
 $8,000,000. and that wdtere there, were 414.000 notices of accidents they paid some- 
 thing or other in about 52,000 of the accidents, or in other words paid something 
 or other in one-twelfth of the accidents, or in 12 per cent, of the accidents. 
 
314 
 
 MINUTES OF EVIDENCE: No. 65 
 
 the Slate of Illinois where they spent a large sum of money in making their 
 They found they paid something or other in 8 per cent, of the 
 idents. In Ohio they spent $16,000 or $18,000 investigating all the accidents in 
 ga County during five years prior to 1910, and Mr. Wilson, Manager of the 
 i Insurance Company in Cleveland testified to having settled 65,800 cases, 
 and in paying something or other in six per cent, of the cases, and the Bussell- 
 Foundation investigated all the accidents in Alleghany county, Pennsyl- 
 vania, during the years 1906 and 1907, showing something or other was paid in 
 ahout ten per cent, of the cases, so that something or other is paid according to 
 those vast investigations in from six to twelve per cent, of the cases; and experi- 
 ence in Germany shows, as the German economists pointed out, prior to the passing 
 of the German Act, they paid something or other in ten per cent, of the cases. 
 So you see that is practically an average of our experience here. When I 
 had to face the legislature, with the vast number of prominent lawyers, and then 
 finally the Supreme Court itself, with an array of attorneys, such as H. and M. 
 Johnston,, of Cleveland, and Kline & Stone, the Standard Oil attorneys, and the 
 attorneys for the Norfolk Eailroad company, and several other attorneys, we 
 had to have the facts, which I think are clearly established in my investigation and 
 pointed out there. In making a resume of the operations of the German Act we 
 had the statistics which, your Lordship, were statistics they had kept not for the 
 purpose for which I used them, but for the purpose of guarding 
 against accidents and to find in what respects the employer might avoid 
 accidents, how he might help to reduce accidents, and in what respect the 
 employee might be required, and new duties imposed upon him, to reduce the 
 number of accidents, and on the part of the State to reduce the number of acci- 
 dents. But taking a resume of those annual reports I wish to point out the follow- 
 in-- fundamental economic results, which to my mind enabled me to convince the 
 legislature of the State of Ohio that we must abandon — I say abandon — the com- 
 mon law remedy, for the basis of procuring compensation for injured workmen. 
 The German Act in 1887 covered over 3,000,000 employees; in 1907 it covered 
 over 27,000,000 employees. Taking the decades, 1887, 1897 and 1907, where they 
 have millions of accidents under consideration, the causes of accidents clue to the 
 natural hazard of the business, leaving out the employee's conduct and the em- 
 ployer's conduct wholly, was 44.96 in 1887, and in 1897, your Lordship, after the 
 agricultural labourers came in, which took in about 8,000,000 workmen, the cause 
 of accidents attributable to natural causes of the business was 42.82 per cent., 
 although there were millions more workmen. In 1907 when there were 27,000,000 
 "f workmen under the act, and their dependants, the causes of accidents due to 
 ■ i u ml hazard was 44.35 per cent., practically a constant factor of 44 per cent. 
 Thi of accidents due to the combined negligence of employer and 
 
 employee, which to be sure by creating care on the part of the employer and em- 
 ployee can In- slightly reduced, is ten per cent, of all the accidents. Adding that 
 to your II per cent, ami yon have 54 per cent, of all your accidents caused or 
 due to fli«' unavoidable risks of the business, and cannot be but slightly changed. 
 For example, it would not make any difference how careful the State was, or how 
 he employer mighl be required to ho, or the employee might be required 
 to 1"'. aboul 53 peT cent, of all the accidents thai will occur is due to the unavoid- 
 able risks of the business. You can reduce, of course, the number of accidents 
 thai will occur among your thousand foundry men by the inauguration of schemes 
 for the prevention of accidents which have been so highly developed in Germany, 
 
1912 WORKMEN'S COMPENSATION COMMISSION. 315 
 
 but about 52 per cent, or 53 per cent, of all those that happen are due to the 
 unavoidable risk of the business. Now, the percentage of the accidents due to 
 the negligence of the employer is 18, taking the average for the three decades, or 
 18.4 per cent. The percentage due to the negligence of the employee is 28.4 per 
 cent. Now, for the 28.4 per cent, he cannot recover because of his negligence 
 under the common law, because that is a defence as a rule. That only leaves 18 
 per cent. He must first prove his employer is negligent, and he can only do that 
 in 18 per cent, of the cases. The percentage that is due to the negligence of the 
 fellow-servant of those is 6 per cent, and take that away from the 18 per cent, and 
 it is 12 per cent., or 12.91 per cent, only in which the employee theoretically has a 
 cause of action. Now, what is the difference to the dependants of the man who is 
 killed whether his negligence caused the accident or not? The reason that the 
 Prussian Government and the German Empire inaugurated industrial insurance 
 was to provide that under no circumstances would the dependants of a workman 
 injured suffer in this respect, that his development should not be interfered with 
 until he was enabled to support himself or herself. This is the fundamental basis 
 of workmen's compensation or industrial insurance. 
 
 Now, I would like to say a little about the number of accidents. The 
 lowest estimate of accidents to workmen in the way of bodily injury in the 
 United States, where we will say the population was 90,000,000 when we made our 
 investigation in 1910, was 1,536,000 people injured, maimed and killed in one year. 
 In the battle of Gettysburg there were 43.500 soldiers killed, wounded and 
 missing in that three days' battle, but you would have to have one of those every 
 month in some part or other of the United States in order to create the same 
 havoc; but if we are as careful as Germany is — they have a million accidents 
 among 63,000,000 of people — if the people are no more careful in the United 
 States than in Germany we would have one million and a half instead of 1,536,000. 
 Now, if I can buy a thousand dollar insurance policy, the laws of our State pro- 
 vide a protection for that fund, and prescribe the nature of the contract which the 
 life insurance company must make in order that they may be permitted to come 
 into the State of Ohio and even write insurance. Now, I take all kinds of busi- 
 ness, from the poorest to the richest people, and I have in my office three policies, 
 where a woman insured her mother against funeral expenses at the age of 60, and 
 has paid 25 cents a week for seventeen and one-half years, or $230, and the Western 
 and Southern Life Insurance Company of Cincinnati say they will pay her in 
 settlement of that policy $50. Now, the State of Ohio, among other States of the 
 United States furnishes the workingman a means whereby by paying a small 
 amount of premium he can protect himself or herself in instances of that kind 
 against a small competency for funeral expenses or disability and old age. 
 
 The careful marshalling of the facts, and they are more fully set out in 
 this brief which will appear in your record, was sufficient to convince the legislature 
 of the State of Ohio that we must abandon the old common law remedy at least 
 in accidents of bodily injuries. Then came the question, "What is your remedy; 
 what are you going to put in place of it ? "' lu my brief likewise I have stated 
 under five propositions a brief resume of what the act contains, and I will pre- 
 sent your Lordship with a copy of the Bill, which the reporter will be so kind 
 as to insert either as an appendix to the brief or an introduction to the brief, just 
 as he sees fit. Our Bill provides in the first place that in case of death the workman 
 shall receive from $1,500 to $3,400, based upon 66 2-3 per cent, of the average 
 weekly wage, and doctors' bills and funeral expenses not to exceed $150. That is to 
 say in no case is it less than $5 a week for 300 weeks, and in no instance more 
 
316 MINUTES OF EVIDENCE: No. 65 
 
 than $12 a week for 300 weeks. There was a slight compromise, your Lordship. 
 300 times $12 would be $3,600, but it was reduced to $3,400 in the conflict at the 
 discussions in the Commission. Now, total disability runs as long as it lasts, and 
 not more than $12 a week, or 66 2-3 per cent, of the average weekly wages, which 
 generally is an enormous compensation. 
 
 Mr. Wegenast : May I ask, Mr. Boyd, whether the clauses are limited to which 
 this act applies, with reference to the salary that a man earns? 
 
 Mr,. Boyd: It is limited in the compensation. 
 
 Mr. Wegexast: Only in the compensation? 
 
 Mr. Boyd: That is right. It applies to all employees, including the em- 
 ployees of the state, counties, cities, and school districts of the townships. Every- 
 body is in there but those who employ four or less. 
 
 In partial injuries the compensation is 66 2-3 per cent, of the loss of 
 earning power, and doctors' bills not to exceed $150, to run for 300 weeks, but in 
 no instance more than $12 a week, nor more than $3,400. The act provides 
 for a period of seven days there shall be no compensation at all except doctors' 
 bills. 
 
 Mr. Wegexast: May I ask, Mr. Boyd, whether in limiting the total amount 
 of compensation to $3,400 you fix a period of time at which the payments on the 
 basis of 66 2-3 per cent, shall cease, or whether you reduce the percentage ? What 
 I mean is, suppose a young man is injured. He. gets 66 2-3 per cent, of his wages 
 and it will not take many years before the $3,400 is eaten up. What happens then? 
 How do you work out that feature ? 
 
 Mr. Boyd : Well, his compensation shall in no instance, except in total dis- 
 ability, be more than $3,400. It is paid monthly. 
 
 Mr. Wegenast: And when the $3,400 is reached then the payments end? 
 
 Mr. Boyd: Yes. Now, as to the case of a lump sum payment, it is within 
 the discretion of the Board to say wdiether it would be most wise in a particular 
 case that a part or all of this compensation may be paid at once — be commuted. 
 For example a man might be killed or totally disabled and may have a mortgage 
 on a small house, and instead of allowing that to become foreclosed they would 
 commute sufficient of his compensation to pay that off. Otherwise he gets his 
 compensation, or his dependants get the compensation, in monthly payments. 
 
 So then we have a provision for partial injuries and total disability and death 
 cases; we have a waiting period of seven days; it is based upon 66 2-3 per cent. 
 of the loss of earnings; the payments are made monthly and can be commuted in 
 special cases at the wisdom of the Board; and the workman can not assign or 
 transfer his interest in the fund. 
 
 Now then, we wished to accomplish first of all two things. One was to take 
 tlii i birds of all this money that it had cost the employers through liability 
 
 insurance ami the hiring of attorneys to defend these personal injury suits — we 
 wanted all that to go into the fund. Then we wanted all that the workmen had 
 spent in hiring lawyers, that in these investigations as you will see never is less 
 than 25 per cent, ami often 50 per cent., and more, of what he gets, to go to the 
 fund. For example in the New York investigations, and in our investigations in 
 Cuyahoga County, and in Alleghany County, Pennsylvania, it was shown that while 
 "ii the average aboul 6 to 1 '' per cent, of the people injured got something — take 
 fur example the married persons in Cuyahoga county, 42 per cent, only got some- 
 thing, and 58 per cent. ,L r "t nothing; of the single men, 25 per cent, got something 
 and 75 per cent. L r <>t nothing — while on the average they got something in 36 per 
 
O 1 rv 
 
 1912 WORKMEN'S COMPENSATION COMMISSION. 31 
 
 cent, of the cases, but it averaged only $835 in fatal cases, among those who got 
 something in the 36 per cent. Then of that 25 per cent, at least must go to the 
 lawyers, and there is the delay and the borrowing of money from Tom, Dick and 
 Harry until a settlement of some kind or other is made. So that summing the 
 whole thing up of that 6 to 12 per cent, that get something, on the average 
 it is one-fifth of what any man or any person would consider, your Lordship, as 
 adequate compensation in those cases. So that is no remedy at all. That is what 
 I told the legislature, and presented to them what 1 thought was proof that it was 
 no compensation at all. 
 
 Now, first of all we desired the remedy to provide that all this waste should 
 go into the fund and that the workmen should get it all. We had twenty-seven 
 hearings, and sometimes there were a thousand, five hundri 1. two hundred, fifty 
 people present, and when the labour leaders read a paper or when the employers 
 read a paper everybody joined in. We did not have any experts. We just invited 
 everybody to come in and tell us all they knew about it, but it wasn't a preaching 
 proposition, gentlemen. When they got through I cross-examined till I got all I 
 thought of out of them, and then the other members of the Commission examined, 
 and then anybody in the room, as this record will show, asked any question he 
 saw fit of the speaker pertinent to the issue, and so it was all threshed out. 
 
 The employers were unanimous, and so were the labour leaders, that we should 
 get rid of the old remedy, and after we had got our act completely drafted 
 except- as to two propositions, every member of the Commission voted unanimously 
 for every provision in the act — with as I say two exceptions. The labour leaders 
 did not want the employee to contribute. They did demand at first that the em- 
 ployee should have the right to take the compensation or sue — but up to that time 
 everybody admitted that an insurance fund was the thing to have. We wanted to 
 get rid of the contention between the employee and the employer, and that is the 
 only way, gentlemen, you can get it. And mind you, the employer is willing to 
 pay a good deal of money to get rid of that contention. It is no profit either to 
 the employee to have the contention. Now then, I first demonstrated to my satis- 
 faction and to the satisfaction of the legislature, and finally to the satisfaction 
 of the Supreme Court, that whether you have an insurance proposition or not de- 
 pends on whether you have a definite liability to insure against. In fire 
 insurance you have. You go out and determine the value of your house; you deter- 
 mine the hazard; the circumstances and the surroundings in which it is situated, 
 and then you can fix your premium, and the owner can pay his pro rata share of 
 the fund to insure that house. 
 
 The very moment you can determine the liability under any industrial 
 insurance act or workmen's compensation act then you can say the premium is so 
 much, but if you cannot do that you cannot fix any premium at all. In New 
 York State they passed an act, and by the way Chairman Wainwright wrote me 
 that he was always in favour of an insurance act, but they were afraid to take the 
 stand. I can produce his correspondence to prove it. The New York Act pro- 
 vided the workman might take his compensation under the Compensation Act, and 
 it would be obligatory upon the employer to pay the award that might be made 
 against him, regardless of negligence on the part of the employer or employee, 
 except malicious negligence, or he might file his petition in court, but the em- 
 ployer would not know which was going to happen until the workman decided to 
 do one or the other. Now, I contend that the New York Supreme Court was wise, 
 especially from the standpoint of protection of the workmen, in getting the wisest 
 
318 MINUTES OF EVIDENCE: No. 65 
 
 remedy at the start. It would be a terrible thing to inaugurate in the State of 
 New York with ten million people and with its enormous number of workmen, a 
 wron? scheme, and then try to shift from the wrong scheme to the right scheme. 
 
 As to the other proposition, why should the employee contribute? In 
 the first place the workingmen had agreed on our Commission that total disability 
 should onlv run for 300 weeks. The employers of the State of Ohio were un- 
 animously of the opinion that at the start at any rate they wanted the employee 
 to contribute, and to be a party to the fund, even though it be a very small amount. 
 So we finally decided to make him a party to the fund, and they insisted upon his 
 paying 25 per cent. Then I said to them you must then make the total disability 
 run as long as it will last, and after weeks of contention about that particular 
 point they said all right. Of course it was left for the legislature to say whether 
 H .-hould be 25 per cent, or something less. 
 
 Now then, under the German Act, your Lordship will understand the sick 
 insurance runs for thirteen weeks, and therefore it is sickness whether it is an 
 injury or sickness. After the thirteen weeks it is an accident. During the 
 thirteen weeks the employee contributes two-thirds of the sick fund, and the em- 
 ployer one-third. After the thirteen weeks the employer contributes it all. In the old 
 age insurance the workmen contribute half, the employers half, and the State fifty 
 marks in each individual case insured. I understand, your Lordship, that 
 your act will consider first of all personal injuries, not sickness nor old age. That 
 is the way ours is drawn. No matter how desirous you might be to inaugurate 
 sickness and old age insurance it would be practically an impossibility to launch 
 it all at one time, and even Germany did not attempt it, where they have got every- 
 thing to facilitate it, where everything is bookkeeping. Why, if I were in Berlin 
 all I would have to do would be to go right down to the police office, if you were 
 a workman and I wanted to find you, and find you in twelve hours. So even with 
 their bookkeeping scheme of running a Government they did not attempt any- 
 thing but accident insurance at the start. Then in a couple of years they put in the 
 sickness, and a couple of years more the old age insurance. It was longer than that 
 before they put in the old age insurance, but they put in the agricultural labourers 
 about four years after the accident insurance. Figure out the operation of the- 
 German Act and you will find that the workmen contribute to the bodily injury 
 insurance— that is to say personal injury insurance — about 16 2-3 per cent., or 
 about one-seventh of the fund. 
 
 The Commissioner : That is by these thirteen weeks ? 
 
 Mi:. Boyd: Yes, some of the injuries being in the thirteen weeks. 
 
 Mr. Bancroft: But there is no direct contribution in the legislation? 
 
 Fin: Commissioner: So far as the employer is concerned he pays it all. 
 
 Mi:. Boyd: But for those thirteen weeks the employer does not pay it all. 
 Supposing a man gets his leg cut off it is sickness for thirteen weeks, or in the 
 
 of occupational disease, or if he was really sick or got sick while he was em- 
 ployed, it would be sickness. So there is some bodily injury compensation in that 
 thirteen weeks, and figuring that up the workmen will pay under the German Act 
 ahout L6 or 17 per cent. 
 
 In Ohio the legislature drove it down to 10 per cent. The employer pays 
 
 »" per cent., and he is authorized by the act to deduct 10 per cent, of what he 
 
 pays from the pay-roll, and the Stair pays the entire cost of administration. That 
 
 is not so in Germany, bul I thi svould be justified in thai on account of the 
 
 enormous expense which the State of Ohio is now out to. Any man can file a 
 
1912 WORKMEN'S COMPENSATION COMMISSION. 319 
 
 personal injury suit and he does not have to put up any security for costs. He can 
 have a jury for four or five days or a week, and lose his case, and it does not cost 
 him anything in court costs, lie can come in and make an affidavit and say he 
 cannot pay it, that he has not more than $500, and flic Slate has to pay it. There 
 are the summonses of witnesses, sheriff's fees, and the clerk, and the juryman, and 
 the judge. Why. the State will be making money by this scheme. The State 
 must spend $300,000 or $400,000 or $500,000 in that kind of expenses, and tho 
 estimate of the first annual expenditure under this Act is $100,000. I think it will 
 be more than that. 
 
 1 think that other points can be brought out perhaps better by your asking 
 the questions, or some gentleman present asking questions. 
 
 However, I will direct my attention for a few minutes to some principles of 
 jurisprudence. I understand, your Lordship, that there is no question here as 
 that an act might be unconstitutional if passed by the Province of Ontario, or by 
 the Dominion Parliament. There is, I believe, what is called a veto power residing 
 in the Dominion Parliament and also in His Majesty the King, which is seldom 
 used. 
 
 Now, gentlemen, it only required industry and honesty and a reasonable 
 amount of brains to make the investigation of facts and bring them together, but 
 when it came to the questions of legal justification of abandonment of the old act, 
 where a great many of the legal profession were interested in making a living by 
 defending personal injury suits, and where we had in the Judiciary Committee 
 often fifteen liability insurance companies lined up around the wall trying to 
 make all the trouble they could for us when getting the Judiciary Committee to 
 O.K. our Bill, and they had clever attorneys to look after their interests, that was 
 the hard part of the proposition. 
 
 I wish to direct your Lordship's attention to a few basal decisions which I 
 think are equally applicable in the Province of Ontario. In Munn v. Illinois, 
 94 U. S. Supreme Court Reports — that case I regard as the ablest case ever written 
 by any judge of our Supreme Court, notwithstanding the opinions written by 
 Chief Justice Marshall. I may be mistaken. That was a case in which the 
 legislature sought to limit the amount that grain elevators might charge. It 
 fixed a maximum rate. That was in 1876. At that time Illinois became a great 
 grain producing country, so the legislature, in order to limit the abuses, passed 
 a law. They had no corn cribs to store the grain, and possibly the farmer might 
 produce ten thousand bushels of grain and might want to haul it in at once, and 
 everybody else might want to do the same thing, and when it came to a critical 
 time in the fall they began to jockey the rates so high to make all the money they 
 could out of the public, and the legislature said. We will limit that, we will fix a 
 limit beyond which you cannot go in charging rates for storing grain. Now, in that 
 case Chief Justice Waite goes back into English history and refers to English decis- 
 ions. You will get that in the records, showing that when a man uses his property in 
 such a way as to create a public interest then it is within the police power of the State 
 to regulate the matter. Now, in the economic evolution of our country, that is the 
 first instance of the extraordinary use of the police power in that respect. Then 
 we come to the development of the mining business in Colorado and Idaho, when 
 the handling of the mines was done by smelters, and Idaho passed an act limiting 
 the hours they might require a man to work, even voluntarily. It 
 simply prohibited smelters from employing any man, whether he wanted to work or 
 not, more than eight hours, or underground in the mines more than eight hours, 
 

 MINUTES OF EVIDENCE: No. 65 
 
 and placed not only a money fine, but a penal sentence, and an employer in this 
 case was sentenced to one or two years, and the Supreme Court sustained the act. 
 There is another feature of the economic evolution of our country, and it is true 
 of this country of Canada as well as our own, as is also the grain proposition. 
 Then comes the third economic evolution as shown by the evolution of our prin- 
 ciples of jurisprudence. That was when there were the great discoveries of oil 
 and gas. There was the Ohio Oil Company v. Indiana, 177 IT. S., and the Idaho 
 case is Gordon v. Hardy, 169 U. S. In the Ohio Oil Company v. Indiana, the 
 court first laid down a proposition that it was the law of Indiana that when the 
 owner of the land drilled a hole and struck gas or struck oil, the oil or gas was not 
 bis property, the title was not in him until he reduced it to his possession. If 
 that man who owns that land digs a hole and strikes gas and allows it to escape, 
 then the act says, We will fine you so much if you do that, because the gas has 
 the natural capacity of moving itself from place to place, so that this gas that he 
 allows to go to waste might come from under his neighbour's land, but so long as 
 he uses it and reduces it to his possession and sells it to the public then it is his 
 property, but when he did not it was an abuse of the public's right by his not 
 doing so. Now, then, we have first an exhaustive definition of police power for 
 the regulation of the manner in which a man may conduct his business, shown 
 by the elevator case, the smelter case and the oil case. Then comes the Oklahoma 
 Bank case, and I would only touch upon one feature that may be of interest here, 
 and that is the Oklahoma Act provided that every bank should be required to put 
 one per cent, of its deposits into a fund, that fund to be administered by a Board 
 for a guarantee that every depositor of a bank, in case the bank fails, should be 
 paid in full, and authorized that Board to take possession of the property of the 
 bank and take the money from the fund and pay off the depositors and settle up 
 the a hairs of the bank, and put the money back into the fund. 
 
 For our purposes there were three other interesting lines of cases on 
 which this act is based. One of them, your Lordship, I think you must have here, 
 what is called the sheep-dog law. In all the Staites of the United States 
 where sheep are raised they have a law where every man that owns a dog must 
 pay a tax of $1 or $2 into a fund, and in case sheep are killed they send out 
 appraisers, and the appraisers issue an order and pay the damages out of this fund. 
 Now, that involves the same principle as the administration of this industrial 
 insurance fund. Then there is another line of cases such as in Illinois and "Wis- 
 consin, where a fire insurance company coming into Illinois and doing business, 
 in Chicago, for instance, when he writes a policy he must take a part of that pre- 
 mium and pay it into a fund, and the fund is to be used for the compensation of 
 the dependants of firemen injured or killed in performing their duties as firemen. 
 Then there i- another very interesting line of cases in connection with the whiskey 
 traffic. That is a Minnesota case, Minnesota v. Cassidy, 22 Minn., where the State 
 requires that every man going into the saloon business should pay a certain license. 
 Ut'T lie lias taken oul his license and paid for his license, they say. "you must pay 
 $10 more/' ami ibis goes into a fund to be administered by the Board to build a 
 -aniiarium ami furnish such medical attendance as necessary to rejuvenate such 
 persons as have become confirmed drunkards. 
 
 Now, your Lordship, I think 1 have given you a resume. of itho investigations 
 which we made in connection with the Ohio Act, and T think possibly any further 
 point- could be besl broughl out by asking questions. 
 
 Mi;. \\'p;i \wr: ] have nothing in particular to ask. but T thought I might 
 
1912 WORKMEN'S COMPENSATION COMMISSION. 321 
 
 ask Mr. Boyd whether the question was considered by them as to what form the 
 contribution by the workmen should take. That is, whether it should be a money 
 contribution, or take the form of a waiting period during which the burden of com- 
 pensation would rest upon the workmen. 
 
 Mr. Boyd: Both. There was no opposition on the part of the workmen 
 that a reasonable wailing period should be provided for. The act provides for a 
 seven days' waiting period, and they all agreed that that was a reasonable provision. 
 There was no objection to that whatsoever. For instance, page 2 of that report 
 shows that. In addition to that, for the purpose of having the workmen interested 
 in it and watching other workmen so that they may be more careful, and may report 
 on them if they weren't careful and making the fund cost more (for the more acci- 
 dents the more the fund would cost), the workmen ought to make some kind of 
 contribution. That is the line of argument that seemed to prevail. Our act, for 
 example, provides that the actuary specifies the employment and fixes the premium. 
 The premium is fixed by the hazard, and the amount of the premium will be deter- 
 mined by the amount of pay-roll. When an employer has paid his premium he 
 takes up the pay-roll and deducts ten per cent, of that from the pay-roll, pro rating 
 to the amount of wages that each individual had earned. 
 
 Mr. Wegenast: Every three months, is it? 
 
 Mr. Boyd: Every six months, I think. 
 
 Mr. Wegenast : What I was thinking of, Mr. Boyd, was not a waiting period 
 of one week, because a period of one or two weeks is recognized as a necessity in all 
 systems, but a longer waiting period of thirteen weeks, as it is under the German 
 system, or say four weeks as it is under some other systems. Was the question con- 
 sidered whether the workmen's contribution should take that form rather than the 
 money contribution ? 
 
 Me. Boyd: That was discussed to a limited extent. For example, the per- 
 centage of accidents which lasts only a week constitutes the enormous total sum of 
 49 per cent of all the accidents. Take Germany's millions of workers, and the 
 accidents that occurred in year 1908, 19 per cent, of them did not last over seven 
 davs. 
 
 The Commissioner: But what Mr. Wegenast asked would not be applicable 
 to your act at all. You have no invalidity insurance as they have in Germany, 
 which provides for that thirteen weeks. The sickness fund provides for the thir- 
 teen weeks, half contributed by the employer and half by the employee. 
 
 Mr. Boyd: Yes. 
 
 The Commissioner: So that that feature not being in your act, it would 
 follow that that contribution would not be applicable at all. 
 
 Mr. AVegenast: This is the principle upon which Mr. Chamberlain put it, 
 that the workmen could be expected to take care of this. He is not presumed to be 
 entirely indigent, but he could be expected to take care of that period, whatever it 
 might be, himself, and thus bear a portion of the cost of the compensation. 
 
 Mr. Boyd: I was just coming up to the point. Suppose you extend that 
 waiting period two weeks instead of one week, look at the enormous number of 
 accidents that that would cover. The fundamental principle of the waiting period 
 is not for the purpose of depriving workmen of compensation, but to be sure and 
 have a reasonable waiting period so that the abuses of the inauguration of the 
 act would not defeat the act. 
 
 Mr. Bancroft : To stop malingering. 
 
 Mr. Boyd: That is for the workman's own protection. The workman has 
 21 L. 
 
MINUTES OF EVIDENCE: No. 65 
 
 found that out in a century of operation of mutual associations of various kinds, 
 sickness and accidents and all kinds. 
 
 The Commissioner : Did you figure out, Mr. Boyd, what that week of wait- 
 ing would mean, what contribution from the workmen that would involve, because 
 that would represent so much money. Is that not a contribution by the workmen? 
 Me. Boyd: I had that at one time precisely. It figures 49 per cent, of the 
 accidents. Your Lordship wishes to know what the monetary consideration would 
 be? 
 
 The Commissioner : Yes. 
 
 Mr. Boyd : I cannot answer that precisely. I can give you some very close 
 idea with regard to the thirteen weeks, and that will shape it a little. I can give 
 you the precise figures for the thirteen weeks. Now, take the cost of the German 
 Act for twenty years ending 1904, for sick insurance, accident insurance and old 
 age insurance. " That total cost was $803,000,000. Of that $803,000,000, 
 $555,750,000 was paid on account of sick insurance. First divide it up that way. 
 Then the accident insurance which runs after that thirteen weeks was $232,750,000, 
 and the old age insurance was $13,500,000. Now, going back, ithe employees paid, 
 on account of paying two-thirds of the sick insurance and half of the old age 
 insurance, which would be only about $6,000,000, $424,500,000. Now, you deduct 
 the $6,000,000 that he paid in the old age, and you have $418,000,000 that he paid 
 for sickness insurance by paying the two-thirds of the thirteen weeks. 
 
 Mr. Wegenast: That would include, however, Mr. Boyd, real sickness, as well 
 as occupational diseases and accidents? 
 
 Me. Boyd: Yes, it includes everything. 
 Mr. Wegenast: You would have to divide it. 
 
 Mr. Boyd : I admit that does not quite reach it. His Lordship wants to 
 know what the monetary consideration during one week would represent? 
 
 The Commissioner : Yes. It seems to me it would be a pretty large contri- 
 bution. I should think it would not be unfair to assume that 75 per cent, of the 
 accidents were real accidents and not malingering. Supposing you allow 25 per 
 cent for malingering. 
 
 .Mr. Boyd: I can give you exact figures on that. It is a little more than 
 one per cent, and a little less than two per cent. 
 
 Mi;. Bancroft: I think that justifies what we have been claiming. 
 The Commissioner: Then does that not mean the workmen contribute that 
 one week? 
 
 Mu. Boyd: Yes, there is no question of that. 
 The Commissioner: Is that not a large contribution? 
 Mr. Boyd: Yes, it is a large contribution. 
 
 Mr. Bancroft: In the Ohio legislation, Mr. Boyd, there is a waiting time 
 of seven days? 
 
 Mi:. Boyd: Yes. 
 
 If the period of injury continues say into three weeks he is 
 the firsl day of the injury? The compensation is retroactive to the first 
 day of the injury? 
 
 Mi;. Boyd: That is my memory of it. 
 
 Mit. Wegenast: So it would not be a seven days' waiting in all cases? 
 Mi;. Bancroft: Where it was less than a week it would be. 
 Mi;. Boyd: Now. if mi accident lasts only two days it costs as much to the 
 State as one thai would lasl for a long period. 
 Mu. Bruce: Yov mean for i ho procedure? 
 
1912 WORKMEN'S COMPENSATION COMMISSION. 323 
 
 Mr. Boyd : Yes. 
 
 Mr. Bancroft: You are familiar with the German system? 
 
 Mr. Boyd: Yes. 
 
 Mr. Bancroft : You remember the first piece of legislation was the sickness 
 and death insurance. 
 
 Mr. Boyd: The so-called fundamental law of July 6th, 1884, for industry, 
 transport trades, telegraph, army and navy; the "Agricultural Law" of May 5th, 
 1886, for agriculture and forestry; the "Building Law," July 11th, 1887, for 
 building trades so far not insured; the "Marine Law," July 13th. 1887, for navi- 
 gation. The Bill for sick insurance passed on May 31st, 1883, with a majority of 
 117 votes. 
 
 Mr. Bancroft: That was the first attention that Germany paid practically 
 to social insurance, when they introduced the sick insurance? 
 
 Mr. Boyd: That thirteen weeks? 
 
 Mr. Bancroft : That thirteen weeks was placed, in the legislation. The 
 sick insurance only covered about 13 weeks of illness at that time. After that they 
 passed another piece of legislation for invalidity and old age, which was interwoven 
 into the sick insurance, and the third piece of legislation was workmen's com- 
 pensation. 
 
 Mr. Boyd : You mean the personal injuries ? 
 
 Mr. Bancroft: Yes, accident insurance. That was the last piece of legis- 
 lation they passed, and they could not change the compensation legislation without 
 interfering with the whole system of social insurance from the first day of a man's 
 injuries. They had to interweave it into the system of social insurance, and they 
 recognized the theory in workmen's compensation that the workmen should not 
 directly contribute because the burden was on the employer. It was only because of 
 the fact that the sick insurance was already in existence and was working well that 
 they interwove the other piece of legislation into that, and put in that thirteen 
 weeks. 
 
 Mr. Boyd : Of course that thirteen weeks is based upon the fact, as I stated 
 in the beginning, that they had mutual insurance associations for fifty or sixty 
 years before that. So they simply brought that under a national Bill. 
 
 Mr. Bancroft : What I wanted to bring out particularly was that a direct 
 contribution to workmen's compensation has not been recognized in Germany. It 
 is only a matter of accident that the thirteen weeks was interwoven into the legis- 
 lation, and then experts assume that thirteen weeks is the contribution of the 
 workmen to workmen's compensation. In the legislation the whole burden is 
 borne by the employer by a tax upon his industry. 
 
 Mr. Boyd : You can scarcely put it that way. The actual fact is that the 
 Bill for sick insurance required the employees to pay two-thirds and the employers 
 one-third, and therefore it should be treated as sickness up to thirteen weeks. Now, 
 in 1854 the Prussian Bill provided that the employers contribute half or contribute 
 as much as the employees to the funds of associations whose members were their 
 employees. So that German law recognizes the fact that they have made the 
 workmen contribute. 
 
 Mr. Bancroft: But the sentiment has changed. In Europe now. I think 
 there are only two acts where -the workmen contribute, one is Switzerland and the 
 other Austria, and the third act is the State of Ohio. 
 
 Mr. Boyd : In the German Act he contributes. 
 
 Mr. Bancroft; Not directly. 
 
MINUTES OF EVIDENCE: No. 65 
 
 Commissioner : "What difference does it make whether it is directly or 
 
 indirectly ? 
 
 Mr. Boyd: It is directly in the German Act. He pays two-thirds of the cost 
 
 of that sick insurance. 
 
 Mr. Bancroft: Only on an estimate. There are 52,000,000 workers in 
 Europe who come under compensation legislation practically, who do not contribute. 
 Why, Mr. Boyd, the argument that has been used here about Mr. Chamberlain, 
 Mr. Chamberlain's idea on the subject had he been interested in the matter to-day 
 would have undergone a complete change. His Compensation Bill has been change'd 
 completely twice since he gave vent to those opinions, and with the consent of his 
 own party, his own people. 
 
 The Commissioner: We are getting away from the point. Mr. Bancroft 
 is right that on the face of this insurance act there is no direct contribution. 
 There is no certain percentage payable on the face of the German Act, but by 
 reason of the contribution to the sick insurance under the provisions of the other 
 act he does contribute directly. 
 
 Mr. Boyd: I see the gentleman's point now, that there is no specific direct 
 contribution with reference to the personal injury fund, but indirectly he does. 
 
 Mr. 'Wegenast: And consequently your act is reactionary in its tendency. 
 It goes back to the principle which Mr. Bancroft thinks has been abandoned. That 
 is the workmen contribute to the workmen's insurance. 
 
 Mr. Bancroft: We say the evidence is all to the contrary, the world wide 
 evidence. Is there any other act in the States where they contribute, Mr. Boyd? 
 
 Mr. Wegenast: Mr. Bancroft considers your act very out of date in that 
 particular feature. 
 
 Mr. Bancroft : No, I protest against Mr. Wegenast expressing my opinions. 
 The workers do not consider the Ohio Act any such thing. 
 
 The Commissioner: Well, I suppose there is no doubt about this, if the 
 workman contributes a percentage to the sickness fund and he gets nothing during 
 the thirteen weeks if he meets with an accident, he does directly contribute to the 
 accident, and that he pays into that fund in the case of an accident, as far as it 
 is due to an accident. 
 
 Mr. Boyd: Yes, your Lordship. 
 
 Now. Mr. Bancroft, of course the Ohio Act is the first Industrial Insurance 
 Act ever brought into effect in English history. There is no question about that. 
 The Chamberlain Act is not; there is not any insurance fund, and there is not any 
 absolute guarantee that the employer will pay the award when it is made. They 
 hope he will insure. , 
 
 Now, the Washington Act defines 47 classes of hazardous employments, and 
 
 repeal the common law remedy as affecting those 47 different 
 
 s of employment. We do not make any exception. I was determined to have 
 
 the employees of the Slate Penitentiary, and the County k and School districts and 
 
 dry goods stores given the same right to be in as anybody else. 
 
 Mr. Bancroft: You are right. 
 
 Mr. Boyd: There may not be as many injured per thousand in those different 
 employments, but when a man is killed and the children are left it is just as bad 
 ,f '' * as '" ;| railroad accident, or any other accident. His rate is less, and the 
 liability should be distributed just the same. 
 
 I almost forgo! this, 1ml 1 want to point out thai there are some very 
 
 deep economic problems here. We would have to spend a day talking about a 
 
 ogle proposition to do 11 justice. Will yon explain to me why alf the New 
 
1912 WOKKMEN'S COMPENSATION COMMISSION. 325 
 
 England employers, every last one of them, opposed the employees contributing? 
 They would not have them in. They would have given anything to have thoni out. 
 Then every one of the Ohio employers wanted them in. 
 
 The Commissioner: That is the cussedness of human nature. 
 
 Mr. Boyd: Well, it would be pretty hard for a legislative agent to reconcile 
 those two things. 
 
 Mr. Bancroft: I suppose the New England people recognized the fact, and 
 
 I think you mentioned it earlier, that if the workmen did not contribute that the 
 
 period of payment was only going to continue over 300 weeks, whereas the other 
 
 ■ consented that the payments should continue all a man's days, provided he 
 
 contributed. 
 
 Mr. Boyd: You see, Mr. Bancroft, we were in this position. We had to work 
 night and day. I had to work nights and days and Sundays, for this reason, that 
 we were having a Constitutional Convention which began the first of this month we 
 will say. Then if you read these public hearings you will see a great number of 
 lawyers, some of them with a big personal injury business, were making a big 
 fight over the high constitutional passes that we would have to get over. I told 
 them we weren't looking for the highest passes, but the lowest, and as a dis- 
 tinguished gentleman said, "I know a great many lawyers who can tell me what I 
 can't do, but I want the lawyer to come to me and tell me what I can do." Now, 
 I put that proposition. They had a conference in Springfield, Ohio, and they 
 invited me over there on this final proposition as to whether the employees should 
 contribute or not. After they got warmed up on it the Springfield people had a 
 bunch of figures showing they ought to contribute 25 per cent, and the employers' 
 and the Cleveland manufacturers' figures showed he ought to contribute 50 per cent. 
 Then I wanted to know why the New England employers didn't w r ant him in at all. 
 Now, in order to get a Bill before the House so that in case there were any of these 
 constitutional difficulties we would have the workmen and the employers together, 
 and the State would have a Constitutional Convention to rectify it, and everything 
 would have to be done to get the Bill out in the best shape it could be gotten out, 
 so I finally conceded he should contribute 25 per cent. I advised them, however, 
 to limit it to 16 per cent, and if they had done that they would have got it 16 per 
 cent., but they asked too much in the opinion of the legislature, and got too little. 
 Then we made them give us total disability as long as it lasted, and that is enormous 
 compensation. Now, in the Washington Act all the compensations are limited to 
 $4,000; none of them exceed $4,000. Just think of it. A man earns $20 a week, 
 and two-thirds of $20 would be $13 and something. Then the limit is $12 a week. 
 
 Mr. Bancroft: Yes. 
 
 Mr. Boyd: Not for 300 weeks, but for as long as he lives. The employers 
 are willing to stand that if the workmen contribute something. They were con- 
 scientious about it. There is no piece of trickery about it. There is none of this 
 Macnamara business about it. They were conscientious about it and that was the 
 concession they made, total disability as long as it lasted, as long as the workmen 
 contributed something or other, on the theory that two hundred workmen as against 
 one employer watching the fund would be of great value in the protection of the 
 fund. 
 
 Now, mark you, don't you be too optimistic about the abuses of the fund. 
 There will be much more than you have any idea of, and that in the end will hurt 
 nobody but the workmen, because the employers will all be in the same position, and 
 I contend they will be able to charge it up to the cost of production. The same 
 old arguments were made against import charges against the goods bought abroad. 
 
326 
 
 MINUTES OF EVIDENCE: No. 65 
 
 I remember in one political campaign when I was a youngster my nncles were all 
 Republicans, and they all contended that the exporter had to pay that tax, and 
 seriously contended it; then they got round to contending that the importer had to 
 pay it ultimately, and now they all concede that the consumer pays it. 
 
 Mr. Bancroft: Particularly the consumer. 
 
 Mr. Boyd: Now, my position I think on the whole, under conditions there, 
 is it would be best for the workmen to contribute where those compensations are 
 large, but mind you your socialistic scholars do not contend that if the workmen 
 ould pay the entire cost of the fund that it would ultimately reduce his wages. 
 They claim his wages would rise by that amount in a period of two. three, four or 
 five years. It is the consumer that has got to pay it. 
 
 M r. Baxcroet : Isn't that very fact breeding a whole lot of trouble in 
 industry, the adjustment of that payment afterwards. There is a fundamental 
 law that the workman must have the amount given to him that will give him an 
 existence. 
 
 Mr. Boyd: There is no question about that. The average workingman 
 does not require much discussion to demonstrate that the average workingman in 
 order to be reasonably efficient must have a reasonable subsistence. Now, the 
 workingman who is more prudent than the average workingman will accumulate 
 some capital, and the man that is less prudent than the average workingman never 
 does and never can, unfortunately. 
 
 Mr. Harris : With regard to the workmen contributing I understand the 
 point Mr. Wegenast was getting at was whether it would be better, if he con- 
 tributed at all, to contribute in money or contribute by a longer waiting period. 
 
 Mr. Boyd : We will put it in another way. 
 
 Mr. Harris : In a probationary period you only penalize the man with the 
 accident, and in taking money weekly or monthly, or whatever it may be from all 
 the workingmen, you penalize even the careful man. 
 
 Mr. Boyd: Well, of course he is paying an insurance. Under the Ohio Act 
 where a man is insured against total disability, an average man earning $2 a day 
 or $12 a week, that would be $8 a week as long as he lived. He is making a small 
 contribution towards that insurance. 
 
 The Commissioner: Especially in view of what Mr. Boyd has told us that 
 over 50 per cent, of these accidents cannot be avoided. 
 
 .Mi;. Boyd: That is as true as that the square of the hypothenuse of a right- 
 angled triangle is equal to the sum of the squares of the other two sides. 
 
 Mr. Bancroft: Did you ever know of a case, or was it ever brought out in 
 
 • investigations where one or more than one man ever wilfully injured himself 
 
 i ation? 
 
 Boyd: There never was any pointed out, We have statistics in Great 
 
 and European countries to show that there has been what has been decided 
 
 be or held to ho malingering, between one and two per cent. That is, in cases of 
 
 bodily injury. 
 
 • Ba] I - Thai is they did not want to go back to work? 
 
 Mi;. Boyd: Ma ag. 
 
 'I'm Commissioner: You spoke about "malicious negligence." The 
 ious and wilful misconduct." The Washington Act is some- 
 thini: e 
 
 } U: - WEQEm ;lf inflicted/' or something like that. 
 
 'I'm: Commissioner: The cases where a man will indict injury upon himself 
 are a negligible quantity. The cases must be very tow. 
 
1912 WORKMEN'S COMPENSATION COMMISSION. 327 
 
 Mr. Bancroft : 1 think it is the same in the Washington Act as the British 
 Act. We didn't see much difference in it. 
 
 Mr. Boyd: I have the language of our Act here, " In case such injury has 
 arisen from the wilful act of such employer" then he is allowed to sue if he wants 
 to. I think the same language is used. 
 
 Mr. Bancroft: Is the man then allowed to sue under the common law? 
 
 Mr. Boyd: Yes, but only in that particular case, and it was put in on the 
 theory that it really belonged to the Factory and Workshop Inspection Act. It 
 was one way of forcing the employer to guard the machinery. 
 
 Me. Wegenast: If he sues under that can he come back under the 
 compensation ? 
 
 Mr. Boyd: No, he surrenders the right. 
 
 The Commissioner: What about the employee? 
 
 Mr. Wegenast : It is section 6 in the Washington Act. 
 
 The Commissioner: That is a question of detail. 
 
 Mr. Boyd : I am quite sure it is " wilfully causes the accident for the purpose 
 of obtaining compensation." That is to make it really a criminal intent. 
 
 Mr. Bancroft: For instance in the British Act I think it was always on 
 the same theory. It it is " wilful and serious misconduct." 
 
 Mr. Boyd : We eliminated " serious," and said " wilfully causes the accident 
 for the purpose of obtaining compensation." 
 
 The Commissioner : Yours apparently is very much narrower than the 
 British Act. 
 
 Mr. Bancroft: If a man was convicted of that does that stop him from 
 getting compensation, or does his family still get compensation? Supposing he is 
 killed or permanently injured do they penalize him? 
 
 Mr. Boyd : I would rather get the section and see the final form of it. It 
 was intended to leave it like the German Act, that he lost his compensation unless 
 the Board saw fit anyway to give it to him. 
 
 Mr. Doggett: In what way is the present Act of Ohio administered? Is it 
 by Commission or by Board of Arbitrators ? 
 
 Mr. Boyd : The act is administered by a Board of Awards whose members are 
 paid so much a year, and they are vested with the sole authority to administer the 
 Act according to the terms of the act. They are authorized to hire an actuary who 
 shall classify the employments with reference to hazards, and fix the premiums. 
 I shall send to your Lordship as soon as they are published the lists of premiums 
 that the employers will pay under the Ohio Act. Then they are authorized to 
 gather information from the employers of various kinds. Then they are authorized 
 to receive the notices and to make the awards of compensation for injuries. 
 
 Mr. Bruce: Have they any authority to direct the employers to put up 
 safety guards and such like, and to adopt safety protective measures? 
 
 Mr. Boyd : We have that under the Factory Act. 
 
 Mr. Bruce : Not under the Board ? 
 
 Mr. Boyd: No. He has a right to sue. 
 
 Mr. Bancroft: That is considered a means of compelling the employer to 
 keep his machinery in proper order. 
 
 Mr. Boyd: Yes, but that was a compromise part of it. I thought that 
 should be part of the Factory and Workshop Act. 
 
 Mr. Wegenast: Do you classify the industries according to hazard, or do you 
 classify them according to the industry? For instance, would you put printers and 
 silver-smiths in the same class, or say printers and carpenters, just because the 
 
MINUTES OF EVIDENCE: No. 65 
 
 hazard seemed to be about the same, or do you classify them strictly according to 
 the industries? 
 
 Mr. Boyd: I have not been in the office down there. I had nothing 
 to do with that. The act provides, and it is the intention of the act, that they 
 be classified with reference to the hazard, and the rate fixed. The hazard 
 determines the rate. Whether they would carry that out to the point of 
 separation if it is a fact that there are a few different kinds of employment that 
 have the same hazard, I don't know. 
 
 Mr. Wegenast: You don't know whether they divide them up? 
 
 Mr. Boyd : I don't know about that. What will happen in Ohio is this. In 
 the course of a year or two after this is well started then there will be an assoc- 
 iation of employers formed harmonizing with the provisions of the act, or the act 
 harmonizing with the expected way in which the employers will organize, you 
 understand, — I don't care which way you put it, — so that after a while any class of 
 employers, A, B, C, etc., will begin to study the thing out, and A and B will not pay 
 the same premiums. A and B will each pay the premium of the hazard which 
 their experience has shown they create. If John Smith's hazard is raised during 
 this year over what it was last year they raise his rate a little. 
 
 Mr. Wegenast: That is right inside the same class of industry? 
 
 Mr. Boyd: Yes. 
 
 Mr. Wegenast: You would divide those engaged in wood-working into a 
 number of classes according to the hazard? 
 
 Mr. Boyd: We will say we have twenty-six employers in the foundry 
 business. At the start they will all pay the same rate, what the operations of 
 the liability insurance companies during the last twenty-five years have shown 
 they ought to pay — make the best guess the actuary can make. Then after a 
 while in the course of four or five years the employers in those twenty-six classes 
 will say, Here now, we want this thing fixed so that the employer in whose business 
 more accidents per hundred people employed in his business occur to pay 
 a little more. In other words under the German Act every fellow pays in accord- 
 ance with the amount he draws from the fund. 
 
 Mr. Wegenast : Do you consider that a better way of bringing home to each 
 employer his own risk than throwing it on him individually as under the British 
 Act? 
 
 Mr. Boyd: Oh yes, I think it is much better. 
 
 Ah;. Ransford: That might be pure ill-luck, that condition of things. For 
 instance we might all be in the foundry business and at the end of three years I 
 might have had five very bad accidents and you none, but it might not be owing 
 to any carelessness on my part. 
 
 .Mi;. Boyd: Of course there is a small number of accidents that is called 
 
 Now, in this record presented here it gives all the classes and 
 
 iformation are nil iriven so that you can check it up. There is 18 
 
 t of the accidents due to the employer, 28.4 due to the employee, and 54 per 
 
 •■'■lit due i" natural risk. 
 
 The Com- : Bui thai natural risk is common to all businesses. 
 
 Mr - ,; " Yn: T " thi he talks about that is part of the natural hazard. 
 
 The < OMM] [oner: Take the case he puis. One of the natural hazards is 
 
 '"■• ; "" 1 an explosion may happen in one place and not in another, or it 
 
 kill five people in one an.! nobody in another. That is following up Mr. 
 
 tford'a point. W] ild a man's rate be increased because it happened in 
 
1912 WORKMEN'S COMPENSATION COMMISSION. 329 
 
 this particular foundry he was unlucky enough to have these natural causes operate 
 more severely? 
 
 Mr. Bancroft : Take a foundry for instance where men are carrying ladles 
 of molten metal, and sometimes there is an obstruction in the way. 
 
 The Commissioner: I am not talking about negligence. 
 
 Mr. Boyd: His Lordship's point is, are not these accidents part of the 
 natural hazard. If they are then why should there be a rule requiring every 
 employer to pay a premium in accordance with the accidents which take place in 
 his particular place? 
 
 The Commissioner : Would it not give an infinity of work to the Board to 
 have to examine into that? 
 
 Mr. Boyd : We do not put them in in the start. I said the object is later 
 to amend the act as far as possible and make everybody pay the premium he ought 
 to pay, just as I do on my house that I own. 
 
 The Commissioner: You do not pay because you have been particularly 
 negligent; you pay because experience has shown that the hazard in the kind of 
 house you live in is so much. You do not pay because the people about your house 
 have been careless and a fire has been caused. 
 
 Mr. Boyd: Well, I have never investigated that particular question, as to 
 whether that accident would be a part of the natural hazard or not. Your Lord- 
 ship may be correct that that would be. 
 
 The Commissioner: The insurance company classifies the different build- 
 ings. I should think it would not work out very satisfactorily unless you did so. 
 
 Mr. Boyd: The figure is given here as one per cent, of all accidents as due 
 "to act of God." That is to say, outside of being caused by the employer and out- 
 side of being caused by the employee, and outside of the natural hazard. That is, for 
 instance, lightning would not be regarded as part of the natural hazard. 
 
 The Commissioner : Do you guard against, or provide to cover such cases as 
 this ? There was a very peculiar case recently happened in England, which went to 
 the House of Lords. A man was working at a threshing machine out of doors and 
 a wasp stung him, and blood poisoning followed and he died. They held that he had 
 no claim, that while the accident happened in the course of his employment it 
 did not arise out of the employment, and therefore he was out of it. Would your 
 act cover such a case as that ? 
 
 Mr. Boyd : Our act reads like this, that every employer employing five or 
 more persons in and about the same business is under the act. 
 
 The Commissioner: Accidents happening when and how? 
 
 Mr. Boyd: That is within the discretion of this Board or this Court. Of 
 course an act could not define all those particular cases. 
 
 Mr. Bruce : Some say, " In and about the course of his employment." 
 
 Mr. Boyd: It would be for the Board to say whether he was entitled and if 
 he was performing his duties imposed upon him as an employee in the due course 
 of his employment. 
 
 Dr. Doggett : Take the case of a man working for a contractor who had not 
 been in business for six months, or six weeks, would he come within the provisions 
 of the act? 
 
 Mr. Boyd : Yes, for ten days. 
 
 Mr. Doggett: Although the employer had not contributed? 
 
 Mr. Boyd: Every person employing five persons. At one place they wanted 
 the word " elect " in one of the provisions, so I went down and put in the provision 
 if they did not pay the premium it would take away all common law defences. 
 
MINUTES OF EVIDENCE: No: 65 
 
 Now, that is all the penalty there is. Every employer "shall" pay. In one law- 
 it says every person who breaks into a house shall be dealt with so and so. Take 
 the Washington Act. They repealed the common law remedy. They have to have 
 a penalty to enforce the Act in case the employer fails to pay the premium into 
 their fund. The Ohio Act is as obligatory as it can be made. What difference 
 would it make to say " if anybody elects to break into a house he shall be dealt with 
 so and so"? What difference does it make? 
 
 Mi;. Watts: You spoke of 49 per cent, of all injuries being covered by that 
 week's waiting period. 
 
 Mr. Boyd: They will occur within seven days. 
 
 Mr. Watts : Xow t , that whole 49 per cent, does not last a whole w r eek. One 
 man might be injured and not be off at all, another man might be off one day, and 
 another two days, or three days, or four days. So that that 49 per cent does not 
 contribute one week. It would range from nothing to seven, or six days. 
 
 Mr. Boyd: Yes. Of course some only last one day. 
 
 Mr. Watts: The contribution that a man makes is the wages he loses during 
 that idle time ? 
 
 Mr. Boyd: Yes. 
 
 Mr. Watts : If he is off six days he loses six days' wages, but if one day he 
 only loses one day's wages, so it is only a percentage. 
 
 Mr. Boyd : Yes. In fact the most of it is less than three days. 
 
 Mr. Wegenast : Yesterday I expressed a doubt as to your figures. I thought 
 the figure was 41 per cent., and I expressed a doubt as to the correctness of that. 
 It appeared to me to be a very large percentage of the accidents. 
 
 Mr. Boyd: You are talking about the percentage of accidents that last only 
 one week. I am quite sure it is 49 per cent., but I will write you about that. 
 
 Mr. Wegenast : I had 41 per cent, in the report of the Federal Commission, 
 and I expressed a doubt as to the correctness of even that figure. I just wanted 
 to have your confirmation of it. 
 
 Mr. Boyd: I will write you a letter as to that. 
 
 Mr. Harris: Mr. Bancroft asked you a question, if when investigating the 
 matter any case came before you where it was known that a man deliberately had 
 injured himself to get compensation, and you answered no. 
 
 Mr. Boyd : I said there was no one produced a case. 
 
 Mr. Harris: Then- you went on to say I believe in the Ohio Act it states 
 that if a man deliberately causes an accident to obtain compensation he shall not 
 receive it. That is hardly the words, but it is the sense. 
 
 Mi;. Boyd: Yes, if a man wills to cause the injury for the purpose of obtain- 
 ing tlif compensation. 
 
 Mi;. Harris: Can you loll what was in the minds of the committee that 
 prompted thai language when no case came before the Commission? 
 
 Mi;. Boyd: Well, the German Act provides this, that it defeats his claim 
 to compensation, bul the Board may nevertheless give the dependants or the man 
 compensation even if lie wills it. It is left with the Board. It defeats his right 
 to compensation if if is shown that he willed the injury for the purpose of obtaining 
 compensal inn. 
 
 Mi:. Harris: Sometimes- they do will it too. 
 
 Thai is my own personal position, that it ought to defeat him in 
 ,,lf ' nghl in obtain it, hut there might be circumstances brought to the attention 
 ° r the Board which would cause them to say it had hotter be paid in part or whole 
 to the dependants anyway. Supposing a man committed suicide and they could 
 
1912 WORKMEN'S COMPENSATION COMMISSION. 331 
 
 prove it, it would be a very hard case, and what is the difference to the dependants 
 whether he did or not? 
 
 Mr;. Harris: As Mr. Bancroft has said there has been different expressions 
 of opinion, and the one opinion that seemed to prevail was that some do deliberately 
 injure themselves for compensation. Now. that act as framed shows there must 
 haw been in the minds of the Commisioners some idea of that kind, that some 
 men do deliberately endeavor to get injured for compensation. 
 
 Mr. Boyd: Yes, we just accepted that as a physical possibility. 
 
 Mr. Bancroft: It wasn't proved at all. 
 
 Mr. Boyd : No, it was not proved in our hearing. Of course statistics have 
 
 been gathered from different countries to show that once in a while it happens, 
 
 and that under the operation of the British Act it is something over one per cent. 
 
 . As I stated it was held that they did. Whether they did or not, as far as the 
 
 operation of the act is concerned they did. 
 
 Mr. Bancroft: Your remark threw some light on the subject. That Act 
 was probably framed having in mind that a man might commit suicide, or some- 
 thing like that. 
 
 Mr. Boyd : Well, of course there are a few men commit murder. 
 
 Mr. Harris: The question I asked, and which I did not think was answered, 
 was what in your opinion, if you wouldn't mind giving it, would you consider the 
 best plan if the workman contributes — whether it should be in a money contribution 
 or a waiting period ? 
 
 Mr. Boyd: I think he ought to contribute. Now, I am basing this state- 
 ment on the experience of the German Act, and some European acts. He ought 
 to contribute for personal injuries about 16 per cent, assuming the total disability 
 lasts. 
 
 Mr. Harris: In money? 
 
 Mr. Boyd: Yes. You couple with that, however, this waiting period. That 
 waiting period should be narrowed down as far as experience will warrant it be- 
 ing narrowed. The only object of the waiting period is to shut out abuse. That 
 must be shut clown. Now, on the theory that he contributes a 'Substantial amount, 
 and of course three or four per cent, would be more trouble to look after than it 
 is worth, it is simply to recognize the principle, if it is sound economics, if the 
 workmen are all interested in the fund it will have a tendency to prompt them to 
 watch their neighbours, and so on. There is some sense in that. But that is 
 under the assumption that total disability is compensated as long as it lasts. 
 
 Mr. Gaxder: Does the State collect this fund, or how do they guarantee it? 
 
 Mr. Boyd: The act authorizes the Board to classify the premiums and fix 
 the premiums to pay the compensation. 
 
 Mr- Wegexast : Does a man send in his cheque or what does he do? 
 
 Mr. Boyd: Why, they send him a statement, or a blank in which he can- 
 fill out the amount of his pay-roll, and so on, during the last year, or during the 
 last six months, and he makes an affidavit that he is in such and such a business, 
 and that puts him in the class. If he is in such a class then his rate is so much. 
 Then he makes an affidavit that his pay-roll is so much, and he multiplies his 
 pay-roll by the rate, and that is the amount he has to pay. and lie writes his 
 cheque and attaches it to his affidavit, and the moment it is posted that is notice 
 to the employees that they are insured against all accidents and entitled to get all 
 the compensation that that act provides, the moment it is posted in the building. 
 
 Mr. Wegexast : I have a table here given by Mr. Schwedtman, and I wanted 
 to ask you whether it is correct or not- 
 
MINUTES OF EVIDENCE: No. 65 
 
 Mr. Boyd: That is liability insurance. 
 
 As I say nobody knows what the Ohio rates are, unless they have been published 
 since I left Toledo. I will send his Lordship the rates just as soon as I can. 
 Adjourned at 1 p.m. till 2.30 p.m. 
 
 2.30 p.m. resumed. 
 
 The Commissioner: If there is anyone desires to ask Mr. Boyd any ques- 
 tions now is the time- 
 
 Mr. Bruce: There was one statement I understood Mr. Boyd to make this 
 morning in his opening remarks, that in Great Britain the workers contributed one- 
 third. Would that relate to workmen's compensation or State insurance? 
 
 Mr. Boyd: That is Lloyd George's Bill. 
 
 Mr. Bruce : But not to the Workmen's Compensation Act ? 
 
 Mr. Boyd: Oh, no. 
 
 The Commissioner: I did not quite understand your statement as to the 
 limit of $1,200 or $3,400, as the case may be. You stated that in case of total 
 disability a man received a proportion of his wages. 
 
 Mr. Boyd: 66 2-3 per cent, as long as he lived, with two limits, a maximum 
 of $12 a week and a minimum of $5 a week. 
 
 The Commissioner: That is partly invalidity insurance, and old age in- 
 surance, because if he lives over 65 he probably would be incapable of work, and 
 you still provide for him. 
 
 Mr- Boyd: Yes. 
 
 The Commissioner: Then what is the $3,400? 
 
 Mr. Boyd: In case of death he gets 66 2-3 per cent, of his average weekly 
 wages for 300 weeks. A minimum of $5 a week would be $1,500, and the maxi- 
 mum for 300 weeks would be $3,600. 
 
 The Commissioner: That is death? 
 
 Mr. Boyd: There was a slight compromise on the $3,400, you see- It is 
 
 not necessary to go into it any further beyond illustrating this point, because it 
 
 will all appear in this record. I will just illustrate the point. They had 370 
 
 fatal cases that were investigated in Cuyahoga county during the period from 
 
 1905 to 1910. Now, there were 135 of those cases that received something up 
 
 to $300, or an average of $163.83. Then there were 107 of those cases received 
 
 something between $300 and $1,000, or an average of $519.81. There were 71 
 
 cases that received something between $1,000 and $2,000, or an average of $1,269.98. 
 
 There were 42 cases that received something between $2,000 and $4,000, or an 
 
 581.13. There were 15 cases received something above $4,000. or 
 
 :& of $4,991.66. There were the 15 best cases out of the 307. 
 
 quarter off $4,991 and you got $3,740. and $150 doctor's bill off 
 
 would leave a little less than $3,600. In other words it brought it 
 
 down below the $3,600, and they compromised on it and called it $3,400, and the 
 
 wot] organizations all agreed to that. 
 
 TH] ussioner: Would you mind re-stating. Mr. Boyd, your reasons 
 
 linking at least ten per cent, should be paid by the employees? 
 
 The reafon that they made them contribute at a,ll was, — and 
 it was unanimously agreed if they contributed at nil their contribution should be 
 substantial; thai is, to the extent of amounting to considerable more than it 
 •would cost lo collect it — for the purpose of having them all interested in the 
 fund, "ii the theory that the workmen all being interested in the fund would have 
 I care to see thai his ueighbours were more careful, or whether his neighbours or 
 
1912 WORKMEN'S COMPENSATION COMMISSION. 333 
 
 fellow-workmen were practising any imposition upon the fund, because it is cost- 
 ing him money. That is the theory upon which he is in. If he is identified with 
 the fund, the employers said, it would tend to eliminate any friction between the 
 employee and the employer. Now, a careful investigation of the German Act 
 convinced me that in bodily injuries he paid about one-seventh, or sixteen or seven- 
 teen per cent, so we made it 15 to 17 per cent, for bodily injury. The employers 
 insisted upon it being 25 per cent, and then we came back at them 
 and made them agree to total disability as long as it lasted, under those higher 
 terms. The legislature would not take the position of not making them con- 
 tribute, but they would not take the position to make him contribute 25 per cent, 
 and they compromised on ten per cent, in a Conference Committee between the 
 Senate and the House. It never had to be re-threshed out in the two Houses. 
 The Conference Committee of the two Houses agreed on that. 
 
 The Commissioner: What did I understand in your view to be the basic 
 principle of such an act as we are discussing, whether you call it an Industrial 
 Insurance Act or not? 
 
 Me. Boyd: The basic principle is simply this, that it is an insurance for 
 the workingman and his dependants against economic insecurity arising out of 
 the modern wage system. As Bismarck said, it provides that the dependants of 
 persons whose earning power has been interefered with shall not be hampered in 
 being able to get a normail training up to a point where they are able to support 
 themselves without having to fall back upon private or public charity. 
 
 The Commissioner: Is it a violation of that principle to take out of the 
 fund for the support of the dependants of a man who has brought the injury 
 upon his own head by his own misconduct, and perhaps has injured others, as well 
 as his employer? 
 
 Mr. Boyd: Well, it is consistent with this position, that the dependants 
 are in no way responsible. 
 
 The Commissioner: Is that not getting into the region of the eleemosynary, 
 rather than the economic field? 
 
 Mr. Boyd: No, I think not. There is no great evidence to show that work- 
 men injure themselves intentionally- 
 
 The Commissioner: I am not putting that case at all. The case has been 
 put once or twice here. For instance a locomotive engineer — we will assume the 
 facts to be as I state them — deliberately with his eyes open, and nothing com- 
 pelling him to do it, passes a signal which says to him to stop. There is another 
 train coming on that track, and the result is that a collision follows and half a 
 dozen lives are lost and thousands of dollars of property destroyed. He breaks 
 his leg. Upon what principle is that man entitled to compensation? I can 
 understand appealing to the generosity of the public for his dependants who are in 
 no way responsible for his act. 
 
 Mr. Boyd: It is on the ground of the protection of the health, safety and 
 general welfare of the public, because his dependants, no matter whether he is 
 negligent or not, in many cases are apt to become public charges. Now, the 
 family as a unit are the subjects of the State, and the reason, as I said before, 
 why Germany put it in operation, without asking whether the injury was intentional 
 or not, was to assure the dependants at least of an amount sufficient to bring 
 them to a point of being able to support themselves. 
 
 The Commissioner: Let me add one more factor to my case. Suppose that 
 man is worth $15,000? Is there anything to justify taking anybody's money 
 to compensate him or provide for his family? 
 
334 MINUTES OF EVIDENCE: No. 65 
 
 Mi;. Boyd: Well. I don't know that there is, but that is a very rare case. 
 
 The Commissioner: Of course it is. 
 
 Me. Boyd: Of course limiting it to 66 2-3 per cent, or 50 per cent., or 60 
 per cent., whichever rule you follow, it is simply that he shall not he able under 
 any circumstances after he is injured to get quite as much as he did before he 
 was injured — to earn as much. 
 
 The Commissioner: It is said that there is no State guarantee .in the 
 Washington Act. Is there in the State of Ohio any guarantee? 
 
 Me. Boyd: You mean in regard to the fund? 
 
 The Commissioner: Yes, if it should fall short. 
 
 Mr. Boyd: Well, your Lordship, the act authorizes the actuary to fix the 
 'premiums so that the fund will be able to pay all the claims against it 
 
 Tut: Commissioner: So the State is never called upon to do anything but 
 pay the cost of administration? 
 
 Mr. Boyd: Yes. In Germany the employer and emplo} r ee pay a great deal 
 of the cost of administration. 
 
 The Commissioner : Well, an accident happens and death follows, or total 
 disability. What is done then in the case of death? 
 
 Mr. Boyd: Well, the dependants, the widow or otherwise, file notice with 
 the Board that John Smith was killed, that John Smith was her husband, and 
 he has so many children, so many dependent upon his earning capacity- Then 
 the Board notifies them that there will be a hearing of the case at a certain time, 
 and to make proof of what his average weekly wages were, and of what the actual] 
 medical expense was. They would allow the widow and the dependants up to $150 
 for doctor's bills and funeral expenses. Of course they would not allow that 
 much if they did not spend that much, but they would not allow any more than 
 thai no matter how much they spent. Then they take two-thirds of the average 
 weekly wages and multiply it by 300, and if it made more than $1,500 and less 
 than $3,400 it would be paid in monthly instalments. 
 
 The Commissioner: Where are you going to get the money to do that? 
 
 Mr. Boyd: The actuary publishes the rate and the employer pays the 
 premium. He multiplies his ]5ay roll for the preceding year by the rate, and 
 pays it into the treasury and gets a receipt, and posts it in and about his place 
 of business, and when he does that all his employees are insured under this act. 
 
 The Commissioner: Supposing you had 50 or 100 of these cases, in which 
 between $1,500 and $3,400 was to be paid out? Would the annual contributions 
 provide for that? Because in the Washington Act there is a provision about the 
 employer providing the fund. 
 
 Mn. Boi'D: Well, that is provided in the same way as ours is, except in 
 the Washington Act they appropriated $150,000 to start off with. 
 
 Mi;. Wegenast: What your Lordship has reference to, I suppose, is the 
 tin- aside of the $4,000. That is not done by the employer but by the insurance 
 department 
 
 Tin: ( low MISSION] i; : I'ut you are getting now on to your proposition to prevent 
 the bringing into operation of such a scheme as is proposed as being too onerous. 
 •Im-i explain, Mr. Wegenast, wha! your scheme is in that resped to Mr. Boyd. 
 
 Mi:. Wegenast: Well, the scheme is that advocated by Mr. Dawson as set 
 out in In- -mi. im-iii and his brief before the Federal Commission, and is briefly 
 this, thai each year only enough should be assessed upon the employers to pay 
 the pensions due for thai year, with perhaps a small margin. 
 
1912 WORKMEN'S COMPENSATION COMMISSION. 335 
 
 Mr. Boyd: But the award is made. 
 
 Me. Wegenast: Yes, but the idea is not to levy at once enough to lay 
 aside a reserve fund to provide for all the future payments- 
 
 The Commissioner : How does your act work, Mr. Boyd? 
 
 Mr. Boyd: Our act does not provide thai way. It provides that the premium 
 shall take care of all these compensations. They are only paid monthly, and I 
 understand Mr- Wegenast to say when an award is made it is only paid out as the 
 instalments come along. 
 
 Mr. Wegenast: Yes, that is the way the Washington Act works, but under 
 the system advocated by Mr. Dawson, and under the system which is in operation 
 in Germany the plan was to assess simply enough to pay the payments for that year. 
 In the following year the assessment would be what was necessary to carry the 
 dependants of the year before, plus the dependants accruing in that year, and the 
 annual rate would under normal conditions continue to increase for a period of 
 thirty-five years or so. 
 
 Mr. Boyd: Under the Ohio Act they can do it either of those ways- They 
 can work it out in whichever way they think best. 
 
 The Commissioner: When you left" the common law liability open why 
 was it you did not abolish the idea of common employment, and the rule of con- 
 tributary negligence ? 
 
 Mr. Boyd: Just like the Washington Act? This is the reason we did not 
 do that. The labour organizations had just put through ' the legislature the 
 Norris Bill which modified all the common law employments. Well, the State 
 was all torn up about it, and it was out of the fight on that Bill. They said the 
 legislature passed that Bill and now we will appoint a Commission and go into 
 this thing and get a new remedy and thresh it all out. Well, that we had just got 
 through with, and so we decided to leave it there, but to put it out of business as 
 far as the act covered the employment. 
 
 Mr. Wegenast: You have in all your States, Mr. Boyd, I think, as between 
 the labor interests and the employing interests, a controversy as to whether the 
 Act should assume the form of a liability law, stripping the employer of his 
 defences, or a compensation law, implying of course an insurance scheme of this 
 kind. 
 
 Mr. Boyd: We might say up until 1910 all the fight was on the common 
 law, the modification of the common law defences. Then the moment that those 
 fights grew more intensified in say ten or fifteen of the States, then they came 
 to the realization that it was necessary to adopt a Compensation Act or Industrial 
 Insurance Act. 
 
 Mr. Wegenast: So that an individual liability act does not represent a per- 
 manent solution? 
 
 Mr. Boyd: Oh no. I think I have demonstrated that in these statistical 
 systems. 
 
 The Commissioner: That is what you explained to us, wasn't it, about the 
 effect of the e'mployers' liability insurance? Do you mean to say if the doctrine 
 of common employment were eliminated, and the contributory negligence of the 
 workman did not disentitle him to recover, that it would not increase the number 
 of cases very largely in which compensation could be recovered under Employers' 
 Liability law? 
 
 Mr. Boyd: They would theoretically recover if all the common law con- 
 ditions were abolished in 18 per cent, of the cases- 
 
336 MIXUTES OF EYIDEXCE : Xo. 65 
 
 The Commissioner : Why so few ? Do you mean the other cases would be 
 tilings for which the employer would not be responsible? 
 
 Mr. Boyd: Xo, we wouldn't have a case at all. 
 
 The Commissioner: With these doctrines eliminated? 
 
 Me. Boyd: Yes. 
 
 The Commissioner: Suppose you had to delay the passing of your act 
 and you wanted to provide a temporary measure for bridging over the difficulty, 
 what would be the objection to providing that these three doctrines that you 
 mentioned should no (longer have application ? 
 
 Mr. Boyd: Which would mean the common law defences? 
 
 The Commissioner: Yes? What objection would there be to that? 
 
 Mr- Boyd: Well, I think the development of the proposition has been 
 brought to such perfection it would be better to delay a few months and adopt 
 the right method, than to adopt a compromise. 
 
 The Commissioner: Only as a temporary measure. It is admitted appar- 
 ently on all hands that the present law is unjust. 
 
 Mr. Boyd: Yes. When they took up the Xew York Act Mr- Wainwright 
 was in favour of the insurance plan. He was the Chairman, but he didn't have 
 the courage, or they did not feel like going so far as to introduce an insurance 
 Act, so they adopted a modification of the British Compensation Act, with the 
 hope that the Supreme Court would sustain it. That was a perfectly hopeless 
 proposition because while the court admitted that their investigations showed that 
 the present method of providing compensation under the common law remedy with 
 more or less modified common law defences was justifiable, yet they said that" this 
 remedy that you have chosen is an impossible remedy under the constitution of 
 Xew York State ; that is taking property without due process of law. That brings 
 us right back to the Abinger decision in Priestly v. Fowler, and in Ohio, for 
 example, it would drive a large number of employers out of business. You take 
 away the common law defences, and to-morrow he would be liable for $2,000 or 
 $3,000 or $4,000 where yesterday he was not liable at all, and 50 per cent, of all 
 employers employ less than 20 men. But if the employer is put in a position 
 where he can pay a small premium, his prorated share, and insure himself against 
 the liability of his workmen being injured, and they receive the same protection 
 that the United States Steel Corporation may individually be able to furnish with 
 its own individual scheme, as it has, and the International Harvester Company 
 has, the court is bound to find that you have not offered to find a reasonable 
 remedy when one exists and bring it within the law, namely, the principle of 
 ation. I might bring in one thing that I omitted, and that is this, the legal 
 justification in the United States is, you appropriate the right of the employer 
 to !. just the same as in the right of Eminent Domain you expropriate a 
 
 ; property. You ran take it in three ways, for general taxation, for general 
 
 public |>i: or you can take it for special assessments where the man assessed 
 
 benefit, such as in the paving of the street in front of his lot, and 
 
 in the genera ition he gets the general improvements of the city, sewers and 
 
 In II"- right of Eminent Domain if a man's property is taken he is supposed 
 
 to gel i id adequate compensation. This comes under the exercising 
 
 of the taxation power or police power, taking the right of the employer to defend, 
 ;| "'' taking tl t of the employee to sue, and gives back to the employer pro- 
 
 tection from thi and ■_ iack to the employee his right to compensation 
 
 no matter whose fault, except where the fault is malicious. 
 
1912 WORKMEN'S COMPENSATION COMMISSION. 337 
 
 Now, just as a matter of interest, for I do not pretend to understand the 
 jurisprudence of the Dominion Government, but I wish to call his Lordship's 
 attention to a case that is extremely interesting to a student of American juris- 
 prudence. In section 92 of the British North America Act, sub-section 13, the 
 heading of the act says, "In each Province the legislature may exclusively make 
 laws in relation to matters coming within the class of subjects next hereinafter 
 mentioned, that is to say." Then section 13, "Property and Civil Eights in the 
 Provinces." Under that section you had a case under what is called the 
 Prince Edward Island Land Purchase Act of 1875. This act was passed to convert 
 the leasehold tenures into freehold estates upon terms just and equitable to the 
 tenant as well as to the proprietor, for which purpose it provided a Commissioner's 
 Court, by proceedings in which a compulsory transfer of the lands affected to the 
 Government could be obtained, and in Kelly v. Sullivan the Supreme Court of the 
 Island held that the act came within sub-section 13 of section 92 of the British 
 North America Act as legislation on property and civil rights of the Province. 
 Peters, J., observes in 2 P.E.I., pages 87 and 88, "If the Provincial Legislature 
 is restricted to subjects coming under what American jurists call the right of 
 Eminent Domain, it seems to me that this act, at least in some of the provisions, 
 would be an excess of legislative power, for no such emergency exists that would 
 justify legislative interference under the right of Eminent Domain." 
 
 Now, there, where these large estates were held, on the ground, as provided 
 under the British North America Act, for the peace, order and good Government 
 of the Dominion, or the Provinces, or as we say, exercising the police power for 
 the protection of the health, safety, and general welfare of the public, they passed 
 this act which says you must sell your property to the Dominion Government at 
 an appraised value fixed by this court created by the act, and the Dominion 
 Government pays them so much for the land, and pays the tenant so much for 
 his interests, and then can sell the land to the public at 4 ar g e ? an< ^ thus create 
 an entirely new status of owning and farming land between owners and tenants 
 and the public at large- For what reason? For the peace, order and good 
 Government of the Dominion. Now r , that is exceedingly interesting to us. 
 
 The Commissioner: You told us, Mr. Boyd, that the Act applies only to 
 persons employing five or more? 
 
 Me. Boyd : Five persons or more, yes. 
 
 The Commissioner: Is there any option to persons who are not employing 
 as many taking the benefit of the act? 
 
 Me. Boyd : There is nothing in the act. 
 
 The Commissioner : Would that not be a proper provision ? 
 
 Mr. Boyd: Yes. We recommended that, but through an oversight it was 
 not put in. You remember seeing about a lot of graft in the legislature, and 
 they indicted ten or fifteen of the legislators at that time. That was merely 
 an oversight that it did not provide that it be left optional on those employing 
 less than five men to come in. It should so provide- 
 
 The Commissioner: Take an employer with a few men. Perhaps in the 
 summer time he will have five or six and in the winter time he will have one or 
 two, or perhaps none. How is he classified? 
 
 Mr. Boyd: Well, there is a large discretion residing in the Board. The 
 act says every employer employing five persons or more, that is, regularly employing 
 five persons or more, in and about the same business. 
 
 The Commissioner : Would they then take the average over the year, or how 
 would they work that ? 
 22 l. 
 
338 
 
 MINUTES OF EVIDENCE: No. 65 
 
 Me. Boyd: Well, half or more of the year. You see it was merely on prac- 
 tical grounds, to let out domestic servants and casual employments, and most of 
 the farmers; but it is intended, of course, to put the farmers all in in a short 
 
 time. 
 
 The Commissioner : If they will let you. 
 
 Me. Boyd: In spite of their letting us. 
 
 The Commissionee : "Which is larger, the urban or rural population in Ohio? 
 
 Me. Boyd: The city population. It is like this. The labour organizations and 
 the employers' associations are much more readily educated on the proposition 
 than the scattered and isolated farmers. They have very little organization as 
 yet, but organizations are being developed among the farmers. 
 
 The Commissionee: Do you think you will ever educate a farmer to believe 
 
 in that? 
 
 Ah;. Boyd: "We got their leaders to admit it after the Act was passed. 
 
 The Commissionee: Do you mean to say you will ever get him to believe 
 that if he has John Smith employed, and John Smith goes into the stable and a 
 horse kicks him and kills him that he should pay $2,000? 
 
 Me. Boyd: I was raised on a farm myself until I was 25 years old, and a 
 very large percentage of the farmers only have the husband and sons working, 
 and if through some misfortune the son is seriously injured, or the farmer is 
 iously injured, there would not be any sense in suing himself, but when this 
 aci comes into force he can insure himself and get compensation. It was de- 
 liberately left out for the purpose of getting the act as far' as we could get it, 
 but mark what I tell you, that perhaps not the next legislature, but the third 
 one, he will be in. 
 
 Me. Gander: The act in the State of Minnesota includes the farmer. 
 
 Me. Boyd: Do you mean Wisconsin? They have no compensation Act in 
 Minnesota ? 
 
 Me. Gandeb: They have a Bill that is pretty well ready to go before the 
 House now. 
 
 Ah:. Boyd: What they have done during the last six months I don't know. 
 
 Tin. Commissionee: What do you think of a case of this kind, Mr. Boyd? A 
 small employer of labour, say a carpenter, works at the bench beside his workmen. 
 He is injured, possibly by the carelessness of one of his men. What reason is 
 there that he should be excluded from the benefits of such an act ? 
 
 Me. Boyd: Well, as I say, we just drew a limit where experience had shown 
 ii was wise. In launching a big scheme you have to draw the line somewhere in 
 order to inaugurate it. 
 
 Tin I o missione!;: [s there any reason why that man in that shop should 
 ■ be insured? 
 
 Mi;. Boyd: No, no reason whatever. 
 
 Tin < o [MIS8IONEE: [s there not some law of that kind? 
 
 All;. Weoenast: The Washington Act allows them to come in voluntarily. 
 
 Mi;. Boyd: Our recommendations were that any employer could come in 
 voluntarily, or come in himself, but inadvertently that was omitted. 
 
 The <'m\i : Now, this leaving of the common law liability upon an 
 
 iployeT who by his wilful or malicious negligence, as you have expressed it, 
 
 the injury, to whom does that extend? Take the case of a joint stock 
 
 company thai is running a business, the International Harvester Company, if you 
 
1912 WORKMEN'S COMPENSATION COMMISSION. 33Q 
 
 like. What is to be understood by the employer as applying 'to that company? 
 Docs it mean the company itself or its 'directors, or the superintendent in charge? 
 
 Mi;. Boyd: The superintendent.. 
 
 The Commissioner: You do not say so in so many words. 
 
 Me. Boyd: It is left to the Board to determine. 
 
 The Commissioner: There will be a great deal of work for this Board to do 
 if you have left it free and easy like that. You see one of the troubles is about 
 these corporations that we have no such doctrine here as the vice-principal. That 
 gets over a good many difficulties on your side, but the general manager of the 
 company is a fellow servant just as much as the man that carries the lead or the 
 iron in a foundry. 
 
 Me. Boyd: Well, of course with us it is defined. That provision was put 
 in there as a compromise in this matter, of the right to sue also, and I thought 
 that it ought to be in the statute which is called the Factory and Workshop In- 
 spection Act, a regulation regarding the machinery and the operation of 
 machinery. 
 
 Me. Wegenast : You thought the employer should be got after in that way ? 
 
 Me. Boyd: Yes, but they insisted on something of that kind in this act. 
 
 The Commisstonee : Is the Washington Act not better than yours, that when 
 an accident happens owing to failure to comply with the provisions of any act 
 or ordinance the employer pays so much into the fund, instead of making him 
 liable according to the common law? 
 
 Me. Boyd: That is what I recommended, but in this compromise they goi 
 it in in that shape. 
 
 Me. Wegenast: They did not want to be deprived of the right of trial by 
 iury. 
 
 Me. Boyd: There would not be one case in 10,000. Supposing a man that 
 is killed has been earning $3 a day. Two-thirds of that is $2 a day, or $12 a 
 week. Now, he gets $3,400, and $150 for doctor's bills. He is going to sue 
 an employer, we will say, who neglected to put a guard on a saw. He is going to 
 sue the employer at common law and deny himself any possibility of getting any- 
 thing under the Compensation Act, and stake his chances on that, and divide up 
 with his attorney, and the jury might allow him $5,000 or $6,000. With us it 
 is usually $4,000 or $5,000. Then it goes up through the Circuit Courts, and to 
 the Supreme Court and back, if the verdict is large. He never would do it in 
 the world. 
 
 Me. Wegenast: That is your average verdict in cases of that kind. I think 
 Mr. Emery stated somewhere that the basis of assessment of damages in the 
 "United States is uniformly very much higher than in this country, and about 
 twice as high as in England. 
 
 Me. Boyd: You will find that in the statistics of our investigations, on page 
 40 of the brief. 
 
 Me. Wegenast: And you base the limitation of $3,400 on what? 
 
 Me. Boyd: We took the fifteen best cases out of 370 in Cleveland. 
 
 Me. Wegenast: Do you think that is a fair way of getting at it? 
 
 Me. Boyd: Well, it should not be higher than that. The employers said we 
 will stand for that in order to get rid of this litigation. 
 
 Xow, as to the cost of the act. It is figured that the act will cost from two 
 to three or four times as much as it now costs the employers in the State of Ohio. 
 
340 
 
 MINUTES OF EVIDENCE: No. 65 
 
 That is assuming that all the waste in the liability insurance, and the hiring of 
 attorneys, and what liability companies keep as over against what they actually 
 pay out, that all to go in together, and then multiply it by two. 
 
 Mr. Wegenast: Then to compare the corresponding benefits under a system 
 where the liability is thrown on the employer individually, how much do you think 
 your rates would be increased over what they are? Supposing you had a system 
 like the British Act, where each employer insures voluntarily, how much more 
 would it cost ? 
 
 Mr. Boyd : Well, I don't know. Of course in our act the employee contributes 
 ten per cent, of what the employer does. That is considerably more than ten per 
 cent, of the entire cost, because the cost of administration will be somewhere be- 
 tween ten and twenty per cent. 
 
 Mr. Wegenast : Do you think it would be as high as that ? 
 
 Mr. Boyd: I think it is about twelve per cent. 
 
 Mr. Wegenast: In Germany they have it down to about four and a half per 
 cent. 
 
 Mr. Boyd: But they do not pay all the costs of administration. I think it 
 will be reduced to between ten and twelve per cent, after five or six years. 
 
 Mr. Wegenast : I am stating in my brief that it will take about twice as high 
 a rate under an individual liability system as it would under an insurance system, 
 basing my statements on statistics in England. Have you anything which will 
 confirm that, or otherwise? 
 
 Mr. Boyd : I would not like to make a statement off-hand now. We have gone 
 into that pretty carefully, but I do not carry the figures in my mind. If you 
 write to Mr. E. E. Watson, State Liability Board of Awards at Columbus, he will 
 give you all the information on that. He has got the best information there is in 
 the country. Have you read Part III. of this report? 
 
 Mr. Wegenast: Not through. I have looked through it. 
 
 Mr. Boyd: You will find something in that. 
 
 The Commissioner: I have no doubt you have read the criticism of the 
 Washington Act. I have just forgotten the man's name. One of his objections is 
 that it will tend to make men more careless, and that the careful man is no 
 better off than the careless man. 
 
 Mr. Boyd: Of course we went into that as thoroughly as we could, and we 
 finally came to the conclusion that the employee contributing from ten to twenty 
 per cent, where he was given total disability as long as it lasted, that that was the 
 best possible arrangement we could make to start the proposition. 
 
 I i iv to your Lordship that a lot of these people get up and write some- 
 
 ising some act or other who have not spent perhaps one week or two 
 
 u " olid study on it, Now, what does that amount to? It takes a man at 
 
 -iv months to learn very much about it. and if he studies it two years he will 
 
 nov. oirl it than he did at the end of six months, and it is idle 
 
 , " I ! i"') t<» a man's criticism unless he is a thorough student of the 
 
 'in. 
 
 Tin [issiONER: Such a criticism as that even on the surface contains 
 
 evidence of it. That is a thing that does not require much study, does it, to de- 
 mine what your opinion would he as to whether the effect would be to make an 
 employee earoless. 
 
 Mi;. Boyd: Well, you will find this in Part IT. There are one or two who 
 afraid thai people will have their fingers and Viands out' off by the score under 
 
1912 WOBKMEN'S COMPENSATION COMMISSION. 341 
 \ 
 
 an industrial insurance act, as they were under the old common law arrangement 
 of insurance. Well, that is not so. Accidents per thousand employees in Germany 
 and France, and even in England, are much less now than they used to be. There 
 is nothing in the argument at all. It is mere guess work. 
 
 The Commissioner: There was another objection made, that a man with a 
 high wage, leaving a wife and one child, that his family would not get any more 
 than a much lower paid man who was killed who had three or four or five 
 children. 
 
 Mr. Boyd : Well, I think our act is slightly defective in providing' an analysis 
 of the compensation to dependent children. Our act simply provides that the 
 dependants of the man killed get from $1,500 to $3,400, but the German Act, for 
 example, and the Eussian Act, and the French Act, and all other acts, and your 
 Lordship will find in Part I. all the acts from civilization down — you will find 
 the scales of compensation in those cases in there. For example, the German Act 
 and the Eussian Act provides the widow gets twenty per cent, of it, and the first 
 child gels twenty per cent., and the second child gets twenty per cent. That would 
 make sixty per cent. Then, if there were more children, it would be divided up 
 so that the total would not exceed sixty per cent. That is a more just way, 
 but it might have taken two weeks longer to have hammered that through the heads 
 of some of the Commission. I tried to get it through Smith's head, and he couldn't 
 get it through, and we did not want to defeat the Bill just because we could not 
 get that simple provision through Smith's head. We wanted the act ready before 
 the Constitutional Convention was pulled off. 
 
 The Commissioner : Will the effect of such an act, in increasing the burden 
 upon the employer, have any effect in keeping old men out of employment? 
 
 Mr. Boyd : I think not. We discussed that, and the employers discussed it, 
 the most intelligent employers in Cleveland, I think. They said we are willing to 
 pay four times as much, or even five times as much, to get rid of this old wrangle 
 between the employers and the emploj^ees. Now, one gentleman from Brookfield, I 
 think it was, said, I don't take any stock in this argument, because Ohio will have 
 such a Compensation Act and Indiana does not, that the employers of Indiana will 
 be at a great disadvantage as against the employers of Ohio. He said that is all 
 rubbish and nonsense; and Kilbourn of Columbus said the same thing. 
 
 The Commissioner: With what arguments did he back that up? 
 
 Mr. Boyd: Well, he said the competent workman would tend to go where he 
 could get the best consideration, and five good workmen as against seven poor 
 workmen would do more work. 
 
 Mr. Wegenast: Do you think, Mr. Boyd, that a man would go to a State 
 where he got $2.50 a day with a good Compensation Act, in preference to a State 
 where he got $3 a day with a poor Compensation Act? 
 
 Mr. Boyd : I think that is almost true. Now, in Germany, when they were 
 inaugurating the scheme, they never asked whether France or Holland or Bussia 
 was going to do it; they did it not on grounds of sentimentality, but on grounds 
 of sound and wise statesmanship. That is what they did it for. 
 
 Mr. Wegenast: Did you have any opposition on the part of the employers' 
 liability companies? 
 
 Mr. Boyd: Oh yes. We had a room twice as big as this, and the walls 
 lined with liability insurance men- We had fifteen there one night. 
 
 Mr. Wegenast: I suppose you have read the addresses and compilations by 
 Mr. P. Tecumseh Sherman? 
 
342 
 
 MINUTES OF EVIDENCE: Xo. 65 
 
 Me. Boyd: Xo. There are a lot of parlour orators who disuss the Work- 
 Compensation Act, who never go anywhere and never do anything. 
 You don't require very much investigation to know that is true. At 
 :he Convention of the Xational Economical Society they had a great number 
 of parlour orators, and a few hard-headed people who were willing to study the 
 thing out and take a step and stand on it. If Mr. Wainwright had insisted 
 upon an insurance act they would have had it in Xew York State, and the State 
 would have held it constitutional, and they would have had the act in effect. 
 
 Mi;. Wegenast: There is a series of addresses being distributed by the 
 Xational Civic Federation. 
 
 Mr. Boyd: They are mostly made up of parlour orators. I do not wish to 
 mention any names, but I was there in December of 1910, and they were all on 
 the water wagon. They said it is an insurance scheme, and the courts will never 
 sustain it. That is what Parker said in the Chicago Conference; and Davy of 
 Boston, the Chairman of the Committee of Ten on uniform State laws in the 
 United States, took the same position; but they took the Ohio Bill down in Massa- 
 chusetts and drew the Massachusetts Bill right after it with one exception, and 
 that is they allow the liability insurance, people to get their hands into the business, 
 by allowing the employer to contract out of it. 
 
 Me. Wegenast : To form separate schemes. 
 
 Mr. Boyd: Yes. That is it lets the liability insurance companies do the 
 business. 
 
 Mr. Wegenast: To let them down easy. 
 
 Mr. Boyd: Yes. 
 
 Mr. Wegenast: Is it anticipated they will continue in business for any 
 length of time? 
 
 Mr. Boyd: I don't know about that. 
 
 Mr. Wegenast: Have you seen this book, Mr. Boyd? It consists of ad- 
 dresses by representatives of the Liability Companies at the Fifth Annual Meeting 
 of the Liability Insurance Association. 
 
 Mr. Boyd: Xo, I haven't read this. 
 
 Tin-: Commissioner: What were the arguments that these Liability Com- 
 panies urged against the passing of the Workmen's Compensation law? 
 
 Me. Boyd: Xo argument, except they wanted to continue doing business. 
 For instance I met one man and he wanted to see the rate being charged in the 
 Washington Act. I gave it to him, and then he said under that provision of our 
 Ad where the employee might sue in case the employer was guilty of violating 
 some inspection Ad provision it would cause a large number of cases. Their 
 whole argument is that it will affect a large number of cases, or cover a large 
 Dumber of cases. Thai is the sole argument now. 
 
 Mi;- Wegenast: So there would lie -till a necessity of insuring against that 
 liability. 
 
 'I'm; Commissioner: There would not be if the man obeyed the law. 
 
 Mr. Boyd: II is a question of whal practically will take place. Every 
 
 Mian know- what he is going to do if he has go1 a cinch on $3,400 and the 
 
 bill. Everybody knows whether he will go over to Charles Thatcher's 
 
 office and mlcr int., a written contract to give him from 20 to 50 per cent, of all 
 
 get, and drop any right he has in $3,400, and $150 doctor's bill. He 
 
 never will do it. 
 
 Tin: COMMISSIONER: What do yon do with non-resident dependants? 
 
1912 WORKMEN'S COMPENSATION COMMISSION. 343 
 
 > 
 
 Mr. Boyd: Well, we recommended them to get half. I think they are 
 treated the same. It is either half or the whole- 
 
 MR. Wegenast: Whether they live in the United States or not? 
 
 Mr. Boyd: Yes. It is either the half or the whole. 
 
 The Commissioner: Upon what logical ground do yon defend putting them 
 on any different footing? 
 
 MR. Boyd: Well, they live under different wage conditions. For example, 
 if they are supporting children abroad they are not a part of the community and 
 do not shoulder any of the responsibilities, and the man working here gets 66 2-3 
 per cent, of a higher wage, while in Austria he would get 50 or 60 per cent, of 
 a lower wage. 
 
 Mr. Beuce : Does the Ohio Act recognize non-resident dependants in another 
 State ? 
 
 Me. Boyd: They recognize non-resident dependants in any country in the 
 world, either half or the whole. I recommended half. 
 
 The Commissioner : If the principle of your act is that justice demands 
 that the employee should be protected to this extent, that is one of his rights, 
 why should the flag he lives under make any difference? 
 
 Mr. Boyd: Well, if what I said is no reason then there isn't any reason. 
 
 The Commissioner: I could understand it as based upon what you said. 
 The real principle is it is for the benefit of the community of your State. 
 
 Mr. Boyd : The legal basis of the act is the protection of the health, safety 
 and general welfare of the public in our State. 
 
 The Commissioner: Then I can understand the logic of that. 
 
 Mr. Boyd: There is no use putting a premium on people residing here and 
 supporting their children abroad. 
 
 Mr. Watts: Suppose you have the case of a workman in Ohio who is a 
 Macedonian, but capable of earning just as much as an American, and he is 
 killed. He has a family living in Macedonia, and they are maintained in Mace- 
 donia for probably half what they are here. Now, those dependants are the 
 heirs of that man who is killed, and they are entitled to whatever is awarded to 
 him. Now, do you regard the full amount and pay it to them, and if you do 
 how do you do it, weekly or monthly? 
 
 Mr. Boyd: Monthly. They are allowed either half or the whole. I am 
 not just sure of how the act is. My memory is there is no discrimination. There 
 were a few things in the Bill as finally passed that I do not remember, and I 
 would have to look it up. 
 
 Mr. Wegenast: Would not the fact of the non-resident dependants being 
 recognized in your State, and not being recognized in another State, constitute 
 an unfair disadvantage and discrimination? 
 
 Mr. Boyd: Well, there would be some slight discrimination there, but the 
 general tendency will be in my opinion to give them something. 
 
 The Commissioner: It was held that what we call Lord Campbell's Act, 
 that first gave the right in fatal accidents to recover, did not apply to the foreigner 
 killed within the jurisdiction, but that was reversed by the House of Lords. 
 They held that the foreigner was just as much entitled to the benefit of that act 
 as a subject of the Crown. 
 
 Mr. Wegenast : Do you anticipate any difficulty in finding out whether there 
 are really dependants, and who they are? 
 
 Mr. Boyd: Well, that was an objection that was raised to giving them 
 anything. 
 
344 MINUTES OF EVIDENCE: No. 65 
 
 Mb. Wege.vast: For instance the Chinese? 
 
 Me. Boyd: Not only that, but as to the just distribution amongst them, 
 and whether they would ever get any of it. Even their own parents. They have 
 great difficulty sometimes in getting the money to them, especially amongst the 
 ignorant people. 
 
 Mr. Wegenast: There was one feature I would have liked you to have gone 
 into a little more at length. You appear to anticipate under your act there will 
 be formed something in the nature of the employers' associations of Germany? 
 Mr. Boyd: Something of that kind. 
 
 Mr. Wegenast: You do not afford any facilities in the act for it? 
 Mr. Boyd: The act is left so that it can be attached to it. 
 Mr. "Wegenast: Then what do you expect these associations to do? What 
 will be their scope? 
 
 Mr. Boyd: That will depend on the intelligence with which they manage 
 their business. 
 
 Mr. Wegenast: Do you expect they will have any influence in the matter 
 of prevention of accidents? 
 
 Mr. Boyd: Yes, great influence. 
 
 Mr. Wegenast: Do you expect they will appoint inspectors and expert 
 draftsmen of machinery? 
 
 Mr. Boyd: There is no question they will. 
 
 Mr. Wegenast: In that case then would it not be better to have the 
 industries classified according to the industries rather than according to the 
 hazard of risk? You remember the allusion to that this morning? 
 
 Mr. Boyd: Well, in the course of two or three or five or six years we will 
 have over a million workmen, and employers of over a million workmen. Now, it 
 will not do to try to manufacture too many details in the launching of the scheme. 
 What the workmen want is the recognition of a new remedy within reasonable 
 limitations, and then a rational extension of it. 
 
 Mi;. Wegenast: I was thinking of what would likely happen in the future. 
 Mr. Boyd: I think they will follow almost identically the steps of the 
 German plan. 
 
 1 would like to add this. Just think of it. They have demonstrated that act, 
 
 all fit' it. for twenty-four years, and the number of workmen under it has increased 
 
 from 3,000,000 to over 27,000,000 in 1908, and they never have changed one figure 
 
 in the scale, but they have constantly changed the administrative features of the 
 
 Thai is constantly changing. They got together and agreed upon this scheme 
 
 has never been changed in twenty-four years. That shows from the 
 
 poinl of statesmanship they got it fairly accurate, or there would have been 
 
 constant changes. 
 
 Mi;. W r: Then you think, Mr. Boyd, it is not necessary in order to 
 
 work out the principles of the German Act to have these voluntary associations 
 thai existed before the German Act was passed. 
 Mi;. Boyd: No. 
 
 Mi;. Wegen vst: You anticipate the voluntary association part will be worked 
 out voluntarily as ;i result of (be net? 
 Mi.. Boyd: Yes. 
 
 'I'm r Commissioner: T suppose it is not expected that these bodies would 
 any more than advisory ? 
 Mi;. Boyd: Well, it will be up to the employers largely to adjust that matter. 
 
1912 WORKMEN'S COMPENSATION COMMISSION. 345 
 
 Mr. Wegenast: For instance if the employers in the woodworking industry 
 were classified with the employers in the agricultural implement industry and they 
 came to the conclusion the class should be divided it would be divided? 
 
 Me. Boyd: It would be divided. They would simply bring in a recommend- 
 ation to the legislature, and the workmen could not have any objection. 
 
 The Commissioner : I thought the Board would have power. 
 
 Mr. Boyd: It would be under our act. All wc have to do is induce the 
 Board to do it, and no doubt the Board would do it. 
 
 Mr. Wegenast : Do you think that would be better than to have it arbitrarily 
 fixed by the legislature? 
 
 Mr. Boyd : I do, yes. You are more highly developed here in the matter of 
 operating through Commissions than we are, and. the population of the Province 
 is not so great. 
 
 Mr. Bancroft: Your population will grow up in the meantime and the 
 efficiency of your Commission will grow. 
 
 The Commissioner: I should doubt if an act that left it entirely to the 
 Board to start the scale would be satisfactory. 
 
 Mr. Boyd: It is an awkward proposition. 
 
 The Commissioner: The Washington people evidently got their experts 
 to work and they put it in the act, and you waited until after the act. 
 
 Mr. Boyd: That question will be answered when you get the Ohio actuaries' 
 scale. You will find it very different from the Washington scale, but they have got 
 to go to the legislature to change the rates. The Board can do it whenever the 
 employers' associations show them it ought to be done. 
 
 The Commissioner : I do not think it would be necessary to go back. 
 
 Mr. Boyd: Can they change the rate, for instance? 
 
 Mr. Bancroft : If the expense exceeds the revenue they can raise the rate to 
 meet it. 
 
 The Commissioner: "If after this act has gone into operation it is shown 
 by experience . . . any establishment or work is unduly dangerous." 
 
 Mr. Boyd: You see they put the rates right into the act, and they say in 
 such a class of employment the rate is thus. Well, of course the Board cannot 
 change the law. 
 
 The Commissioner : It would be very easy to have a law which started with 
 a schedule, and giving the Board power to change it from time to time. 
 
 Mr. Boyd: Yes, that would be the same as we have. 
 
 Mr. Bancroft: What does this scale mean? Take "powder" 
 
 Mr. Boyd : That means they charge $10 a hundred on the pay-roll. 
 
 The Commissioner: It would not look like that to the ordinary casual 
 reader. 
 
 Mr. Boyd : I wrote him and found out about that. 
 
 The Commissioner: .035 means what? 
 
 Mr. Boyd: $3.50 a hundred. 
 
 Mr. Wegenast: I have a letter here from the manager of one of the large 
 lumber companies in Seattle, and he says, " On account of my previous experience 
 as outlined above I was somewhat opposed to the State Compensation Act as they 
 had contemplated a cost of seven and a half per cent, on the pay-roll. However, 
 we were able to get an amendment which made the two and a half a balance, and 
 made the subsequent assessments cover only actual losses paid out." So there must 
 be power to reduce that rate, and I think I remember a section there by virtue of 
 which it was done. 
 
346 
 
 MINUTES OF EVIDENCE: Xo. 65 
 
 Me. Boyd: His Lordship first referred to a section where if they discovered 
 some new character as to the hazard of an employment they could change it. 
 
 The Commissioner: That is a particular man who by mismanagement 
 increases the hazard they can alter his classification. 
 
 Me. Doggett: Under the act of the State of Ohio do you not find that the 
 employers who are employing more than five individual workmen, who are within 
 the act, have a preference over the employers who do not come within the act? 
 
 Me. Botd : I don't know really how that would be. We had to draw the line 
 somewhere in order to start the act off, and unfortunately they omitted to provide 
 that employers of four or fewer men might voluntarily come under the Act. 
 In Toledo, for example, there are fifteen or twenty who employ only three or four 
 men who would like to come in voluntarily. An amendment will be made a year 
 from this January. 
 
 Mr. Doggett : There must be thousands in the State of Ohio who are not 
 within the scope of that act, 
 
 Mr. Boyd : Do you mean carpenters ? 
 
 Mr. Doggett: Carpenters and sheet metal workers and such like. In the 
 city of Toronto, for instance, there are hundreds of so-called contractors who 
 are employing sometimes four and sometimes three, and sometimes they have no 
 work on at all. 
 
 Me. Boyd: The "Wisconsin Commission recommended four or more. 
 
 The Commissioner: What objection is there to having no limitation? 
 
 Mr- Boyd: I have stated that several times. In Ohio it would be impossible 
 to launch the act, and look at the abuses which would arise, these ambulance 
 chasers, and all these people. Every Polish woman that had a little accident in a 
 laundry, the employer would not know about the act and would not be insured 
 under the act but his defences would be gone, and there would be just a stack of 
 litigation of that kind. 
 
 Mi;. Wegi-xast: A man is not insured, or his men are not insured, until 
 he gets his receipt? He has got to pay his premium first? 
 
 Mr. Boyd: Yes. 
 
 Mr. Wegexast : Then what happens if he is not insured ? 
 
 Mr- Boyd: In case a workman is hurt all his defences are gone. He has 
 
 inly nothing to do but to prove he was at fault. I advised with a great many 
 
 attorneys who had experience of forty years in defending corporations, and they 
 
 said that the removal of all the common law defences would drive them all in. 
 
 tically. Thai is a question of judgment as to what the penalty should 
 be. The workmen can see there ought to be a reasonable penalty, and that was 
 voted on unanimously by the representatives of labour and the employers. 
 
 Tii!: COMMISSIONEE : I did not quite follow your answer to my question as to 
 why the ad did no1 apply to every case in which one man was employed by 
 another. 
 
 Mi;. Boyd: Well, we simply concluded first from the experience of other 
 
 counti These European countries, mosl of them, started, off in that way. 
 
 Germany 3tarted off in making their act applicable to five or more. Then we 
 
 wanted to guard againsl the difficulties that would arise in launching the act. 
 
 Tin COMMISSIONEE : You wauled to feel your ground? 
 
 Mi;. Boyd: You will notice in my brief what the Supreme Court says 
 
 aboul that. This gentleman. Mr. Doggett. raised the question a< to the unfairness 
 
 to the workmen working where then were three or four. There the court justified 
 
 hal elimination as being a reasonable elimination, because where five or more 
 
1912 WORKMEN'S COMPENSATION COMMISSION. 347 
 
 men are employed there is more danger than there would be where there were two 
 or three men employed, and where there are only two or three men employed 
 they have a chance to know more about each other than where there are ten em- 
 ployed, and we have that principle established in the regulation of mines. 
 
 The Commissioner: We have it in our Factory Act, I think. I think it is 
 five. 
 
 Mr. Wegenast: In the Washington Act they lapse a payment or two, ap- 
 parently. 
 
 The Commissioner: The changing of these rates can only be done by the 
 legislature. 
 
 Mr. Boyd: The Board can do it with us. They make the employer pay it in 
 advance, and for example, if they have made the rate too high on an employer they 
 adjudicate that in the next premium. 
 
 The Commissioner: Why do you not make the workman's right of com- 
 pensation commence at once, whether the man pays it or not. It is sure to 
 come in. 
 
 Mr. Boyd: Well, the proof is whether a man is entitled for one day or 
 two days- 
 
 The Commissioner: I do not mean that. I understand you to say the 
 workman is not insured until the premium is paid by his employer. 
 
 Mr. Boyd: Yes. 
 
 The Commissioner: Why could you not abandon that feature, because it 
 is sure to be paid? Why should a workman not be insured from the beginning? 
 Mr. Boyd: If you put it in that form and he fails to pay then the workman 
 is not paid- 
 
 Mr. Wegenast: You haven't the money to pay him. 
 
 The Commissioner: It can be made up by an assessment. It is just put- 
 ting the employees of men who do not pay promptly in a hole. 
 
 Mr. Boyd: Well, we make a penalty. 
 
 The Commissioner : But that does not help the workmen- Supposing the 
 workman's right was absolute upon the fund whether his employer paid or not, 
 what objection would there be to that, because from the body of the employers 
 you would get the money eventually. 
 
 Mr. Boyd: No, you wouldn't unless everybody paid his pro rata share, Hike 
 fire insurance. 
 
 The Commissioner : But the next year you would raise the rate ? 
 
 Mr. Boyd: That would not be just. You would make every man pay in 
 proportion to the hazard of his business- 
 
 The Commissioner: If you want to get at improving the position of the 
 great body of workmen do not leave them out if their employers do not pay up 
 to date, because it would happen every year, and if a man defaulted for a week 
 or two weeks the workmen would have no claim upon the fund, unless the Board 
 in its discretion allowed it. 
 
 Mr. Wegenast: Would that not make just the difference between a State 
 sj'stem and a collective system? 
 
 The Commissioner : I do not see why if such a system were adopted there 
 should not be a pro rata assessment? 
 
 Mr. Wegenast: That makes the difference in the case your Lordship sug- 
 gests : the State would really stand behind them. 
 
MINUTES OF EVIDENCE: No. 65 
 
 Commissioner: The State would only temporarily do that. I don't 
 care what you call it, the thing is what you do. 
 
 Mr. Doggett: Supposing I am a carpenter working in the State of Ohio 
 for a year or two years, under the present act, and the contractor employs over 
 five carpenters and we are all insured under the act, and I get fired from that 
 employer and go to another one who only had four carpenters working for him, 
 and I met with an accident. Where would I be? 
 
 The Commissioner: Out in the cold. 
 
 Mr- Doggett: After I had been paying for years. 
 
 Mr. Wegenast: You are not paying for years in advance. 
 
 Mr. Gander: If he paid for one year it would be good for one year. 
 
 Mr. Boyd: Where your premium is based upon your pay-roll, why, the pay- 
 roll is the measure of the exposure of the workman to injury, isn't it? 
 
 Mi;. Gander: Yes. 
 
 Mr. Boyd : Then if your premium is paid based upon the pay-roll you have 
 covered the exposure. 
 
 Mr. Doggett : My point is this, Mr. Boyd. After working two years for an 
 employer that had more than five men working for him that was within the act, 
 and then I get fired and work for a contractor with less than four men and I have 
 an accident, would I have to fight that emplo} r er under the common law to get 
 compensation — under the Ohio Act I mean? 
 
 Mi;. Wegenast: Supposing a man works for an employer of five men or more 
 in the month of January, and the assessment is then paid, say on the basis of the 
 pay-roll, which included we will say, Mr. Doggett. Then Mr. Doggett leaves that 
 employer and goes into the employ of a man who does not come under the insur- 
 ance system, his insurance is paid on the larger man's pay-roll, but he doesn't 
 get it. 
 
 Mr. Watts: His insurance is not paid beyond the time he is working. The 
 employers' liability insurance companies, for instance, collect your premium on the 
 pay-roll. They do not pay any insurance whatever on a workman who may be 
 hurt when be is not in your employ. 
 
 The Commissioner : Take Mr. Doggett's case. If he were to contribute 
 ten per cent, why should he be in that position? 
 
 Mr. Boyd: He just contributes ten per cent, of the wages that he earns. 
 
 Tin; Commissioner: But he gets no insurance for it in the case put. 
 
 Mi;. Boyd: He didn't get any because he didn't pay for- any. 
 
 Mr. Doggett: It is not my fault- 
 Mi;. BotU: You are getting across the line of practicability. 
 
 'Iiii': Commissioner: Suppose a person is employed with Mr. Smith who 
 i-- insured^ and Mr. Smith deducts the ten per cent, from him, if that is the law. 
 Thru months he goes away into the employment of Thomas Jones who has 
 
 (inly three men. What justice would there be in leaving him without any -remedy 
 under the act when he' has paid for insurance for the year? 
 Mi;. Wegenast: 1 think it does not go for the year. 
 
 Tin: Commissioner: I am talking of the scheme of this act which does 
 pay for the year. 
 
 Mi;- Boyd: No, every six months. 
 
 'I'm Commi a: Under the Washington Act it is a yearly payment. 
 
 Mi;. Watts: In the rase of Jones you are not collecting anything at all. 
 Jones pays nothing and therefore the workman is paying nothing during that 
 period. 
 
1912 WORKMAN'S COMPENSATION COMMISSION. 349 
 
 The Commissioner: If you have the Washington system where the yearly 
 payment is paid in advance, and you have as Mr. Boyd recommends, a contribu- 
 tion of ten per cent, taken by the employer from his employees, that amount would 
 have paid for his insurance during the ensuing year, and if he left that employ- 
 ment and went into the employment of somebody that was not insured he would 
 not get anything, although he had paid his ten per cent- 
 
 Mr. Watts: .Suppose, your Lordship, this particular case. A man is work- 
 ing for a firm in the month of December, and on the 1st of January you put this 
 act into force. He works for that firm for a week. The act goes into force 
 on the 1st of January and you make your assessment on the pay-roll on the 31st 
 of December, and that man was on the roll and his assessment, such as it was, was 
 collected, but perhaps he left that firm in the first week in January. 
 
 The Commissioner : That is a payment in advance for insurance for the 
 year to come under the Washington act. 
 
 Mr. Watts: Not on the individual. It is on the total pay-roll. 
 
 The Commissioner: It is to insure all the workmen. What answer is that 
 to Mr. Doggett? The employer deducts from him ten per cent, of what he has 
 to pay in respect of his wages on the basis of the contribution- When he goes 
 into the employment of somebody else and is hurt what answer have you got for 
 him when he says, "why, I paid $2 or $5 or $10," whatever it was, "for insurance 
 for a year, and why won't I get it?" 
 
 Mr. Watts : But he did not pay $10 for insurance for the year. If he had 
 worked for the year previously he would. 
 
 Mr. Wegenast : It depends on whether you view it as a payment in advance. 
 
 The Commissioner: That is what the Washington Act says. 
 
 Mr. Wegenast: There is a temporary difficulty there. 
 
 Mr. Gander: Do I understand Mr. Boyd to say very likely it would be 
 changed to include men who employed five or less? 
 
 Mr. Boyd: I think the next legislature will make it elective for those who 
 employ four or less, and ultimately it will be extended to include practically 
 everybody. 
 
 Mr- Gander: That will cover the trouble entirely. 
 
 Mr. Doggett : That is why I asked Mr. Boyd if he did not think under that 
 present act it would have the tendency to be a hardship in particular trades, in 
 the building trade for instance. Would it not make the men leave the employer 
 who had only four men working and go to the employer where he knew he would 
 be insured and come within the scope of the Ohio Act? The reason I raise that 
 is, it is a very vital point for the building trades to consider. I know for a fact 
 in our own trade the majority in this city have in the neighborhood of three or 
 four or five or six employers in one year. 
 
 Mr. Wegenast: You would like to have the elective feature included in the 
 act. You would want the man who employs less than five to be able to insure if 
 he wanted to? 
 
 Mr. Doggett: Certainly. 
 
 Mr. Boyd : He wants more than that. 
 
 Mr. Bancroft : We have asked for compulsory insurance. 
 
 Mr- Boyd : That is what we will have in a short time, but we didn't put 
 it in that way to start. You have got to get a start made and get somewhere 
 first, and then you can extend it as far as public sentiment will demand it. 
 
 Mr. Doggett : There is another case might come up under your present act 
 in the State of Ohio. A large foundry, for instance, in one of your leading cities 
 
350 MINUTES OF EVIDENCE: Xo. 65 
 
 would be employing a large number of foreigners whose dependants would be living 
 in other countries or other States. We will say two or three men meet with 
 accidents and their dependants in foreign countries would receive compensation,- 
 and we will say there are some American citizens working for American contractors 
 in the state of Ohio who get hurt and their dependants do not receive compensa- 
 tion, and therefore the dependants of foreigners in other countries will receive 
 compensation under the State law of Ohio, and a citizen of the State of Ohio 
 who has perhaps lived there all his life, if he meets with an accident -in a factory 
 employing less than five individual workmen, would not receive compensation at all. 
 
 Mr. Boyd: Of course that is true. Of course the hazard where two or three 
 persons are emplo} r ed is much less than where eight or ten are employed, and it is 
 only a cuiestion of expediency for a short time to get the scheme going. 
 
 Mr. Gander: How long has this act been in working order? 
 
 Mr. Boyd: It has not been working yet. The act will go into effect just 
 as soon as the rates are published now, perhaps next week. 
 
 The Commissioner : Do you know Mr. Moulton of Ishpiming, Michigan. 
 He is a lawyer who has drawn a Bill. Is there a Michigan Bill? 
 
 Mr. Boyd: There is a Commission. They advised with me about starting 
 up the work of the Commission. 
 
 Mr- Wegenast : I had a long talk with Mr. Smith a few days ago. 
 
 Mr. Boyd: They were going to take my man Watson to work up there but 
 he got some appointment as actuary. 
 
 The Commissioner: I would like to ask what, if anything, there is in the 
 notion that some people have that the wage is increased in proportion to the 
 risk attendant upon the work? 
 
 Mr. Boyd: There is nothing in that wdiatever. 
 
 Mr. Bancroft: Are you familiar with all the systems in Europe? 
 
 Mr. Boyd: I have made a careful study of them. 
 
 Mr. Bancroft: In Great Britain the workmen do not contribute to work- 
 men's compensation. 
 
 Mi;. Boyd: Under the old act they do not. Under the new act they do, 
 the Lloyd George Act. 
 
 Me. Bancroft: That is the Sickness Act. It is not Workmen's Com- 
 pensation. 
 
 Mr. Boyd: Oh yes, it covers the whole thing. It insures against sickness, 
 accidents, old age and out of work. 
 
 Mr;. Baxcroft: Great Britain is in this position. Germany first brought 
 in a bill for sickness and death insurance; secondly they brought in a Bill for 
 invalidity and old age, and then they introduced workmen's compensation. Great 
 Britain started with workmen's compensation and they are now supplementing. 
 
 Mr. Boyd: Germany does not have any compensation in the sense that 
 England hi 
 
 Mi;. Bancroft: They started where England left off. 
 
 Mr. Boyd: The German Act is sickness, accident, and old age insurance. 
 A.c1 is compensation and the award is made against the employer 
 personally, hut in Germany the award is against the fund, not against the em- 
 ployer at all. 
 
 Mb. B 'ir: In Great Britain we claim this, Mr. Boyd, that the social 
 
 insurance of Mr. Lloyd George has nothing to do with the Workmen's Compensa- 
 tion at present in existei That legislation stands and is being worked out in 
 some measure to a satisfactory conclusion. Now, in Germany we also claim 
 
1912 WORKMEN'S COMPENSATION COMMISSION. 351 
 
 that directly the workmen do not contribute to workmen's compensation, and we 
 have evidence we think to establish that. 
 
 Mi;. Botd: You are mistaken about that, because he does contribute. 
 
 Mr. Bancroft: I said directly. 
 
 Mr. Boyd: It takes it out of his pocket and puts it in there. It does not 
 make any difference. 
 
 Mi;. Haxcroft: There is a difference, and we want to establish this thor- 
 oughly, that in Germany the man who is injured comes under the siekness insurance 
 for thirteen weeks. The compensation takes care of him after the thirteen weeks, 
 
 Mr. Boyd: You are mistaken in calling it compensation. Tt is insurance 
 after thirteen weeks, because his claim is against the fund, not against the employer. 
 
 Mr. Bancroft: The fund in Germany is not accident insurance. We could 
 call it workmen's compensation and have the same act. 
 
 Mr. Boyd : When you use the word compensation in the British Act there 
 is as much difference as day and night, because under the Compensation Act the 
 award is made against the empiloyer personally, and if he is able to pay it you get 
 it, and if he is not you don't get it. 
 
 Mr. Bancroft: Aren't these terms as to which the employers differ, and 
 which the workmen do not differ? Employers' liability to the employees is dif- 
 ferent from collective insurance, or even a mutual trade insurance association. 
 To the workmen compensation is compensation whatever you call it, if he gets 
 compensated for his injury. 
 
 Mr. Boyd: He gets the money. 
 
 Mr. Wegenast: If he gets it; there is the problem. 
 
 Mr. Bancroft: We claim this, and I think we can establish it. that in 
 Great Britain the workmen do not contribute, and in Germany the workmen do 
 not contribute to workmen's compensation. 
 
 Mr. Boyd : You are mistaken in the way you claim it. 
 
 Mr. Bancroft: In Italy, in Holland, and in Sweden the legislation is not 
 built upon that theory. There are only two places in Europe, Switzerland and 
 Austria, and the jthird place where there is that kind of legislation, where the 
 workers contribute, is the State of Ohio. We claim the evidence is all against it. 
 
 Mr. Boyd: Your statement about Germany is not a correct statement, be- 
 cause a man has his leg cut off, and the workmen pay for thirteen weeks in the 
 insurance. That is bodily injury which we in Ohio treat simply as accident in- 
 surance- 
 
 Mr. Bancroft: Supposing you wiped the social insurance out in Germany, 
 the sick and death insurance, and the invalidity and old age insurance, and left just 
 what they call the accident insurance, would the workmen contribute? 
 
 Mr. Boyd: No, but what would he get? He would lose $550,000,000 in 
 twenty years and get $232,000,000. 
 
 Mr. Bancroft: It was because that legislation was in existence first that 
 they had to make it in that way. In Great Britain they do not have any dif- 
 ficulties. 
 
 Mr. Boyd : It does not make any difference how it was brought about so long 
 as he contributes. 
 
 Mr. Bancroft : I am saying directly the workmen do not contribute in 
 Germany, Great Britain, Holland and Italy. There are only the two places, 
 Switzerland and Austria. 
 
 Mr. Boyd : Your statement is not a correct one. You may say it isn't 
 direct and I may say it is direct, but that does not prove anything. It is a mere 
 
352 
 
 MINUTES OF EVIDENCE: No. 65 
 
 ier one recognizes a fact to lie so. If everything is treated as sick 
 
 insurance then he contributes. A man loses his leg., or both arms, or his eye, or 
 
 his nose, and the workmen are assessed two-thirds the cost of carrying him thirteen 
 
 Now, if we treat everything of that kind after seven days, why, that is 
 
 accident insurance, although it is paid under the sick law. 
 
 Me. Bancroft: That is right. In Ontario at the present time that is 
 why Ave say the workman is not assessable. We are not dealing with social 
 insurance. We are dealing with accident insurance. 
 
 Mr. Boyd: It is purely a question of whether there is anything in the 
 argument that the workmen would be more careful if he had an interest in the 
 fund, and whether he ought to contribute anything to the fund at all or not. 
 That is all there is about it. 
 
 Mr. Wegenast: And the question of the form his contribution if any, 
 
 should take- 
 
 The Commissioner : I suppose the simplest way to test it would be to take 
 the German case. Supposing the man has in his pocket $20 to-day. The tax 
 man comes around and says I want $10 of that for your sick insurance, and he 
 pays it out. He meets with an accident and he does not get any pay for the 
 thirteen weeks for which he has paid that $10. Surely it is obvious that he is 
 contributing to his support while he is incapacitated by the accident. Surely 
 that is manifest. 
 
 Mr. Bancroft: But the fund that contributes to the thirteen weeks is 
 not accident insurance. 
 
 The Commissioner: What is the difference? It makes a difference of $10 
 to him. 
 
 Mr. Boyd: Take the average injury from a day to three days or five days, 
 and so on. There are a great many people who do not get out of the hospital 
 for thirteen weeks you see, so they draw the line there to include all this hospital 
 business under the sick insurance. 
 
 Mr. Bancroft : If the theory is advanced that the workman should contribute 
 just because he is going to be taken care of as a matter of sicloiess, then why 
 is the proposition not made — 
 
 Mr- Boyd: That has not anything to do with the question whether he 
 should contribute or should not contribute. It is purely upon the question whether 
 he ought to contribute anything or not. As a matter of statesmanship the argu- 
 ment is it would make him more careful because he is interested in the fund, and 
 in Ohio we gave him more compensation in order to get him to do it, namely $12 a 
 week as long as he lives. 
 
 Mit. Bancroft: In the first instance if the workmen did not contribute they 
 only got compensation for three hundred weeks. 
 
 Mi'. Boyd: The workmen consented to that, 
 
 A Ii:. Bancroft: And did the employers agree to that? 
 
 Mr. Boyd: The employers wanted him to contribute 25 per cent, and the 
 legislature reduced it to 10 per cent. 
 
 MR. B it: And when he did it he gets it to the end of his days? 
 
 Mi.-. Boyd: Yes- 
 
 Mr. W I there anything to increase the contributions? 
 
 rything is in suspense. There has been no agitation one 
 way or 1hr other. 
 
 Mi:. Bancroft: Our friends the manufacturers claim in the last analysis 
 th< of compensation rests upon the consumer. 
 
1912 WOKKMEN'S COMPENSATION COMMISSION. 353 
 
 Mr. Boyd: I think there is no question that is true. 
 
 Me. Bancroft: Don't you think it is a curious thing when ii is an estab- 
 lished fad that a workman is entitled to compensation that lie lias to pay more 
 for his provisions and also they take it from his wages? 
 
 Mr. Boyd: If you think that simply stand on it. The question is whether 
 there is anything in the argument that the workmen are more careful if they 
 are interested in the fund. Now. there was a compromise in order to get some- 
 where, so that all workmen in Ohio where there were five persons and more 
 employed would be under the protection of the law and have the advantage. 
 I wouldn't take the responsibility of standing out. I thought if I could get 
 total disability as long as it lasts I would get the report before the legislature/, 
 and let the workmen's contribution be 25 per cent., and let the legislature ham- 
 mer it down. 
 
 Mr. Bruce: If it is true that in the last analysis the consumer has got to 
 bear the expense that is a double penalty. 
 
 Mr. Boyd: That woujd be so if the workmen paid it all. 
 
 Mr. Bancroft: We claim there is sacrifice at both ends. 
 
 The Commissioner : You surely shut your eyes to the fact that every manu- 
 facturer also pays. You must be fair in these things. Every manufacturer as 
 a consumer pays as well as paying his tax- 
 Mi;. Bancroft: He is one in about 5,000. Suppose he has 5,000 workmen 
 and he is only one. 
 
 The Commissioner: Each pays in proportion to the amount that he con- 
 sumes. 
 
 Mr. Simpson: But the mass of consumers who arc going to benefit by the 
 compensation system also pay the increased cost of production. 
 
 The Commissioner : So does the manufacturer. 
 
 Mr. Simpson: But he is only one in five or ten thousand, and he reaps 
 the chief benefit from it, and he does not bear any burden at all. It looks as if 
 it is anything so long as you do not hit the profit end of the employers' business. 
 
 Mr. Bancroft : As far as we are concerned the whole sentiment is against 
 contribution by the workmen. They think it is an injustice to the workers from 
 that standpoint. It is admitted as a theory of workmen's compensation all over the 
 would that it is a natural charge on industry to take the hazard and the risk 
 and pay for it, and to take the wages of the workmen at this stage of the game 
 for the purpose of paying the compensation seems a rank injustice- There is 
 no doubt in Great Britain they do not contribute, and in Germany they do not 
 contribute directly, and they do not in any other country directly. It is only 
 by reason of the fact that they have social insurance mixed up that it can be 
 claimed they do contribute. 
 
 Mr. Wegenast : Mr. Watts of the Canadian General Electric Company is 
 here and would like to make a statement. 
 
 Mr. G. W. Watts: Beferring to the hearing before the Commissioner on 
 Workmen's Compensation, it being assumed that compensation for all injuries 
 is to be paid without regard to the negligence of the workman, it necessarily 
 follows that the cost of this will be very heavy as compared with the present law, 
 and this extra cost will be added to the cost of the products in this Province 
 
 I understand that the view has been repeatedly urged before the Commissioner 
 that very few accidents are due to the fauilt of the workman. This is not correct 
 as the statistics which have been gathered on this subject by the Commission sent 
 to Europe 'last year from the United States point out- 
 23 l. 
 
354 MINUTES OF EVIDENCE: No. 65 
 
 A proportion of the accidents are seemingly unavoidable and this percentage 
 will vary with the various occupations, some being more risky than others. 
 
 A proportion is due to the fault of the employer or his agent, and a consider- 
 able proportion is due to the negligence and carelessness of the workman who 
 receives the injury, and his fellow-workman. 
 
 My experience of the matter is that the larger percentage of accidents which 
 occur are due to the neglect of either the workman injured or his fellow-workman. 
 
 As to the question of contribution on the part of the workman to the expense, 
 I think it is nothing but fair and right that he should contribute a proportion 
 of this expense if he is to receive compensation for all injuries, and the question 
 of his own contributory negligence or that of a fellow-workman, is to be eliminated 
 when awarding this compensation. 
 
 The contribution by the workman of any portion of the expense will tend to 
 make all such contributors vigilant in preventing accidents as they will feel that 
 their own money is at stake and it is desirable to have the co-operation of the 
 workman in this. 
 
 I am of the opinion that the question of concurrent' insurance should 
 have no bearing upon the payment of compensation as it should be rated exactly 
 the same as life insurance, and if a man is willing to pay the additional expense 
 of further insurance beyond the amount which is paid for by him in his contribu- 
 tion to the workmen's compensation, he should be entitled to receive that con- 
 current insurance. 
 
 I am in favour of a collective liability system rather than an individual one. 
 The individual system is burdensome and cannot attain the maximum results 
 for the workman or his family, as payment of the compensation is contingent upon 
 the financial strength and solvency of the individual. 
 
 Two men, we will say, may be injured in an identical manner in the employ 
 of two different firms, and both may be entitled to an identical amount of com- 
 pensation. However, it is possible that one firm might be in such a financial con- 
 dition that it could not pay compensation while the other firm might be perfectly 
 able to pay theirs. The result of this would be that although both workmen 
 could be equally injured and both equally entitled to receive compensation, one 
 would receive compensation, and the other would not. It may be urged that 
 this can be overcome by forced liability insurance but even this would not assure 
 the compensation reaching the workman or his family in all cases, as it would 
 be contingent upon there being no lapse on the part of the employer in keeping 
 the insurance up, and also upon the continued solvency of the insurance company 
 carrying the policy, whereas, with a collective liability properly and economically 
 administered, all injured would be assured of their compensation and the maxi- 
 u m proportion of the money raised would be free for use in payment of com- 
 pensation. 
 
 present method is very wasteful as a large proportion of the money 
 which is devoted to compensation is wasted in litigation and only a comparatively 
 entage of the total can find its way into the hands of the injured work- 
 man ot his family. 
 
 Mfe. W i : You are manager of the Canadian General Electric Com- 
 
 pany, I belie 1 
 
 Mr. Watts: I am manager of the works. 
 
 Mi:. Wegenast: Eave you any books showing the proportion of accidents 
 due to the EauH of the workman, the faull of the employer, and so on? 
 
1912 WORKMEN'S COMPENSATION COMMISSION. 355 
 
 — — i 
 
 Me. Watts: I took out some figures in our own establishment for a period 
 of a year. 
 
 Mr. Wegenast: Have you the figures with you? 
 
 Mr. Watts: I have the way it worked out, the percentage. 
 
 Mr. Wegenast: How many accidents docs that cover? 
 
 Mr. Watts : Probably three hundred of all kinds. 
 
 Mr. Wegenast: How did the proportion run? 
 
 Mr. Watts: About forty per cent- represents the hazard of the industry, 
 and probably about fifty-six per cent, due to the negligence either of the fellow- 
 workman or the worker himself, and the balance is due to the neglect of the com- 
 pany. 
 
 The Commissioner: That is a very small balance. 
 
 Mr. Watts: On the figures here it works out one per cent, but I am 
 allowing the figures for cases that were afterwards adjudged against us. 
 
 The Commissioner: Do you think if we got a similar report from the 
 workmen the percentages would be anything like the same? 
 
 Mr. Watts: I think you would probably find if the "workmen who were 
 mixed up in the accident itself were reporting they would report it very much 
 the same, but if some one else was passing on it they wouldn't. This is based 
 upon the report as made by our own men and it is truthful as far as we know, 
 but of course it might not be absolutely correct in all cases- However, the proof 
 of that is in the faot that in the great majority of these cases very few ever went 
 so far as claims being made, and of those claims which were made there were 
 comparatively few where decisions were given against us. 
 
 The Commissioner : Do you mean actions ? 
 
 Mr. Watts: Or demands made for compensation at all? 
 
 Mr. Wegenast : They did not even go so far as to ask for compensation. 
 
 Mr. Watts: No. 
 
 Mr. Wegenast: Do you pay doctors' bills in cases where they are not de- 
 serving ? 
 
 Mr. Watt: Well, in two of our works we don't pay doctors' bills. The 
 men themselves have a mutual benefit association and that takes care of the doctors' 
 bills, and also gives them a small sum of money, $3 or $4 a week. 
 
 Mr. Wegenast: Do you contribute to that? 
 
 Mr. Watts: We don't now. We did when it was first started. It is self- 
 supporting now- 
 
 Mr. Bruce: You heard Mr. Boyd's figures this morning. How do you 
 account for the large difference between his figures and the figures you have sub- 
 mitted, as regards the risk in the business? He said 10 per cent, of accidents 
 were unavoidable, due to an "act of God," and he said 44 per cent, of the accidents 
 were due to the hazard of the business, after four years of investigation. He said 
 18 per cent, were due to negligence on the part of the employer, and 28 per cent, 
 on the part of the employee; and you shoulder all the responsibility over the 40 
 per cent, on to the employees. 
 
 Mr. Watts: Not entirely- My figures are not his. They were gathered 
 from a different source entirely, and under different conditions. This is my 
 own personal experience. 
 
 Mr. Bruce: I am asking the reason for the vast difference. 
 
 Mr. Watts: I don't know why. You can ask Mr. Boyd yourself. 
 
 The Commissioner: Mr. Boyd was speaking of the whole matter, and Mr- 
 Watts is only telling the experience in his particular establishment. 
 
356 MINUTES OF EVIDENCE: No. 65 
 
 Me. Wegenast: Now, what increase in expenditure will this mean to your 
 concern, if all cases are to be compensated? 
 
 Mr. Watts: That would be pretty hard to fix, but I think it would be at 
 least three times as much as it is now; perhaps more. 
 
 Mr. Wegenast : I do not know whether it is fair to ask you what that would 
 mean to the individual firm with which you are connected. 
 
 Mr. Watts: It might mean $40,000. 
 
 Mr. Wegenast: Additional annual expense to you? 
 
 Mr. Watts: Yes, depending entirely on the amount. 
 
 Mr. Wegenast:. You are speaking for the institution you represent? You 
 are willing then to go into a scheme of tbis kind? 
 
 Mr. Watts : No, I am not autborized to say I am willing to do anything 
 for my company. I am giving information. 
 
 Mr. Wegenast: Perhaps that was a strong way of putting it, but you have 
 expressed yourself as favouring a collective liability system of compensation for 
 workmen as against an individual liability system. 
 
 Mr. Watts: Undoubtedly. 
 
 Mr. Wegenast: Would it make any difference to your concern which of 
 those schemes was adopted, and what difference would it make? 
 
 Mr- Watts: It would make a very considerable difference, but I couldn't 
 put it in money value at the moment- It would be very heavy. 
 
 Mr. Wegenast : An adverse difference if an individual system was adopted 
 instead of an insurance system of some kind? 
 
 Mr. Watts: Undoubtedly. ' 
 
 Mr. Wegenast : Tbat is speaking entirely irrespective of the contribution 
 by the workmen? 
 
 Mr. Watts : Yes. 
 
 Mr. Gibbons : Your place must be unduly hazardous. 
 
 Mr. Watt: Not necessarily. There are lots of accidents not reported. 
 
 Mr. Gibbons: Then being a hazardous occupation I suppose you put up 
 notices that a man is not to do so and so. and if be does so it is considered that 
 be has been negligent? 
 
 Mi;. Watt: No, we do not lay traps for people, Mr. Gibbons. . 
 
 Mr. Gibbons: Well, just along tbat line we were told the other night that 
 there was a clause in your rules that gross negligence was to be penalized. That 
 looks very innocent, but I see now that it looks very much like a trap. Then fur- 
 ther down the line, if we come to section 7, it says the workmen should pay con- 
 trib according to the number of accidents caused through their negligence, 
 
 you come along now and say that is 59 per cent., and therefore you would 
 
 cl the workingman to pay 59 per cent. 
 
 MR. Watts: Did I say that? 
 
 Mi;. Gibbons: Well, 41 per cent. 
 
 The Commissioner: He is not responsible at all for Mr. Wegenast's state- 
 ment. 
 
 MR. Watts: I did qoI make those statements. Mr. Gibbons. 
 
 An expert on accident insurance was here the other night, 
 
 aid I think in places where men wwr injured, where there was only the 
 
 common law of the employers' liability to claim under, that claims made were 
 
 only in aboul 10 per cent, of the number of total accidents that happened? Then 
 
 where there \\.\.< compensation the claims went up as high as 60 per cent. 
 
 ; " I"' 1 ' p ent., as it has been in England. Do yon not think the reason whv 
 
1912 WORKMEN'S COMPENSATION COMMISSION. 357 
 
 there are so many who do not claim compensation for their injuries in a con- 
 cern as big as yours is because they know they haven't the money to fight and 
 they are in the hands of the lawyers and they lei the thing go? 
 
 Mr. Watts: That has not been my experience. I have never found any- 
 body loathe to attack our company. It has been the other way. 
 
 Mi;. Wegenast: Was it in your company where the man went to sleep 
 on the belt? 
 
 Mr. Watts: No, that was an accident that occurred in another place. A 
 man went to sleep on a belt that was still, and he was killed when the machine 
 started up. 
 
 The Commissioner: Was he sober? 
 
 Mr. Watts : Yes, but he was working at night and the machines were not 
 running and he lay down on this belt and went to sleep, and the man who was 
 supposed to have seen that everything was right, didn't see him, and the machine 
 was started up and the man was carried under the pulley by the belt. 
 
 Mr. Bancroft : I think there was a case your Lordship will remember where 
 a man was under instructions by a foreman, and knowing that a certain generator 
 was not fastened to the floor securely enough he grabbed a wrench and went to 
 make it firmer, although he had not been instructed, and he put his knee on the 
 belt and was killed. 
 
 The Commissioner: I do not remember that case. 
 
 Mr. Bancroft: Of course they got damages, although they brought in 
 their negligence claim, that he was not instructed, but the man seeing the machine 
 was not fastened went to do his duty without asking his foreman, and because 
 he did that they called it contributory negligence. 
 
 The Commissioner: It would be his volunteering to do something. There 
 was a case the other day against I think the General Electric Company, where 
 Chief Justice Mulock dismissed the case. The man was doing the very best thing 
 and doing it honestly for the company, hut he was not sent to do that work. He 
 volunteered to do it. 
 
 Mr. Watts : Another workman started the machine without seeing whether 
 the man was free of the machine, and the man was killed, and the verdict was 
 given in our favour. 
 
 The Commissioner : I think it was tried without a jury. 
 
 Mr. Simpson : Taking it for granted, Mr. Watts, that the number of accidents 
 which you have enumerated are directly traceable to negligence on the part of the 
 workmen, would you say in your industry that an act of carelessness, no matter 
 from what source or how trivial it might be, would cover the whole risk, if it arises 
 out of the nature of your industry, as compared with tit her industries? 
 
 Mr. AVatts : I don't know just what your question means, but if you want to 
 ask whether our works or our industry is any more hazardous than industries of a 
 similar nature I would say no, 
 
 Mr. Simpson : Would you say your industries were no more hazardous than 
 others, such as boots and shoes? 
 
 Mr. Watts : No. if it is running machines I don't think it is anv more 
 hazardous. 
 
 Mr. Simpson: In your foundry do they not carry big pieces of steel? 
 
 Mr. Watts: When you say our industry, there is not an equal risk in the 
 whole of it. 
 
 Mr. Simpson: I am referring to the Dominion Bridge Companv. 
 
358 
 
 MINUTES OF EVIDENCE: No. 65 
 
 Me. Watts : In the handling of those heavy masses there is naturally greater 
 risk than the handling of light bodies. 
 
 Mr. Simpson: An act of carelessness, whether it is big or small? 
 
 Me. Watts : A very serious act of carelessness might result in nothing and a 
 very trivial act of carelessness might result in considerable damage. It just 
 depends. 
 
 Mr. Wegenast: As a business man is there anything startling, or is there 
 anything to alarm you or frighten you, to use the language that has been used, in 
 a system of state insurance administered by the Province? 
 
 Me. Watts : Not from my point of view. 
 
 The Commissioner: When you stated you preferred collective to individual 
 liability, was that on the basis of the present Employers' Liability Act, or the 
 proposed one? 
 
 Mr. Watts: Both. Of course my experience has all been with the present, 
 
 The Commissioner: Would you prefer to come under the collective system 
 with increased liability, or stay where you are? 
 
 Mr. Watts : Well, I don't know. I have not followed that up. I am going 
 on" the assumption that the Government is going to do something, and I am stating 
 my views on that assumption. 
 
 Mr. Wegenast: What about this feature: The question of assessment on 
 capitalization, or the current cost plan? Would that make any difference to you? 
 
 Mr. Watts: It would make a very great difference. 
 
 Mr. Wegenast : Would it make any difference to your willingness to see an 
 act introduced? 
 
 Mr. Watts : I would sooner see it on the current cost basis. 
 
 Mr. Wegenast : How do you think the proposition would be received by the 
 general public? 
 
 The Commissioner : I do not think I am concerned in that. That is for 
 the Government. I am not going to be governed by the political aspect, using it 
 in the broad sense. 
 
 Mr. Wegenast : I do not want to press the matter at all. 
 
 The Commissioner: I am going to recommend, when I come to make a 
 recommendation, what I think is right, and as far as I think it is feasible. I will 
 not recommend anything that I think public opinion would not justify, and I would 
 not very likely recommend anything that I thought the House would not adopt. 
 1 think it would be a great mistake to have what is admittedly a serious grievance 
 of the workingmen, to have a remedy delayed by proposing something that would 
 not Ito !, and have the thing thrown over perhaps for years. 
 
 AIi;. Wegenast: Perhaps I did not go at it in the proper way. 
 
 The Commissioner: I do not think I sbould take evidence of that kind. 
 Mi:. Rancroft: If a person is injured in a big industry, poorly off as 
 wage-workers are, the only way they can make a claim against the 
 company of any kind is by consulting a lawyer. 
 
 Thai is absolutely not the case. We would very much rather 
 v would ool go near ;i lawyer. Tbey will get more money out of us by not going. 
 Mi:. Bani ROPT: Is that not generally the case, they have to make a bargain 
 with the lawyer. 
 
 Mi:. Watts: I don't know aboui other people hut in our company we do not 
 wanl them in consull ;i lawyer. They can tret better sdtlpments without it. 
 Mi:. Bancroft: Have you n list of accidents and the amounts of compensation 
 
1912 WORKMEN'S COMPENSATION COMMISSION. 359 
 
 paid? I would like to get at how many claims are made, and if they do not claim 
 why they do not claim. 
 
 Mr. Watts: I may tell you, Mr. Bancroft, that my statement is compiled on 
 every accident without regard to whether it is an accident that you could claim on 
 or not. J have in view the fact that under tins so-called compensation act, with 
 all the defences swept away, that a man has got to be paid anyway, without regard 
 to his negligence, and that a great many accidents that are reported by us to-day 
 for our self -protection would then come in, which would not be considered accidents 
 under the present act and where there is no compensation payable. I am taking 
 into account the fact that they would probably come in under a new law. 
 
 Mil. Bancroft: From a business standpoint collective liability or a tax paid 
 into stale insurance, with contributory negligence swept aside, without any chance 
 of litigation, would be a better proposition to you than what you are doing at the 
 preseut time. 
 
 Mr. Watts : No, it will cost us more money, but we would have no rows or 
 trouble or fighting with people, and no arguments, and we would know exactly 
 where we were at. 
 
 Mr. Bruce: As has been shown, it might only be in initial instances that 
 it would be heavier- If it was an assessment plan according to the risk of the 
 industry, and all assessments were based upon the number of accidents, then it 
 would probably come less to your industry. 
 
 Mi;. Watts: No. it would be more even on that basis. Of course it would 
 come very much heavier if it was capitalized on the start, but it will be heavier. 
 You must recognize the fact when you start in to pay compensation for all injuries 
 without regard to whether a man is at fault or not it will be very much heavier. 
 You have got the percentage, whether my figures are right, or somebody else's are 
 right,, , 
 
 Mr. Sangster : Would the extra expense which would be raised in connection 
 with the new law be devoted to payment? 
 
 Mr. Watts : I do not quite follow your question. 
 
 Mr. Sangster: I mean the extra expense in connection with the new law, 
 would that be devoted to the claims or to legal procedure? 
 
 Mr. Watts : Oh, no ; as I understand it this present act if put into force 
 would assess a certain rate upon the wage roll, and that goes into a fund which is 
 administered by some department of the Government, and I have no doubt they will 
 administer it honestly and then there is no law about it at all. A man has only 
 got to come and prove his case to the satisfaction of whatever Board is appointed. 
 The employer is out of it entirely. It wipes out all our law costs and the law costs 
 of the individual who is suing us, and the liability company, or whoever it may be. 
 
 Mr. Simpson : Whatever yon pay for the claims for these accidents it must 
 come out of your profits, out of your revenue? 
 
 Mr. Watts: Of course. 
 
 Mr. Simpson: If you were to pay into a fund, which might be even more 
 than you are paying now, and then you tacked that on to the cost of the product 
 you would be in a far better position under the new act than at the present time. 
 
 Mr. Watts: If we got it out of our customers, yes. if we got the increased 
 cost. 
 
 Mr. Simpson: That is what I wanted to emphasize in regard to the assess- 
 ment on the consumer. 
 
 Mr. Watts: The consumer will pay in any event in thee last analysis, or 
 would come out of the business. 
 

 MINUTES OF EVIDENCE: No. 65 
 
 The Commissioner: Unless you are forced to live on a smaller profit. 
 
 Watts : If you keep on paying more than you are earning you have got 
 
 to go out of busin 
 
 The Commissioner: If you are making 25 per cent, on your capital then 
 
 you cuii id stand a little shave. 
 
 Mr. Simpson: I want to give you a little illustration if you will permit it. 
 
 us suppose for a moment that the National Trust was a hazardous corporation. 
 
 I read their statement very carefully in the paper the day before yesterday, and I 
 
 saw that they paid ten per cent, upon the invested capital, and they put away 
 
 0,000 as a reserve fund, and another $100,000 for another fund. Now, I claim 
 
 "manufacturing establishment that can show such good returns as that should be 
 
 assessed a little on the profits and not put it entirely on the cost of production so 
 
 that the consumer will have to pay it all. 
 
 The Commissioner: Competition. 
 
 I judge from what you said, Mr. Watts, that you have no insurance system 
 established by your company? 
 
 Mr. Watts: No, there is a mutual benefit society, but that is not ours. 
 There is no system of insurance in the work itself. 
 
 Air;. Wegenast: I have two or three members of the Committee who have 
 been associated with me in the work, who would like to say something simply by 
 way of support from a practical business standpoint. On Tuesday night I hope to 
 have Mr. Dawson, the expert actuary from New York. He was a joint author, with 
 Mi'. Frankel, of the well-known work on Workmen's Compensation. I thought to 
 have Mr. Preston, the draftsman of the Washington Act, but he sent me word 
 the day before yesterday that he could not start from Seattle until the 7th Feb- 
 ruary, and I have wired him that I did not know whether the sittings would 
 continue as long as that, but I would let him know shortly whether there would 
 be an opportunity for him to be heard. Mr. Preston is a man that I think would 
 give considerable assistance. He is a man of few words as you can see by the 
 Washington Ait, and yet it is probably one of the most compact pieces of legisla- 
 tion that we have upon the subject. 
 
 The Commissioner: Requests are coming in for sittings at outside places, 
 
 ! T suppose T will have to comply with them. There have been requests from 
 
 Hamilton and Windsor. The east has not spoken yet, but I suppose we will have 
 
 sn somewhere there. Then Mr. MacMurchy, I understand, wishes to be heard, 
 
 Mr. Merrick of the Employers' Association, and T think Mr. Gander, repre- 
 
 • the Builders' Exchange, also. 
 Supposing the legislature chose to adopt some such scheme as the Ohio one, 
 with or without the contribution by workmen, and extending it to all 
 workmen or employees, no matter how many were employed, and if the body of 
 
 ically required to guarantee to the State the payment of 
 tributions by all of them, or to make it up themselves, what objection, if 
 aid there be to that by the employers of labor? 
 Wi;. \\ egen wr: Well, so far as T can see T do not think there would be any 
 
 itever on the part of the employers with whom I am concerned. 
 TH] [ONER: T do not see how you can escape from having it in the 
 
 lebody he industry, or whoever is to pay the burden, for any 
 
 deficiency (hat may occur. 
 
 Mi:. Wi i : Thai is exactly what we propose. 
 
 Tin- COMMISSIONER: Thai musl he dm,,, to make it self-sustaining or else 
 yon throw the burden on the State. 
 
1912 WORKMEN'S COMPENSATION COMMISSION. 361 
 
 Mr. Wegenast: 1 have gone so far as to draw up lists of the different classes 
 of industries. I have a lisl before me of all the furniture manufacturers. To 
 this would be added, I suppose, the manufacturers of musical instrument.-, so as to 
 
 include all wood-working industries. Now, 1 think it is a reasonable business pro- 
 position that these industries should be classified in this way, and the cost of the 
 compensation, or industrial insurance, whatever you choose to call it. assessed 
 upon it. 
 
 The Commissioner: That would throw upon the small employer all the 
 burden of the little ones who would not pay up. 
 
 Mr. Wegenast: I, of course, assume there would be facilities for compelling 
 payment. 
 
 The Commissioner: You can't get blood out of a turnip. I have not con- 
 sidered that aspect of it, but I do not see why they should nol be classified just as 
 they are in the "Washington Act. 
 
 Mr. Wegenast: Well, there is this argument that I want to refer to at a 
 later stage, that if you classify them according to the industry you are affording 
 better facilities for their getting together and working out uniform regulations 
 for accident prevention. 
 
 The Commissioner: You get together as a whole body now. 
 
 Mr. Wegenast: We have attempted as a whole body to discuss preventive 
 devices for fifty or a hundred classes of industries. 
 
 The Commissioner: There would be no objection to your dividing it as you 
 pleased for that kind of thing, but for paying the tax I do not see why at present 
 its rate should be stated. It may be I am not right, but that is the way it 
 strikes me at present. 
 
 Mr. Wegenast: You mean in the act? 
 
 The Commissioner: In the act, subject to modification from time to time 
 by such authority as the act creates, to modify it according as circumstances show- 
 there ought to be modification. 
 
 Mr. Wegenast: That would at once involve a contest over the question, 
 and we feel very strongly upon that matter, whether the whole capitalized cost 
 should be assessed as under the Washington Act, or only sufficient for the assessment. 
 
 The Commissioner: I do not see how that is involved in the proposition. 
 if it is simply an annual assessment to meet the losses of the year. 
 
 Mr. Wegexast: I am quite satisfied with that, but you could not fix the 
 rate in the act. You would have to leave it to be adjusted according to the 
 number of accidents. 
 
 The Commissioner: .You would have all sorts of trouble if you hadn't 
 something to show the relation between the amounts which the different industries 
 would pay. You must have something like that. My idea was to have something 
 more like a mutual insurance plan where there would be a fixed payment, and then 
 if anything more was required an assessment made to meet that based upon the 
 amount, or proportionate to the amount of the original contribution, and if there 
 was a surplus it would either sro to a reserve or emer^encv fund, or whatever vou 
 might call it. 
 
 Mr. Wegexast: There is this further aspect to consider. Those rates in the 
 Washington Act are approved by the actuaries as being somewhere nearly right in 
 this business, and if you put the rate at twenty per cent., as they have found in 
 Germany— start at twenty per. cent, of the ultimate rate — there would be at once 
 an awful howl that this act was absurd, that it wasn't enough to carry the risk 
 and you would have to explain to all the actuaries your reasons for adopting the 
 
362 MINUTES OF EVIDENCE: No. 65 
 
 other plan of insurance, whereas, under the plan of Mr. Boyd of the Ohio com- 
 sion it is left for the Insurance' Board to work out with actuarial expert advice. 
 After ail it is an actuarial matter and not a matter to be discussed in the legis- 
 lature, or perhaps in a Commission of this kind. It is a matter for expert 
 actuaries. I was particularly struck with that feature. I had not followed it out 
 to any extent before, but it appeals to me very strongly speaking off-hand. The 
 Commission or the Board, whoever they would be, would be responsible for the 
 success of the institution, and there would be no doubt men selected who would 
 give it the requisite attention, and men of the requisite capacity to make it a 
 success, and it could very well be left to them. 
 
 The Commissioner: If I were a manufacturer I would not want it left quite 
 at large that way. 
 
 Mr. Wegenast : I think, speaking off-hand, we would rather have it in that 
 form. 
 
 The Commissioner : If I were Prime Minister I would not want it that way. 
 
 Mr. Wegenast: It would avoid criticism to leave it out. 
 
 The Commissioner: I would not be willing to leave it to any Board that 
 was appointed. They would make ducks and drakes of the whole scheme. 
 
 Mr. Wegenast : Well, they could do that in any event. It is the old question 
 of tying down the administrative body. It must have powers of adjustment, and 
 whatever rates are fixed in the act must necessarily be only approximations, and 
 they must necessarily be subject to adjustment, and for that reason I should think 
 it might be just as well to go further and avoid criticism by leaving the details to 
 the actuaries. 
 
 The Commissioner : However. I am only discussing this on your argument 
 that insurance is the proper thing. Of course that is not settled vet. 
 
 NINTH SITTING. 
 
 Legislative Building, Toronto. 
 
 Friday, 19th January, 8 p.m. 
 
 Present: Sir William P. Meredith, Commissioner. 
 Mi;. W. B. Wilkinson, Law Clerl. 
 
 The Commissioner: I understand the Employers' Association wishes to 
 present a statement. 
 
 M R - •'• (; - Merrick: Your Lordship, I represent the Employers' Association 
 
 Toronto, an organization that is somewhat allied to and probably embraces a 
 
 field among the smaller employers of labour than the Canadian 
 
 A.ssociati( In addition to those engaged in some process of 
 
 manufacture we also have in our membership organizations such as the pavers and 
 
 ;i1 c< >ntrai ide of most of those engaged in the building operations, 
 
 trich are undeT the Builders' Exchange. The general argument advanced by the 
 
 Natives of the Canadian Manufacturers' Association is agreeable to us * We 
 
1912 WORKMEN'S COMPENSATION COMMISSION. 363 
 
 have been working more or less in unity, because in a discussion of this nature 
 there are certain well known principles which require to be incorporated in an Act 
 of this character, and which are recognized as being advantageous both to the 
 workman and employer. Mr. Wegenast has outlined these to our entire satis- 
 faction. I have read over his brief with great interest, and he covers in an 
 elaborated way practically all the principles that we decided upon. There is one 
 matter which I think has not been alluded to here, and that is the number of 
 accidents which have taken place in this country during the past year, and I have 
 taken from the Labour Gazette the reports of the accidents taking place in Canada, 
 and I have compiled a statement of them under their various classifications, which 
 may be of interest as showing the ratio in the different employments. 
 
 Statement of Employers' Association of Toronto. 
 
 To the Commissioner appointed to consider the subject of Compensation to work- 
 men for injuries sustained in the course of their employment. 
 
 Sir, — It is generally conceded by those who have made a study of comparative 
 legislation with regard to Workmen's Compensation, that the Act at present in 
 force in Ontario is unsatisfactory, inadequate and by reason of inviting litigation, 
 wasteful. It would seem, therefore, to be the duty of those who are more or less 
 brought in contact with accidents of this character to assist in framing a measure 
 that would meet the requirements of our industrial life, and one which, at the 
 same time, should not bear too heavily on provincial industry. 
 
 In a complex question such as this it is advisable as far as possible, to establish 
 the principles that should underlie a measure of this character. We submit the 
 following suggestions which we believe should be material to the framing of the 
 act and incorporated in its provisions. 
 
 \ 
 
 \ 
 
 1. Work?nen's Compensation preferred. The act should be framed along the 
 lines of Workmen's Compensation and not of Employers' Liability. 
 
 2. Efficiency and Economy. The system of compensation should be efficient 
 and economical, and as large a proportion as possible of the amount paid by either 
 the employer or employee should actually be paid out in compensation. 
 
 > 
 
 3. Joint Contribution. We believe that compensation should be provided by 
 joint contribution from both the employer and workman such as may be found 
 to be equitable in view of the relative number of accidents occuring by reason of 
 (a) hazard or risk; (b) fault of employer; (c) fault of employee. 
 
 4. Question of Negligence. We are of the opinion that all accidents should be 
 the subject of compensation from the fund contributed to for that purpose, but 
 that gross carelessness, drunkenness and wilful disobedience to orders should be 
 penalized in some way. 
 
 5. Periodical Payments. The amount awarded in compensation should be 
 paid periodically and riot in a lump sum. It should be made, as far as possible, a 
 substitution for the wages of which the injured workman and his dependants are 
 deprived by the injury. 
 
364 MINUTES OF EVIDENCE: No. 65 
 
 6. Compensation should be Sure. It is impossible through ordinary channels 
 to be assured of the continued solvency of the employer. Some provision should 
 be incorporated, however, which would guarantee compensation being paid in the 
 event of failure or other cause. 
 
 7. Expert Supervision. If a general compensation plan is decided upon it 
 should be supervised, enforced and the rates adjusted by experts similar to those 
 employed by insurance companies. Administration of the system should be on 
 ordinary business lines as distinguished from the procedure in the courts of law. 
 
 8. Relief from further Liability. The system of compensation adopted should 
 relieve employers from any other legal liability. 
 
 9. Burden of Compensation. The cost of compensation to employer or work- 
 men should not be made heavier in Ontario than in any other of the Canadian 
 Provinces. 
 
 10. General Application. The plan adopted should embrace all employers and 
 workmen in the Province. 
 
 It is conceded that it would be advisable both to employer and workman if 
 some basis of compensation could be arrived at which would be so certain in its 
 operation that it could be contemplated at the beginning of the term of employ- 
 ment. The right of an employee to compensation and the amount in case of injury 
 could be known in advance, and the liability of the employer being ascertained, 
 could be dealt with as a constant factor of expense in the ordinary course of 
 business. 
 
 It is most desirable that the uncertainty of compensation through litigation 
 should be removed and the ascertainment of the payment of compensation should 
 be made as nearly automatic as possible. The trend of modern legislation has 
 generally recognized the claim of the workman to compensation for injuries incurred 
 outside those resulting from the employers' negligence. This has been largely 
 brought about by the consideration of the causes of industrial accidents and the 
 desire of providing legislation that would more nearly coincide with existing con- 
 ditions than with theories of employment. 
 
 It has been established that it is almost impossible in a number of cases to 
 apportion the responsibility for accidents. Statistics covering a number of years 
 and embracing a large number of cases under the German system have established 
 the following ratio of causes of accident: 
 
 - 
 
 FauH of employer 17.30% 
 
 FauU of workman , 29.74% 
 
 FauH of both employer and workman 4.83% 
 
 ill of fellow-servant 5.31% 
 
 1 'nil voidable accident 41.55% 
 
 of Cod 1.27% 
 
 Contribution to Fund by Employees. If it is decided to recommend legis- 
 lation amounl of compensation, and over a wider field than is at 
 
 presenl il . il is desirable thai employees should contribute to the fund out of 
 
 which the compensation is to be made. 
 
 '* !l n established thai such .a plan would remove the idea of charity and 
 
1912 
 
 WORKMEN'S COMPENSATION COMMISSION. 
 
 365 
 
 would put the employee ou a basis of independence with reference to the amount 
 coming to him for injury. It would also be conducive to the exercise of care on 
 the part of the workmen knowing that while the injured person would be com- 
 pensated, pari, at any rule, of the cost of the accident would fall on the employees 
 generally. It is also certain that it would reduce the number of fraudulent claims 
 and malingering for the reason that honest, conscientious workmen would have a 
 personal interest in the fund and would be on the look-out for such cases. 
 
 It may be of value in the present connection to include here the industrial 
 accidents that have taken place in Canada during the pasl twelve months to 
 December, 1911. These are classified under diil'crent headings and embracing all 
 occupations. 
 
 Trade. 
 
 Agriculture 
 
 Mining 
 
 Lumbering 
 
 Fishing and Hunting 
 
 Transportation — Railway 
 
 Transportation — Navigation 
 
 Transportation — Electric Railway 
 
 Miscellaneous Transportation 
 
 Railway Construction 
 
 Metal Trades 
 
 Building Trades 
 
 Wood Working Trades 
 
 Food and Tobacco 
 
 Textile Trades 
 
 Clothing Trades 
 
 Printing Trades 
 
 Leather Trades 
 
 Unclassified Skilled Trades 
 
 Unskilled Labour 
 
 Public Employees 
 
 Killed. 
 
 150 
 
 119 
 75 
 25 
 
 193 
 33 
 
 104 
 
 3 
 
 15 
 
 95 
 
 74 
 
 10 
 
 10 
 
 4 
 
 2 
 
 58 
 80 
 15 
 
 1,065 
 
 Injured. 
 
 179 
 
 122 
 
 110 
 
 1 
 
 292 
 
 131 
 
 36 
 
 11 
 
 19 
 
 376 
 
 188 
 
 108 
 
 44 
 
 17 
 
 9 
 
 13 
 
 8 
 
 101 
 
 134 
 
 87 
 
 1,986 
 
 Total. 
 
 329 
 
 241 
 
 185 
 
 26 
 
 4S5 
 
 164 
 
 140 
 
 14 
 
 34 
 
 471 
 
 262 
 
 118 
 
 54 
 
 21 
 
 11 
 
 13 
 
 8 
 
 159 
 
 214 
 
 102 
 
 3,051 
 
 While these industrial accidents cover the whole of Canada and are reported in 
 all occupations, still for the purpose in Ontario they can be used as an illustration 
 of the proposition that will likely be found to obtain in the various trades and 
 occupations classified. It is fair, however, to assume that this will probably embrace 
 all the serious accidents, but that many of a minor nature go unreported. 
 
 The Compensation Rate. It will be a matter of extreme difficulty to adjust 
 the scale of compensation to the various industries when considered from the view- 
 point of the interests involved. One of the fixed points of a compensation plan 
 should be that it should operate equally and uniformly in respect to all workmen 
 included, and not unequally and discriminateiy according to the financial position 
 and occupation of the employer. Its provisions should also be of such a nature as 
 to be applicable to every class of industrial activity. 
 
 The history of pension legislation would indicate that if there is any alter- 
 ation in the original rates, it is to be expected in an increase . rather than in a 
 reduction. So that an initial rate should, as a matter of policy for compensation, 
 be a moderate one. It could be also urged in fairness, that if the employer is to 
 be made responsible for injuries beyond his fault that the burden imposed should be 
 reasonable and not exorbitant. 
 
366 MINUTES OF EVIDENCE: No. 65 
 
 The Commissioner: In the figures you have given is there anything to 
 indicate the extent of the injury ? 
 
 Mr. Merrick: No, it is just a bald classification, and I would not like to 
 urge that any great reliance should be placed on this tabulation, other than probably 
 the comparison of the amount of risk that is liable to be incurred in these different 
 occupations. There may be probably some correspondents who have overlooked 
 injuries of one kind and another, or injuries may have been of such a trifling 
 nature that they have not been reported. 
 
 The Commissioner: What is the source of the correspondents' information? 
 Just what they can pick up? 
 
 Mr. Merrick : I think so. That is all they put forward. 
 
 Mr. Doggett : Were those figures you submitted for all Canada ? 
 
 Mr. Merrick : Yes, just for the year, to the end of December. 
 
 The Commissioner: In your organization have you any rule about your 
 members reporting accidents? 
 
 Mr. Merrick: No, we have not. I do not think there is any organization 
 that has a regulation of that character. 
 
 The Commissioner: I suppose a great many are not reported at all? 
 
 Mr. Merrick : The accidents of a more or less trivial nature are practically 
 tried on the spot, or looked after by the employer himself, who pays the doctor's 
 bills and wages, and they are never brought to the attention of the public officials 
 or the correspondents of the Gazette. 
 
 The Commissioner : The Factory Act requires every accident to be reported. 
 
 Mr. Burke, (Factory Inspector) : Yes, within six days. 
 
 Mr. Gibbons : I do not think the figures can be correct. You gave some 
 figures as to the number of injured. I think there must be that many injured 
 here every week. The Toronto Railway Company would think they got off lightly 
 if they did not have more than that every week. 
 
 Mr. Merrick: These are industrial accidents of all kinds. 
 
 'I'm: Commissioner: Mr. Burke says they have reported in this Province 
 alone over a thousand accidents. 
 
 Mi:. Burke: That is accidents that would come under the Factory Act. 
 
 Mr. Merrick : My grand total is 3,051 for the Dominion. 
 
 The Commissioner: If this insurance plan were adopted would it not be very 
 cult to get at the small employers of labour? 
 
 Mr. Merrick: Yes, in one sense it would, for this reason, that as my friends 
 
 on the other side know there is a steady graduation from the ranks of labour into 
 
 the ranks of employers going on all the time. That is largely confined to the 
 
 aller classes of cmp^ers of labour, and from their successes generate, in a great 
 
 Dumber of instances, into larger firms. Now, the lives of these small employers 
 
 •y. At least the lives of their firms vary very considerably. Some keep in 
 
 business for a few months and then they relapse back into the ranks of journeymen. 
 
 If they succeed, in the initial stages they hire very few men. They are usually 
 
 working combinations of two or three workmen, and as the business expands then 
 
 hire men. 
 
 Tin: COMMISSIONER: They would be partners, practically. 
 
 Mr. MERRICK: Yes, but as their business expands they engage other help, 
 i particularly the case wilh regard to such employments as the plumbing 
 rade, or the glazing trade, or the painting trade, where very much capital is not 
 required in ordeT to set up in business. 
 
 M^ W"] t: There La ;i provision in one of the acts, I think it is the 
 
1912 WORKMEN'S COMPENSATION COMMISSION. 367 
 
 State of Washington, where the employer is allowed to come in if he is on the 
 pay-roll. 
 
 The Commissioner: Yes, but just what that means may be uncertain. I 
 suppose there are a number of the smaller industries where the employer works 
 alongside of his men. 
 
 Mr. Merrick: Yes, in most of the smaller industries they do that. 
 
 The Commissioner: There is a pretty fair-sized bricklaying firm, Ham & 
 Eeid, and they both work along with their men. 
 
 Mr. Merrick: It is very difficult in the early stages to really classify them 
 as employers or as journeymen because they fluctuate to and fro. 
 
 The Commissioner : If Mr. Wegenast's idea were carried out in an insurance 
 scheme, could the men you are speaking of be depended upon to bring in a report ■ 
 on the men that weren't coming in to pay up ? 
 
 Mr. Merrick : The only way they could really be brought in I think is under 
 some penalty regulation. 
 
 The Commissioner: What use is a penalty if a man has nothing? 
 
 Mr. Merrick : It is a question of his continuance in business. If it was an 
 obligation which threatened the security of his business unless he did so, that 
 would be an inducement for him to report. 
 
 The Commissioner: Do many of these smaller men join your organization? 
 
 Mr. Merrick: Yes, some of them do, and they lapse back into the ranks of 
 journeymlen. It all depends on the prosperity of the country at the particular 
 moment. 
 
 Mr. Wegenast : What would you think, Mr. Merrick, would be the prospect 
 of these smaller employers voluntarily availing themselves of the act, if provision 
 was made for them by way of insurance? 
 
 Mr. Merrick : In what way ? 
 
 iMr. Wegenast: Take the case of a partnership, say two men carrying on 
 the plumbing business with perhaps an apprentice. Would they pay in on their 
 pay-roll and thus insure themselves and the apprentice? 
 
 The Commissioner: Not making it obligatory? 
 
 Mr. Merrick : I am rather inclined to think they would not, for this reason, 
 that generally the attention of men of that character is concentrated almost 
 entirely on either following their business, or acquiring new business. They have 
 not the purview of a larger employer, and they may not be sensible to the risk 
 they run. 
 
 The Commissioner: I suppose they think they can insure themselves 9 
 
 Mr. Merrick: Pretty nearly. 
 
 The Commissioner: Has it ever been thought under an insurance scheme 
 it would be practicable, supposing you did not adopt the plan of compulsory con- 
 tributions, to allow him to contribute and give him a larger indemnity if he did; 
 would that be practicable on a business line? 
 
 Mr. Wegenast: We went into that somewhat thoroughly. It was a favourite 
 idea of Mr. McNaught's, if I may use his name in connection with it, and it has 
 been carried into practice by Mr. McNaught in his own watch case establishment. 
 He insures his men under a collective policy for, I think, $1,500, which is allowed 
 by the Employers' Liability Act in this Province, but if the men contribute a small 
 additional premium by way of deduction from their wages they are insured for an 
 extra amount. He works the thing out in such a way as to make it some induce- 
 ment for them to take the additional insurance, but we thought a general scheme 
 of that kind woud not be made use of by the workmen. The class of men for whom 
 
368 
 
 MINUTES OF EVIDENCE: No. 65 
 
 ilation is intended is not the class of men who set aside even a small 
 amount. 
 
 The Commissioner: Would not the men getting up in years, or the men 
 th families be likely to avail themselves of making that small contribution, when 
 perhaps the single man might not feel like doing it? 
 Mr. Wegenast: Yes. 
 
 The Commissioner: The doubt I have is whether it could be worked as a 
 business scheme so as to get a proper financial basis for it. 
 
 Mr. Wegenast : Yes, and the man who might do it at one time might drop 
 out, and there would be a great difficulty in simply the book-keeping end of it so as 
 to know when the man was insured, and when he wasn't insured for the extra 
 amount. So long as you leave it voluntary the large proportion will not take 
 advantage of it. 
 
 The Commissioner: Well, who would the workman swear at when the ten 
 per cent, was deducted from his wages? 
 
 Mr. Wegenast: He would likely swear at the employer. 
 The Commissioner : Or the State that did it ? 
 
 Mr. Wegenast : No, I think he would probably swear at the employer, but I 
 am anticipating something I was going to say later, that their irritation may be the 
 means of inducing an amount of care or an amount of attention on the part of the 
 employee which could not be evoked without it. Then there is always this pos- 
 sibility, that the employer might not take advantage of it, beoause I think the large 
 majority in fact of the larger employers at all events would find it to their inter- 
 ests not to collect that amount. 
 
 The Commissioner: Now, is that not cutting away one of your arguments? 
 Mr. Wegenast: Yes. 
 
 The Commissioner: Then the inducement of the man to be careful for 
 himself and fellow- workmen would be gone. 
 
 Mi:. Wkgenast: I am suggesting a section something like this, a section 
 allowing the employer at his option to deduct a certain percentage of the insurance 
 premium from the wages of the workmen, on due notice to the workmen that that 
 oing to be done, or on notice to the workman on entering his employment. 
 Now, the way it would work out practically I think would be this. The large 
 employer would not probably enforce the provision for reasons that need not be 
 into now, but he would have it to hold, as it were, over the workmen. Sup- 
 found an amount of carelessness in using certain appliances, or whatever 
 ssness consisted in, he could post up a notice saying if this rate of 
 i kept on, or if these regulations were not enforced, whatever it was that 
 bring home to the workmen, the rule as to contribution would be 
 aid call his employees together and could say, now. the accident 
 in my shop so and so, and the rest of the employers in my class are 
 mil they are going to put me in a higher class or in for a higher 
 rate, and if (bal is don I will have to charge this percentage against you; I will 
 e to pul thai rule into force. It would be a most elastic way I think of bring- 
 the impor neventive care home to the employees themselves. 
 
 'In i Cow >n t er: Does the employer, where a man continues to disregard 
 
 his own safety and t of those who are working with him, ever exercise his right 
 >.'■ don't want you any more? 
 Mn. Wi<;i \\kt: If he does he is subject to the danger of a strike. There 
 is thai always to be coi !. If the reasons for dismissal are not approved of 
 
1912 WORKMEN'S COMPENSATION COMMISSION. 
 
 in the eyes of the Union to which his workmen may happen to belong, he is always 
 up against that difficulty. 
 
 The Commissioner: You see in so many of these cases the carelessness of 
 the man not only involves himself, but those who work with him. 
 
 Me. Wegenast: Yes. there is also that feature to be considered. It is an 
 idea of my own, but it looks to me like one of the easiest and most elastic, and n 
 salutory forms that the contribution from the workmen could lake. 
 
 Me. Bancboft: Mr. Merrick, do you represent most of the Employers' Assoc- 
 iations all over Canada? 
 
 Mb. Merrick: Oh no, Toronto and some towns in Ontario. 
 
 Mr. Bancboft: I was going to ask you if the manufacturers or employers 
 in Manitoba. Alberta, Saskatchewan or British Columbia in framing up the acts 
 they have, which are largely on the British plan, ever suggested contribution- from 
 the workmen? 
 
 Mb. Merrick: I couldn't state that. 
 
 Mr. Wegenast: I would like now if your Lordship would hear Mr. W. B. 
 Tindall. Mr. Tindall is a member of the committee under which I have been 
 working, and is in touch with all the proceedings, and would like to make a state- 
 ment as to the attitude in general. 
 
 Mr. Tixdall: Your Lordship, and gentlemen. I have only a few remark; 
 to make. I take it that Mr. Wegenast has presented the matter pretty fully as 
 regards the act, the reasons for the act, and the outline generally, and it is hardly 
 worth while taking up time in going over the ground that he has probably gone 
 over, working under he instructions of the committee to which I have the honor 
 to belong. There are several features of it, however, that it seemed to me your 
 Lordship might care to hear. I presume it will be looked upon if such an action 
 is taken, and if recommendations are made, that the solution of this vexed question 
 of workmen's compensation for injuries in the hazards of the different occupations 
 that a workman may be engaged in should take the form of a State act, or State 
 insurance form. Then the members of the legislature would want, and quite 
 properly so. that they would be backed up by public opinion in order to satisfy 
 them in their minds that this would be a satisfactory solution to the majority of 
 the people under whose suffrages they were representatives in the House of Parlia- 
 ment that might be deliberating on this question. Now, I take it that the evolution 
 that is going on in the world at the present time is altering matters to a very 
 great extent. I refer to this because I can hardly take it. that although there is a 
 difference of opinion maybe between labour and capital, thai there is an actual 
 conflict between labour and capital. It seems to me that labour is just as much 
 interested in having this in a proper and right form as capital is. Moreover. I go 
 further than that. I say as it appears to me. looking back from my knowledge of 
 business for thirty or forty years, that it is in an altogether different shape. Capital 
 has assumed to-day and is to-day in a very much different shape than what it was 
 in those times. My father happened to be somewhere about 1820 on the continent 
 of Europe, engaged with one of the best engineering firms that ever started in 
 business there. Now. in his day the majority of the manufacturers were private 
 individuals. There was very little company organization in those times. It was 
 generally the father and the son, and the business was transferred down, and the 
 difference of opinion between labour and capital came directly between the one man 
 who had the money and the other man who did the work. Now. to-day evolution 
 has changed things both here and in the United States. I do not think there are 
 any of us that take the public press, but can see the enormous progress that is beins: 
 24 l. 
 
370 MINUTES OF EVIDENCE: No. 65 
 
 way, that nearly every undertaking is formed on the joint stock 
 
 inciple. That means that a large amount of shares, from $50 to $100 
 
 ed to the public generally, and I take it that any thrifty workingman who 
 
 money is looking for a safe investment for that money, and that invest- 
 
 lent to a certain extent is in the purchase of listed shares in such companies as 
 
 listed on the Stock Exchange, or private enterprises that are not listed. So 
 these men may be working in a shop and still be the capital. He may be the 
 employer as well as the employee, and in several easels I know of that condition 
 of things obtains. Therefore if this goes on and if the thrifty man, the man who is 
 putting his money by and getting his returns, has got to look for investments, he 
 _roing to make his investments in joint stock companies or banks, or other things 
 that furnish a means for him to do that. Take banks, for instance. Our 
 banks to-day are in this position, that the workingman who has got his money de- 
 posited in a bank is vitally interested in the life of every concern in this country. 
 There is not a bank in the country that is not financing to a larger or less extent all 
 kinds of industries, and to-day, if the banks did not finance those industrial con- 
 cerns they would cease to exist, they couldn't get on in the way they are doing, and 
 consequently the men could not get work because they would not have the means to 
 employ them. Now, he is interested in that. He is interested that nothing should 
 be done that would interfere with progress and of capital getting a right and 
 proper return so that there may be profits in which he can share. The idea I want 
 to convey is that he is more interested than one would think in the other side of the 
 question, at which as a general rule he is not looking. The whole State all 
 the way through is interested in a proper solution of this question. I think the 
 majority of men to-day who think and who read will concede that there are hazards 
 incidental to every industrial occupation, and more so with those in which machinery 
 is more or less used for the conversion of a raw product into a manufactured 
 article. A man says: "Here I am living in this country and in this community, 
 and some portion of this community has got to furnish me an honorable employ- 
 ing ii for my -time at an equitable rate." He cannot get a rate beyond the 
 amount that that industry can profitably pay. You cannot put a greater burden on 
 an industry than it can bear. So the question turns around in a circle. Those 
 who can remember some years back will know that our rate of living is very much 
 higher now than it was, and it is all brought about possibly by this condition of 
 things, more or less. 
 
 I have not come across any of my colleagues in discussing the matter at 
 ;|IIV of our A ion meetings, who expressed an opinion adverse to the general 
 
 broad principle laid down that tho workman who is injured is entitled to compen- 
 sation, is entitled to a proper compensation, and to a compensation that is given 
 by the manufacturers willingly and liberally. Then the whole question that we are 
 now t iving to solve is how this compensation shall be .given with the least amount 
 of practical difficulty, and that will work out for the benefit of the men, and that 
 w '" "" , be too greal a burden on the industry. Those general principles all the 
 way through, outlined by Mr. Wegenast, seem to mo to furnish a fairly good way, 
 if carried oul and worked out in detail, to solve the difficulty. One thing that 
 "•'■ me more or less in the doliberations I have been at, is that our friends of 
 the labour side of the ho em to think that it would be better that they should 
 
 contribute to this State fund. If it is going to be managed by the State then 
 Iho ad should be framed in nuch a way that the fund should ho available to everv 
 workman, no matter whal his . iss may be, and if he wants to come into it and 
 contribute to the fund, he should gel the benefrl of the fund. I have not been at 
 
1912 WORKMEN'S COMPENSATION COMMISSION. 371 
 
 all the deliberations here and I do not know hrvw far evidence has been brought in 
 on that, but I know that the suggestion has been made that several 'of oar very 
 large manufacturing establishments have schemes working very satisfactorily both 
 to themselves and to their own men, and it was suggested that possibly those might 
 be retained in lieu of any state act that might come in. Mj contention on 
 that is that I do not see how you are going to practically work that out. It seems 
 to me the solution of the difficulty is altogether a state act, or very much as we 
 are going on now. I do not see how you are going to take part of an industry, 
 or portions of those industries, and have them manage that part of the industry 
 ami tire state the other part, and have it work out any way economically for the 
 State or the people who are getting the benefits from it. 
 
 Another thing, it seemed to me that the Government was the best medium of 
 taking care of these things. It has always seemed to me that such things as 
 insurance and schemes of that kind were a proper function for any Government to 
 take up, and I think originally should have been taken up by the Government 
 rather than by private enterprise. It seems to me if there is anything that is 
 proper for Government control and Government handling it is these Workmen's 
 Compensation Acts, and sick benefit schemes, and all that sort of thing. Now, 
 if that is taken up then I take it that all the parties that are going to benefit by 
 that should contribute in some way or another. The extent of the contribution 
 would have to be worked out, but I cannot see any difficulty in the way to the 
 workingmen contributing. I know in our own works, not as far as the iron work 
 is concerned, but as far as our wood-working industries are concerned, they have 
 schemes, and I am connected with several of them, and I have spoken to our men 
 a good deal about it and nearly all of those I have spoken to prefer contributing 
 to it. They voice the opinion to me that they would rather contribute than not. 
 It seems to me if I were a workingman that that is the position I would 
 take, that I would rather contribute to it than not contribute to it. The con- 
 tribution can be arranged in such a way that it will not be a burden to the man, and 
 as to the means for collecting there should not be any difficulty. I know in the 
 iron works some years ago the men got up a scheme of their own by which they 
 wanted to have the benefit of the scheme for themselves. We said we were perfectly 
 satisfied with that. They w r anted their own officers, their own treasurer, and their 
 own secretary. We did not interfere with it in any way, only they asked us to 
 'allow them to collect the money for it on the regular fortnightly pay-roll, and that 
 was deducted. That worked along for a time but it did not work out altogether 
 satisfactorily, because a certain number of the men did not agree with some of the 
 details. Where the thing broke down was, they had a meeting and they elected a 
 doctor that was to attend them in the case of sickness or injury. Several of them 
 got injured and they had medical men of their own, and they wanted to have him 
 instead of this man they all had agreed upon, and consequently one wanted to drop 
 out and the next one wanted to drop out. and it did not work out. But that was 
 not any fault of the system. It was just because the men could not agree, and were 
 not satisfied to go on. It seems to me if the state takes hold of it in any 
 way it should work out practically and economically for all persons concerned. I 
 cannot see that any one would argue for a moment that you can get these schemes 
 without any trouble and without any difficulty. There will be difficulty, but I do 
 not think any of the difficulties are insurmountable or any that cannot bo got over. 
 I do not know that I have anything further to say than this, that I 
 noticed an article in the Accountant*' Journal, of England, which is the authority on 
 such matters. I haven't got it with me, but it was about some trouble and diffi- 
 
MINUTES OF EVIDENCE: No. 65 
 
 they have met with in England. The editor was discussing the proper 
 ing of what he calls clubs over there. Now, it turned out they had two cases 
 :»lice court. Over there in one of these large industrial concerns the foreman 
 ory was the treasurer of one of these so-called clubs, and the men who were 
 \ under him subscribed to the club so many shillings or pence a week, and 
 e to loan this money out. They were to have so many members. It was 
 icthing on a building and loan association scheme the same as we have had in 
 5 country, but this money was loaned not for the purposes of building a house 
 for buying a house, but for tiding the members of the club over any difficulties 
 they might be in through sickness overtaking them, or wanting some money for 
 household purposes, or something of that kind, and I think in three or four cases 
 Jesuit has been most disastrous. This man had got the money, and he was not 
 a man who was used to handling money carefully and well. In one case the man 
 did not consider it was necessary that he should keep books of any kind or nature, 
 but as a friend of mine once told me, who was leaving a business that he had been 
 id to and embarking into the lumber business — he said "Mr. Tindall, I can't 
 understand why there are so many books necessary. When I kept hotel 
 all the money that came in I put in one pocket, and all the money I wanted to pay 
 out was in the other pocket, and when the pocket was empty that settled it. I said, 
 'Vim can't run a lumber business that way," and he found out that he could not 
 run it in that way, although he tried it. Now, this man kept his books in the 
 same way, with the result that when the end of the year came instead of their 
 being any funds to divide among the different members of the club and have some 
 profit out of the two shillings and a penny a week, or whatever they paid into it, 
 they {oun<\ the funds were all gone, and the man had a police court case hanging 
 over him. This was not the only case. They pointed out this was a thing that was 
 prevailing. These clubs I am speaking of are not registered. There is a Benevo- 
 lent Clubs Act, or something of that kind, and they are registered in England. It 
 is under the Friendly Societies Act. These companies are outside the Friendly 
 Societies Act, and this editorial rioints out there was no way of getting at them, and 
 furthermore they pointed out the greatest difficulty they had was the influence 
 that the foreman had over these men, that these men felt if they did not contribute 
 1" i b of which this foreman was treasurer that they might look somewhere 
 
 for work. Now, that was something the employer had nothing whatever to do 
 with. These foremen were not representing him, they were representing them- 
 selves, lint they used their positions, and that shows one of the many phases of 
 this question. 
 
 Mi:. Bancroft: T was jus! going to say. your Lordship, while we are on this 
 
 subjecl thai I would like in poini out tin's little bit of evidence that was put before 
 
 Employers' Liability and Workmen's Compensation Commission in the Senate 
 
 of the ; - by Mr. Miles Dawson, the actuary that we have heard quite 
 
 a little aboul already. 
 
 T] I inks: Ee will be here on Tuesday evening. 
 
 MR. Bancbofg : I jusl w.-mt to draw your attention to this. He was speaking 
 the German 3ystem, and what had happened there. Senator Chamberlain says: 
 'Your proposition is not to tax thi ral public, but the owners of businesses 
 
 to be regulated in accordance with the pay-roll, as they do in 'Germany? 
 
 ' Mr. Dawson: Precisely; thai the central Government should levy the tax on 
 
 ••'II employers, or all emplo of the particular class thai you embrace in your 
 
 You will not need to pay attention to any restrictions to interstate com- 
 
1912 WORKMEN'S COMPENSATION COMMISSION. .:;:; 
 
 merce whatever. You will find this power is not limited by the enumerated powers 
 of the Constitution. It is an excise tax a tax that may be collected from all en- 
 gaged in that occupation, corporations or individuals, and should be a tax in pro- 
 portion to the hazards of the occupation, and upon its pay-roll. 
 
 "Mr. Brantley: Would that be a direct tax? 
 
 "Mr. Dawson: It would not be a direct tax. It would be an excise tax. I am 
 giving you ample authorities on that. 
 
 ■•'the Chairman: Does you scheme include any tax on the employee? 
 
 " Mr. Dawson : That is with you. In my judgment no tax should be levied 
 on the employees to pay the consequence of accidents arising out of, or in the 
 course of employment. It would be wiser, however, to have this extend so as to 
 protect employees against non-occupational accidents as well: possibly against sick- 
 ness also; and if that were done, undoubtedly a tax should also be levied against 
 employees. It may be wise even to do so in other cases. Personally I do not re- 
 commend it. 
 
 "Mr. Moon: In Germany, there is a tax on employees? 
 
 " Mr. Dawson : It is only because they insure them against sickness and non- 
 occupational accidents." 
 
 Then just another quotation: 
 
 " The Chairman : May I interrupt you there ? 
 
 " Mr. Dawson : Certainly, yes. 
 
 " The Chairman : Do you think it is wise in this scheme to impose a tax upon 
 the workman as well as upon the employer ? In other words, would it tend to make 
 him more careful? 
 
 " Mr. Dawson : In my judgment, if you only provide for the payment of com- 
 pensation to the workman when injured because of an accident while at work, i.e., 
 arising out of his employment, you ought not to assess any portion of the tax 
 upon the workman, because to start with, that is not the way to get it into the 
 price of the product, except by his forcing wages up, which is an unpleasant way; 
 second, because if you did so, the portion of it which you would impose on the 
 workman would be so small (and that has been the experience in other countries) 
 as not to have any marked effect in that direction. I am of the opinion that the 
 great public purpose we have been discussing calls for the civilized method of 
 •dealing with this, which is to protect the workman of the United States against 
 the effects of sickness, and non-occupational accidents as well, through these asso- 
 ciations, in which case they should be required to pay a tax. and I may say that 
 in such case they will not only pay the tax, but they will pay it willingly and en- 
 thusiastically, with an amount of acclaim which it is not possible for the gentle- 
 men within the sound of my voice to credit at this time. The workmen of the 
 United States are standing day after day, as to themselves and their families, 
 under the shadow of disaster. The conception of this matter as dealing with in- 
 dustrial accidents is already a mistaken one, and we, as the most civilized country 
 in the world, absolutely in the van in the most important respects, ought not to 
 tail in behind the rest, hut should go clear to the front, 
 
 "The Chairman: I think you are quite right in saving workmen would quite 
 willingly contribute to this. 
 
 "Mr. Dawson: They will not. in my judgment, contribute willingly to any 
 considerable amount to a fund out of which injuries and deaths due to industrial 
 accdents are compensated. 
 
MINUTES OF EVIDENCE: No. 65 
 
 ■• The Chairman : My observation has been that poorer people are more will- 
 am] they always have, been, to help one another. 
 
 ' Mr. Dawson: But they will not willingly contribute to any considerable ex- 
 tent to a tax which is raised purely- for the purpose of covering, industrial accidents. 
 That has not been the experience anywhere in the world, and I am sure will not 
 be here. But if it is made a comprehensive, civilized plan for keeping working men 
 and families out of the poorhouse when disaster comes upon them, they will not 
 only contribute, but they will contribute with an amount of satisfaction and en- 
 thusiasm which will be absolutely astounding to some people in this country who 
 think workmen would regard it as tyrannical." 
 That is his statement before the Senate. 
 
 The Commissioner: I suppose we will see in a year or two, in the work- 
 ing out of Lloyd- George's Bill, how that will work out. 
 
 Mr. Wegenast : I am quite in touch with Mr. Dawson's views on that. I was 
 under the impression, not when I asked Mr. Boyd to come, but sometime after- 
 wards, that he was absolutely opposed to contribution on the part of the workmen, 
 and that the section in the Ohio Act had been inserted against his wishes. I don't 
 know how I got the impression, but that was my impression. It is a matter of 
 no concern to me particularly whether Mr. Dawson, or Mr. Boyd, or Mr. Preston, 
 or any other men we might bring before your Lordship, believe in contribution or 
 not. So far as our Association is concerned, I think I can safely say we have an 
 absolutely open mind on that as well as anything else, and I can quite conceive 
 of the attitude of the New England manufacturers to whom Mr. Boyd has re- 
 ferred as being entirely opposed to contribution. There are other factors entering 
 into the question with which I am afraid our labour friends have not reckoned. It 
 looks at first blush that here was something to fight over and fight to a finish, but 
 it is not the attitude with which we are approaching it at all. I am willing to 
 place my arguments, so far as 1 have any, before your Lordship, and before the 
 men, and in fact leave it to the labour men themselves to say whether they are just 
 and reasonable. 
 
 Mr. Bancroft: I think, Mr. Wegenast, it would be fairer if you stated the 
 employers from the actuarial standpoint are interested, and from our standpoint 
 the one thing that is important is whether the workmen's wages shall be deducted 
 or decreased, and Mr. Dawson says in no place in the world is that acceptable 
 willingly, or has been, to the working class. 
 
 Mr. Wegenast: You have not given his qualifications to that in making your 
 Btatement, but I do not think it is of any particular importance. 
 
 The Commissioner: He will be here to speak for himself. 
 
 Mi:. Bancroft: I do think, your Lordship, when it was the working class 
 who broughl th \ up, who asked for the Commission, and who asked the Premier 
 for quite a while before it was appointed, to appoint the Commission, and after 
 the Commission was appointed have done all they can to bring evidence, that it 
 rtiould nd be though! or said thai we have not taken this thing in a serious light. 
 We are nol looking at ii from the working-class point of view alone, but we have 
 ;| 'i-' 1 ' to defend what we think are the serious considerations of the working- 
 class of this l'i-n\ ince. 
 
 Mr. Wegenast: I do no! think ii is quite fair, your Lordship, and I do not 
 think it right that the inference to be taken from Mr. Bancroft's remarks should 
 remain unchallenged. The inference has been brought out here on a number of 
 
1912 WORKMEN'S COMPENSATION COMMISSION. 375 
 
 different occasions, beginning at the first sitting, that the manufacturers in this 
 matter were cither insincere or did not appreciate what they were doing. I have 
 myself, I think, cast no doubts upon the sincerity of Mr. Bancroft, or the other 
 gentlemen representing the labour interests, and I do not think there is anything 
 of that kind called for as far as our Association is concerned. We are willing to 
 leave the matter, as I said, absolutely open, and we want to be credited, if it is 
 possible for the gentlemen opposite to credit us, with an absolute desire to have 
 this matter adjusted in such a way as to be satisfactory, not only to the labour 
 people, but to the employing interests, and to the public at large. 
 
 Mr. Bancroft: We want you to credit us with those same sentiments, and 
 there will be no trouble. You said just a little while ago that there were many 
 things we have not thought of. Well, it is all right if we haven't; but point them 
 out. 
 
 Mr. Boyd: Your Lordship, in regard to this matter of opinion as to why these 
 New England peoplle do not want the employees to contribute to the fund, and the 
 Middle States employers do want them to contribute to the fund, quite a number 
 of the attorneys for^the employers give their reasons why the New England em- 
 ployers did not want them to contribute, and they base it upon this reasoning: that 
 if the employees contribute to the fund then the Board in making the awards out 
 of a fund to which the employees have contributed will make a more liberal award, 
 and would off-set the amount of his contribution by a larger award, and when you 
 take all the awards together it would more than make up the amount he would 
 contribute to the fund, and therefore they prefer the workman should not be a 
 contributor to the fund. Now, that is advanced by attorneys who are paid to 
 guard the interests of employers. 
 
 Mr. Wegenast : I am calling attention to this, that in Germany during the 
 past session of the Reichstag, against the strenuous opposition of the representa- 
 tives of the labour interests, and on the proposal and with the support of the whole 
 employing interests, an amendment was brought in by which the employers were 
 to contribute one half of the premium to the sickness fund instead of one third 
 as they had formerly. The new German Act now calls for a contribution of one 
 half from the employer and one half from the! employee, and this, as I say, was 
 the proposal of the employing interests, and was bitterly opposed to the labour 
 interests. 
 
 The Commissioner : On what grounds? 
 
 Mr. Wegenast: On the ground that by reducing the amount of contribution 
 from the Avorkmen the workmen would be deprived to that extent of the control 
 of the fund. There had been for some years, a considerable period of years back, 
 an agitation against the administration of the sickness fund. It had fallen into 
 the hands of the socialist organizations, which are in Germany, of course, a large 
 political factor. It was found that the meetings of the Boards of the Sickness 
 Insurance Organizations were really an avenue of a. socialistic propaganda, and were 
 generally obnoxious on that account to the employing interests, and consequently 
 the demand was made, and the measure was carried through, and it is now in 
 Germany that the contribution is in the proportion of half and half. 
 
 The Commissioner: It is not difficult to understand the motives of both 
 sides, is it ? 
 
 Mr. Wegenast : No. I simply throw that out as a suggestion, with regard 
 to the suggestion here. 
 
 Mr. Gibbons: It wasn't a matter of generosity on the part of the employers. 
 
376 MINUTES OF EVIDENCE: No. 65 
 
 Bancroft : Ho wanted to get more representation on the Board. 
 
 Mb.. Wegenast: There is just that feature. It was brought to my mind by 
 
 tatement of Mr. Boyd that in New England the disposition was to keep the 
 
 ibutions of the labour interests out of the thing altogether for the sake of 
 
 having a larger measure of control. Now, I do not want to argue for or against 
 
 The Commissioner: That is hardly it. It is thought the sympathies of the 
 Board that made the awards would go out in a larger measure to them because 
 they had contributed. It was rather that way. 
 Mr. Boyd: Yes. 
 
 The Commissioner: That would not be a judicial Board, then. 
 Mr. Boyd: No, but the Board is a Board, and the Board is made of men, 
 and men will do what human nature prompts them to do, whether they are judges, 
 or whaever they are. This is based on an experience of 40 or 50 years. I 
 don'1 say that is my opinion, but I say that it is the opinion of these men who 
 are paid $10,000 and $12,000 and $15,000 a year to advise the employers as to 
 policy, and yet there is that diametrical conflict between the Eastern employers 
 and the Middle States employers. So that the matter of opinion is not grounded 
 upon narrow mindedness; it is grounded upon the extent of their actual know- 
 ledge as to how things worked out. 
 
 Mr. Wegenast: My point, your Lordship is this, that where the workman 
 contributes he will demand a larger share in the management, and a larger say 
 in the disposition of the funds. Now, that is an argument against me. 
 
 The Commissioner: How can you have that if you have a Board of three? 
 Mr. Wegenast: If he cannot have it any other way it will be by raising his 
 voice in the public press and by making his influence felt by deputations to the 
 
 "Government and such other methods of propaganda 
 
 Mr. Gibbons: He has not money to keep a man lobbying all the time. 
 Mr. Ho yd: Why, with us the labour organizations are more strongly represented 
 ■on the floor of the legislature than the employers are. Over in the State of Ohio 
 there is no doubt about that. They have professional lobbyists. For example, the 
 railway trainmen had W- J. Winans, a trained lobbyist; for twelve year-. 
 Tin; Commissioner: What does he do? 
 
 Mi:. Boyd: I don't know everything he does; I only know some things. He 
 is there long before the legislature opens, and he is there when they go out, and 
 ; is there during the intermissions, and lie is there all the time he isn't asleep- - 
 he time; and he i- down there on the floor to-day, around the floor in some 
 capacity, in the Constitutional Convention: and not only is he there, hut there are 
 •~" representatives of (he locomotive engineer- and firemen, and conductors, and 
 forge! for a minute or think they don't take notice of what they want. 
 Mi:. Bancroft: That is why I would like to correct a statement: not cor- 
 ! i'. hni j Per another statement. Mr. Wegenasi said he thought if legis- 
 
 is kind ed that the workmen would blame the employers. We 
 
 been connected with legislation for years, on deputations, and so forth, and 
 I assure you they will not do anything of the kind. The workers know what 
 Ration is in this day. and they will blame the State. They won't blame the 
 employere Poi thing they could not prevent. , 
 
 Mi;. Wegenast: I am ready righl now, if yon desire it, to go into the whole 
 "ii of i ontribution. 
 I'm; Commissioner: If von are ready I will be glad to hear von. 
 
1912 WORKMEN'S COMPENSATION commission. :;;; 
 
 Mi;. Wr.ciKXAST: I do not want to take any more time than your Lordship is 
 prepared to give. I wanted to go into a number of the items which come under 
 
 the different principles. Some of them are so obvious that no supporting argu- 
 ment is necessary, but a number I will give some authorities on. I will read a 
 paragraph or two out of my brief: — 
 
 '" 'I'lir only phase of the subject of workmen's compensation upon which any 
 considerable diiference of opinion exists is that of contribution by the workman 
 to the cost of the insurance. So long as compensation was a matter of recovery 
 of damages for fault, direct or indirect, on the part of the employer, there was no 
 logical reason for contribution, but the modern systems of compensation in which 
 all cases are covered practically regardless of fault, raise the question whether the 
 workmen should not contribute out of his wages a proportion of the insurance pre- 
 mium representing the proportion of accidents due to the fault of the workman. 
 
 "The diiference of opinion amongst expert authorities may be attributed very 
 largely to the strenuous opposition of the rank and file of the labour interests to 
 any deduction of wages. Some of the w r riters and authorities upon the subject 
 have been or are official representatives of labour organizations, and are naturally 
 influenced by the general attitude of these bodies. Other investigators who are not 
 directly subject to this influence are nevertheless actuated by a spirit of compro- 
 mise to the hostility of labour organizations and by the notion that any economic 
 injustice will find ifs adjustment in the amount of wages." 
 
 Now, your Lordship can appreciate the temptation to me in my position. We 
 are practically agreed with the labour interests on every point but this. Your 
 lordship can appreciate the temptation to say, "Oh well, have it your own way."' 
 or something of that kind. It means really less to us than the labour inter. - - 
 after all. but as I said before I could not conscientiously give way on this point. 
 I am willing, as I said, to simply lay the principle with the arguments before your 
 Lordship, and before the labour people, and let it rest there. But I would not be 
 doing my duty by letting the matter go by default. I adhere to the idea that I am 
 expressing here, that no system will be found permanently satisfactory in which 
 the workmen has not a direct pecuniary interest so far as reducing the number of 
 accidents is concerned. 
 
 Mr. Gibbons: Might I ask Mr. Wegenast a question or two on that? 
 
 Mr. Wegenast: Yes. 
 
 Mr. Gibbons: Now. one of the reasons for a new act was to gei away fr 
 litigation. 
 
 Me. Wegenast: I am coming right to that point in the next few sentem 
 
 Mr. Gibbons: Then here you put in this "contributory negligence" clause, 
 or "gross carelessness." Now, it would be necessary to prove to that Commiss 
 that there was no gross carelessness, or that there was. 
 
 Mr. Wegenast: But I haven't that in. 
 
 I have had some conversation with the labour interests and I have found what 
 appeared to me an amazing amount of difficulty in convincing them that when T 
 say in my brief that it is proposed to compensate the workmen for all accidents — 
 
 Me. Gibbons: With his own money. 
 
 Mr. Wegenast: And then go on to say there should be some penalty for mis- 
 conduct, that I mean exactly whatl say. Tt seems an absolutely ineradicable idea in 
 the minds of the representative- of the labour interests that there is some trap. I 
 am not wedded to any form of words in the plan which I have enunciated. T 
 simply say there must he some principle somewhere — in the Criminal Code, if you 
 like, — which will bring home to the workman the responsibility for his misconduct. 
 
378 MINUTES OF EVIDENCE: No. 65 
 
 — _ , 
 
 Me. Gibbons: Just get that trap out of your head for a while. Section 2 
 of your statement of principles says that gross carelessness, drunkenness, and so 
 on, should be penalized in some way. Very good. We come down to section 7, 
 I think it is, and you have stated there that the workman should pay a contribution 
 equal to the amount of the compensation that is caused by his carelessness, or gross 
 carelessness, whichever you like. One of your representatives this afternoon stated 
 that only forty per cent, or forty-one per cent, of the accidents were due to the 
 employers, leaving fifty-one per cent, to the credit of the employees. Now, if the 
 employee has to pay fifty-one per cent, of the contribution to this fund I think he is 
 a great deal more interested in it than the manufacturer. That is your statement 
 now, that he should pay an amount equal to what is charged up to his carelessness, 
 and it was stated to-day that fifty-nine per cent, was his carelessness. 
 
 Mr. Wegenast : I am coming to that. Because in the Canadian General 
 Electric Company there is that ratio of fault 'it does not follow that the same 
 ratio exists in other industries. 
 
 Mr. Gibbons : Let me point out there why that ratio does exist in the Can- 
 adian General Electric. If you go down to their plant you will find they employ 
 a large percentage of foreigners and they don't understand our language at all. 
 They don't understand practically the instructions that are given, and they go into 
 danger that they don't know is danger, and nobody can tell them because they don't 
 understand our language, and they are killed by large beams falling on them, and 
 one thing and another. They can't get any instructions about that kind of thing, 
 because they don't understand the language. 
 
 Mr. Wegenast : I am not attempting to say what the proportion should be. 
 I have statistics showing in a general way. We have Mr. Boyd's statistics, and I 
 think I have them right here to show a proportion of about twenty-eight per cent, 
 of fault on the part of the workmen. 
 
 Mr. Boyd : That is correct. 
 
 The Commissioner : Does that mean due wholly to the fault of the workmen ? 
 Or due partly to the fault of both? 
 
 Mr. Boyd: Wholly to the negligence of the workmen. You will find that 
 carefully stated in the brief I presented at page 27. 
 
 Mr. Gibbons : Now, we had a striking instance of that recently in that car 
 accident at the St. Lawrence street switch. It was heralded abroad that the 
 motorman had done so and so, and it was all his negligence. Now, that has been 
 thoroughly investigated at over five sittings of a Board, and they found no fault 
 with him at all. They do not even mention in their finding that he was negligent. 
 These statistics are gathered possibly without a trial as to whether the worker 
 was negligent or not. 
 
 Mr. Boyd: Oh, no. 
 
 Mr. Wegenast: These statistics in the State of Ohio and in the State of 
 Illinois are not gathered; at haphazard. They were gathered by a Commission con- 
 sisting of representatives of labour interests, or given under their sanction. At all 
 events the statistics of Germany are on a basis of simply entering a claim 
 without any action whatever. 
 
 Mr. Boyd: The Boards there all have representatives of labour. 
 
 Mi;. Gibbons: It may be duo to the employee not observing rules laid down 
 by the companies. Now, let mo point out to you here, as I did before,— We will 
 take a piece of road over which a train is running, or a street car is running, and 
 yon will find at the car barns they are not to run more than four miles an hour, 
 and at another point, " all cars must stop hero," and another one that " the motor- 
 
1912 WORKMEN'S COMPENSATION COMMISSION. 379 
 
 man must shut off his power and have his car under control at each crossing/' and 
 " must go slow past cars." Then you go to the schedule and you find he has 
 twenty-four minutes to go from the Union Station to North Toronto, and if he 
 observed those rules he could not do it in 35 minutes, and if he does not observe 
 one of them then he is guilty of negligence. 
 
 Mr. Wegenast : I am not speaking of the correctness of anybody's statistics, 
 but we know the labour men say a very small number are due to the fault of the 
 workmen. Let it be a small number, but a certain number of accidents are due to 
 the fault of the workmen, and the general principle that I am enunciating is that 
 a proportion, representing somewhere near the number of accidents which are due 
 to the fault of the workmen, should be paid by the workmen. 
 
 Mr. Doggett: I would like to ask one question on this matter as far as it 
 has gone. Do you think if the men did contribute the ten per cent, to the State 
 insurance that that would stop them and make them look around and see that 
 everything was safe on buildings, or in the industries where they were working, or 
 do you think they would safeguard themselves on account of the pain and suffering 
 they must endure afterwards? Don't you think the speeding-up system does not 
 allow much time, or the Unions to save much? We have accident insurance at the 
 present time. I do not think my experience has shown me that a workman on a 
 building is thinking about saving the Union's money if there is going to be an 
 accident. I have found he is looking at the subject in the light of his pain and 
 suffering and I think mvself the fame thing would occur with the State insurance; 
 they would not be thinking so much about saving the State insurance, or the money 
 gathered by the State for insurance and their ten per cent, contribution, as they 
 would be of the pain and suffering. 
 
 Mr. Wegenast: I will come to that presently.' 
 
 " As the question of contribution is the only feature of the subject upon which 
 the interests of employers and workmen seriously diverge, it is only natural that 
 this spirit of compromise has found expression in some of the established systems. 
 But notwithtanding the disposition of workmen to avoid the burden, the principle 
 of joint contribution has been recognized and embodied in a majority of the 
 systems." 
 
 Then I have a foot note referring particularly to a number of them. This is 
 all in my brief. 
 
 I may say, by the way, that I do not propose to fight this to the bitter finish 
 with Mr. Bancroft. The facts are what they are, no matter what they are. I hope 
 Mr. Bancroft will let me say what I want to say, and leave the issue as an issue of 
 fact. 
 
 " The contributory principle is recognized in the following European 
 countries: Norway, four weeks waiting period; Sweden, sixty days waiting period; 
 Denmark, thirteen weeks waiting period; Holland, about thirteen weeks waiting 
 period; Germany, about thirteen weeks waiting period; Austria, about four weeks 
 waiting period; and also about ten per cent, of premiums; in Switzerland, twenty- 
 five per cent, of the premiums after certain deductions have been made." 
 
 The application of the contributory principle in Europe is also shown in the 
 figures on page 14 of Schwedtman and Emery's book. They divide the countries 
 of Europe into two classes. 
 
 The Commissioner: I think the difficulty between you and Mr. Bancroft 
 is fanciful rather than real. He points to this schedule which shows what you state, 
 that in Norway it is fifty per cent, of the yearly wage, dating from the fifth week 
 after the accident. Of course there is no direct contribution by the employee, and 
 
380 MINUTES OF EVIDENCE: No. 65 
 
 all that Mr. Wegenast is arguing for is that by means ;of that five weeks waiting 
 period he does indirectly contribute to the funds. 
 
 Mr. Bancroft: The contributions are for sick insurance, and we are not 
 dealing with, sick insurance. We are dealing with industrial accidents. 
 
 The Commissioner: Now. take Norway. It says the contributions yearly 
 are by the employers alone. That is the direct contribution. Then the benefits are 
 free medical treatment and 'pension up to sixty per cent, of the yearly wage, or free 
 hospital treatment and relief to family up to fifty per cent, of the yearly wage, 
 from the fifth week after the accident. Mr. Wegenast's point is that if under 
 the proposed act you only give a waiting time of a week, that that four weeks in 
 Norway is 'practically a contribution to that extent to the funds by the workmen. 
 
 Mr. Bancroft : In all cases where there is a waiting period you will find 
 there is sick insurance legislation connected with it. 
 
 The Commissioner: That is right enough, but Mr. Boyd made that very 
 clear that while that 'is so it covers the accident as well. 
 
 Mr. Boyd : That is physical accident, injury to the body. 
 
 The Commissioner: So that as far as it 'covers physical accidents it is taken 
 from the workmen. 
 
 Mr. Bancroft: In 'none of those cases is there such a proposition as the 
 employers have made, for a direct contribution to the funds. 
 
 Mr. Boyd : Yes, there is in France. ' 
 
 The Commissioner: If the manufacturers propose there should be a five 
 weeks' wait and no contribution it would be 'like Norway, would it not? 
 
 Mr. Bancroft: No, because there is no sick insurance. 
 
 The Commissioner: Still for an accident there is no payment. Supposing 
 he is not sick at all excepting the accident, during five weeks of that time he gets 
 nothing and he has to support himself, but if you give him four weeks of com- 
 pensation then surely you /put him in a better position than the Norway man by 
 that four weeks? 
 
 Mr. Wegenast: I do not want to quibble over all this, your Lordship. This 
 is the Bulletin of the Labour Bureau of the United States, and I think there is a 
 column here showing there is only one State in the Union — Oh no, there are a 
 number of other systems — one I think in Montana, where the coal miners 
 contribute. 
 
 The Commissioner: The question is. what is right to be done? 
 
 Mr?. Wegenast: In Maryland there is a contribution and in Ohio, and I 
 think one other. There is an analysis of all the acts in the United States. 
 
 Mr. Bancroft: They contribute as a Compensation Act without any other 
 insurance? In Great Britain, we have no other insurance. 
 
 The Commissioner : It would be wholly inconsistent ; the employer pays 
 there. 
 
 Mr. Boyd: That is not an insurance proposition. 
 
 Mr. Wegenast: The original intention in introducing the British Act 
 was that workmen should contribute to the compensation for injuries by them- 
 selves bearing the burden for the first three weeks. Mr. Joseph Chamberlain 
 stated in introducing the Act of 1897 that the only ground which justified the 
 proposal of the Government io make provisions for work injuries was the fact 
 that there was a huge number of injuries that might he presumed Io incapacitate 
 I he workman more than three weeks, and said: "If it could be presumed that 
 all work injuries would last three weeks or Less, I can see no reason for the in- 
 
1912 WORKMEN'S COMPENSATION COMMISSION. 381 
 
 — , 
 
 terference of the Government, because those are injuries for which the workman 
 might be expected to provide against himself." 
 
 My proposition is as long as the workman is supposed to provide something 
 for himself, his clothes or his food, his sell' respeci should deter him from asking 
 the employer to pay for something which is due to his own fault. The whole matter 
 is discussed at large in the report of the Conference of Commissions at Chicago to 
 which Mr. Boyd has already made reference, and here is a paragraph from Mr. 
 Smith of the Ohio .Commission. " The next reason why he should be a party 
 to this compensation fund is that I have learned between fifteen and twenty per 
 cent, of the personal injuries have any cause for action in the court-." 
 
 Mr. Boyd: He means he does not have a cause of action. 
 
 Me. Wegenast: He would not have a cause of action in the courts on the 
 ground of fault of the employee, and acts of God, being inherent causes of the 
 accident. 
 
 " It is the eighty per cent., then, gentlemen, that we have to consider. We are 
 going to make a law to take care of the eighty per cent., and the greatest number 
 should always be considered. That is my belief. Now. that being the case, that we 
 are going to compensate those that have no right for compensation. I feel that 
 the American workman is honest, the American workman is fair, and the American 
 workman is not a charitable party, nor does he require or ask any charity from 
 you or from me, and he is always willing to pay his part and to do his duty. But 
 the arguments will be brought "forward by some workingmen that the industry 
 should pay it all, and then we come down to the industry. What is the industry? 
 The industry, as we look at it, or I look at it, is something that is there where the 
 employer derives an income from and' where the employee derives an income from. 
 Therefore, he is a part of the industry. When you come down to saying that, that 
 the industry should stand it all, he is a part of the industry." 
 
 The Commissioner : I suppose the strongest argument for it is, if it is 
 morally right for the workman not to be compensated for injuries due to his own 
 negligence, you buy insurance for him against that, and is it right or not right 
 that lie should pay something for that insurance? That is the business proposition 
 as it strikes me. I would not put it upon the ground of making him more care- 
 ful. I think there is a great deal in what Mr. Doggett says, that the fact of him 
 contributing a few cents would not make much difference. 
 
 Mr. Wegenast: The fact of his irritation at the contribution would con- 
 stantly keep his attention upon the necessity of being careful. I am not speaking 
 of the workman in an individual capacity, because I believe that in the matter of 
 accident preventio it is necessary to have not only the individual interest of the 
 employer, but the collective interest of the employer enlisted — the collective effort? 
 of the employer; and on the other hand it is necessary to have not only the 
 individual interests of the workmen, and his pain and suffering, but the collective 
 interests of the workmen. What I would like to see is on the agenda of the meetings 
 of the labour unions and their conventions the subject of accident prevention. 
 I cannot for the moment see any better way. or any more forcible way of getting 
 it on the agenda and enlisting the interest of the workmen collectively than by 
 keeping up this very irritation. 
 
 The Commissioner : Do you think a law that causes irritation is a good law ? 
 
 Mr. Wegenast : It is not per se a good law. I do not think it is necessary 
 there should be a great deal of irritation, but as I stated before, if a clause were 
 introduced in an insurance act enabling the employer to say to the workmen, if 
 von are not careful, or if you take off those guards— or enable only the foreman to say 
 
382 MINUTES OF EVIDENCE: No. 65 
 
 1 
 
 to his men, if you don't leave those guards on the machine, or if you do this, that, 
 or the other thing, this rule will be enforced against you and you will have your 
 wages reduced next month, I think there must be a direct deterring influence. 
 
 The Commissioner: What would you think of a provision by which this 
 Board would have power to take something off the compensation that the workman 
 would otherwise be entitled to if the accident was caused by his fault? 
 
 Mr. Wegenast : I do not like that so well. I am going into that later. There 
 are other methods of contribution none of which are so satisfactory. 
 
 " The German system has steadily adhered to the principle of a long ' waiting 
 period,' thirteen weeks. In other systems the workman pays directly a portion 
 of the insurance premium by way of deducting from his wages, and the latest and 
 one of the most carefully considered acts in the United States, namely, that of 
 Ohio, recognizes the contributory principle by authorizing the employer to deduct 
 ten per cent, of the insurance premium from the wages of the workman." 
 
 I think the representatives of the workmen here will not contradict me when 
 I say that the Ohio Act is certainly an advanced type of act. 
 
 The Commissioner: If that was eliminated it would be perfect, I suppose. 
 
 Mr. Wegenast : It must be a grave fault if we believe what the labour people 
 would have us believe. 
 
 Mr. Boyd: They were not kicking before the Supreme Court. They were 
 there with all the money that the attorney demanded to defend that act, and not 
 only that but they printed thousands of copies of his brief and sent them all over 
 the State of Ohio, showing his argument for sustaining that act, with that con- 
 tribution in it. 
 
 The Commissioner: Does it not mean they would rather have it with that 
 flaw in it than not at all? 
 
 Mr. Gibbons: Mr. Wegenast has stated that one of the intentions of this 
 was to cause irritation, and now they must come around and tell us that the work- 
 men are in favour of it. It -can't work both ways . 
 
 Mr. Wegenast: There may be an occasional workman who is so far seeing 
 as to appreciate what would be the probable operation of an act of this kind. 
 
 I thought when your Lordship started to speak a moment ago you proposed 
 to refer to a possible power being vested in the Board to sanction the use of this 
 contributory section. It might be further safeguarded so that the workmen 
 would have power to impose the contribution only on consent of the Board. I do 
 not mind how you do it as long as it is a reasonable amount. 
 
 The Commissioner: That would shift the odium from the employer to the 
 Board ? 
 
 Mr. Wegenast: It might result, and I think it would, in very few impo- 
 sitions being made, but the power would be there and the principle would be there, 
 and theworkme n would have his pecuniary interest enlisted by the mere possibility. 
 After all the individual employer would be very likely to say to the workmen, 
 " Now, I am going to pay your wages; I have the right of course to take this insur- 
 ance premium, but I am not doing that with my workmen." It is probable a 
 large percentage of employers would do that. I should think nine out of ten would 
 do that. Tt would work out as a matter of adjustment of wages, but the power 
 would be there. 
 
 Mr. Bancroft: Mr. Wegenast, didn't the gentleman who represented the 
 Ocean Accident here state that they only issued the policy that he asked for, and 
 as a rule he did not ask for anything only his legal liability to be covered, and as far 
 as humanitarian principles were concerned he had nothing to do with it? Didn't 
 
1912 WORKMEN'S COMPENSATION COMMISSION. 383 
 
 be say that? Then why should we assume that the employer would do these things 
 if it is not in the legislation ? He only does what he has to do, like everyone else. 
 Mk. Wegenast: Well, the law is not made for the righteous man, and I have 
 not anywhere suggested that the employers are all of that class. 
 
 " There is of course no question that a very large numher of accidents are 
 attributable to neither the fault of the employer or the intrinsic hazard of the 
 injury. The only question that can arise is as to the relative proportions. The 
 17 1-3 per cent.; workers' fault, 29 2-3 per cent.; employers' and workers' fault, 
 1U per cent. ; hazard of industry, 43 per cent." 
 
 The Commissioner: How are those figures arrived at? Are they arrived 
 at as Mr. Watts arrived at his figures? 
 
 Mb. Wegenast : These are from the reports of the Boards of Award. 
 Mr. Boyd: As I said in my opening remarks they cover millions of accidents. . 
 where they are analysed and tabulated. For example, the German Industrial 
 Insurance Act is administered by a Commission and they publish every year an 
 annual report of the statistical operations of the Act, covering every feature. 
 
 The Commissioner: What is the object of continuing that inquiry when it 
 does not make any difference? 
 
 Mr. Boyd : As I pointed out in my opening remarks they gather and keep 
 these statistics for the purpose of seeing in what way they can reduce the number of 
 accidents due to the fault of the employer, the number of accidents due to the fault 
 of the employee, the number of accidents due to the combined fault of the employers 
 and employees, and to reduce the element of fault in the natural hazard of the 
 business. 
 
 Mr. Wegenast : They have most elaborate statistics on all these subjects. 
 The Commissioner : You say these are compiled from the papers in con- 
 nection with the claims that are made upon the fund ? 
 
 Mr. Boyd : My statistics are taken from the annual report, a volume of about 
 500 pages, and the investigation of each individual case. 
 
 The Commissioner: That ought to be fairly accurate. 
 Mr. Boyd : Those figures are not put down until the Commission agrees upon 
 them, and that is about evenly composed of employers and employees. 
 
 Mr. Bancroft : In accident insurance I am told the ones who administer it 
 are the mutual trade associations of Germany, composed entirely of employers, and 
 they are the ones who gather all those figures. 
 
 Mr. Boyd : No. For example every accident to the body is carried in the 
 sick insurance if it lasts not more than thirteen weeks, every single accident. Every 
 one of those accidents is first reported under the sick insurance. 
 The Commissioner: And labour is represented on that, 
 Mr. Wegenast: Then I have another set of statistics. In Mr. Boyd's brief 
 in the Federal Commission, on page " 732 " of ;the Report of the Federal Com- 
 mission, there is another set of statistics for the years 1887. 1897 and 1907. at 
 intervals of ten years. 
 
 Mr. Boyd : That covers the entire operation of the act over twenty years. 
 Mr. Wegenast: In 1887 the number of accidents due to the employee was 
 26.56; in 1897 it was 29.74 and in 1907 it was 28.89. Those figures agree prac- 
 tically with the figures given by Mr. Boyd. The following figures are given by the 
 Illinois Commission, and they are very surprising. The Illinois Commission have 
 been quite frank and say they have got them from the Reports of the Appellate 
 Courts. In the Supreme Court the employer's negligence is attributed in twentv 
 cases : employee's negligence, four cases ; other causes, four cases. 
 
obi MINUTES OF EVIDENCE: No. 65 
 
 The Commissioner: Those would be very defective statistics, because it 
 would only apply to cases going to court. 
 
 Me. Wegenast: The proportion must be somewhere in the neighbourhood of 
 between 25 and 30 per cent. These figures are all in the brief which I have 
 submitted. 
 
 " The principal reason for covering all accidents regardless of questions of 
 fault, is that the expense of determination of these questions in specific cases is 
 eliminated." 
 
 If any Workmen's Compensation Act were to be placed upton the correct moral 
 basis, a basis of natural justice, it would mean the employer would bear only com- 
 pensation for those accidents which were due to his fault and due to the intrinsic 
 fault of the industry, or due to the acts of God. There can be no justice in charg- 
 ing the employer with those accidents which are due to the employee's fault. 
 
 Mr. Doggett : I would like to say one word. It has been mentioned here 
 that we should educate and use a propaganda in respect to educating men along 
 the lines of being careful. Now, it is only about twelve months ago when I was 
 on a committee, that was appointed by the Ontario legislature, to advocate tile 
 enforcement of a Scaffolding Bill for this Province. , I might state that a resolution 
 was sent on from the Trades and Labour Congress of Canada, and we duly laid our 
 views before the committee that was appointed by the Ontario legislature, after 
 Sir James, the Premier, and his Cabinet, had seen fit that something should 
 be done along those lines. I might state that quite a few employers opposed 
 that Scaffold Bill that we have now in force. That was for the prevention of 
 accidents and for the safety of the workmen on the building, and the employers 
 came there and opposed it, some on the grounds that it might cost a few cents more 
 to put supports on. 
 
 Mr. Wegenast : I can show you hundreds of answers to the circulars we sent 
 out in which employers are opposed to any change in the law for workmen's com- 
 pensation. I cannot answer for the sins and shortcomings of the members of my 
 own organization, let alone the employers of Toronto outside of our Association. 
 With the large number represented by our Association it is hardly to be expected 
 that there would not be an occasional one who falls a little below the general 
 standard. 
 
 Mr. Bancroft: I suppose what Mr. Doggett thought was that while it might 
 be advisable to discuss those things in his organization, it might not be inadvisable 
 to take them up in yours. 
 
 Mr. Wegenast: No doubt we would have to bear the lion's share. 
 
 What I said was the principal reason for covering all these accidents was that 
 the expense of determination of questions of fault in specific cases would be 
 eliminated. If 25 per cent, of the accidents were due to the fault of the workmen 
 it might take, and doubtless would take, as much, or almost as much, to weed out 
 the bad cases as it would to compensate them. That is the point I am trying to 
 make. 
 
 " But to throw the entire cost of insurance upon the employer not only shocks 
 the sense of justice but places the workman in a humiliating position. It is no 
 doubt true that on its economic side any money contribution on the part of the 
 workman could be worked out as a matter of adjustment of wages. It may he 
 observed, by the way also, thai this is true in a sense converse to that in the argu- 
 ment against contribution, for if the workman's contribution were inequitably 
 large it would result in an increase of wages." 
 
1912 WORKMEN'S COMPENSATION COMMISSION. 385 
 
 That was already touched upon by Mi-. Boyd, only, as Mr. Boyd pointed out, it 
 would take three or four years to work it out, by means of strikes, I suppose. 
 
 ''There is. however, a point at which the self-respect of the workman becomes 
 involved. Even the most advanced form of socialism would not seek to free the 
 workman from all sense of responsibility for bis own action, or to throw upon tbe 
 employer or tbe community at large tbe responsibility of making provision for his 
 every want.'' 
 
 The Commissioner: You are arguing without your host. We have bad 
 strong arguments for that. 
 
 Mr. Wegenast: I don't quite appreciate that? 
 
 The Commissioner: We have had strong arguments here for making some- 
 body pay for them, although it is tbe workman's fault. 
 
 Mr. Wegenast : I do not agree with that. 
 
 The Commissioner : I am saying we have heard arguments here. 
 
 Mr. Wegenast : Yes. 
 
 The Commissioner : I didn't like to say so, but that is rather reflecting 
 upon those who have urged those arguments, to say that no self-respecting man 
 would. 
 
 Mr. Wegenast: It is so intended. It was put in this way, I forgot by 
 whom, but in one of the text-books, in the case of an accident in a molding shop, 
 where the question was as to whose fault it was. The man, I believe, stumbled and 
 spilled some molten iron, and it was found he had stumbled on tbe ravelled edge 
 of his overalls. The obvious answer of the labour interests was that the employer 
 should give him better overalls. Well, if overalls, why not underclothes? 
 
 Mr. Bancroft: Do you say that was tbe answer of labour? 
 
 Mr. Wegenast : My argument is this, that so long as it is recognized that 
 each workman is expected to provide something out of bis wages, there must be a 
 point at which tbe obligation of the employer ends, and that point is between those 
 deserving cases of accidents, and the undeserving cases, but as I say in view of the 
 expense of litigation in determining in each case who was at fault, the whole series 
 ought to be covered. This principle is so elementary that its mere statement almost 
 calls for apology; yet this very principle would be violated by throwing on 
 employers the burden of compensating workmen for injuries-due to their own fault. 
 Take the case of the man lying on the belt. On what principle of natural justice 
 can you justify the employer bearing the compensation of that man who lay on 
 the belt to sleep ? 
 
 Mr. Bancroft : You have already admitted that even if that man did lie on 
 the belt and was killed that his dependants should have compensation. 
 
 Mr. Wegenast: No, not on any grounds of natural justice; simply on the 
 ground of expediency. 
 
 Mr. Bancroft : You have admitted it should be done ? 
 
 Mr. Wegenast: On the ground of expediency. 
 
 " So long as any injuries arc due in whole or in part to the fault of the work- 
 men elementary principles of justice demand that all should bear a share of the 
 pecuniary responsibility. 
 
 "If the pecuniary consideration were the only one it might be partially 
 counterbalanced by the inconvenience of collecting the workman's portion and the 
 irritation attendant thereupon. But there are other and weightier reasons for a 
 recognition of the principle of contribution. It will not be seriously disputed that 
 the highest degree of co-operative effort on the part of the workman to the end of 
 preventing accidents, cannot be secured without throwing upon him some direct 
 25 L. 
 
386 MINUTES OF EVIDENCE: Xo. 65 
 
 pecuniary responsibility. If there should be irritation attendant upon the practice 
 of deducting from wages a portion of the insurance premium, or if there should be 
 dissatisfaction with the " waiting period " these serve to keep before the mind of 
 the workmen not only individually but through their organization, to a degree not 
 otherwise possible, the interests of the workmen in systematic and scientific methods 
 of accident prevention." 
 
 Mr. Bancroft : At the present time you have stated that there are employers 
 in Ontario who already have that kind of a system where employees contribute, that 
 they have an agreement, and often this implies that it is compulsory. You have 
 heard what Mr. Tindall said about the foremen using their position to force 
 payments, and you will admit that many a man has joined them for the sake of 
 Dot losing his job. Has that stopped accidents? 
 
 Mr. Wegenast: Yes. 
 
 Mr. Bancroft : No sir. We will have that out. I could bring witness after 
 witness here to prove it. 
 
 Mr. Gibbons : Your argument is so inconsistent. You point out about the 
 litigation, and you say in the next breath no self-respecting man would oppose it. 
 Now, there must be no self-respecting man in the ranks of labour. 
 
 Mr. Wegenast: What is the inference? 
 
 Mr. Gibbons : The inference is you are inconsistent. You say it will cause 
 irritation, and on the other hand it won't. 
 
 Mr. Wegenast: You have not drawn the proper conclusions. 
 
 Mr. Gibbons : You would say there was no self-respecting man in the labour 
 ranks. 
 
 Mr. Wegenast: Well, I didn't want to say it. 
 
 Mr. Gibbons : We might say there was no self-respecting employer or manu- 
 facturer, but we wouldn't even throw out that inference. I think it would be 
 uncalled for. 
 
 Mr. Wegenast : I want it to be understood as not only making the inference, 
 but the statement, that the self-respect of the workman demands that he should 
 contribute something towards the cost of an insurance which covers not only the 
 employers hazard, and the hazard of the industry, but the employee's own fault, 
 and any other view of the operation of a system which does not embody that view 
 means humiliation and pauperization of the workman. Whether the opposition 
 on the part of the workman is due to the want of appreciation or the want of 
 snlf-respect I don't know. 
 
 Mr. Gibbons : At the present time they may collect compensation for any 
 accident that is due to the negligence of the employer. On the other hand if they 
 took and collected a fund of their own. or as the Unions do at the present time, 
 pay under any circumstances, might they not just as well contribute to a fund of 
 iheir own and pay this? 
 
 The Commissioner: You forget the forty per cent, or so where you would 
 not recover anything at all, where they are not at fault and the employer is not at 
 fault ; in these necessary risks of the business the employer is not liable. It is 
 something incidental to their occupation, and that they get the benefit for under 
 this system. You see now a man can only recover if his employer, not through a 
 fellow-workman, but through somebody in a position of superintendence, has been 
 guilty of negligence, with some exceptions, and if the workman himself has been 
 oniiltv of negligence and without his negligence the accident would not have 
 happened, then he cannot recover at all. So you see it cuts him down to a very 
 small field where under the present law he can recover. 
 
1912 WOKKMExVS COMPENSATION COMMISSION. 387 
 
 Mr. Wegenast: It is pointed out in the reports of the Illinois Commission 
 with great force, and it has been pointed out by Mr. Boyd here to-day, that (the 
 numher of accidents winch would he added to the present list of recoverable accidents 
 for which compensation could lie recovered, the percentage would be very small, 
 something about seven per cent. 
 
 Mr. Gibbons: You stated that the laws were not made for the honest man. 
 We are going on that basis. Now, in this case we will suppose that a very small 
 percentage of the employers would be dishonest because they are all self-respecting, 
 but supposing it would induce them to post up rules a violation which would make 
 the employee guilty of negligence, and rules are just put up for that purpose. 
 We know cases of that. I have them every day in front of me where the rule is 
 put up to be broken, but at the same time it protects the employer; it protects the 
 company. 
 
 Mb. Wegenast : What protection would there be under such a system as we 
 propose? AVhat object? 
 
 Mr. Bancroft : It would throw more of the payment upon the men. 
 
 Mr. Wegenast: Let me say frankly what is in my mind, that a minimum 
 should be fixed in the act. I think ten per cent, is too low. I think twenty-five 
 per cent is high enough. 
 
 The Commissioner : That would be to take out of the wage earner, on the 
 figures you gave us, from a million to a million and a half dollars per annum. You 
 said this morning from four to six million. 
 
 Mr. Wegenast : Well, on the basis of twenty five per cent, out of $4,000,000 
 it would take $1,000,000, and out of $6,000,000 it would take $1,500,000. That 
 is on 25 per cent. On a ten per cent, basis it would take off $400,000 and $600,000. 
 
 The Commissioner : It is a big sum in the aggregate. 
 
 Mr. Wegenast : It is a tremendous shock on the wage-paying capacity of 
 industry. 
 
 Mr. Gtbbons : When we come to ask for an increase of wages, and that is 
 determined by arbitration without a strike, is it not usually settled by just the cost 
 of living? That is the basis they go on. I have always had to submit a statement 
 of the cost of living, just what a man could live on, and that was the basis of the 
 wages. Now, if a man only gets the cost of living how is he going to contribute 
 without he denies his family and allows his children to go barefooted? 
 
 Mr. Wegenast: I want to answer that with this suggestion, which is so 
 absurd that it answers itself. Would it not be a good plan to work out a com- 
 pensation system by giving each man the increase of salary requisite to enable him 
 to insure himself in an accident company? 
 
 Mr. Gibbons: That is what they do with policemen and firemen. 
 
 Mr. Wegenast : Would anyone contend that one workman out of one hundred 
 would use the money for the purpose of insuring himself: The whole basis of the 
 compensation system is the improvidence of the workmen. 
 
 Mr. Bancroet : If you want a contribution from the workmen I suppose 
 all the employers will raise the wages of the employees in Ontario to meet that 
 compensation ? 
 
 Mr. Wegenast: I am quite willing to make the suggestion, if that will do 
 any good. 
 
 Mr. Bancroft: Why do they not pay the whole tax instead of doing it in 
 that way? 
 
 Mr. Wegenast: If it is an adjustment in the wages, in the ultimate result 
 it works out in one wa3 r a« well as the other. 
 
388 MINUTES OF EVIDENCE: No. 65 
 
 Me. Bancroft: I don't like to say you haven't thought of this situation 
 that we have thought about. In Toronto and very big cities there are hundreds 
 of girls employed, and we have been discussing in the moral reform meetings how 
 girls are driven into the white slave traffic, and we have had it admitted by min- 
 isters all over this country and otherwise that it is an economic question, and if 
 those girls were given enough to live on properly there would be pactically a 
 minimum of that traffic. 
 
 The Commissioner : That is very weak evidence. 
 
 Mr. Bancroft: They are proposing to take the wages of these girls at the 
 same time they are proposing to deduct the wages of the men. Is that not a con- 
 sideration? It is going to cover everybody, even the girls whose wages now are at 
 a minimum. 
 
 Mr. Wegenast : In the Commision by the State of Illinois a strong argument 
 is made out of a feature akin to that mentioned by Mr. Bancroft. The question is 
 raised there, what becomes of the girls in families where the father or wage-earner 
 is cut off, and the question is answered with a blank. These girls under the 
 system we propose, under a rational insurance system, would receive their compen- 
 sation, and is it too much to expect that in return for compensation which is pro- 
 vided to a very large degree by the employer that they shall contibute their pittance ? 
 Doesn't self-respect have some place in the matter? 
 
 Mr. Bancroft : I do not think under the social system under which we live 
 there is any justice whatever for a proposition by any self-respecting employer to 
 take the wages of the workmen. 
 
 Mr. Wegenast : " Collective effort on the part of workmen is in fact as 
 necessary as collective effort on the part of the employers in order to obtain a full 
 measure of success in prevention of accidents." 
 
 We want not only the individual efforts of the employer. Experience 
 shows, and overwhelming statistics show that the best results in accident 
 prevention cannot be obtained without bringing employers together in some collec- 
 tive capacity. The great success of the German system is due, not wholly, but in 
 a very large measure indeed, to the fact that it produces collective effort. What 
 I say is you cannot have the highest degree of effort on the part of the workmen 
 without creating some collective effort. 
 
 The Commissioner : Is it not a little over-stated that the wage earners as a 
 class get only barely what they can live on? If that is so where do all these 
 accumulated funds thai we have lately heard about in the different trade-unions 
 come from? They must come from the workmen. 
 
 Mr. Bancroft: Yes, your Lordship, but it is recognized as an economic basis 
 to-day that wherever yon go in the world a man's wages represents the amount that 
 is necessary to reproduce his labour power so he can serve it out again on the 
 morrow. 
 
 The Commissioner: TTe must have a larger margin than that? 
 
 Ali;. Bancroft: They are kept up largely by self-denial. 
 
 The Commissioner: How many millions would be saved if there was no 
 liquor drunk by the workmgman? 
 
 Mr. Bancroft: 1 didn't know that all the liquor was drunk by the work- 
 ingman. I fancied I lie manufacturers were consumers in that respect. 
 
 Mr. Doggett: 1 don't think there is ever a workingman if lie didn't go into 
 the saloon but could put that money, or that money could lie used to buy clothes 
 to put on the backs of bis children. As a matter of fact they are going without 
 something else to supply themselves with that particular want. 
 
1912 WORKMEN'S COMPENSATION commission. 389 
 
 The Com missionee : There are a lot of young men who have not got children. 
 
 Mr. Gibbons: We are here to talk about British laws, and we are all sroins 
 into Germany, and if we get into this trouble that is threatened with Germany Ave 
 will be tempted to take the side of Germany and work detrimentally to the British 
 Empire. 
 
 Mi;. Wegenast: Would yon prefer the British Act to the Act in the State of 
 Ohio, and in Germany? 
 
 Mr. Gibbons: I certainly would if the labour men have to contribute one- 
 third or one-half of it. 
 
 Mr. Wegenast: That is a statement so — 
 
 Mr. Gibbons: Absurd! Ha. ha. 
 
 Mr. Wegenast: Yes. absurd. 
 
 Mr. Bancroft: We are asking for what they are asking in Great Britain 
 to-day. state insurance with compulsory insurance. 
 
 Mr. Wegenast: That answers Air. Gibbons in a different way from the 
 answer I got. 
 
 Mr. Gibbons: I would say I would prefer it to this that you are proposing. 
 T didn't say 1 would prefer it to a modern act. 
 
 Mr. Wegenast: "While the general tendency is for workmen to oppose and 
 employers to favor contribution from the workmen this is not uniformly the case. 
 In Germany where the relations arising out of the workman's contribution are 
 best understood the tendency is to some extent in the other direction. During 
 the last session of the Reichstag an amendment proposed by employers and bitterly 
 opposed by workmen was passed increasing the contribution of employers to the 
 sickness fund to from one-third to one-half-"' 
 
 The Commissioner: That is only a partial statement of the case. Of 
 course it was a matter of the control of the administration of the fund. There 
 is a big difference there. You just take that in the same spirit that you regard 
 that in this country. The socialists in Germany are the trade-unions. The 
 socialist movement in Germany was the one that organized the trade-unions for 
 industrial purposes. 
 
 Mr. Wegenast: The motive of the workmen in opposing the change was 
 to maintain their representation on the management of the Association. 
 
 "There is, therefore, this further consideration in connection with the question 
 of contribution that the extent to which the workmen participate in the administra- 
 tion of the system will naturally depend upon whether and to what extent work- 
 men contribute to the insurance fund. It has been already pointed out that the 
 principle of contribution may be embodied in a number of ways. The most 
 direct method is that of collecting from the workman a proportion of the insurance 
 premium. This is practicable only by having the employer pay the whole premium 
 and deduct the proper amount from the wages of the workmen. Another method 
 is to interpose a considerable 'waiting period' between the occurrence of the injury 
 and the beginning of the compensation payments, thus leaving workmen to bear 
 minor injuries either individually or through collective first aid or sickness funds. 
 A third method is by reduction of the scale of compensation, leaving workmen to 
 individually bear a greater portion of the burden of all injuries." 
 
 I would like to point out in connect i<m with that a fact that is not generally 
 realized, that the 50 per cent, basis in the Quebec Workmen's Compensation Act 
 was arrived at as a compromise on a question of contribution. It was said we 
 will pay him for half his injuries if he pays the other half. 
 
 Mr. Bancroft: To-day is it not the fact that it is illegal for an employer 
 
390 MINUTES OF EVIDENCE: No. 65 
 
 under the common law to take the wages of a workman for anything without 
 his consent? 
 
 Mr. Wegenast : Well, I know one method by which you can take it and take 
 it away altogether, by garnisheeing it. 
 
 Mr. Bancroft: I know that is a fairly good joke all right, but is it not 
 a fact that the employer cannot legally take his employees' wages to-day? 
 
 The Commissioner: That is statutory, not common law. 
 
 Mr. Bancroft : And you are suggesting legislation that will remove a pro- 
 tection which the workman has to-day, which has been very valuable to him in 
 times past. 
 
 The Commissioner: I do not think we have got any law of that kind in 
 this Province. 
 
 Mr- Bancroft : I remember several cases where men who had made mistakes 
 were threatened with a reduction of their wages by reason of those mistakes, and 
 upon notifying the employer that they would sue for it the matter was dropped. 
 
 Mr. Wegenast: "It is submitted that the last of these three methods is 
 the least satisfactory and that in preference one or both of the other two methods 
 should be adopted." I may say the third method is by reduction of the scale 
 of compensation. 
 
 The Commissioner : But my suggestion to you, which you said you would 
 ••afterwards answer, was not that at all. Mine was about allowing the Board to 
 make a reduction where the accident had been caused by the negligence of the 
 workmen. 
 
 Mr. Wegenast : Well, it of course depends on the amount of the reduction. 
 If it is not large enough it has no salutary effect, and if it is too large then it falls 
 Upon the innocent dependant. 
 
 The Commissioner: Well, applying some of your arguments, if the work- 
 man knew he was liable to have his compensation reduced if the accident was 
 wholly due to his serious misconduct would that not be a check upon him? 
 
 Mr. Wegenast : Yes, but there I am more magnanimous than my friends 
 opposite give me credit for. I said all these accidents should be compensated, 
 partly on account of the expense of determining the question of liability. 
 
 The Commissioner : Not if this Board is to settle everything, if you adopt 
 the Ohio plan and give them a wide discretion. This doctrine of contributory 
 negligence has not prevailed, but if a collision occurs and both are at fault the 
 loss is divided- 
 
 Me. Wegenast: The objection to that is there will inevitably be an extension 
 of the principle in the case of the death of a man, because it is expedient on human- 
 itarian grounds. The dependants suffer just as much. It does not make it any 
 more just, but still it comes. 
 
 The Commissioner: Could you not afford in the case of a fatal accident 
 to submit to that? 
 
 Mr. Wegen \st: It appears to me there is a discrimination there. 
 
 The Commissioner: It is not defensible on an economic basis upon which 
 the thing is put- Although Mr. Boyd did not agree to it it seemed to me to 
 introduce the eleemosynary or charitable aspect of the thing. 
 
 Mi:. Wegenast: That is one of the objects in saying that carelessness should 
 be penalized. I am not speaking about gross carelessness in the way it is referred 
 to in legal actions. The language of our clause was a subject of controversy 
 and alternatives wire suggested, but the matter was leii in that way to suit the 
 
1912 WORKMEN'S COMPENSATION COMMISSION. 391 
 
 views of one or two members who thought the idea was expressed in its terms. I 
 prefer the general word "misconduct" and what I had in my mind there was that 
 there should lie some way of penalizing. I don't know that the way under the 
 Washington Act is the "best, but I would not like to say it is not. 
 
 The Commissioner: Misconduct may cover very little things and very large 
 things. 
 
 Mr. Wegenast.: I am willing to have that qualified in any way that is 
 reasonable. 
 
 The Commissioner: The way it was interpreted I think was perfectly fair, 
 "serious and wilful misconduct?" 
 
 Mr. Wegenast : I must say I myself favoured those exact words. 
 
 The Commissioner: It must be both serious and intentional. 
 
 Mr. Wegenast : I think it expresses the intention of the Committee better 
 than the words that are there. It is in the acts of six different provinces, and I 
 am quite willing, but I doubt still whether it is the proper way of penalizing. 
 
 Mr. Bancroft : That is covered by the other in case of death and disability. 
 
 The Commissioner: Now, if you added to that in this case there should 
 not be an entire loss of compensation, but it should be scaled down by the Board? 
 
 Mr. Wegenast: Yes, I quite agree with that. 
 
 The Commissioner : That would not create the irritation by colllecting from 
 every man something every week or every month. 
 
 Mr. Wegenast: I was not thinking of that feature, because the proposition 
 is not to weed out all the cases due to the workman's fault. There must be a 
 distinction drawn there. The cases covered by an exception in favour of wilful 
 misconduct might be, say, only five per cent., and the cases weeded out by the 
 question of fault, or contributory fault, or whatever it might be, might perhaps 
 be twenty-five or thirty per cent. 
 
 The Commissioner : I thought you started out with the assertion that the 
 doctrine of contributory negligence should go? 
 
 Mr. Wegenast: Provided there is a contribution to make up the workmen's 
 share. Those are two different classes although the one includes the other. The 
 twenty-five per cent, will include the five per cent, if that is the proper percentage. 
 
 Mr. Gibbons: Just take as a basis, supposing there are one hundred work- 
 men, and ninety-nine of those men are carefu'l and do everything possible to avoid 
 an accident, and there is one careless man. There the other ninety-nine men con- 
 tribute to protect that careless man. 
 
 Mr. Wegenast: Yes, because the employer is doing that very thing him- 
 self. 
 
 Mr. Gibbons: We have understood that was a charge upon the industry, 
 and in the last analysis the consumer would pay for it. 
 
 Mr. Wegenast: We have also understood that in the last analysis the 
 protection is paid. 
 
 I want to point out that the question of contribution goes farther than that. 
 
 The Commissioner: You want more, of course. 
 
 Mr. Wegenast: It is not that Ave want more. The question of penalizing 
 by deduction of compensation would cover perhaps two, three, four or five per 
 cent- of the cases of wilful misconduct. 
 
 Mr. Gibbons: Isn't he penalized already? He only gets compensation for 
 part of the loss of his wages. If a man has an arm taken off, or a leg taken off, 
 look at the amount of suffering? Isn't he penalized already? It is like hang- 
 in o- a man and shooting him aiterwards. 
 
392 MINUTES OF EVIDENCE: No. 65 
 
 Me. Wegenast : I admit all that, but the five per cent, that is covered in 
 the case of wilful misconduct is one thing. The extra twenty per cent, that is 
 covered by the fault, or carelessness, or negligence, to use the term of the British 
 Act— 
 
 The Commissioner: But under modern conditions it is impossible for the 
 man to work without a very critical employer saying he was careless. It is 
 almost necessary sometimes, he works at such high speed. 
 
 Mr. Wegenast: That simply goes to prove it may be less than twenty : five 
 per cent, on that account, but whatever the proportion is. There is a proportion 
 of accidents over and above what is represented- by serious and wilful misconduct- 
 
 Mr. Doggett: AY hat about if death occurs? 
 
 Mr. AA t egenast: I am saying, cover them all. What I have thought of, and 
 I haven't thought it out to any extent, is that in the case of a man who is guilty 
 of misconduct the money might be paid to his wife, or paid to some trustee for him 
 so as not to give him the handling of the money- It is a very feeble way of 
 meeting the tiling. Or he might be sent to jail or the workhouse. 
 
 TENTH SITTING. 
 
 Legislative Building, Toronto. 
 
 Tuesday, 23rd January, 8 p.m. 
 
 Present: Sir AYilliam B. Meredith, Commissioner. 
 Mr. AY. B. Wilkinson, Law Clerk. 
 
 Mr. Wegenast: As I intimated at the last session, Mr. Miles M. Dawson 
 is with us, and is ready to give your Lordship any information he can. I do 
 not suppose he needs any introduction as he is so well known in Toronto. I 
 thought it would be just as well if Air. Dawson would make whatever preliminary 
 statement he wished to make, and then we could ask him some questions. 
 
 The Commissioner: It might.be as well if you would ask him to make a 
 statement along the lines you desire, as he may make some statements not pertinent 
 to the inquiry. 
 
 Mr. Wegenast : I think Mr. Dawson knows what the scope of the inquiry 
 is, and [ judge from the evidence given by him before the Federal Commission 
 a good deal may be left to his judgment as to the form of his remarks. 
 
 Mi:. Miles M. Dawson: I am more or less embarrassed to take that course 
 not because I do not think I could say things which might be useful to you, 
 but because there is such a volume of matter. T would suggest that Air. AA>genast 
 should indicate by questions or otherwise pretty generally what be would like to 
 have mo go into. 1 might explain I do not feel I am here in the slightest degree 
 to lay oui plans of insurance for the Province of Ontario or for the Dominion of 
 Canada. I am here because of having made a number of very careful investiga- 
 tions on the subject, one of them for. the Russell Sage Foundation in New York, 
 by travelling in Europe as well as studying it. and the oilier for the Federal 
 Government of the United States. Mr. Wegenasl having examined these things 
 
1912 WORKMEN'S COMPENSATION COMMISSION. 393 
 
 I think got the impression that perhaps some of the matters could he hrought 
 out more clearly by my giving you some information instead of getting it from the 
 bare report. However, I should be very fearful to enter upon it of my own 
 initiative and I should feel it would not be as beneficial hardly as if I were 
 directed. 
 
 Tin: Commissioner : As far as the employers and the employees are con- 
 cerned, as far as they view it, it is perhaps narrowed down to four or five points. 
 
 Mr. Dawson: If I can help you on any of those points I shall be very glad. 
 
 Mr. Wegenast: You might give us some information on this point, Mr. 
 Dawson. I have drawn the distinction in my brief, and in the argument before 
 his Lordship, between individual liability systems, collective liability systems, 
 and State liability systems of workmen's compensation. Could you give us your 
 opinion as to the merits of these respective systems, and I might suggest that 
 perhaps the expression might assume the historical form in which you put the 
 matter before the Federal Commission of the United States. 
 
 Mr. Dawson: Well, I shall be pleased to do what I can in that direction. 
 
 The subject of compensation as distinguished from liability of employers 
 first of all was brought forward in Germany as you know, and there from the 
 start it was recognized to be a matter which, while primarily between the employer 
 and the employee, was really between the community as a consumer and the com- 
 munity as a producer, and consequently the original plan as introduced in Ger- 
 many was one of taxation under which the industry would be taxed for the 
 purpose of providing a fund from which the workmen would be compensated, 
 and in various documents relating to that the idea that I have just expressed was 
 very frequently brought forward. 
 
 Another thing that was at that time pretty fully recognized, and the truth of 
 which I think there can be no question, was this, that already the people of 
 Germany were paying compensation precisely as in Canada and all other civilized 
 countries. The widows and families of workingmen who were killed were not 
 being permitted to starve. They were being sheltered and fed and clothed by 
 the community in one way or another. It was also recognized that this con- 
 dition would stiil continue as to the families of all workmen who had already 
 been disabled or killed, that the community would require through its charitable 
 institutions, either public or private, through its connectional institutions, and 
 other agencies, to raise money and take care of those families. They treated it 
 from the beginning in Germany consequently merely as a plan by means of 
 which the families of workmen who bad reached that stage, not through some 
 serious criminal or almost criminal conduct of the father of the family, such as 
 for instance chronic intoxication, or actual crime, but merely through accident, 
 should be supported, not as a matter of charity, but through some compensation 
 system that would preserve their self-respect, and thus enable them the better 
 to recover from the misfortune, and to re-assume, or in case of children assume 
 a position as an industrious workman in the community. Because of that 
 in large part they also introduced in Germany this idea that they would not 
 collect from the employer a larger amount currently, except in a particular respect 
 which I shall mention in a moment, than was needed to meet the current dis- 
 bursements. This would mean that more and more people would be on the 
 fund as years went by, and only after twenty-five years, or such a matter, would 
 it reach an equilibrium as to the number and the amount to be expended. They 
 did that on two grounds, first that it was not fair to impose upon the community 
 
394 MINUTES OF EVIDENCE: No. 65 
 
 which would gradually be getting rid of the burden that it was already carry- 
 ing a large new burden immediately of putting up capitalized values for future 
 payments, and on the further ground that the German industries as a whole 
 would be much less affected if the cost came upon them gradually, and there 
 would be retained in industry a very large sum of money which otherwise would 
 be withdrawn and deposited in reserve funds and invested at low rates of interest, 
 and that of itself of course would have a beneficial effect upon German industry. 
 Now, one purpose, and an avowed purpose, for the introduction of this plan in 
 Germany was to head off socialism- When it was brought forward by Emperor 
 William in a state paper, which has always been credited to Prince Bismarck, 
 that was one of the avowed statements of purpose. At that time historically the 
 results of the Paris Commune had spread socialism throughout France very 
 broadly, which has since then resulted in a socialistic government in France, as 
 you know, and it seemed to be making greater headway in Germany. Since then 
 although there has been a growth of socialistic sentiment and the party itself 
 has grown in numbers it has not grown in relative strength, and to-day can 
 boast but a relatively small proportion of the membership of the Reichstag. I 
 think that purpose they achieved, and the further purpose of assisting the people 
 of Germany to solve successfully the problem of providing for the support of 
 workmen and their families under these conditions without breaking down their 
 self-respect, and to conserve them in every possible way for the good of the entire 
 country is also believed to have been successful. Among other things it raised 
 the average longevity of workmen in Germany or the German people in general 
 almost one-half during that period, which is largely ascribed to the good con- 
 ditions thus induced. The public and private charities are not spending more 
 money than they did before, but it is undoubtedly true that the direction in 
 which the money is spent is very different, and it is the testimony of a Com- 
 mission sent over by the British Trades-Union Congress some two or three years 
 ago that they did not find any slums whatever in Germany. In other words it 
 has eliminated and prevented those conditions. Now, this spread to other coun- 
 tries. Austria first took it up and introduced the scheme as a system of State 
 insurance pure and simple, or virtually so, and it undertook to set up capitalized 
 values. They divided Austria into seven districts and in but one of those dis- 
 tricts have they succeeded in maintaining capitalized values. It then spread to 
 Norway, which was the next country to take it up. It adopted a pure State 
 insurance system with capitalized value reserves, and it has maintained them, 
 but only by the Norwegian Parliament undertaking to make good a deficiency. 
 About that time the general idea seemed to appeal to many countries, but the 
 idea of dealing with it as a matter between the public as consumers and the 
 public as producers did not seem to appeal so strongly, and consequently Great 
 Britain, France and Denmark. at about the same time introduced laws providing 
 for compensation to be made to workmen for accidents on about the same lines 
 as in Germany, but instead of providing for it being an insurance system, placed 
 the liability directly on the employer- In France alone of those countries was 
 there any State insurance connected with it. In France the State organized 
 a department in which employers might voluntarily insure, but the State would 
 not cover anything but permanent injuries and deaths, and consequently very few 
 relatively have insured in it. The State in Ftance also introduced one other idea, 
 and Hint was the collection from all employers of a small tax for the purpose 
 of guaranteeing that if an employer who was liable for a benefit became insolvent 
 
1912 WORKMEN'S COMPENSATION COMMISSION'. 395 
 
 the benefit would still be paid, or if an insurance company which was liable for it 
 failed the benefit would still be paid. The tide about this time had run as far in 
 that direction as it could, and it turned. I might say in that connection that Bel- 
 gium followed these countries modelling it largely upon that of France. When it 
 turned it caused Holland and Italy to adopt insurance plans. In Holland it was a 
 State insurance plan, but with the privilege of the employer to run his own risk 
 provided he had let the State Department adjust the claims, and then would put 
 in the hands of the State Department the money to pay them. It also required 
 him to give a satisfactory bond so that it was sure he could provide it. In Italy 
 they had compulsory insurance, but a choice was given between private companies 
 and mutual companies set up by the State. In Sweden they introduced State 
 insurance, but with the privilege of insuring in stock or mutual companies, and 
 also the privilege of going without insurance altogether. The last country to 
 take action was Hungary, which although under the same crown is not, as you 
 doubtless know, really a part of the Austrian Empire, or at least not a part of 
 Austria, and the insurance law of Austria did not apply to Hungary. The action 
 which was taken in Hungary was to introduce a system almost identical with that 
 of Germany. That is historically what has taken place. 
 
 In some of these countries the system has not been operating long enough to 
 know preceisely what is to be expected from it. I might, however, mention what 
 has taken place in a few of the smaller countries first. In Belgium, where insur- 
 ance is not compulsory and is altogether in private companies, they have lost sa 
 much money that it is now probable that they will have to introduce 'State insur- 
 ance as a means of taking care of it. In Holland, where private companies or 
 employers might carry the risk provided they gave a bond and did various things, 
 and permitted the State Department to adjust the claims, the State Department 
 is doing all the business. In Denmark they have just decided to introduce State 
 insurance, according to my latest advices. In Sweden the ! State Company is driv- 
 ing the private company out of business. That is conceded by the private com- 
 panies themselves, and it is evident on the face of the returns. In Italy, up to 
 the present time the situation has not been satisfactory and what the result is 
 going to be I hesitate to say. In France, I do not know of any immediate proba- 
 bility that the plan there in use will be changed. The private companies have not 
 found business profitable, and the mutual companies are finding it necessary to in- 
 crease their rates, and the conditions are not altogether satisfactory. I know lead- 
 ing men in France, who when that law was put into effect were very much opposed 
 to compulsory insurance, are now converts to it. Monsieur Poincare, who is now 
 Premier, and an acquaintance of mine, takes a very pronounced position about the 
 matter, and Monsieur Millerand, who is a member of his Cabinet, and who was the 
 author of the old age pension law of France, declared in favour of compulsory in- 
 surance at the conference in Rome some three or four years ago. He is also a 
 friend of mine and I know his attitude, and if any change is made in France that 
 will probably be the change there. As you are so fully aware of what has taken 
 place in Great Britain it is not necessary for me to give any special mention to it. 
 The tide of opinion has greatly changed concerning the way in which these matters 
 should be dealt with. The British people, as short a time ago as four or five years, 
 were supposed to be almost unanimously, as far as the influential classes were con- 
 cerned, opposed to compulsory insurance, and yet it has now been introduced in 
 two very important lines, whether wisely on the whole remains to be seen. Of 
 course nothing but experience will show. However, it is noteworthy about it that 
 
396 MINUTES OF EVIDENCE: No. 65 
 
 the Conservative part}', while they are strongly disapproving of much that was 
 contained in the Bill, was so convinced that some remedy of this nature was re- 
 quired that its members preferred to let the bill pass without either strenuously 
 opposing it or insisting upon amendment, indicating that a great change in the 
 opinions of the people of England has taken place relative to the entire subject- 
 Some things can certainly be said about the diametrically opposite ways in which 
 the thing has been done in England, for instance, and in Germany. One of them 
 is that on the whole the way in which it has been done in England has proved 
 unsatisfactory. It would not be necessary to name a single man who says that; 
 it is almost universally the opinion there. The Trades Union Congress, for in- 
 stance, has condemned the present system in Great Britain, and I think at every 
 single session since 1897 has called for the introduction of compulsory insurance, 
 and a very large proportion of the British employers are of the same opinion. The 
 highest authority on the subject from the technical standpoint in Great Britain 
 is Mr. Henry AVolfe, and his opinion has for a long time been pronouncedly the 
 same. On the other hand, in Germany, with -only the occasional exceptions of 
 some person who from the mere fact that he does speak makes him prominent 
 as being so much against the chorus, the entire sentiment of all the people is 
 that the plan has worked well, and the only changes that are being proposed in 
 it are with reference to its extension to solve other problems, and assist the people 
 and the Government in bringing about better conditions for the German in- 
 dustries in which the country is always so much interested. To the criticisms that 
 are brought against the British system as in actual operation I shall be glad to 
 call your attention, but first I should like to mention the things which are gene- 
 rally brought forward as those which have certainly been accomplished under the 
 German system. In the first place, it is said of it that it does the work — it really 
 does the work. I have said the Trades-Union Congress of Great Britain sent re-~ 
 presentatives over to look into the matter on the ground in Germany, and here is 
 one sentence out of their report: "The absence of slums in the manufacturing 
 quarters of the towns visited, and elsewhere, was also noticeable. It can be said 
 that nowhere did the deputation see any quarter that could be classified under 
 the heading slum." They started with some prejudice against the general idea, 
 but they returned very much in favor of it. The second great recommendation 
 was it started without any great strain upon the industries. This was due, as I 
 have stated, to the industries being taxed only enough money to meet the money 
 requirements. Perhaps your Lordship will remember that I promised I would 
 mention one departure from that. They collect a small reserve in Germany in 
 the form of a surcharge upon the regular assessment. This reserve is not collected 
 for the purpose of providing, in the present at all events, for future sums pay- 
 able. It i- collected with the view that if there should be a war or great depres- 
 sion of industry for a lime so that the pay-rolls of employees became greatly re- 
 duced, under those circumstances under the German system, with the amount 
 that should be paid for workmen's Compensation depending on the year's work. 
 but arising oui of all the years prior thereto, it might be necessary to collect a 
 considerable increase in the regular rate of assessment, and the German reserves 
 are maintained for the purpose of taking care of thai situation if it arises. 
 Another thing thai has made it very successful is, as I have stated, that it with- 
 draws the minimum of capital from the nation's industries. This looks very 
 small, your Lordship, when we deal with it as percentages. For instance, you 
 take the rates which arc charged for workmen's compensation insurance, and it 
 
1912 WOKKMEN'S COMPENSATION COMMISSION. :\\r t 
 
 does not look like a big thing at all, hut it would have been literally hundreds of 
 millions of marks tied up in relatively non-productive investments at low rates of 
 interest, and actually withdrawn from the active industries of Germany, and it 
 might have made a very great difference to Germany in their race for the world's 
 supremacy in the markets. In fact, I think I can say it would have made a great 
 ileal of difference, because Germany has never had more capital than she needed. 
 You remember at the time of the late unpleasantness what is supposed to have 
 brought a halt in Germany was want of money, and had she crippled her indus- 
 tries \iy tying up funds in the manner I speak of she might not have assumed the 
 important place in the world's markets that she has. Another feature of that is 
 it is managed by the contributors and they are therefore self-convinced, and there- 
 fore content. In my opinion absolutely the best method of control and manage- 
 ment of these funds is that the persons who are paying in the money should have 
 as large a measure of control over them as practicable. Another feature of the 
 German plan is its being so economically conducted. It costs, including what 
 they spend for prevention, which is a very considerablee amount, only 14 1-10 per 
 cent, to manage the fund. This, however, is equalled by the State system in Nor- 
 way where the cost is only 11 per cent., but no part of that is used for prevention. 
 Another feature that they are very well satisfied about is it greatly encouraged 
 prevention. Xow, it may seem at first blush you could not get a better way of 
 encouraging prevention than to hold the employer distinctly and directly liable, 
 and there is something in that as applied to the large employers where you can 
 get an average, but the small employer, to him it is only a risk, it is not a cer- 
 tainty, and he ascribes necessarily the whole thing to luck, and experience has 
 shown that it does not greatly encourage prevention unless it is operated through 
 some insurance system where want of care on his part, and want of keeping up 
 proper safety appliances, and so on, results in an increase in his premiums. 
 Another feature which has done a great deal of good is this, and it is laid great 
 stress on in Germany : it has greatly increased the efficiency of the German work- 
 man. iSTow, your Lordship, I am sure you can remember, as I can, a time not 
 veiy long ago, a quarter of a century or a little over, when it would have been a matter 
 of absolute amusement to us, or to either of us, if anybody had affirmed that the 
 German workman on the whole was more efficient than the British, and yet that 
 is not affirmed now only in Germany, but it is affirmed in Great Britain ; and the 
 thing which is the most surprising is the German employers ascribe it very largely 
 to this system. I take it it is the moral effect of it. The German workman who 
 does his work right, and who does not do something criminal, or quasi-criminal, 
 is assured of support for himself and for his family whenever such misfortunes 
 fall upon him. and it has had a tremendous moral effect. Another thing, too, under 
 the German system there is a considerable amount of co-operation between the 
 employer and employee in the carrying out of the plan, and that has had a 
 tremendous moral effect- In any event, it has been decided by the German manu- 
 facturers and the German employers generally that such is the case. In addition, 
 it is also attested by them that it has been a very large element in the great in- 
 dustrial advance of that country. For instance. Dr. Kaufmann, the President 
 of the Imperial Insurance Department, said at the 35th anniversary of the in- 
 auguration of the German system, " It was no accident that the period of this 
 great expansion synchronized with a radical improvement in the condition of the 
 workers, for the two are intimately connected. Unquestionably a contributory 
 cause of our growing industrial pre-eminence may be seen in the successful treat- 
 
398 MINUTES OF EVIDENCE: No. 65 
 
 ment of social questions, and particularly that of workmen's insurance." Then 
 Dr. Zacher, who is the highest authority on the subject in the world, also said at 
 the same meeting, "AH these facts warrant us in affirming that, far from tram- 
 melling, workmen's insurance has been one of the principal factors in the un- 
 paralleled advancement of Germany." 
 
 Now, the other system, I am sorry to say, because I am a great admirer of 
 the British — I spring from British ancestry myself and I am proud of the an- 
 cestry and the country from which my people came — is not satisfactory. We call 
 it British just because it happens to have been Britain where this particular 
 method was first introduced. Now, one of the objections to it, and I think the 
 worst objection, is that it really does not do the work. Here, for instance, is a 
 quotation from the Policy Holder, published in the interests of the private in- 
 surance companies in Manchester, England. " We must say that if anything is 
 likely to provoke the State to start compensation insurance, it is the action of 
 many offices in ' bluffing ' claimants into unjust settlements. Almost every day 
 we notice in some part of the country the intervention of the County Court to 
 prevent the registration of 'some agreement which is manifestly unfair." Then 
 there is an omission, and then goes on: "To-day they often trade upon the ignor- 
 ance of claimants when they should be collecting higher premium rates. This 
 naturally arouses the anger of all right-minded persons, and it certainly gives 
 those members of the community who are inclined towards socialism an oppor- 
 tunity to plead for the nationalization of all the means of production, distribution 
 and exchange. If the insurance offices serve the public well they have nothing 
 to fear, but shaving claims to swell the dividend returns is not good service." 
 Then here is a little account of something that took place in a court in England, 
 published also in another insurance paper, the Insurance Observer, a paper 
 published in the interests of the private insurance companies in London. " Judge 
 Emden said that he did not approve at all of those lump sums. They were getting 
 far too frequent. He believed that he was correct in saying that now the larger 
 portion of the work under the Workmen's Compensation Act was being trans- 
 acted under agreements of that character and the object of the Act was being 
 defeated. If the case before him was, as was alleged, an improper case to bring, 
 it was not a case for an agreement at all, and ought to be dismissed. If it was 
 a proper case, then an agreement was not the right way to dispose of it, and he 
 did not think the workman would be properly protected unless the matter came 
 before the court. He had been watching those cases for some time, and his con- 
 clusion, based upon investigation, was that the whole beneficial effect of the Act 
 was being defeated." 
 
 In that connection I might call your Lordship's attention to the original con- 
 ditions which caused this legislation to come into existence, that it was merely 
 the community in one sense dealing with the community in another sense, and the 
 machinery was through taxation upon the industry in order that it might be fair. 
 The difficulty about it when the private company is thus interposed is the private 
 company simply wants to get a settlement and get out of it. Now, the community 
 wants that widow, those children, or that disabled workman, whatever the ca c e 
 may be, supported during this disability under these conditions. It wishes to take 
 a burden off its own shoulders, not merely to provide that family with a lump 
 sum, for instance, or something like that, which they may spend in six weeks or 
 six months, and then he on the community again. Another difficulty about 
 
1912 WORKMEN'S COMPENSATION COMMISSION. 399 
 
 the British system was that it started with a maximum strain on the British in- 
 dustries, not a minimum. It may be it is only coincidence — I would not care to 
 blame it on this system as being the only cause, or even the chief cause, your 
 Lordship, that this thing should have taken that course — that on the whole rela- 
 tively in the world's market British industry has fallen back during the last fif- 
 teen years, while Germany has gone forward; but these ^are significant notwith- 
 standing, taking into account the very close margin on which the world's markets 
 are handled, and which especially British employers and manufacturers have 
 always dealt in. Here is a specimen : "A blast furnace in Great Britain, prior to 
 the adoption of the 1897 Act, was paying from 10 cents to 20 cents insur- 
 ance rate on $100 of pay-roll. After the adoption of the act they paid $1.50 om. 
 $100 of pay-roll. I have used dollars because that is familiar to us, instead of 
 pounds and pence. A nail factory which had previously been paying from 10 
 cents to 20 cents on $100 of pay-roll was required to pay $1.25. A rolling mill, 
 and that is one of the greatest of British industries, which had previously been 
 p'aying from 10 cents to 20 cents, was required to pay from $1.50 to $1.87 1 / 4. 
 A tannery, one of the great industries of Great Britain, the tanning of hides and 
 manufacturing of leather, previously paid 10 cents on $100 of pay-roll, and was 
 required to pay $1.25. Those changes almost as they stand there were super- 
 imposed upon the British industries immediate^ with no chance to adjust them- 
 selves to them, or anything else. There is the same illustration here in Canada. 
 Several of your Provinces have already adopted Workmen's Compensation Acts. 
 One of them is the Province of Quebec, and one the Province of British Columbia. 
 There have been several since that time, but I haven't the rates for those Provinces. 
 In the Province of Quebec the rate for a nail factory prior to the passage of the 
 Quebec Act was 42 cents on $100 of pay-roll, and it became immediately $2.40, 
 six times as much. On a rolling mill it was 52 cents on $100 of pay-roll, and it 
 immediately became $3.61, nine times as much. Now, those are exceedingly im- 
 portant differences, and the differences in other lines are similar. We had a 
 similar experience in New York when we passed our law. I have investigated 
 what the change was that took place in New Jersey after they passed their law, 
 and to-day several industries in the city of Camden, just across from Phila- 
 delphia, are paying ten times the rate for workmen's compensation insurance that 
 it is necessary to pay in Philadelphia, in the State of Pennsylvania, for Employers' 
 Liability Insurance in some industries. You can easily see that is a serious handi- 
 cap to a New Jersey industry, and in the world's markets such things are handi- 
 caps. Another thing has been that it has withdrawn a maximum amount of 
 capital from the nation's industries. It did this on account of a capitalized value 
 system of setting up reserves in private companies, and also on account of the 
 forcing of the purchase of Government annuities. Wherever the company wished 
 to get out of the risk or get out of the payment it would pnt up a lump sum to 
 be invested in the purchase of Government annuities, or else it would be de- 
 posited with a trust Company, and in that way a great deal of money that did 
 not need to be used at that time has been withdrawn from the industries of the 
 country. Another harm that it has done is that there has been'no personal touch 
 between the employer and his injured employee, or between the employers as a 
 class and their injured employees, and consequently they are eternally criticizing 
 the companies without really suggesting any remedy. Then, again, it has proved 
 very expensive. The avowed expenses are 36 per cent, as compared with 14 per 
 cent, in Germany. The actual expense, however, is larger because in the pub- 
 
400 MINUTES OF EVIDENCE: No. 65 
 
 lished report of expenses of the British companies they do not include the money 
 paid for litigation or in the adjustment of claims, and the estimate of those who 
 are really expert in it is that the real expense is ahout 50 per cent., about the same 
 as in Canada and the United States. In the United States there is 51 per cent. 
 of the premiums absorbed for expenses. Another thing that has come out of it is 
 that it does not encourage prevention. There is not even a pretence anywhere in 
 Great Britain that anything has been accomplished in the matter of encouraging 
 prevention in this way. It has been given on the authority of persons whose know- 
 ledge of the matter is very complete, such as the recent Boyal Commission that 
 investigated it, that there is not any evidence whatever that it has encouraged 
 prevention, and there is considerable evidence to the contrary. It has not in- 
 creased the efficiency of the British workman. I am not going, to spend time on 
 that. Your Lordship is, I know, fully aware of the nature and extent of the 
 problem in Great Britain of bringing about an increase of the efficiency. Less 
 than twenty-five years ago no workman in the world was considered the ecpial of the 
 British workman, and I am sure that that condition will be created again. The 
 average to-day is high, but in some other countries, and very particularly in Ger- 
 many, in a way that is attributed to the superiority of their way of dealing with 
 this thing, the achievements in Great Britain in the matter of efficiency have been 
 reached and passed. I would like to mention one thing, though, to your Lord- 
 ship which I think is really very interesting. Under the system there of holding 
 the employer directly liable and permitting insurance to be carried with private 
 companies two things have arisen, one of which is practically openly avowed by 
 the companies, and the other exists although not avowed. The first of these that is 
 avowed is that wherever they are competing very closely as to rates they make 
 arrangements with the employer so that persons are not employed who are beyond 
 a certain age, and in letting older employees go. Those who are beyond that age 
 are permitted to go, and a preference is given to the younger employees. This, of 
 course is a very serious situation, in view of the fact that it tends to throw men 
 out of employment at advanced ages, and one of the reasons that the British Gov- 
 ernment felt it right to deal with the question in so serious a way was because if 
 a man had reached a certain age and got out of employment he did not get back 
 again, in some lines of trade at least. Now, that is not denied at all, but there 
 is another thing taking place which is not so openly avowed, but which has un- 
 questionably taken place notwithstanding, and that is that a preference is given 
 to unmarried workmen. If the unmarried workman is killed at his work the 
 amount that is paid is simply a benefit, and the company can get out of it cheaper 
 if a larger proportion of the workmen is not married. It may occur to you 
 immediately that that happens the same with any kind of system, for instance, 
 willi a State insurance system, but the difference is the State is not interested in 
 competing with somebody else as to rates. The State is interested, on the other 
 hand, in having all its people who are capable of labour profitably employed, so 
 there is not any financial inducement for the State insurance system to behave 
 in that manner, nor really any opportunity at all. Tt is said that the failure of 
 Greal Britain to advance her foreign trade as rapidly in proportion as Germany is 
 to a considerable extent due to this condition, resting partly upon the falling back 
 in efficiency, partly upon the withdrawal of capital which should he in industry, 
 .Mid partly upon other causes growing out of the system. I rather think, your 
 Lordship, that there is (me clement of that that is more powerful than any of 
 the things I have mentioned, and that is thai while they have admirable trade 
 
1912 • WORKMEN'S COMPENSATION COMMISSION. 401 
 
 unions in England and haw done a greal dea] of good work, and arc established 
 in better shape perhaps than the trade-unions on this continenl for doing good 
 work, they haw almost no established do-ordination and co-operation between the 
 employers and employees through these associations. On the other hand, 
 the German employees are quite accustomed to business negotiations with their 
 employers or representatives of employers relative to the insurance system, and I 
 am told in Germany that they Consider that thai has been a large elemeni in pre- 
 serving peace there, and thereby increasing the chances of Germany in the world's 
 markets. 
 
 Your Lordship will remember, I am sure, an issue that was raised in England 
 not long ago about the increasing difficulty of obtaining- for the army men who 
 measured up physically and otherwise, and the complaint that there were signs 
 of actual degeneracy in that respect, and I thought I would like to read to you 
 .something that Dr. Zacher, whom I have already mentioned as the greatest 
 authority on this subject in the world, says about this in Germany, " According to 
 recent data (and he names the data) the average duration of life rose from 38.1 
 years in 1870 to -18.85 in 1900 far men, and from 42.5 to 54.9 for women; the 
 general death rate sensibly diminished and the mortality due to tuberculosis has 
 been reduced to about half what it w r as formerly, so much so that one can hope to 
 see the scourge which decimates the people soon completely vanquished, a hope 
 which could scarcely be realized without the powerful organization of workingmen's 
 insurance. For this by curative and preventive measures brings every year pros- 
 perity into millions of working families, and thus not only conserves numerous 
 forces for the nation, but even augments, by the hygienic education which it gives 
 them, the vital force of great masses of population. That explains why the oper- 
 ations of recruiting despite the growing industrialisation of Germany indicate a 
 constant improvement of the number of men called to perform their service and 
 of their physical development." 
 
 If there were no other reason why such a method would be preferable, and if 
 that reason he valid and correctly stated, I should say it would be entirely 
 sufficient, and it is because of those things I have personally formed the conclusion 
 sometime ago that on principle as between these two methods undoubtedly the 
 insurance method is preferable. I am afraid I have given a rather long answer 
 to the question, but I hope it may be useful. 
 
 Mr. Wegenast : I just wanted the historical story as a basis. What do you 
 consider the real basic difference between the British and the German systems, 
 speaking of tihem in those terms? 
 
 Mr. Dawson : Fundamentally the difference is between conceiving this as a 
 method of causing the consumer of products or services to include in the price which 
 he pays for them provision for the same consumers as producers against accidents, 
 and the system which primarily conceives of it as causing the employer to pay it 
 as an employer to the employee. 
 
 Mr. Wegenast: Is that not more a difference in the method' of attaining the 
 same result? 
 
 Mr. Dawson : The result of that difference in conception is that in England 
 they have held the employer directly liable. In case he does not insure and the 
 accident happens he himself must pay it. and in fact he must do so in any event 
 if the insurance company should fail, while in Germany they hold the State liable 
 virtually and compel the employers to pay taxes, raising a sufficient fund out of 
 which to pay all such compensation. It also fundamentally differs in this that 
 under the British system where there is insurance it necessarily results that the 
 26 l. 
 
402 MINUTES OF EVIDENCE: No. 65 
 
 insurance company must put up a reserve sufficient to take care of future payments 
 on account of the accident that has happened, and therefore must charge a premium 
 accordingly, or it must pay a lump sum, if it can get an adjustment on a lump sum 
 payment, or it must pay the money over to a trustee, or else must buy an annuity 
 from the Government for an employee, and in any one of those cases the lump sum 
 must be raised and the rate of insurance grow, while under the German system 
 they only collect enough from year to year to meet the requirements of the year. 
 Possibly it would interest your Lordship to learn how they arrange about those 
 collections in Germany. In Germany the Postal Savings Banks advance all the 
 money necessary to pay all the claims during the year, and those advances are made 
 to the different funds out of which the payments are to be made as required. The 
 Savings Banks of course charge interest upon the aggregate amount. At the end of 
 the year, after it is definitely known just how many marks were required to be 
 paid, the insurance authorities divide up the amount into assessments upon the 
 individual employers. They say it works very simply. There is no guess work 
 about it. It is a post mortem assessment. 
 
 Mr. Wegenast: The assessment is made after the amount required is defi- 
 nitely ascertained? 
 
 Mr. Dawson : Yes. 
 
 Mr. Wegenast: Now, you have spoken of the social insurance systems of 
 Germany which consist of four different types of insurance, but on the basis of a 
 workmen's compensation system alone, a system which would compensate workmen 
 simply for the results of accidents happening in connection with industrial occupa- 
 tions, what would you say as to the relative merits of the individual liability system 
 such as that represented in England, and the collective liability system such as 
 represented in Germany? 
 
 Mr. Dawson : Unquestionably the system of treating this as a public matter 
 and assessing all employers their fair share of the cost of it, instead of imposing 
 an individual liability upon the employer, has worked best everywhere and is best 
 in every respect. 
 
 Mr. Wegenast : I was not thinking of it so much in the sense of a State 
 function, but in the sense of simply a large collective system. Suppose you could, 
 without the intervention of the State, establish a system in which all employers in, 
 we will say. one certain industry were assessed on the basis of the hazard of the 
 industry — how would a system of that kind compare in efficiency with a system 
 where the liability is thrown on the individual employer? 
 
 Mr. Dawson : I should expect it to be very much more efficient and much 
 more economical. The German is a system such as you describe. That is to say, 
 in Germany they divide the employers of the country into classes according to 
 their industry. All the metal trades would be in one class, for instance, and so on. 
 All the drug and chemical trades would be in another, and it is generally thought 
 that has worked even better than the State insurance system in Norway, for 
 instance, especially in the matter of encouraging prevention. 
 
 Mr. Wegenast: You would p-efer then classifyi lg the risks according to 
 the industry rnlher than according to the hazard? 
 
 Mr. Dawson: Oh, undoubtedly. For one reason, because the people engaged 
 in related industries understand one another's hazards, and would be able to give 
 far more guidance in the matter of prevention. I think it is an immensely better 
 system. 
 
 Mr. Wegenast: Of course you are familiar with conditions in this country 
 and in the United States. There are of course no institutions in this country 
 
1912 WOKKMEN'S COMPENSATION COMMISSION. iU3 
 
 corresponding to those upon which Bismarck founded his compensation system, 
 namely, the voluntary employers' associations? 
 
 Mi;. Dawson: There weren't very many of them, even in Germany. There 
 were some. 
 
 Mr. Wegenast: How many, approximately? 
 
 Mr. Dawson: I could not give you the number, but it was few. There was, 
 however, quite a development of private mutual sickness insurance associations, 
 and really they based their system as much on that as anything else. The first 
 development in Germany was to broaden the sickness insurance association.. 
 
 Mr. Wegenast : Do you see any difficulty under the conditions here, and of 
 course you are operating under the same conditions, and coping with them, in the 
 United States, in working out a system similar to that of Germany, without having 
 these employers' associations? 
 
 Mr. Dawson : Well, it would not be similar to that of Germany in the strict 
 sense of the word " similar," because it would not be like it, but a system of State 
 insurance under which no more was collected than would be required from year to 
 year, except an amount for the establishment of the contingency reserve that I 
 spoke of, would be very closely similar to it. It would not be the same thing, of 
 course. 
 
 Mr. "Wegenast: Aren't the essential principles of the acts of the State of 
 Washington, and Ohio, and Massachusetts similar to the German. 
 
 Mr. Dawson : The Act of the State of Massachusetts is very similar because 
 it does recognize a classification of industries and separate associations, as I recall 
 it. I am not quite sure about that, but I think so. I know there was in the 
 original suggestion. In any event it is very similar to it because the employers are 
 to have the management of the Association. In the other two States it is a State 
 insurance plan under which the State authorities operate it, but in other respects 
 it is very similar. 
 
 Mr. Wegenast : I asked Mr. Boyd, who was here the other day, this question, 
 whether in his opinion the result of classification of the employers of industries 
 would be to raise something similar to the associations in Germany. What do you 
 say as to that, Mr. Dawson? 
 
 Mr. Dawson : If it were undertaken on a national scale in Canada or the 
 United States it would. It might in a great State like New York in any event. 
 
 Mr. Wegenast: What I am thinking of, Mr. Dawson, is this. Suppose the 
 employers in the Province of Ontario, say the employers in the woodworking indus- 
 tries, were placed in a class, and that class made to bear the hazard of its industries? 
 What I had in view was there would be some way found whereby those employers 
 would combine to undertake activities in the direction of accident prevention, and 
 perhaps in other directions, without being compelled by the Government to form 
 an association as they are in Germany? What do you say as to that? 
 
 Mr. Dawson: Well, I fear I would only be hazarding a guess, and I am 
 inclined to think you could answer it better than I could because of your position 
 in the Manufacturers' Association. I am not certain that it would in all cases or in 
 nearly all result in that, and yet I can see that it would in some cases if it was 
 intelligently directed. If these same manufacturers had any disposition to associate 
 in some other respect, or some other way. I can quite see that this would give an 
 impetus to their giving attention to this also. 
 
 Mr. Wegenast: You have spoken of the compulsory insurance system, or 
 as I call it the collective liability system, as tending to a greater degree to prevent 
 accidents. How do vou consider it has that effect? 
 
404 MINUTES OF EVIDENCE: No. 65 
 
 Mr. Dawson : It has had that effect in Germany very markedly and it is 
 attributed to the fact that first of all it is a pure assessment system, and if through 
 failure to take proper precautions there is a heavy burden thrown on the fund in 
 a given year the result of it will appear in larger assessments at the end of that 
 very year so that there is no escaping it. 
 
 Mr. Wegenast: So it is brought directly home on the start, and not spread 
 over a number of years as in the insurance companies. 
 
 Mr. Dawson : Another reason is they themselves or their representatives 
 manage the fund. They have the right also to make rates for the different in- 
 dustries that are in the association, and they penalize strongly the failure to put 
 in proper preventive measures. Then again it has given a great impetus to the 
 study of preventive measures. A very large proportion of the failure of pre- 
 vention, your Lordship, is due not to any disinclination, hut simply to the want of 
 knowledge. As a result of the German system they have developed the invention 
 of methods of prevention to a degree that previously would have been deemed 
 absolutely incredible. Persons connected with these mutual funds have that on 
 their minds, and their conscience is charged with it, and they are thinking out ways 
 in which these things can be accomplished. 
 
 Mr. Wegenast: Would you expect that result to follow in the case of an 
 Act like the State of Ohio or the State of Washington where they make classes? 
 
 Mr. Dawson : I could not say certainly what I expect from either Ohio or 
 Washington, except I do expect it will be helpful towards efficiency in a broad way, 
 but when I come to reason by analogy I have to put those into a class with Austria 
 and Norway for the reason that the whole thing is to be conducted by appointees 
 of the Government, and therefore I do not know certainly that there will be any 
 great impetus directly given to prevention. 
 
 Mr. Wegenast: Your idea then, Mr. Dawson, is that the chief inducement 
 towards prevention arises out of the employers themselves being called upon to 
 administer. 
 
 Mr. Dawson: Directly participate at least in the administration. It does to 
 a large extent, and especially where they are participating in the administration of 
 an association of allied industries, the general nature of which every man that goes 
 there as a representative is fully acquainted with. 
 
 Mr. Wegenast: So that is a desirable feature to have incorporated in a 
 workmen's compensation system? 
 
 Mr. Dawson : I personally think it is. I realize the difficulty of incorporat- 
 ing it in a system which applies only to a single Province in Canada, or a single 
 State in the United States, but if it were possible for you in Canada, as far as T 
 know the situation here — I do not claim to know it well — or for us in the United 
 States to do the thing nationally, that is the way I think it should be done. 
 
 Mr. Wegenast: I do not wish to monopolize Mr. Dawson's time, your 
 Lordship. 
 
 The Commissioner : You have opened one branch of it, and I suppose Mr. 
 Dawson has told us all he thinks is important to tell upon that. If any of ihe other 
 gentlemen desire to ask any question they may do so now. 
 
 Ah;. Dawson: T wish to say. your Lordship, it will be a great pleasure to 
 answer any question if T can. If I cannot T will say I cannot. 
 
 The Commissioner: You have dealt with the broad question historically 
 and with the three systems, ami have given your opinion as to which is the best of 
 the three. 
 
 Mr. Dawson: Tn general, yes. 
 
1912 WORKMEN'S COMPENSATION COMMISSION. 4U5 
 
 The Commissioner: If there is any question upon that branch of the 
 subject any gentleman desires to pjul to Mr. Dawson uow 1 think is the time 
 lo do it. II not 1 have a few questions 1 would like to ask him. 
 
 Mi;. Bancroft: In speaking of the assessment of the employers in industries., 
 ] would like to ask, in speaking of the collective method of insurance, as to whether 
 you have anything in your mind which relates to an assessment upon the workmen? 
 
 The Commissioner: We will come to that later. That is not on this branch 
 of the subject. 
 
 Mr. Bancroft: I would like to ask you another question, Mr. Dawson, and 
 that is this, as to which you think is the safest plan for compensation to workmen, 
 the capitalization, as in the State of Washington Act, or in those places you have 
 spoken of, or the current cost system, where the employers pay during that year 
 enough to meet the expense occasioned in that year? 
 
 Mr. Dawson : If the State assumes this burden and provides for the payment 
 to the workmen I should regard one system quite as safe as the other. If the State 
 puts the burden entirely on the fund and does not assume the liability in case, for 
 instance, the fund should be badly invested, or anything of that sort, I should 
 regard the capitalized system as very much more dangerous than the other. The 
 real assurance that the payment will be made is the adoption of this principle by 
 the State or nation, and the adoption of a plan or programme for collecting the 
 money to do the things that are there promised. I do not think the question would 
 ever arise in Germany among workmen as to whether they were not as well pro- 
 vided for as, for instance, in Great Britain where capitalised vahte is held by 
 insurance companies. I think they would feel very much safer under the guarantee 
 of the German Government than under the guarantee merely of an insurance 
 company. As regards Norway I am sure the confidence of the people is in the fact 
 that the Norwegian nation is behind the promises. If that were not true a bad 
 administration might lose the whole fund and the workmen be left without the 
 protection. 
 
 The Commissioner : What is there, Mr. Dawson, to prove that the improved 
 condition in Germany of which you speak is due either wholly or mainly to those 
 things vou have been telling us about. 
 
 Mr. Dawson : Only the opinions of the most competent observers there, your 
 Lordship. The employers of labour, the workmen themselves, the statesmen of the 
 country, of all parties, and the very cautious, careful and thorough-going students 
 of the subject are pretty nearly a unit on that question. Mr. George when he made 
 that investigation before they introduced anything in Great Britain caused the 
 interviews to be put down, and T presume your Lordship may have seen the 
 report. There is a little Old World reasoning about that which I think your Lord- 
 ship would be interested in if I would mention it. The old Chinese philosopher 
 Mincius put forward the proposition that when the people are assured against mis- 
 fortune they are of a fixed heart, and when on the other hand they are overcome by 
 misfortunes, not by their own fault, they are not of a fixed heart. It seemed to me, 
 Sir, as I went about there in Germany that there was a lot of truth in that. They 
 are not well paid as we pay American or Canadian workmen, but they really did 
 have an air of well being that seemed to speak well for the efficiency of the system. 
 
 The Commissioner: But these laws that you speak of as insuring against 
 accidents are only a part of what they have in Germany? 
 
 Mr. Dawson: That is true. 
 
 The Commissioner: Is it not the aggregate of all the laws that leads to 
 this condition ? 
 
406 MINUTES OF EVIDENCE: Xo. 65 
 
 Mr. Dawson : The aggregate of all insurance laws. Insurance laws all 
 grow out of the accident legislation, and in addition are largely merely supple- 
 mental to it. 
 
 The Commissioner: Do you attribute the improvement of the condition of 
 the German workmen entirely to this? Is it not that he was low down and has 
 grown, and that by comparison the Englishman who was away ahead of him has not 
 grown so rapidly? Is there not something in that? 
 
 Mr. Dawson: Yes, I think there is, your Lordship. I do not think that 
 this is the sole cause by any means. 
 
 The Commissioner: There are some people who think that the system of 
 protection in Germany led to the improvement in the condition. 
 
 Mr. Dawson : I am aware of that, and I think there may be some ground for 
 that argument too, although I have not been a strong protectionist myself. 
 
 The Commissioner : I did not quite understand how you thought it would be 
 practicable under such a system as could be adopted here that the employers should 
 administer the fund. If the State is to be behind the fund how can it possibly be 
 that the employers could control it ? 
 
 Mr. Dawson: As I stated at the outset, your Lordship, I really do not feel 
 competent to deal with the particular conditions here, and if I answer your Lord- 
 ship's question I trust you will take it with as much consideration as possible. I 
 do not really wish to make a suggestion as to how you could best deal with it, for 
 1 do not feel that I understand the circumstances sufficiently well. 
 
 The Commissioner: Perhaps you will explain a little more fully how the 
 employers administer the fund there? 
 
 Mr. Dawson: Yes, and then perhaps I can give you a parallel statement as 
 to how I think they could do it in the United States, and that may be useful. The 
 way they do it there is this, the State furnishes the compulsion. It says, you must 
 join these associations; you must make your payment to that association; the 
 association of the trade in which you are engaged shall levy a tax upon you pro- 
 portionate to your pay-roll and the estimated hazard of that business, and you must 
 pav it. It then says all of you who are engaged in that trade may cast votes 
 towards electing persons who will manage that particular association. It will be 
 the duty of that association to adjust claims, to make provision for the carrying out 
 of the different things that are required under the law, to make its reports annually, 
 to distribute at the end of the year the assessment, which I explained to your Lord- 
 ship has been arranged for absolutely, definitely through the payments having been 
 made through loans by the Savings Banks — to distribute that assessment at the end 
 of the year according to the pre-arranged assessments, and so on. The result is the 
 machinery is entirely in the hands of that mutual association. 
 
 The Commissioner: Suppose the mutual association does not act? 
 
 Mr. Dawson : The Government would not permit it not to act. 
 
 The Commissioner: Perhaps here there might be more difficulty than in 
 Germany. 
 
 Mr. Dawson : I do not say that such a thing might not happen, but I do say 
 I do not think it would happen. I think the employers as a class are very willing 
 and really very anxious in their own interests to take part in it. 
 
 The Commissioner: It would rest upon thai state of mind of the employers 
 continuing. 
 
 Mr. Dawson : Well, oP course it is one of the open features. Of course if 
 they do not it would be up to the State to provide other means. 
 
1912 WORKMEN'S COMPENSATION COMMISSION. L07 
 
 The Commissioner: Does it not look like a roundabout method, especially 
 if the employers determine the claims — if they do. 
 
 Mr. Dawson : They do. 
 
 The Commissioner: Does that not make them judges in those cases? 
 
 Mr. Dawson: That is one weakness — the adjustments made by these 
 employers' associations. They were criticised as being entirely too liberal by Mr. 
 Friedensburg. They are so severe that one half of the claims are sent to the 
 Committees of Arbitration. The workmen will not stand for half of them. 
 
 The Commissioner : They have the option of sending it on ? 
 
 Mr. Dawson: Yes. That is one feature, and I think the new bill — I am 
 not sure whether it remained in, but it was the intention of the Government that 
 the employees should be represented. The employers objected to that very power- 
 fully and perhaps it has not been granted. 
 
 The Commissioner: How about the great body of people before these Acts 
 came into force? How are they protected? 
 
 •Mr. Dawson : In Germany the following was the situation before anything 
 had been done. The civil law gave even less chance of recovery than the common 
 law, and especially under the common law as it has been interpreted by the courts 
 of Canada and the United States. The mining industry being peculiarity dangerous 
 was organized into a mutual association such as was referred to by Mr. Wegenast, 
 and thereby agreement between the employers and the employees there had been 
 introduced a system of insurance to which both contributed, and a few other in- 
 dustries in Germany were organized, more or less perfectly. The State railroads 
 were also maintaining systems, and the works which afterwards became the famous 
 Krupp Works also had a system of mutual contribution in existence. That is about 
 all that had been accomplished. 
 
 The Commissioner: That is not quite what I meant. The body of the 
 workmen who became entitled to the benefits of this insurance, the men who had 
 met with accidents before and were not provided for at all, how were they levelled 
 up, or were they levelled up at all? 
 
 Mr. Dawson: As I stated in my introductory remarks, the situation 
 was this, that those who had been disabled previously and their families 
 had already fallen upon the public or private charities, or in some other way were 
 being taken care of, and of course Germany or the German people have had their 
 care on their shoulders through ordinary taxation or other means ever since, until 
 they die off. That is likewise true in Ontario, of course, precisely as in Germany. 
 
 The Commissioner : You said there would not be the danger of discriminat- 
 ing against old employees under a State system. Was not something you said a 
 little illogical, if I may be pardoned for using that expression? You said as the 
 amount had to be taxed at the end of the year he would take care that as few 
 accidents as possible happened in his industry, and therefore he would use the more 
 appliances. 
 
 Mr. Dawson: Precisely. 
 
 The Commissioner : If the employment of younger men would free him 
 from accidents would he not be likely to gravitate in that direction. 
 
 Mr. Dawson : I think that question is particularly apt and I congratulate 
 your Lordship upon having presented it. The situation though is this, that it is 
 obviously a thing which could not be done for an entire country or an entire 
 Province; it could only be done with a particular employer. The whole assoc- 
 iation of employers could not keep the older employees out of service unless we were 
 to assume that a situation existed where the entire industry could get along with- 
 
408 MINUTES OF EVIDENCE: No. 65 
 
 out the whole complement of employees. What actually would happen under such 
 circumstances, if an individual employer tried that particular way of getting a 
 lower rate for himself, would be merely that his associates in that mutual association 
 would refuse to give him a lower rate. You see the private insurance company is 
 interested in the matter simply this way, " can we get this business at a profitable 
 rate? In the first place, can we take it away from our competitors, and secondly, 
 can we do it at a profit." They are only thinking of the specific risk in that case, 
 and they say to that particular employer if you will do so and so we will do so and 
 so. Now, that condition cannot arise in the entire State. 
 
 The Commissioner : That is a difference only in degree. 
 
 Mr. Dawson : In any event it is the universal testimony that it has not made 
 its appearance in countries where they have State insurance. 
 
 The Commissioner: Now, you spoke of the large increase in the rates. Is 
 it quite accurate to say that was due entirely to the increased burden, and was not a 
 good deal of it due to the fact that these risks were being carried at too low a rate ? 
 
 Mr. Dawson: On the contrary the rates I read you first as in existence in 
 Great Britain in 1897 before the first Workmen's Compensation Act went into 
 effect were profitable, and the companies were making good margins on them. 
 
 The Commissioner : They could not have paid many losses ? 
 
 Mr. Dawson : Very light losses indeed, and since the new law went into effect 
 ever since 1897 they have been losing money, and steadily losing more. 
 
 The Commissioner : If you started a mutual company, fire, life or 
 accident, and proposed simply to assess for the losses as they 'happened, would 
 there not be inevitable bankruptcy in a short time?" 
 
 Mr. Dawson: It would be bankruptcy in Germany likewise for that mutual 
 association if it was not for the State compulsion; there is no doubt about that. 
 
 The Commissioner: I suppose there is this difference, that it would be com- 
 pulsory new business all the time. Everybody would hav^ to come in. 
 
 Mr. Dawson: That is it. 
 
 May I state here the assessment life insurance is the most dangerous form of 
 assessment insurance on account of men growing older and the risk getting greater, 
 and yet we actuaries are of the opinion that a life insurance would be entirely 
 practicable and entirely solvent on an assessment plan if we had compulsion. 
 
 The Commissioner: If everybody had to insure? 
 
 Mu. Dawson: Yes, and yet if you tried the same thing on a voluntary plan 
 it would break down. 
 
 The Commissioner: This surcharge as it is called, is that a large amount? 
 
 Mr. Dawson : It no doubt aggregates quite a good amount. I don't recall 
 what it is, but it is many times smaller than the capitalized values would have 
 been. 
 
 Tn e < ommissioner : It is a kind of reserve, is it? 
 
 Mi;. Dawson: It is a reserve, and it is held as I have stated, for the purpose 
 of taking care of a situation of general prostration of industry. They have never 
 had to use it yet. 
 
 The Commissioner: Yon tell me in Germany they went to the Union 
 Postal Savings Banks and drew the money? 
 Mi;. Dawson: Yes. 
 
 The Commissioner: If Mr. Wegcnast is righl that this law would be a 
 burden— thai would be of course if capital sums were paid — of Erom four to six 
 millions a year, it would lie a pretty strong State that could meet these demands as 
 they came up to the counter. 
 
1912 \V()IM\ M i:.\"S COMPENSATION COMMISSION. L09 
 
 Mr. Dawson: It would be of the same nature as a State borrowing on the 
 head of the collection of its taxes. It would be the same type of thing. 
 
 The Commissioner: What do you think of those figures? Perhaps it is 
 unfair to ask you that without the data, but it rather startled me. Four to six 
 million dollars additional by a system such as is in Great Britain, for instance. 
 
 Mr. Dawson: How much is your pay-roll? 
 
 Mr. Wegenast: May I state roughly how I put it? 
 
 The Commissioner: Just state your figures, and let him make his com- 
 putation. 
 
 Mr. Wegenast: I worked it out on the basis of a pay-roll of $150,000,000, 
 which is a very conservative estimate I think of the pay-roll represented by the 
 manufacturing employments in this Province, and I ventured the rough estimate 
 that on the basis of $150,000,000 an act like that of England would cost from 
 four to six million dollars a year more than is being paid now. 
 
 Mr. Dawson: Mr. Wegenast mentioned to me something like four times as 
 much, and I took the figures of British Columbia and Quebec, and the previous 
 rates charged there by the Canadian companies, all of which I collected for my 
 own Government some time ago, and I came to the conclusion that roughly the rates 
 were about three times as much, averaging between those two provinces, as what 
 they were before. I also came to the conclusion that the average rate paid by 
 employers was about 75-100 of 1 per cent., or 75 cents on $100 of pay-roll, and if 
 that is true and if these figures are correct here, which of course I do not know 
 about, roughly at the present time they are paying $1,125,000 Ave will say if they 
 were all insured and were doing it through the insurance companies, and I should 
 say from the comparison that I made that the payment would not be less in any 
 event than $3,500,000. 
 
 The Commissioner: Total? 
 
 Mr. Dawson: Yes. So the difference would be about $2,500,000. Now, 
 that is a very rough statement, and I would not like to be bound by it in any way. 
 
 Mr. Wegenast: I was basing my rates on the Washington Act, of course. 
 You said $2,500,000 of an increase? 
 
 Mr. Dawson : At least that I think. 
 
 The Commissioner : If something on this line were adopted and it was 
 impracticable for the State to provide the funds as they are provided in Germany, it 
 would be necessary to start with a down payment of some kind. 
 
 Mr. Dawson : Yes, it would be. 
 
 The Commissioner: How would you think that could be best regulated? 
 
 Mr. Dawson: Well, actuaries could work that out for you reasonably close. 
 They would necessarily provide in such manner that they would feel confident that 
 the amount collected at the beginning of the year would be sufficient so that there 
 would probably be some surplus to start the next year with, but that could be 
 reasonably closely worked out, a great deal more closely than it could be on a 
 capitalized value plan, for this reason, that on a capitalized value plan you have 
 the uncertainty about the number of accidents and their severity, and we have also 
 the uncertainty about the correct capitalized values of the benefits that should be 
 paid for them. You have the double uncertainty which makes it much harder for 
 an actuary to deal with than the pure risk. 
 
 The Commissioner: The assessment plan that is in use here in fire insurance, 
 and I suppose it obtains elsewhere, with the premium note and the fixed payment 
 on account of that, and then an assessment to meet the losses? 
 
410 MINUTES OF EVIDENCE: No. 65 
 
 Mr. Dawson: A system such as that could be utilized. Speaking of that, 
 I suppose, your Lordship is familiar with the tremendous work which has been done 
 by the mill mutuals in Massachusetts and our eastern States? 
 
 The Commissioner: No, I am not. 
 
 Mr. Dawson: Cotton mills prior to the adoption of the mill mutual system 
 were paying rates all the way from two and a half per cent, to as high as six per 
 cent, per annum on the value of the property for fire insurance, and the fire com- 
 panies were not making any money at that. They created mutual associations and 
 adopted the prevention idea very powerfully, and they have reduced the rate, until 
 to-day it costs less to insure the cotton mills of Massachusetts than a residence. 
 
 The Commissioner: Is that a reflection on the owners, when they insure 
 themselves there are not as many fires? 
 
 Mr. Dawson: I take it it is mainly because they have introduced most 
 excellent methods of prevention. For instance it is one of the rules of one of those 
 mill mutuals, if you don't do the thing we order get out. That is the point. 
 
 The Commissioner : Are they very numerous ? 
 
 Mr. Dawson: There is a long list of them, and they now cover the cotton 
 mills of the entire country. 
 
 The Commissioner : What do you say about the shifting of the burden from 
 John Smith to Thomas Jones, which such a system would necessarily involve? 
 
 Mr. Dawson: Merely this, that if the principle is correct that it is a com- 
 munity method there does not seem to be any great reason why the community 
 should undertake to solve it in one way that is inconvenient and burdensome 
 rather than in another way which is less inconvenient and less burdensome, merely 
 because some particular individual may not pay as large a rate in one case. 
 
 The Commissioner: If you have what looks like a hard object lesson it 
 makes people think the law is bad. Supposing. now this year a man conducts his 
 factory very badly and there are a number of serious accidents in it and he breaks 
 down, and the burden of that is thrown upon the future years and the men that have 
 been careful. Will it not strike people that that is unjust? 
 
 Mr. Dawson: Well, you will only very partially avoid that under the capit- 
 alized value system. Let me take an illustration in dollars so we can get it clearly. 
 Suppose for instance for the amount that had to be paid out for the year the cost 
 was ten cents on $100 of pay-roll. Let us assume that that is only one-tenth of 
 the total cost. It probably would be one-sixth or one-seventh, but we will take it 
 one-tenth, and consequently he should have paid $1. Now, if a condition such as 
 you speak of arises the probabilities are the losses which he will throw on that fund 
 one dollar will not come within any distance of covering it ; it will be ten dollars, or 
 a large amount — such as a big explosion might cause — so you see it is only a 
 question of degree after all, and insurance is intended to take care of that sort of 
 situation. 
 
 The Commissioner: No doubt. With the Ohio law there must be at 
 least five employees to bring it within the taxation. What do you say as to any 
 such limit? Should there be any limit at all in that direction? 
 
 Mr. Dawson: Personally I think not. 
 
 The Commissioner: How would it be practicable in a country like this 
 extending from almost Winnipeg to Labrador. Our Province itself is a very big 
 Province, and how would it be practicable to collect taxes from all these small 
 concerns. 
 
 Mr. Dawson: There will be occasional failures. There are in Germany 
 occasional .failures to collect, but I do not think the failures are larger, or perhaps 
 
1912 WORKMEN'S COMPENSATION COMMISSION. 411 
 
 quite as large, as in the collection of some other kinds of taxes. You see most 
 people who pay wages, especially in industries, are people of some substance, and 
 as a rule I think the taxes are collected rather more easily than some other forms 
 of ( taxes, with a smaller percentage of loss. 
 
 The Commissioner: Do you think the men who are liable for it would 
 voluntarily pay. and you would not have to get after them?, 
 
 Mr. Dawson: The experience in these other countries is they did not have 
 to get after them. 
 
 The Commissioner: I thought an income tax nearly everybody tried to 
 avoid. 
 
 Mr. Dawson: Yes, that is true, 
 
 The Commissioner : What machinery in such a country as this could be de- 
 vised for collecting these rates? 
 
 Mr. Dawson : You would have to use the same machinery virtually that the 
 employers* liability insurance companies use now. That is travelling auditors 
 who visit the offices of the employers. 
 
 The Commissioner: That would only reach the big ones, and you want to 
 get the little ones. 
 
 Mr. Dawson : They insure the little ones, too. 
 
 The Commissioner: They do not get down to the small ones that are here. 
 I suppose you would have to let them out. 
 
 Mr. Dawson : The vast majority of the risk written by the employers' lia- 
 bility companies are on small employers. The biggest companies rarely insure 
 anybody. 
 
 The Commissioner : But they are in central positions, not in remote parts ? 
 
 Mr. Dawson: That is substantially true. 
 
 The Commissioner : It might be as much trouble to collect these taxes as it 
 would amount to. 
 
 Mr. Dawson : It might in some cases, but I think the Government would not 
 have any greater difficulty than with its other taxes in the same neighbourhood. 
 
 The Commissioner : Is the basic principle of this law you advocate economic 
 or humanitarian? 
 
 Mr. Dawson : I consider it is economic. It has its humanitarian phase, as 
 all economic things have. In other words, if it would be healthier and better, and 
 if it would tend to a higher type of man, and the creation of greater efficiency, 
 and of men who when they undergo these misfortunes bear up beneath them, then 
 1 would be in favor of their doing it, even if it caused great distress. 
 
 The Commissioner: Our hospitals, and all those things, are all on humani- 
 tarian grounds. 
 
 Mr. Dawson : Yes, and in Germany they are doing tremendous work towards 
 the creation of more efficient men and better conditions, but the primary step is 
 not humanitarian after all- The primary step here, it seems to me, is first justice 
 and the second economic consideration. 
 
 The Commissioner : In the case of a man who by his own fault has brought 
 about his death, is there anything but humanitarian grounds that would justify 
 the taking out of the employing community compensation for him? 
 
 Mr. Dawson: Well now, your Lordship, I would like to draw a distinction 
 there. If it is his own fault in the sense of carelessness . 
 
 The Commissioner : I do not mean that. 
 
 Mr. Dawson: You mean wilfully? 
 
412 MINUTES OF EVIDENCE: No. 65 
 
 The Commissioner : Or such a thing that anybody seeing it would say that 
 man went to his death with his eyes open. 
 
 Mr. Dawson : I, personally, consider that the only ground that should be 
 included Avith the other, and I am not at all clear it should be either — I would not 
 object in the statute to see wilful fault absolutely excluded. There are relatively 
 few and they could be dealt with through private and public charities at present, 
 but if there is any principle I think it is not humanitarian. I think it is strictly 
 economic. Let us take an illustration. Supposing John Doe, living in the city of 
 Toronto, virtually commits suicide by doing a thing that was either so rash or 
 crazy or reckless, or else he was intending to commit suicide and everybody was 
 convinced it was wholly his fault. Under such circumstances, if he leaves a 
 family in destitution the city or the province, either through public or private 
 charity, is going to support that family and educate it. They will do it anyway 
 if you do not have any law at all, and if there is any reason for bringing him 
 within this act it is merely that his family may not be brought up on the pauper 
 basis. 
 
 The Commissioner: That falls upon everybody in the community. That 
 does not fall on the employers. 
 
 Mr. Dawson : It does not fall on the employers except as a means of transfer. 
 
 The Commissioner: I judge that your idea is that the employer gets it back 
 again. 
 
 Mr. Dawson : My judgment is it is part of the cost of carrying on the busi- 
 ness, and will be transferred with other costs into the price. 
 
 The Commissioner: What do you do with the commodity where the world's 
 market controls the price? 
 
 Mr. Dawson : It would be affected by the German and the French and 
 the British, and all the rest of them. They all have the same thing, and that 
 market has already a provision in the price for this thing. 
 
 The Commissioner : This man cannot raise his price at all if you put another 
 burden upon him. Take, for instance, the mining industry or the lumber industry, 
 how can they add anything where the market is the world ? How can the man 
 who produces wheat add anything? 
 
 Mr. Dawsox : I would rather take some business which is already a world's 
 business in which other countries are engaged. Let us take mining. 
 
 The Commissioner: Is mining not a harder one? 
 
 Mr. Dawson: I will take mine first and then your Lordship's. If it is already 
 a world's business in which Germany and Great Britain and all these countries are 
 engaged, and if the prices are fixed in the world's markets with reference to those 
 conditions, then either one of two things is happening: either Canada or the United 
 States where those conditions do not exist is dragging down the world's market 
 to their level, which ought-to be stopped, if it is resulting in all the cost not being 
 paid, or else the employers of t\n'^' countries that are escaping this burden are 
 getting higher prices than they (night to gel unless they are willing to assume this 
 burden. I will give an illustration: between Camden and Philadelphia, we have 
 New Jersey imposing ten times the premium upon the industry that Pennsylvania 
 dues, and the industry is probably nut able at all at the present time to shift it 
 into the price I'm' (he reason that it has competition across in Philadelphia, and in 
 that matter i can quite see that il would be a hardship under those conditions. 
 \\ hit ought to he done i> Pennsylvania should pass a law of a proper character. 
 
1912 WORKMEN'S COMPENSATION COMMISSION. 113 
 
 The Commissioner: I want to go back to the firs! point we were dis- 
 cussing. I suppose there is no country in the world as backward until the last few 
 years in legislation in this direction as the United States of America, meaning no 
 offence to a distinguished citizen. 
 
 Mi;. Dawson : Certainly not. and in addition your own country was on a level 
 with it. 
 
 The Commissioner: Exactly. Now. is it not a fact that the United States 
 artisan and the United States manufacturer have advanced more rapidly than the 
 German artisan and the German manufacturer? 
 
 Mr. Dawson: I think the following is unquestionably true your Lordship, 
 that the conditions of freedom in your country and in mine, and the conditions of 
 free opportunity which held hefore the workman the possibility and the prospect 
 of being engaged in something other than manual labour after awhile has had a 
 tremendous effect. There is one thing I think in our country — and I am not 
 speaking of yours because I am not acquainted with it — to-day there is a wide- 
 spread complaint about the want of efficiency in workmen, and I ascribe it to the 
 fact that for the last twenty-five years, during the very period that England has 
 been giving that fixed heart that Mincius spoke of to its workmen, we have been 
 keeping ours on a sea of speculative conditions by which every w r orkman has before 
 him the object lesson of his mates and of friends of his in the same occupation 
 who through no fault of their own have nevertheless become, together with their 
 families, pauperized. I think the moral effect of it is bad. I think the effect of 
 it upon' the efficiency of the workman is had. I do not believe as conditions stand 
 to-day the workmen of my country are on the whole, taking into account the 
 greater freedom and greater opportunity of success, as efficient as they are in 
 Germany. ! am sorry to say it, but I believe it to he the case. 
 
 The Commissioner : Has not the specializing of industries, a man doing just 
 one little bit, and that is all he does, and another man does a little hit, made it 
 that you do not get the finished artisan that you had in former days, although your 
 production is better. You do not get the man to do the whole thing and make 
 him a better man as an artisan than the man who is practically a machine. 
 
 Mr. Dawsox : I think there is much in that, and yet you must remember that 
 it is exactly what they did have in Germany thirty years ago, and to-day the re- 
 sult is just as you pointed out in asking me a question earlier, a perfectly tremend- 
 ous improvement in the efficiency of their labour. It seems to me. in other words, 
 that we are going to have to deal with the whole subject much more scientifically, 
 and one of the earliest steps to deal with it scientifically from the standpoint of 
 the historical development and the natural development is right here. 
 
 The Commissioner : If you were free in your country f r om constitutional 
 difficulties as we are perhaps free — perhaps to some extent tied up — would a 
 national system be preferable to a local or provincial system? 
 
 Mr. Dawson: Decidedly. I believe we are free to do it now. The National 
 Association of Manufacturers in the United States through its attorney, without 
 any knowledge at all that I was working on it. much less what my conclusions 
 were, arrived at the conclusion that I did, that it was constitutional, and the 
 •attorney of the New York Central lines independently arrived at the same con- 
 clusion. So there were throe of us working entirely separately and arriving at 
 the same conclusion. That view is growing very rapidly, but meanwhile, until 
 
414 MIXUTES OF EYIDEXCE : Xo. 65 
 
 that question is settled, it is necessary for us, as it is here, to act through Pro- 
 vinces, to act through our various States. 
 
 Me. Bancroft : I wanted to get Mr. Dawson to corroborate one or two 
 opinions if he will. While more interested in the prevention of accidents than 
 the compensation from our standpoint, Dr. Cotton, President of the Imperial In- 
 surance Department, says this, " Recognizing that it is of prime importance to 
 prevent injuries the State officials and Employers' Associations have concentrated 
 their combined energies upon prevention, and wonderful has been the result. 
 Scientific accident prevention is now recognized as a special and important branch 
 of technical engineering." I would like to ask Mr. Dawson if he has found that 
 to be true in his investigations? 
 
 Me. Dawson : Well, that is unquestionably a very moderate statement of what 
 has taken place in Germany. 
 
 Me. Banceoft: It is better than that? 
 
 Mr. Dawson : Yes. This I am sure would interest you all. "The exhibi- 
 tion of the means adopted for prevention of accidents in Germany in the tre- 
 mendous exhibition hall that is always open every day in the week and every 
 hour in the day in Berlin is one of the most marvellous things that I have ever 
 seen, and the marvellous thing about it is not merely all these inventions." You 
 must remember they show them here in Toronto and over in the States now and 
 then, "but every solitary one of them that is of value has been adopted by the 
 mutual association of employers and enforced, in the introduction of new machinery 
 at least, and frequently to the extent of even old machinery to be removed and new 
 put in-" 
 
 Me. Banceoft : That has been the result of the collective liability of the 
 employers in the mutual trade associations? 
 
 Me. Dawson: That has been, undoubtedly. 
 
 Me. Banceoft : They combine among themselves to see that those regula- 
 tions are enforced, and they do that for the mutual protection of the cost of the 
 rate upon industry. 
 
 Me. Dawson : That is, it causes the rate to be lower. 
 
 The Commissionee : Just one question- I do not know that it is particu- 
 larly your branch, Mr. Dawson, but you spoke about prevention. What means, 
 if any, are practicable to prevent what is said to exist to a very considerable extent, 
 that workmen, especially those who are doing piece-work, will when devices are 
 supplied for their protection, throw them aside and will not use them? Is there 
 any way of dealing with that situation? 
 
 Me. Dawson : The German associations go to the length of requiring an 
 employer to dismiss a workman. 
 
 The Commissionee: It was suggested here, and it was suggested that the 
 union would make trouble, and say that that was not a sufficient cause. 
 
 Me. Dawson : I am very glad your Lordship brought up that point. Xow, 
 I appear here as a witness brought by the Canadian Manufacturers' Association, 
 and I am glad to come, but I was counsel for the shirt-waist girls in Xew York, 
 and that work I was doing for nothing, from sympathy, in other words, and a 
 great deal of my public work has been done for unions and for working people. 
 There is one thing which I first called to the attention of a committee representing 
 the trades-unions of <ireat Britain at the International Congress of Labour Legis- 
 lation at Lucerne some three years ago, just before I returned from my study 
 for the Russell Sage Knniidaiion. There was one thing that impressed me very 
 
1912 WORKMEN'S COMPENSATION COMMISSION. 415 
 
 powerfully in 'Germany, and that is the workmen seemed to have a complete and 
 very full realization of wherein their interests were adverse to their employers'- 
 That is, it was obviously adverse to the matter of getting a higher wage, and in 
 getting shorter hours of lahour, and similar matters, but they were also equally 
 alive to the things in which their interests were the same as their employers'. 
 I attributed that very largely to the fact that in the insurance system in 
 Germany there is a very large element of co-operation between the employers and 
 the employee in carrying it out, and the employers through their representatives 
 are quite accustomed to deal with the employees through their representatives, 
 not on mere occasions when there was some difference as to wages and hours, 
 but daily- Now, under those circumstances they do not strike for such reasons 
 as you speak of. Instead they say, "You deserve it, you are not only imperilling 
 yourself, but imperilling the rest of us." 
 
 The Commissioner: I am not at all suggesting that is what the unions 
 would do, but it has been said they would. 
 
 Mr. Bancroft : It was not said by the workers' representative- ? 
 
 The Commissioner: That need hardly be said. 
 
 Mr. Dawson: There is one illustration which would appear to indicate that 
 they do enforce rules there with a certain amount of thoroughness. We observed 
 in visiting an iron foundry that the workmen all had their trousers outside their 
 boots in the usual way. Now, I have happened to observe in quite a number of 
 cases in the United States, especially in the Western States, they wear their 
 trousers inside the boots. This was called to our attention by the gentleman 
 who was with us. He told us one of the rules was that they must so wear their 
 trousers. I said, Why, what has that to do with it? He said, That is very 
 simple, if there happened to be some molten metal strike their trousers and the 
 trousers are outside the boot it runs on to the ground, but if they are inside it 
 runs into the boot. Now, as small a thing as that calls for attention. 
 
 The Commissioner: An engineer in charge of a stationary boiler knows 
 that he has allowed the water to get out. He knows also that half a dozen men 
 are there who if he puts cold water into that boiler may probably have their 
 lives lost. He does it- What wouild you do with that man if he had ten 
 children? Would you give him compensation? 
 
 Mr. Dawson : On the economic ground that the fact that he caused this 
 thing has nothing to do with what the State had better do with his family I 
 think I would, although I am not so clear about it. I am not insistent upon it. 
 But in any event, of course, the others you would. 
 
 The Commissioner: We must not put a law in the statute book that would 
 shock the conscience of the people. Suppose you had it demonstrated that a man 
 employed in a powder factory had deliberately gone into the factory with a 
 lighted pipe, had blown up the factory and that half a dozen had been killed, 
 and that was all in the papers, and you proposed to pay that man if he had his 
 leg broken, a couple of thousand dollars- Would that not shock the conscience 
 of the community? 
 
 Mr. Dawson: I do not think it would if it was ordinarily included. I 
 would rather answer your Lordship by what actually happened in one country. The 
 French spent a lot of time in their National Assembly debating that question, and 
 they finally got a law in which they excluded gross negligence on the part of the 
 employee, and included negligence on the part of the employer and made it 
 a larger amount if it was on his side. I do not know the number of cases that 
 
416 MINUTES OF EVIDENCE: No. 65 
 
 have so far been brought because I have not looked into it for about three years 
 perhaps, but after the law had been in force for about ten years the number of 
 cases were less than twenty in the entire country that had arisen under that 
 feature of the law, and my recollection is that in only about seven of them was a 
 favourable decision given. 
 
 The Commissioner: That is on both sides of it? 
 
 Mr. Dawson: So really it did not prove to amount to anything. It looks 
 in theory as if it were an important matter, but I feel personally that it is of 
 no very great importance whether it is in or out. 
 
 The Commissioner : But you believe, with the people of this country or 
 your country, if a thing strikes them as unjust it will make them jealous, and 
 they will condemn the whole law if in a particular case it works what they 
 conceive to be an injustice. 
 
 Me. Dawson: They have not had a gross negligence provision in the 
 British law. 
 
 The Commissioner : I would not say gross negligence. 1 think the man 
 in the case I put is a crimina}. 
 
 Mr. Dawson : Well, the German Act has always had a provision to the 
 following effect, that the criminal aot of the man himself would exclude, and the 
 criminal act of the employer would render him liable for the entire damage 
 directily and immediately instead of the insurance fund. I think that is a good 
 provision really. 
 
 The Commissioner: You have not said whether with a law such as you 
 have suggested the common law liability of the employer should go. 
 
 Mr. Dawson : If it were not for the example that Great Britain has given 
 us I would be disposed to say undoubtedly. The experience in Great Britain 
 has been that to preserve to the employee the rights under the common Haw has 
 not been a serious matter. That is to say, it has been taken advantage of very 
 little. I am not sure that that experience wouild be repeated in the United 
 States, and I am not in a position to judge at all as regards Canada. I am 
 inclined to believe under existing conditions in the United States, if the right 
 were thoroughly preserved and as large as it is now, the common law would be 
 resorted to in a vast number of cases, and it would make a great deal of difference. 
 
 The Commissioner: Well, ought it to be? You are giving to the work- 
 man something to which the law does not entitle him. 
 
 Mi;. Dawson: Yes. 
 
 The Commissioner: Why should he not surrender something? It might 
 be iii a h'\v cases some use, but in many cases it would be of little or none. 
 
 Mi;. Dawson: In my judgment if a plan providing ample and proper com- 
 pensation, and especially providing compensation that continued during the dis- 
 ability, and in the case of minor children until they were sixteen years of age, 
 old enough to go to work ami get a fair education, were introduced in your country 
 or in mine, the workmen a- a class woujd be satisfied with that law and would 
 not wish the common law to be maintained. 
 
 The Commissioner: Would it not seem very unjust to an employer who 
 had, paid Ins contribution that he should be liable to a particular employee in a 
 common law action besides? 
 
 Mi;. DAWSON: It has been decided in Montana to reserve the right to sue 
 under the common law while requiring him to pay compensation .is unconstitutional, 
 and they uphold the constitutionality of the law in every other respect. 
 
1912 WORKMEN'S COMPENSATION COMMISSION. 417 
 
 The Commissioner: Oi' course if that was the direction the law was to take 
 it must be made so that there would be, as you put it, a full and reasonable com- 
 pensation to the man. 
 
 Mr. Dawson: The objection which started strongly in the State of Illinois, 
 so strongly that all the labour people in the United States decided against giving up 
 the common law rights, was really based upon the proposition to greatly limit 
 the benefits. They were to he limited to a very short term of years and to a very 
 relatively small amount. In my judgment had the law of Illinois been that, say, 
 60 per cent, of the wages should be paid as long as the disability continued, which 
 would mean liable to be continued for life, and a fairly liberal per cent, of say 20 
 per cent, for a child to be paid until that child was 16 years of age, in my judgment 
 the workmen of Illinois would not have objected. Of course, as large an allowance 
 as 20 per cent, could not be paid if there were a large number of children, . but 
 just one child. I mean fatal accidents. 
 
 The Commissioner: Has this phase been considered? Perhaps it would be 
 found that the man who has been killed has something put by and that his family 
 are not dependent upon the fund. How then is it justifiable to take the money 
 and pay them? 
 
 Mr. Dawson: The same economic wrong has been done the family. There 
 is not the same powerful social reason for doing it, but if you did not do it then 
 this whole thing would be on a charity basis, and if it were all on a charity basis 
 we would have the breaking down of the self-respect of families exactly the same 
 as any other charity. This might interest your Lordship as to how the work- 
 ingmen look at it. I have introduced several plans of so-called mutual associa- 
 tions for workmen to which employers contribute, or what they call in Great 
 Britain " establishment funds," which by the by was the thing that the British 
 Parliament expected to become the great thing under the British system, but it did 
 not happen. I have helped to devise several of those plans in the States, one not 
 long ago at Albany, for instance. Under that plan the employee is in effect giving 
 up his common law rights, because he cannot draw the benefits of the fund and at 
 the same time assert hi? common law rights. The very first receipt he signs he 
 signs away the right. We provided reasonably liberal benefits in the form of so 
 much a week during disability based upon the wages, and so on. and so much in the 
 event of death, and calling for a contribution. It covers death from all causes and 
 sickness from all causes. It calls for a very liberal contribution from the employees, 
 and I am informed that every solitary man in the works is satisfied with it, and I 
 am satisfied that no stress was put upon them. 
 
 The Commissioner: That was life insurance. 
 
 Mr. Dawson : No, you see it covers accidents and sickness as well, and death 
 from all causes. 
 
 The Commissioner: On the ordinary life insurance plan. 
 
 Mr. Dawson : But you see the workmen were contributing to it as well as the 
 employers. So I do not think when the benefit is substantial and is such as to 
 make a workman feel that what he is receiving is right, and will do the thing that 
 is expected of it, there will be any disposition to insist on maintaining the common 
 law rights. 
 
 Mr. Wegenast: I have persuaded Mr. Dawson to stay over till to-morrow 
 night if a sitting could be arranged. I would very much like to see a sitting 
 arranged. 
 27 l. 
 
418 MIXUTES OF EVIDENCE : Xo. 65 
 
 The Commissioner: I had another engagement, but perhaps it could he 
 arranged. 
 
 Mr. Kingston: There was one question that arose out of the discussion as 
 to the difficulties of collecting this tax. Would not the realization on the part of 
 the small employer that if he did not pay he would not enjoy the benefit of the Act 
 be a means which would induce him to pay? 
 
 Mr. Dawson : I should think that would be an unwise thing to do. I should 
 think you had better give the employee the right to get on the fund irrespective of 
 whether you collected the tax from the employer or not. I am not familiar with 
 your constitutional limitations, but if you have no constitutional limitations 
 against it I think the wise thing to do would be to impose this as an excise tax 
 and absolutely prohibit that particular business. 
 
 The Commissioner: We cannot do that. That is Federal. 
 
 Mr. Dawson : In the United States the States and the Government both have 
 that power. 
 
 Mr. Bancroft : In your investigations in Europe did you find they were 
 better satisfied under this condition, which is supposedly a heavy burden on their 
 industry? 
 
 Mr. Daw t son : On the whole they are. You will find individual cases where 
 employers complain. They generally are seeking some way in which the burden can 
 be made less and that is the reason why prevention has so powerful an influence. 
 
 The Commissioner: How do you get that testimony? It must be from 
 seeing individual employers. Is there any collective statement anywhere where 
 you can see how those who are entitled to speak for particular trades look upon it? 
 
 Mr. Bancroft : There is one here from the chairman of the Employers' Asso- 
 ciations of Germany. 
 
 Mr. Daavson : There are a great number in Mr. Schwedtman's work. This 
 is spoken by Dr. Spiecker. 
 
 The Commissioner: Is he of the socialist persuasion? 
 
 Mr. Dawson: Xo, indeed. The socialist proposition in Germany is pecul- 
 iarly a trade union proposition, and pretty nearly all the working population of 
 Germany, that is the wage-workers, are socialists practically. 
 
 " To-day everybody who views the situation without prejudice must acknow- 
 ledge that the work of the Employer:-" Associations in this field of prevention and 
 compensation is a great blessing not onlv to the workers but to the industries and 
 the nation. It is perfectly evident to-day that we have secured higher efficiency 
 in industry by relieving our workers from the worries and distresses on account of 
 sickness, injury and invalidity." That is a quotation taken from manuscript 
 handed to me, but I have seen the passage. 
 
 Mr. Bancroft : Is that your personal opinion ? 
 
 Mr. Dawson: That is also the opinion I have formed, and my opinion was 
 based, your Lordship, upon the following things. First, upon the almost absolute 
 unanimity of the statements made to me by employers and by persons connected 
 with the employing classes. Second, by my knowledge and by information gleaned 
 from the printed statements that have been made and from books written by persons 
 out of the employing classes themselves. Thiol, from statements made to me by 
 Dr. Zacher, Dr. Kaufmanu and others who have made a very thorough study 
 of it, and are well acquainted with the opinions of all classes, and themselves non- 
 partisan. 
 
 The Commissioner: According to Mr. Wogenast the individual emplovers 
 in (his Province require a good deal of education. They do not seem to see much 
 use of a change, although the Association as a body has taken a different stand. 
 
1912 WORKMEN'S COMPENSATION COMMISSION. 419 
 
 Mr. Dawson: The fact is, of course, till within a very few years the em- 
 ployers in your country and in my country have not given this particular matter any 
 study whatever. As long-ago as 1898, when 1 drew the first Workmen's Compen- 
 sation Act offered in the States, I brought it then to the attention of Mr. Roosevelt 
 who at'tei wards became President, and in fifteen or twenty minutes' conversation 
 made him see the principle upon which it was based, and the correctness of it, and 
 he has never ceased to be an advocate of it. I also brought it to the attention of 
 a gentleman who was then the President of the Travellers' Insurance Company. 
 He was hide-hound, and I did not make so prompt a conversion, but he came to 
 me in a few weeks and he said, "That has been growing in my mind, and it seems 
 to be right." In other words education is pretty quick in these things, and it 
 works quickly when it once gets started, but 1 think it is quite true that the 
 employers of your country and of mine have not until recently been much educated. 
 
 Me. Wegenast: I would like to make ono remark. You used the expression, 
 ' The individual employers of our association." With the words " the " left out I 
 am willing to let it stand, but otherwise not. 
 
 The Commissioner: It could not be the body of them. 
 
 Mr. Bancroft : I think you have mentioned this report ? 
 
 Mr. Dawson: That is the report of the British Trades Union Commission. 
 
 Mr. Bancroft: Did those gentlemen coincide with your views? 
 
 Mr. Dawson: In general, yes. That delegation I think went over as the 
 result of the suggestion that came to Mr. McArthur and others that I spoke of, 
 that went soon after, and I strongly recommended it. 
 
 Mr. Wegenast : You spoke about that in your brief before the Federal 
 Commission ? 
 
 Mr. Dawson: Yes. 
 
 The Commissioner : You spoke of slums. It depends a good deal on how 
 a man looks whether he finds slums or not. 
 
 Mr. Daw t son: Yes, but in my country we find them without having to look 
 far, I am sorry to say. 
 
 The Commissioner: We had a distinguished gentleman here a little while 
 ago who pronounced Toronto free from slums, contrary to the opinion of some who 
 live here. I hope that is not the real condition in Germany. 
 
 Mr. Dawson : I think not. It would be idle to say that there were no 
 paupers in Germany, but it is a fact that you do not see the people with the sodden 
 appearance and the hopeless appearance that we do in New York, and many other 
 localities. 
 
 The Commissioner : The housing problem has a good deal to do with that. 
 
 Mr. Dawson: Yes, and the same scientific education which has brought this 
 about has a good deal to do with the housing problem. They have maintained in 
 Germany a thing which I am inclined to think that perhaps your Lordship and 
 myself, and others who have stood for all we prize in British law will some day 
 have to recognize also, and that is that there is a paramount right after all in the 
 entire nation as regards realty. They do one thing in Germany that I was very 
 much against my w r ill compelled to admire, and that is they really do tell the 
 owner of real estate "it is only within certain limits you may do what yon 
 want with your property." I wish they had said to them in New York, you 
 cannot build a building over a certain height. 
 
 Tith Commissioner : You push the price of the surface up too high and fchej, 
 have to go up. 
 
4-v J o MINUTES OF EVIDENCE: No. 65 
 
 Mit. Dawson : One of the results of that is it destroys the value of the build- 
 ing beside it, and the result has been bad. 
 
 Me. Doggett: I would like to ask Mr. Dawson if he believes that workmen 
 should contribute towards State insurance? 
 
 Mr. Dawson : It is a question I am very willing to answer, your Lordship, at 
 the proper time. 
 
 Me. Bancroft: Unless Mr. Wegenast asks Mr. Dawson about that we are 
 sbut off, and we shall have to retain Mr. Dawson as our counsel. 
 
 Mr*. Wegenast: Mr. Dawson is just as much the witness of the labour people 
 as he is ours. 
 
 The Commissioner: I forgot to ask Mr. Boyd what the Norris Bill of Ohio 
 was. I judged from what he said it was a measure introduced some two or three 
 years ago which took away the doctrine of defences. 
 
 Mr. Dawson : It is called the Norris Bill there, but in other States we do not 
 call it by the name of the author. That was a law passed two years before the 
 adoption of the existing law took away the defences under the Employers' Liability 
 Act, and it was passed with the avowed purpose of frightening the employers into 
 being willing to accept something in the way of a Compensation Act. It removed I 
 think almost entirely the risk defence; perhaps not entirely. 
 
 The Commissioner: 'Contributory negligence? 
 
 Mr. Dawson: I think something of that kind. 
 
 The Commissioner: Mr. Boyd said it did away with contributory negligence, 
 J think? 
 
 Mr. Dawson: It may be, but where it was clearly the employee's fault only, 
 they still left that defence. 
 
 Mr. Wegenast: That is a thing which a great many of your laws have 
 adopted, I think. 
 « MR. Dawson: Do you mean like the Norris law? 
 
 Me. Wegenast: Enlarging the employer's liability by taking away his 
 
 defences. 
 
 Mr. Dawson : No State in the United States had adopted anything like the 
 Norris law, or the law I have described except Ohio, and one Federal law where 
 they replaced contributory negligence by comparative negligence, and modified 
 the assumption of risk. 
 
 The Commissioner : It did away with the doctrine of common employment. 
 
 Mr. Dawson: Yes, the doctrine of common employment was done away 
 
 with entirely. This has happened, however, that after the decision was given in 
 
 ;New York to the effect that the New York Compulsory Compensate Act. so-called, 
 
 was unconstitutional, a number of States adopted the Ohio way of dealing with the 
 
 matter at Hie same moment that they adopted a companion act, the purpose being 
 
 io give a very strong incentive to employers to come under the Compensation Act. 
 
 Mi;. Wegen \st: That is to get over the constitutional difficulty. 
 
 Mr. Dawson : Yes, it was a mere subterfuge. In this case they also, added 
 tnig to [t, in ease the employer did not come under the Compensation Act he 
 would lose the right to sue on the basis that these special defences are not available. 
 In other words they would become available immediately. 
 
 The COMMISSIONER: Are yon in a position to say whether there has been 
 sufficient experience to demonstrate that any system, if adopted now, is one which 
 would bo likely to be reasonably permanent? 
 
 Mr. Dawson: T think the German system will certainly be permanent. That 
 is the ..pinion of all close students of this thing in the world to-day. 
 
1912 WOKKMEN'S COMPENSATION COMMISSION. 421 
 
 1 would like to bring- out something that Mr. Wegenast intended possibly by 
 ins last question. You asked me about other count lies, about destroying the 
 defences. There is one country that gives a very interesting example, and that is 
 Switzerland. I think it is a particularly good example because i1 is a more dem- 
 ocratic country than yours or mine. They have been the most backward country 
 in Europe in this matter. At one time they gave a mandate to their Parliament 
 to pass an act, and they did pass an act, 1 think, with only three or four dissent- 
 ing voices in the two Houses, and because it required the friendly societies and 
 mutual associations of employers to bring themselves to a reasonable degree of 
 solvencj', they had a referendum on it and kicked it into the street, but meanwhile 
 they kept insisting upon the enlargement of the right of the employee to recover 
 under the existing system and also without regard to these special defences, until 
 they wiped out all these defences. Now, the effect of that has been, as was found 
 when there was an investigation made in Switzerland in 1900, that the Swiss em- 
 ployers are paying for employers' liability insurance somewhat more money than 
 would be necessary to give very liberal compensation on the basis of, I think. 70 
 per cent, of the wages in the event of disability under a State insurance system. 
 They investigated just what the employers had paid, and they also carried on a 
 careful investigation as to what the accidents were, and how long they were disabled, 
 and various things, and they came to that conclusion. 
 
 The Commissioner: When you speak of State insurance let us see what that 
 means. It has been suggested here it is not State insurance but the management 
 of the fund by the State — the collection of the fund, the adjusting of the claims and 
 the administration of it. I suppose that is a form of State insurance. 
 
 Mr. Dawson : That is what we mean by State insurance. 
 
 The Commissioner: Would your idea be that the State should guarantee the 
 payment ? 
 
 Mr. Dawson: The State virtually does that through its power of taxation. 
 It does not mean it guarantees it to be paid out of the general fund, but it guar- 
 antees it will require the employers to pay enough to do it. 
 
 The Commissioner: Now, if the legislators find themselves in this position, 
 that a new proposition was being made involving very serious consequences, and 
 that some countries somewhat similarly situated had recently adopted laws upon 
 what is suggested as the best line, and came to the conclusion that it was not pru- 
 dent to put a law upon the statute book this year, would you think it desirable 
 that there should be a temporary law getting rid of these three doctrines whicth 
 stand in the way of the workmen getting compensation in the majority of cases? 
 
 Mr. Dawson: Personally I would not. 
 
 The Commissioner: You think it would be better to wait? 
 
 Mr. Dawson : Yes. I do not think it is needed for educational purposes. It 
 seemed to me then and it seems to me now. too, your Lordship, as if it is sub- 
 verting our ideas of justice. In other words I regard our present Employers' 
 Liability law as it stands with very slight modifications, if any, as just between 
 man and man, if the payment was finally going to rest on the shoulders of the man 
 who wa's going to pay the money just now. Of course the judges of the courts 
 in your country and in our country and in Great Britain have worked ouut the prin- 
 ciples of that law from principles of humanitarian justice, and applicable to 
 every relation of human life. The one mistake that the judges made was not a 
 mistake that arose from their consideration of the subject, as between this individual 
 and that individual man ; it was an error which arose from the economic nature 
 
422 MINUTES OF EVIDENCE: Xo. 65 
 
 of the employment, and so one which could not be foreseen until we had a much 
 greater and more highly organized economic development. 
 
 The Commissioner : There should have been the same economic development 
 in the law. 
 
 Mr. Dawson: That is what I think, but that economic development could not 
 very well be made by the judges. 
 
 The Commissioner: They have done a good deal. 
 
 Mr. Dawson: They have, but they could not do it all. We have a lawyer 
 in the Bar Association who gave a minority report, which I will be very glad to 
 leave with your Lordship, in which he reasons out that it would be possible for the 
 courts to do the whole thing, that they could absolutely subvert the existing rules 
 they have established and establish entirely new ones on different principles. He 
 was a minority of one man. 
 
 Mr. Gibbons: Do not some employers escape liability at the present time by 
 making rules, and the breaking of those rules is considered contributory negligence ? 
 Do they not escape by making rules that it is not practical to carry out, and which 
 they do not expect to be carried out? 
 
 Mr. Dawson: I could not answer your question in the way you state it to 
 me. I know that is a conceivable thing, but that it is actually done I hesitate to 
 say. I fancy his Lordship could answer the question very much better than I 
 could. 
 
 The Commissioner: What has impressed Mr. Gibbons with that idea very 
 much is that he is acting for the 'Street Railway employees, and he is thinking of 
 a Street Eailway Company. They have two classes of persons to deal with, the 
 employees and the travelling public. 
 
 Mr. Dawson : Precisely. 
 
 The Commissioner: And when they lay down these rules they want to 
 guard themselves against claims of passengers, and it is in their interests there- 
 fore to have a set of rules for the guidance of their employees. I do not think 
 that any company deliberately sets to work to make rules in order that they may 
 catch their employees if any accident happens to them. I cannot believe that. I 
 think it is rather the other way, in dealing with the double-headed danger that 
 they are under, that these rules are formulated. 
 
 Mr. Gibbons: They 'must know that under the operation of the road as they 
 want it operated, it is impossible to carry certain of the rules out. They say a trip 
 must be made in a certain time, and they state you must go at such a rate of speed 
 down a certain hill, and you must bring your car to a stop at such a place, and you 
 must have it under control at other places, when actually they must know, if they 
 ever think of it, that you could not do it in probably double the time they allow 
 you. The law must be broken, and in case of an accident if that man was 
 running down hill at a rapid rate of speed, and the car jumped the track and he 
 was killed, they would escape liability on the claim that he was breaking that rule 
 and violating the rules of the company. 
 
 The Commissioner: It just operated the other way in a case that was tried 
 the other day. A woman was suing on behalf of her children. Tier husband was 
 bicycling and came into collision with a car. and one of the principal grounds 
 relied upon for her recovery was, thai by the rnles of the company the motorman 
 when lie came to I lie grade should have shut off his power and let his car coast 
 down the incline. Now. I ha I rule was not made to catch the employee at all. That 
 rule was made for 1 lie protection of the travelling public. 
 
1912 WORKMEN'S COMPENSATION COMMISSION. t23 
 
 Mr. Gibbons: But, your Lordship; suppose the accident had happened to the 
 motorman and he had been thrown from the car, would it not have worked against 
 the employee? j , \ 
 
 The Commissioner: II' the rule was that going down the grade he should 
 shut oil' his power why would he not obey that rule? 
 
 Mr. Gibbons: Because possibly he could not make the time, and if he did 
 not they would not have any use for him. 
 
 The Commissioner: Your Union is strong enough to guard against that. 
 
 Mr. Dawson; One of the most terrible accidents we had in New York re- 
 vealed that it was the fact that the greatest railroad in America was expecting its 
 employees regularly in the tunnel there to run past signals at full speed. It was 
 a thing that none of us could have been led to believe until it came out. When we 
 looked into it w r e found the New York Central was regularly expecting the engin- 
 eers to send the train down that tunnel at full speed past those signals. 
 
 The Commissioner: What was the object of the rule? 
 
 Mr. Dawson: I think the rule was much like wdiat has been stated. It was 
 for the purpose of pointing to the rules in case of ordinary accidents, but they did 
 not expect such a terrible thing to happen. It upset their calculations. 
 
 Mr. Bancroft : You said you believe the Employers' Liability Act of the pre- 
 sent time between man and man is just, with certain modifications? 
 
 Mr. Dawson: If it was really a question between John Jones over here and 
 Frank Robinson over there, and if it was a question of the money coming out of 
 John Jones' pocket, and not being shifted to anybody else in any way, I do not 
 believe that the reasonings which the courts have used, and out of which this thing 
 has been developed are on the whole erroneous or do wrong. The reason why the 
 system itself is wrong is because what we have really been doing is permitting 
 John Jones over there, who in this matter is only an intermediary between the 
 community at large as consumers, and the community at large as producers, to be 
 dealt with and treated precisely as if it was his loss. That is where the whole 
 objection is and just on that account, if no other. I would not be in favour of a 
 workmen's compensation system which held the employer individually liable. 
 
 The Commissioner : I may tell you that you are running foul of the funda- 
 mental principles that Mr. Bancroft has laid down. 
 
 Mr. Bancroft: He just spoke in the way I wanted him to, your Lordship; 
 Mr. Wegenast, I think, knows that too. 
 
 I would like to point this out, Mr. Dawson, where it has ceased to be John 
 Jones' liability and is a cost to the consumer then that law becomes economcially 
 unjust, doesn't it ? That is why we have all these changes. 
 
 Mr. Dawson : Oh yes, that is true, but it should be replaced by a just law 
 and should not be merely destroyed. As to the kind of law to have is the point. 
 
 The Commissioner: It is left with the individual responsibility remaining. 
 
 Mr. Wegenast: We have here in addition to the common law the Chamber- 
 lain law of 1880, throwing on the employer the burden of accidents for defective 
 appliances, and through the neglect of vice-principals, and that sort of thing. Now. 
 would you say this is too strong a statement, that with the common law and that 
 Act we have filled out the full measure of the individual employer's responsibility 
 as a matter of natural justice? Does he fulfil his whole duty as an individual 
 employer when he bears the burden of the common law ? 
 
 Mr. Dawson : If he were to bear the burden. He does not do so now, and 
 that is not the actual fact under any system. 
 
+24: MINUTES OF EVIDENCE: No. 65 
 
 Me. Wegenast: What I mean is, would you put him under any further 
 individual liability? Would you throw upon him any. further liability by way of 
 abolishing defences? 
 
 Mr. Dawson : I would not say there were no changes I would suggest, because 
 I would need to study the law and know precisely what it does, but I will say that 
 I see no reason why on the theory of the individual liability of the employer, there 
 should be any serious change of the existing law. 
 
 The Commissioner : Was it not a fundamental error to say a man when 
 entering an employment undertook the risks of that employment and the risks off 
 the carelessness of his fellow-servant. 
 
 Mr. Dawson : The fellow-servant rule is a rule that even from the other 
 standpoint we would all agree should be modified considerably, if not entirely. The 
 assumption of the risk I am not quite so clear about, your Lordship. 
 
 The Commissioner : When it is compulsory for a man to do work he has no 
 choice. He has got to work, and no such thing enters into his mind that he is 
 taking any risk in going into a particular employment, unless it is a very hazardous 
 one. 
 
 Mr. Dawson : On the theory, however, that it is a question whether he should 
 lose, or the individual employer should lose, I am not at all clear that the assump- 
 tion of the risk is not at all a correct proposition. 
 
 The Commissioner: As far as risks that are incidental to the trade and 
 that are not due to the negligence of the employer at all then that is sound. 
 
 Mr. Dawson : It seems to me so. 
 
 The Commissioner : But when you get beyond that, and when you say that 
 while he has no choice of the man with whom he is working,, or the foreman over 
 him, that he should take all the risk of their carelessness, it seems to me to be a 
 fallacy. 
 
 Mr. Dawson : Oh yes. that is unsound, and it has been greatly modified by the 
 courts where the legislators did not modify it. 
 
 The Commissioner: Then there will be all sorts of trouble even under this 
 law in determining where an accident ai'ose, or an occupational disease occurs in 
 the course of and arising out of the employment. Have you anything to help in 
 the solution of that difficulty? 
 
 Mr. Dawson : I think I have something but I am afraid if I enter into it 
 to-night it will leave room for the question as to contribution. I personally am of 
 this opinion, and I have worked this out largely in connection with my assistants 
 in devising those plans of mutual insurance where employees and employers both 
 contribute — I am personally of the opinion that both on economic and State grounds, 
 communal grounds, and also for the purpose of avoiding just such difficulties as 
 your Lordship lias mentioned that we ought to introduce, taking our cue from the 
 experience of other nations (I am speaking now of my own country, and how applic- 
 able it is to yours I leave you to judge) some more comprehensive system than one 
 that is confined to the idea of occupational accidents only. Now. all countries that 
 have dealt with thai question, including Great Britain, have found it was only a first 
 step, that there were other things that needed to be done, and needed to be done 
 soon. I expressed the opinion before the Federal Commission that the workingmen 
 would contribute with a degree of relief of soul, and satisfaction, and even soul con- 
 solation, that that Commission absolutely had no sense of, if they were at the same 
 time covered against all accidents, and still better if they could be covered against 
 all sicknesses: and that they would contribute liberally, T know this by experience. 
 I am not guessing about it. I see no reason why if this whole subject is approached 
 
1912 WORKMEN'S COMPENSATION COMMISSION. 425 
 
 from the standpoint of the Stair itself as a public subject, as a public matter, and 
 not as a mere redressing of a private grievance between two private parties in the 
 
 State, why we should not also deal with that question. A'ow, for instance, to take 
 the very least that could be done under that kind of an idea, why should we have any 
 distinction such as you speak of? Why should we not create a fund which will take 
 care of the family of the man in the event of an accident ? We will leave out sick- 
 ness entirely at the present moment, and just speak of accidents. If that were done 
 then the employee would be covered whether he was hurt through anything arising 
 out of his employment or not, and of course he also could be very properly called 
 upon to contribute a sufficient amount, at least, to cover the non-occupational acci- 
 dents, including accidents happening on Sunday or at night, and when lie was not 
 anywhere around his place of labour. It is really only by that means we 
 accomplish all that the State desires to see accomplished, which is to see that the 
 inhabitants will not be pauperized by the happening of these things which are beyond 
 their own power to prevent. 
 
 The Commissioner: Suppose a case like this happened. I think it was 
 the President of a cement factory who went into the factory and an explosion 
 happened, and he was killed. Is there any reason why he should not be com- 
 pensated also? 
 
 Mb. Dawson: There is no reason if that class desires to be embraced in it. 
 In Bavaria they have extended the insurance to farmers so as to cover the employing 
 farmers, and it is so satisfactory it has already started in other countries. 
 
 The Commissioner: In Ohio if the man works with his employees he is 
 covered, or in Washington I think it is. Now. w r ould it be actuarially sound, or is 
 there any objection to it upon any other ground, to permit the workmen to con- 
 tribute and give him what you are speaking of now? 
 
 Mr. Dawson: Why, it would be entirely sound actuarially, and very desirable. 
 
 Mr. Bancroft : You mean to cover non-occupational accidents ? 
 
 The Commissioner : To cover all accidents. 
 
 Mr. Bancroft : But in the case of occupational accidents arising out of their 
 employment it is not thought to make the workmen contribute, is it, Mr. Dawson? 
 
 Mr. Dawson: In my judgment if the benefit was confined absolutely to 
 occupational accidents workmen should not be required to contribute. Now, that 
 is not based upon any actuarial grounds. 
 
 The Commissioner: That is your broader proposition, that a workman 
 should not contribute at all? 
 
 Mr. Dawson: Yes, but he obviously should contribute if it covers anything 
 beyond occupational accidents. 
 
 The Commissioner: Now, all these accident insurance companies have an 
 age, 65 or 70, at whiah they shut you off. 
 
 Mr. Dawson: Yes. 
 
 The Commissioner: If they find that essential, why is something like it not 
 necessary with any proper State insurance system ? 
 
 Mr. Dawson: Well, I don't think it is, for the reason that there again you 
 have that question of public policy. If the State has not adopted any system by 
 which it pensions its workmen who have reached a certain age, or made special 
 arrangements for them, and if it expects them to enter into industry it must take 
 a broader view than that. 
 
 The Commissioner : If you are going to pension a workman, why should you 
 not pension everybody? 
 
426 MINUTES OF EVIDENCE: No. 65 
 
 Mr. Dawson : I do not think that I have any particular reason to give why 
 you should not, I do not know that I am quite prepared to enter into the sub- 
 ject of pensions, but I mentioned that for this reason, that if you do not do it 
 and the workman reaches 70 years of age and is still penniless, and has responsi- 
 bilities resting upon him and is still capable of labour, he should work as a matter 
 of State policy. 
 
 The Commissioner : I suppose Mr. Bancroft would be insulted if I said I 
 was a working employee, but 1 think I am just as much as he is. 
 
 Mr. Bancroft : We have not any objection to that. 
 
 Mr. Dawson: My own view concerning pensions would certainly embrace 
 men in your occupation. 
 
 ELEVENTH SITTING. 
 
 Legislative Building, Toronto. 
 
 Wednesday, 2ith January, 1912, 8 p.m. 
 
 Present: Sir Wtlliam E. Meredith, Commissioner. 
 Mr. W. B. Wilkinson, Law Clerh. 
 
 The Commissioner: Before you enter upon the second branch of the inquiry, 
 Mr. Wegenast, I wish to ask Mr. Dawson one or two questions. 
 
 What would you think of allowing the Board, whatever the Board is, to 
 pass upon these things, to make a deduction from the amount of the statutory 
 allowance in case of serious misconduct on the part of the employee causing the 
 accident ? 
 
 Mr. Dawson: The only reason, your Lordship, that I have any hesitancy 
 about answering is, in our slang vernacular over in the States, that I am from 
 Missouri. In other words, I do not know that I recall any place where it has been 
 tried, and I am always a little fearful of the thing which has not been tried, and 
 a little disposed to be exceedingly careful about it. 
 
 The Commissioner: I do not know whether it is in your system or not, but 
 in the British Admiralty system there is a rule whereby if two ships are to blame 
 the loss is divided ? 
 
 Mr. Dawson : Yes, we have a rule of comparative negligence now in the 
 States and in our federal legislation relating to railroads. 
 
 The Commissioner: Might it not be somewhat on the same lines as that? 
 
 Mr. Dawson: I should think if it were well guarded it might work all right. 
 
 The Commissioner: I can understand the hardship from one point of view, 
 if the employee were a man with a wife and family and were killed. Suppose it is 
 some young fellow who has no claims at all and he has only been injured, why 
 should there not be power to say to him : You brought this largely upon yourself 
 by your serious misconduct, and you will not get as much as if you had not done 
 that? 
 
1912 WORKMEN'S COMPENSATION COMMISSION'. 427 
 
 Mr. Dawson: I cannot at the present moment think of any serious objection 
 to it, but I have not known it to be tried. I do not feel sure, therefore, how it 
 would work, but I do think that it would have many things to commend it. 
 
 The Commissioner: I suppose off-hand it would be very difficult for you to 
 express even a very general opinion upon the question I am going to ask you? 
 
 Mr. Dawson : Before we leave the last question, it occurs to me that if you 
 put up a S3 r stem which has no other means of encouraging prevention on the part 
 of cmplo}'ees but that, it might serve a very useful office, depending very largely 
 on how wisely it was administered, and how infrequently it was made use of. 
 
 The Commissioner: Taking a Province such as ours, large in area, and part 
 of it very sparsely occupied, and assuming there are 175,000 employees of all 
 kinds, what would you think roughly would be the cost in dollars of administrating 
 a system such as you have outlined? 
 
 Mr. Dawson : If your Lordship will permit I would like to give that some 
 attention and communicate with you. 
 
 The Commissioner: Very well. If a Provincial Board were established to 
 deal with this, of how many members should it be composed, in your judgment? 
 
 Mr. Dawson : That, of course, is largely a question of the experience in 
 different countries. In our country we generally find a large Board is unwieldy, 
 and I should say, according to our experiences, not more than five persons, and 
 almost preferably three. 
 
 The Commissioner: Then what would be the best material out of which to 
 constitute such a Board, supposing it were three men ? 
 
 Mr. Dawson: I should say unquestionably one person distinctly representing 
 the employer class and one distinctly representing the employee class, and if there 
 were only three the third would be some person whose judgment as an attorney _ 
 the administration would have confidence in. If it were five I would be disposed 
 to add for one of the others a physician. 
 
 The Commissioner: What would you think of a man with some actuarial 
 knowledge, or would you make him an adviser of the Board ? 
 
 Mr. Dawson: That would be a capital thing to do, if you found somebody 
 who knew something about it from a public standpoint. The actuaries who are 
 trained for private insurance frequently have a great deal to unlearn before they 
 are adaptable, but a young man who has been well trained, or a man who has 
 been full of this subject and has ideas upon it and has had some mathematical 
 experience, and preferably some legal experience too, so as to know what he is 
 dealing with, would be a valuable man. 
 
 The Commissioner: Would you want to be the third man in a trio such as 
 you have suggested? 
 
 Mr. Dawson: If I were living here. 
 
 The Commissioner: With a labour man on one side and an employer on the 
 other, would you not be in hot water all the time? 
 
 Mr. Dawson : I do not think so. 1 might give you a little illustration con- 
 cerning that. When I leave you I am going to Providence, Rhode Island, for the 
 eleventh investigation of a mutual society organized for the employees of a large 
 traction company covering the entire state. Senator Aldrich was Chairman, and 
 men of almost equal standing composed the committee. When organized it made 
 provision for a board of two representatives by the public and three appointees by 
 the company, one of whom must be the treasurer of the Traction Company. The 
 
428 MINUTES OF EVIDENCE: No. 65 
 
 experience has been that the men are so fair, and even at times so critical about 
 paying claims that the three members of that board representing the company 
 not infrequently leave the entire settlement to those two men, and rarely is more 
 than one representative of the company present. 
 
 The Commissioner: Is there any contribution by the men to the fund? 
 
 Mr. Dawson : Yes, but it is fixed and could not be increased, no matter how 
 much the claims were. I personally would be entirely willing to act as the third 
 member, if I were asked to and was living here. 
 
 The Commissioner: Would your scheme involve bringing within its range 
 shop employees, such as in stores? 
 
 Mr. Dawson : The experience in most countries is it is certain to be extended 
 to those employees. There surely is no principle which would exclude them, and 
 unless there is some objection that occurs to you that I do not think of, I should 
 say they should be included. 
 
 The Commissioner: Could there be a rough provision for a first payment 
 provided for, to be adjusted at the end of the year? Could it be done without 
 much calculation ? 
 
 Mr. Dawson: It would require quite a good deal of careful calculation, the 
 main purpose being to be sure it would be enough, but it could be done, and 
 undoubtedly could be safely done, especially if you did not set up a capitalized 
 value scheme. If you did that, then it would involve the scientific accuracy of the 
 whole proposition, and it would be much harder. 
 
 The Commissioner: Mr. AVegenast seems to be wedded to the idea that 
 there should be a grouping of trades, and he suggests, as I understand it, large 
 groups, such as one including the metal people. Would there not be great varia- 
 tions in the hazards in the different branches of the metal trades? 
 
 Mr. Dawson : Yes, but I do not understand from what he has said to me 
 that he would expect the entire metal trades would be charged the same rate, but 
 only that in considering these trades they should be dealt with in groups. Of 
 course I do not know anything of the testimon} r previously taken. There is no 
 question that the metal trades, for instance, would cover hazards all the way 
 from very light ones with very small rates, up to very heavy hazards with very 
 heavy rates. 
 
 The Commissioner: What is the advantage of that system over a system 
 which differentiates according to the hazard of the different businesses? 
 
 Mr. Dawson : If you are to deal with it virtually on the assessment plan 
 there is this difference, that if the aggregate losses in your metal trades exceed 
 the losses that you have figured on in making your rates, then you can increase 
 all rates in the metal trades by application, and it will probably work out reason- 
 ably well. Tf we undertake to grade insurance by hazard — we are only really 
 guessing ;is In whether they have the same hazard or not, basing our guess upon 
 experience in countries where the real facts may be different from here. I found, 
 for instance, in my investigation of rates and costs that certain classes would 
 have approximately the same hazard in Norway, and a very different hazard in 
 Germany, and when I examined into it T found it was because of the difference 
 of the ways the two trades were carried on in those countries. In Norway it 
 would be carried on in relatively small shops, and in Germany it had grown into 
 a moderately centralised trade, run under greater pressure and with powerful 
 machinery, and so on, and 1 think therefore a classification of hazards for the 
 
1912 WORKMEN'S COMPENSATION COMMISSION. L29 
 
 purpose of assessment would not work out well. Let us assume, for example, 
 that we find by investigation of the rates now charged in Norway ot in England, 
 for ordinary employers' liability, that a manufacturer of clocks, a retail druggist. 
 and a hardware dealer exhibited the same hazard. Suppose during the year 
 it shows on account of heavy looses among the retail druggists that the aggregate 
 losses of that group ran beyond what we had estimate:! and we wanted moie money 
 from them, 1 think there would be very great complaint from the hardware 
 dealer and the manufacturer of clocks about that. 
 
 The Commissioner: Would that not all be met by readjusting the rates? 
 
 Mr. Dawson : Yes, but the readjustments cannot be made every year. They 
 must be made for a longer period. But you may have to collect a little more 
 money. On the other hand, if you can group together all the metal trades they 
 understand there is relationship among themselves, and if it happens that the 
 hardware dealer contributes a heavy loss that year they are willing to wait for 
 five years, for instance, to get the readjustment. 
 
 The Commissioner: Would you call a man who is a vendor of metals in the 
 metal trade? 
 
 Mr. Dawson: I think so. I would make it a broad grouping so that people 
 who trade with one another and have some similarity would recognize that re- 
 lationship. 
 
 The Commissioner: Would it be necessary to enumerate what particular.in- 
 dustries belonged to these classes? 
 
 Mr. Dawson: It would in a broad way, and then if possible give power to 
 your Commission to do the final grading. 
 
 The Commissioner: T suppose in ironworkers there would be a great diller- 
 ence between a bridge builder and a blacksmith ? 
 
 Mr. Dawson : Yes. Those two will not probably fit. 
 
 The Commissioner: You would put him in the same class? 
 
 Mr. Dawson: Merely for determining whether the aggregate amount of pre- 
 mium you get from that whole class is sufficient. Bridge builders alone would 
 form too small a class to give any real average. That is the purpose of it. 
 
 I would like to speak a little on classification. For instance, in Germany 
 they class in the drug and chemical trade everything from the ordinary retail 
 chemist who has not any hazard at all to amount to anything, to the manufac- 
 turer of high explosives. They are all in one group and they have their rate of 
 assessment fixed and that is fixed for a term. Usually in Germany it is for fixe 
 years. Then the aggregate losses in that whole class at the end of the year are 
 assessed according to those pre-arranged rates of assessment upon all the mem- 
 bers of the group. The retail druggist has a very low rate of assessment and the- 
 high explosive man a very high rate, but the total amount of assessment they pay 
 is determined after all by the aggregate losses for the group for the year. That 
 is the idea. 
 
 The Commissioner : It would make great trouble in making your assess- 
 ment if you sub-divided them into so many classes? 
 
 Mr. Dawson : You can leave them all in one class. In the Province of 
 Ontario it might work all right. I am not at all positive on that. You might do 
 that. I judged by something Mr. Wegenast said that his notion was if those in? 
 related industries were tied up together in some way they would exercise a great 
 deal of influence upon one another for prevention purposes. I think that is his. 
 idea. 
 
430 MIXUTES OF EVIDENCE: Xo. 65 
 
 The Commissioner : Why wouldn't the mass exercise the same on one 
 -another? 
 
 Mr. Dawson: The mass bears little relationship with one another, your Lord- 
 ship. The people engaged in the metal trade do come somewhat into touch all 
 the way through, for instance. 
 
 The Commissioner : Of course this would he largely experimental, and you 
 are only feeling your way as to the best method all the time, I suppose. 
 
 Mr. Dawson : Xo doubt, but in general the principles of the German method 
 have worked best. 
 
 Mr. Wegenast : I wanted to ask Mr. Dawson whether I was correct in this 
 theory which 1 am propounding in the latter portion of my brief, that the remedy 
 for all sorts of discrimination in sub-classification. His Lordship has raised the 
 question whether by throwing the same burden on the careful employer as on the 
 careless employer would not be discrimination, and my answer to that was to be 
 that you could put the careless employer in a different class. You could group 
 the industries into as many sub-classes as it was found advisable, and that the 
 remedy for every ill in the shape of discrimination or in the shape of defective 
 means of prevention was sub-classification. What do you say to that, Mr. 
 Dawson ? 
 
 Mr. Dawson : They do in Germany without hesitation apply a discriminat- 
 ing rate of assessment, as, for instance, to an iron moulder who has antiquated 
 machinery and is unable or unwilling to put in the latest and best means of 
 prevention. 1 think they would also very likely discriminate against him if he 
 retained in his employment some superintendent or inspector to whose carelessness 
 disasters had repeatedly been traced, although about that I am not certain. I 
 think if any such discrimination is undertaken, however, it must be with the 
 .greatest possible caution, because the mere fact that a particular employer has 
 had more losses than another is not proof that he is greatly careless. The number 
 <>f employees is usually such that there is not a safe average in his employment 
 from year to year, or perhaps even from decade to decade, and he may have been 
 i in i re careful than the next man who had few losses according to the fact. 
 
 Mr. Wegenast: In the metal trades it would be quite practicable to arrange 
 the sub-classes in such a way that the hardware dealer would pay say one quarter 
 the rate. He would be put, say, in the third class, and pay one quarter the rate 
 that the manufacturer of bolts would pay. 
 
 Mr. Dawson: Quite so. The exact proper gradations as nearly as they could 
 Ibe arrived at from previous experience would be applied. 
 
 Mi;. Wegenast: I have observed in the Xorwegian system the risks were 
 divided into sixteen classes, and the first three, A, B, and C, are not yet filled, 
 and I have .uuessed that the idea might be that those three classes were left empty 
 to hold out something for emulation. 
 
 Mi;. Dawson: To encourage making such improvements that they would get 
 into them. 
 
 Mi;. Wegenast: So that Class •' I>" might try to get into Class "A" ? 
 
 Tim: COMMISSIONER: That would lie only by trades. 
 
 Mk. Wegenast: That is within the trades. These are sub-classes within the 
 
 trades, I believe. 
 
 Mi;. Dawson: The classification that is referred to, your Lordship, is the 
 Grouping tor purposes of assessments of trades or businesses within the trades, 
 
1912 WORKMEN'S COMPENSATION COMMISSION'. 431 
 
 classified according to hazard. The Austrian system has the same thing with 
 classifications numbered from "1" up to a high number, according to the estim- 
 ated hazard. 
 
 Mr. WEGENAST: So that within the classification of industries you have sub- 
 classifications by hazard? 
 
 Me. Dawson : That is right. 
 
 The Commissioner: While it might be practicable under the German system 
 to allot an amount on account of bad machinery, or some of the causes you have 
 mentioned, there would be great difficulty in doing that under a Board such as 
 we have been talking about. 
 
 Mr. Dawson : They did it in Norway where they have a State system with 
 a Board. They did it in this manner. The Board is given the privilege of re- 
 ducing the rate not beyond a certain percentage below the average that is fixed 
 for that occupation or trade, and also of increasing it not beyond a certain per- 
 centage, the first of those being because of improvements in prevention, and the 
 second as a penalty for the opposite. 
 
 The Commissioner : That would involve an investigation into the plant of 
 the particular manufacturer? 
 
 Mr. Dawson : Yes, but that is a very important thing for the Board to have 
 done by somebody. 
 
 The Commissioner: It is a pretty big undertaking? 
 
 Mr. Dawson : Not so very. If you could unite your present factory inspectors 
 with it, you see you would only be doing the same work as is being done now. 
 
 The Commissioner : It depends on how many factory inspectors you have. 
 
 Mr. Dawson: You might have to increase the inspectors, but you would get 
 better work. 
 
 The Commissioner : Now, what would your idea be as to the finality of the 
 decision of the Board? 
 
 Mr. Dawson : Before answering, might I ask is it the idea that the Board 
 would first fix the award? 
 
 The Commissioner: Assume that. If the parties have agreed of course 
 there is nothing to be done, I suppose, except to see that it is carried out. 
 
 Mr. Dawson: The parties would be the Board on one side and the injured 
 on the other, so it would be a question of the Board fixing it. If it is to be fixed 
 in the first instance by the Board, according to experience it would be wise to 
 have some body to which an appeal could be made. 
 
 The Commissioner: Of what character? What kind of an appeal? 
 
 Me. Dawson: The way they do it in Norway, which is most closely similar 
 to what you have suggested, is instead of the Board passing upon it in the first 
 instance the manager of the fund, who gives his whole time to it and is on the 
 job every minute, does that, and there is an appeal from him to the Board. I think 
 that would be satisfactory. 
 
 The Commissioner: And make that final? 
 
 Mr. Dawson : Yes. 
 
 The Commissioner: Very few questions of law could arise, I suppose, under 
 that system? 
 
 Mr. Dawson: Of course in no country do they make that final as to the 
 construction of the law itself. 
 
 The Commissioner: Upon questions of law there would be an appeal? 
 
i32 MINUTES OF EVIDENCE: Xo. 65 
 
 Mr. Dawson : They do not ask the Board as to the statutory construction 
 anywhere. 
 
 The Commissioner: You must not leave a hole or they will drive a coach 
 and four through it. 
 
 Mr. Dawson: I should think not if nothing was left but the construction of 
 the act itself. For instance, if the amount of the award, if any award was to 
 be made, and so on, were left untouched entirely and were not subject to review 
 by the court, and it became purely a question of the construction of the statute 
 as to whether it was applicable to his case at all — — . 
 
 The Commissioner: That, in effect, is the British system. There there is 
 no appeal except on a question of law from the judgment of the County Court, 
 and a good many cases have gone up to the House of Lords upon questions of 
 Jaw. Now, if you have it, as probably it would be necessary in any such systems at 
 present, that the accident must arise out of and in the course of the employment, 
 that is a question that raises the most difficulty. 
 
 Mr. Dawson : I know it is. 
 
 The Commissioner: That would lie. T suppose, a question upon which you 
 think there could be an appeal to the courts? Or do you think that? 
 
 Mr. Dawson: That, after all, is hardly a question of statutory construction. 
 It is a question of fact as to whether this was or was not during the course of 
 employment. 
 
 The Commissioner : The House of Lords did not think so. They treat it as 
 a question of law. 
 
 Mi;. Dawson: Is that necessarily a question of statutory construction? 
 
 The Commissioner : No, it is the application of the statute to the particular 
 case. 
 
 Mr. Dawson : Yes, but what I suggested was that only statutory construc- 
 tion should go to the courts. 
 
 The Commissioner: That is a very limited field. 
 
 Mr. Dawson : That is it. It should be a very limited field. But supposing 
 your Commission was obviously exceeding its powers and was acting in an arbi- 
 trary manner not called for by law, and there were certain evidences of it? Sup- 
 posing they were putting an interpretation upon the statute itself which appeared 
 to be erroneous? 
 
 The Commissioner : Illustrate that by a concrete case, if one occurs to you ? 
 
 Mr. Dawson : I do not know that I can do it. I am giving it very roughly, 
 I am sure. 
 
 The Commissioner : Perhaps it might be as to whether the man was en- 
 titled to so much money, whether he came within the act? 
 
 Mr. Dawson: "Well, I would not really like to give a concrete instance. I 
 haven't any in mind. I am told in these countries where they have provided that 
 only question of statutory construction could go to the courts, as I understand 
 to be the case in Norway, that almost no cases have gone there. 
 
 The Commissioner: Then just one more question. You have heard Mr. 
 Wegenast's statement and you know pretty well what it is. I would like to know 
 if there is any joker hidden anywhere in his proposition? 
 
 Mr. Dawson": I am sorry to say that I do not know what is his proposition 
 altogether. I have not seen any measure drawn up, and therefore I have no know- 
 ledge of how anything of that sort would come in. So far as the general situa- 
 
1912 WORKMEN'S COMPENSATION COMMISSION'. 433 
 
 lion is concerned, after you have concluded, if yon do conclude that the principle 
 upon which compensation should he paid should be changed, when a change is 
 made it should he such as to call for payments by the employers according to the 
 hazard of the industry, and that the question of how the money shall be raised, 
 whether assessed to provide capitalized values or on a current cost basis, and the 
 (piot ion as to how the fund should he administered is one necessarily in which 
 the employers, if they are the only ones to contribute, will have' a paramount in- 
 terest next to the general public itself, and a met hod which will impose tem- 
 porarily the least burden on industry, and in the end no greater burden than any 
 other method, the payment of claims themselves, and which will impose the least 
 burden of cost of administration, is obviously for the interest of the employers 
 first; but second, and much more important, to the people of Ontario and Canada 
 in general, because it is just so much waste obviated, and it is just so much money 
 kept in the industry, which if withdrawn from it will not readily find its way back 
 into those channels, and I know of no joker or trick which could be accomplished 
 under it, nor do I suspect any desire whatever on the part of Mr Wegenast or his 
 associates to do so. I would like to say in that connection, your Lordship, that I 
 am not here under a retainer in the ordinary sense at all, as you well know, and 
 1 shall he very glad when 'the bill is framed to examine it carefully for you, and 
 I give you my honour T will point out any jokers that I can see. 
 
 The Commissioner : The manufacturers have nothing to do with framing 
 the hill. 
 
 Mi;. Dawsox : But if through the ideas they put forward there should be any- 
 thing that might work that way I will be very glad to point it out for you. 
 
 The Commissioner : I know you will be fair according to your lights, and 
 that is the best that any of us can do. 
 
 The British Act, and I fancy other acts, exclude from the benefit of the 
 compensation casual employees. What is your idea about that? 
 
 Mr. Dawsox: I think the only reason that any act does that is because of 
 the great difficulty of covering them. It is not a good thing from the community 
 standpoint to exclude them, but per contra it is almost impossible to include them 
 and collect a premium. It is difficult to find them, and still more difficult to find 
 the men who employ them. 
 
 The Commissioner: Do you understand under a system by which the rate is 
 based upon the wage-bill that the wages paid to casual employees are excluded? 
 
 Mr. Dawson : Virtually so, yes. You see the casual employee is very much 
 in the position of a self-employed person. The distinction, for instance, between 
 a shoemaker who is doing a job for you and you pay him for it, or cobbling, and the 
 boy whom you meet in the street and ask to run an errand for you and hand him 
 a quarter, is after all very little. They are both really self-employed people. Tt 
 is possible to cover them, but it is difficult, and in the first stages of a thing like 
 this I should think it would be exceedingly difficult. 
 
 The Commissioner : Supposing they brought in two or three men for a week 
 or ten days? 
 
 Me. Dawson: They are not casual employees. 
 
 The Commissioner: Why not within that definition? Is that not what it 
 means ? 
 
 Mr. Dawson : It should be defined so as to include them. 
 28 l. 
 
434 MINUTES OP EVIDENCE: No. 65 
 
 The Commissioner : It seemed to me the British Act was pretty loose upon 
 that point. 
 
 Me. Dawson: It is loose. 
 
 The Commissioner : I thought the idea was if a man came in to work a day 
 or so. 
 
 Mr. Dawson : A day, or an hour, or something like that. 
 
 The Commissioner: Then he was not within the protection of the act? 
 
 Mr. Dawson: I have not studied the construction of the British Act par- 
 ticularly in that regard, but I suppose that would be its construction. 
 
 The Commissioner: 1 have never noticed a case. 
 
 Mr. Dawson : I am not familiar with it. 
 
 The Commissioner: Then another question, and this is the last upon this 
 branch. Supposing, as will probably happen, but I hope it will be long before it 
 comes, there is a very serious depression, what effect would that have upon a 
 scheme of this kind? 
 
 Mr. Dawson: That is the purpose of collecting this reserve. Suppose you 
 •collect ten or fifteen per cent. (I think in Germany it is about eleven per cent.) 
 extra, beyond the requirements each year, then if a depression comes it means the 
 wage-bill for that year is much lower, and they will draw from that reserve a 
 sufficient amount to cover the assessments that would be levied upon the remaining 
 wage-bill, such as would have been paid if the time were as usual. 
 
 The Commissioner: Has that been found adequate? 
 
 Mr. Dawson : The amount has been unquestionably adequate, but they have 
 not called upon it for a dollar. Since 1881- they have had no serious depression. 
 That is a remarkable record, but it is a correct one. 
 
 Mr. Kingston : I put a question to you last night with reference to the en- 
 forcing of collection of premiums in the case of a number of small employers, and 
 I suggested if it might not possibly be we]l to say that unless the premium is paid 
 the benefit of the act will not be applied. Your answer rather indicated that I 
 had reference to the employee, but I meant to suggest in the case of an employer 
 if he did not pay his premium might he not be left open to the old common law 
 action against him, and make it a sort of negative compulsion. If he does not 
 pay his premium in accordance with the schedules of the act he will not have the 
 benefit of settlement for his accidents under the act. 
 
 Mr. Dawson: What they do in Germany is well worth telling, and perhaps it 
 may help to answer the question. If an employer has failed to pay the premium, 
 and also if he has failed to deduct the sickness insurance premium from the wages 
 and pay it over to the sickness society, the employee is insured precisely as if it 
 had been paid. During the first thirteen weeks he is covered by the sickness 
 society, and the communal society takes care of him just the same. After the first 
 thirteen weeks, if he is still disabled, the Employers' Association takes it up and 
 they take care of him. Then they pounce down on his employer and find how much 
 premium he should have paid, and they charge to him first the premium he should 
 have paid, and secondly a fine which is an increasing one if lie has played this 
 trick before, and thirdly all the money they have had to pay on account of his 
 employee, including the present value of what they think they are going to have 
 to pay in the future. One or two such experiences generally make an employer 
 very amenable. 
 
1912 WORKMEN'S COMPENSATION COMMISSION. 435 
 
 Mr. Kingston : Supposing the employer is very poor or 'practically insolvent 
 and it is impossible to collect that? Suppose he is execution proof? 
 Me. Dawson: There are some losses in all countries. 
 
 The Com mission kk: The general fund would have to lose then, of course. 
 Mr. Kingston: You are doubtless more or less familiar with the classifica- 
 tion adopted by the liability companies? 
 
 Me. Dawson : I am somewhat familiar, not extremely so. 
 Me. Kingston: Do you see any difficulty, for example, in the first year in 
 starting this business off, instead of analyzing the whole situation from an actu- 
 arial point of view to adopt the employers' liability rates as the basis, and then do 
 the same as the employers' liability people do, at the end of the year, ask that the 
 excess premium he paid. You undersand the system? 
 
 Mr. Dawson : Yes, perfectly. I might give a little explanation of what I do 
 understand. The suggestion. is that the rate of assessment be fixed at the rate of 
 premium now charged by the Employers' Liability Company, that to be computed 
 on so much pay-roll for the year, and then at the end of the year, if the pay-roll 
 has been more, collect an additional amount, and if it has been less a rebate. This 
 might be all right. Whether it would be or not would depend somewhat on cir- 
 cumstances. Personally, I would prefer to know precisely what the benefits were 
 going to be and to have an opportunity to compare with experience the result, so 
 as to make it clear to my mind that it probably would be fair as between the 
 different industries if it were done that way under these benefits. 
 
 The Commissioner: Would that not exclude this current cost, because these 
 companies charge a premium to cover the capital cost? 
 
 Mr. Dawson : No. At present, you know, they charge a premium only suffi- 
 cient to cover the employers' liability under the existing law. 
 
 The Commissioner: I know, but still it is to cover the capital expenditure. 
 Mr. Dawson : That might not be larger than is required conceivably, besides 
 it was my suggestion that it be made somewhat larger, safely larger, than we 
 thought would be required, so that you would not have a situation of an empty 
 treasury and making an assessment at the end of the year. 
 
 The Commissioner: There is not much difficulty to be apprehended on that 
 score I think if you start with a reasonable estimate of what the current cost plus 
 the surcharge would be. It would be very easy to adjust it at the end of the year. 
 Mr. Dawson : That is my judgment. I think it would he easy to make out a 
 schedule of rates that would be pretty reliable. They might require some read- 
 justment at the end of three years, but I should think they would stand for that 
 time. It must be taken into account that that rate is not meant as a fixed rate, 
 it is meant as a rate of assessment by which you distribute a loss. 
 
 Mr. Kingston : Then on that question of classification. You probably have 
 seen the Employers' Liability Company's classification. There is, as you know, a 
 builders' schedule, and metal schedule, and different schedules. 
 
 Mr. Dawson : It is a grouped classification such as Mr. Wegenast has spoken 
 of. 
 
 Mr. Kingston : Under the builders' schedule there would be probably a dozen 
 classifications, and so on. I suppose under the ordinary liability company's rate 
 book there would be a thousand different classifications and sub-classifications. Do 
 you see any difficulty in practically adopting these well worked out classifications 
 in a system such as has been suggested? 
 
436 MINUTES OF EVIDENCE: Xo. 65* 
 
 Me. Dawson : With a reasonable amount of study and some simplification I 
 think it would answer. I think it would scarcely do to adopt it outright, but with 
 some reasonable study and investigation as to whether the new system might need 
 serious changes in its relation to one another I think it would answer. 
 
 The Commissioner: Perhaps it would be better to go on with the other 
 branch, and ask Mr. Dawson to supplement it by a memorandum. 
 
 Mr. Wegenast : There was a question raised with Mr. Boyd by either your 
 Lordship or myself. Would you put the schedule of rates in the act itself, or 
 leave that to the Board, if a Board were appointed. 
 
 Mr. Dawson: I should be disposed to leave it to the Board. In saying that 
 I wish to qualify it in this way : If there are no reasons of public policy or of 
 custom that would cause a contrary conclusion I do not see any serious objection 
 to putting it into the Bill. 
 
 The Commissioner: I think under our system any readjustment in the class- 
 ification would have to be subject to the approval of the Lieutenant-Governor in 
 Council, because the Government is responsible for the system if the plan is 
 adopted. 
 
 Mr. Dawson: That is not uncommon. There are other countries where it is- 
 first formulated by the Board, and worked out, and the approval is more or less 
 perfunctory unless there is a serious objection from some quarter. I should say 
 that system would be admirable and would work well. 
 
 The Commissioner: You could have it so that it has to be laid before the 
 Governor, and if he does not dissent it will go into force. 
 
 Mr. Wegenast: That leads to another matter that is of very great import- 
 ance, but which I hesitate to mention for reasons that will be at once apparent. 
 
 The Commissioner: After you mention them. 
 
 Mr. Wegenast: Yes. I am trying to account for my hesitation. We recom- 
 mend in the brief which I have filed the organization of an independent State 
 non-political Board. As I put it here, we recommend the creation of a State,, 
 non-political insurance department. 
 
 The Commissioner : You will have to find some uninhabited country to find 
 that. 
 
 Mr. Wegenast: I think my idea will at once be apparent when I refer to the 
 Dominion Bailway Board and the Ontario Railway Board, and the other com- 
 missioned Boards which we have in this country which may be described as non- 
 political, and are generally considered as outside the immediate scope of the 
 system of responsible Government which we have here. 
 
 The Commissioner: You would exclude all manufacturers if you did that? 
 They are generally in evidence, they say, some way or other. 
 
 Mr. Wegenast: I am not suggesting that the body should be composed of 
 them. 
 
 The Commissioner : You must have somebody with ideas. I quite agree that 
 it should be non-partisan. 
 
 Mr. Wegenast: That is the idea. In short, the Board should not be subject 
 to what we call the spoils system, and I am speaking of that not only in the sense 
 that the appointees should understand Hint their term of office continues notwith- 
 standing a change of political complexion in a Government, bul in the other senses 
 that go along with it. It is pretty difficult to describe just what one means, but 
 the general reference to the Railway Board of Canada I think indicates the scope 
 of niv surest 'on. 
 
1912 WORKMEN'S COMPENSATION commission. 437 
 
 The Commissioner: You have forgotten with the Railway Board, in some 
 cases, at all events, there is an appeal to the Privy Council of the Government. 
 
 Mi;. Wegenast: Yes, quite so. 
 
 The Commissioner: So the State controls the Board in a sense. 
 
 Mi;. Wegenast: I was not referring to that. T would not like to sec, and I 
 am saying this advisedly as an officer of the Manufacturers' Association, the matter 
 put in the hands of a Government Department under a Cabinet Minister. That 
 is another way of expressing my idea. 
 
 The Commissioner: You have not discussed yet this question of how the 
 fund is to be created, although it has been incidentally referred to. 
 
 Mr. Wegenast : I am not disposed to give any very serious attention to that. 
 Mr. Dawson's views, I think, are known, and I have proposed to leave that over 
 in the meantime for what 1 considered something a little more important. 
 
 The Commissioner : I would like to have got not only his views, but the 
 reasons for the faith that is in him. 
 
 Mr. Wegenast: Is it your Lordship's wish that I should go into that now? 
 
 The Commissioner : We know what his views are, and I would like to know 
 what the basis of them is. 
 
 Mr. Dawson : What you understand my view to be I hope is that I do not 
 know of any reason based upon experience or knowledge of the working plans in 
 other countries why workmen should be required to contribute to the payment 
 of the occupation accident cost. 1 do know very good reasons why you should 
 get rid of these border line questions and also make a system of this sort as 
 highly beneficial as possible to the working men and their families, and thereby to 
 the entire community. By having the insurance cover at least non-occupational 
 accidents as well as occupational, thereby avoiding all disputes on that question, 
 and if popular sentiment is suffiiently developed, also cover sickness, and when 
 it does I am perfectly clear that the workmen should contribute and should 
 contrihute liberally to the fund. I am also equally clear that from my know- 
 ledge of how it has worked in other countries that they will contribute willingly, 
 and in my judgment, in the United States at least, Avould to-day do so very 
 gladly. That opinion is based upon personal experience such as in this associa- 
 tion I spoke of where I found they contributed amounts as high as one per 
 •cent, or one and a half per cent, or even two per cent, of their wages. That 
 is a pretty large contribution. When the benefits are such as to warrant it, 
 and are such as in the opinion of not only workmen but practically the whole 
 civilized world now ought to be borne by the industry, but are things which should 
 be borne by them individually en masse, they quite see it and are ready to make 
 contributions. If you should find it possible to work out a first-aid plan to take 
 care of the earlier weeks, of some such nature as I am suggesting, I think that a 
 contribution would be welcomed by the working men here, as I am sure it is every- 
 where else. That is, if contribution could be made so that just the moment an acci- 
 dent happened, whether it was one that came within the scope of "arising out of and 
 during the course of employment " or not, assistance would be rendered and bene- 
 fits would be paid, and, better still, if in the event of disabling sickness the same 
 were done, I am entirely confident that a liberal contribution from the working 
 men of Canada would not be resisted, but would be welcomed. 
 
 The Commissioner: I would like to have you tell us what your reason is 
 for thinking that beyond the risks that are neither the fault of the employer 
 
438 MINUTES OF EVIDENCE: No. 65 
 
 or the employee, the risks that are due to the fault of the employer and the risks 
 that are due to the not serious negligence of the employee, due to modern con- 
 ditions under which they work — a little inattention by the man in what he is 
 doing, that strictly might be considered negligence — put those on one side, and 
 say the workman is not to be deprived of compensation by reason of that. What 
 is the justification for saying when you go beyond that, and when he is protected 
 against his own negligence by this insurance fund, that he should not be asked to 
 contribute to the extent to which he is protected? 
 
 Me. Dawson : It does not appeal to me. I say that with a good deal of hesi- 
 tation, but it does not appeal to me for this reason, that in the first place under 
 any rational system of compensation the workmen make a very large contribution 
 by accepting very materially less benefits than their entire earnings. That is 
 when a man is disabled there is a loss of all his earnings, and something more, 
 namely, his care and medical attention, and yet it is not proposed anywhere in 
 this country or in the United States to give him over 60 per cent. So that he has 
 made one very large contribution at the outset. 
 
 The Commissioned : That is a contribution he makes to those things for 
 which he is the most responsible. 
 
 Mi?. Dawson: Yes, and I think that will fully cover the cases that would be 
 charged up to the responsibility of the workmen, the large contribution. The other 
 objection I have to it is this: that if we have abandoned the theory that it should 
 not rest on fault at all, why do we return to it for any purpose? In other words, 
 if our impression is it is really after all a matter between the community in one 
 sense and the whole community virtually in another sense, and we are only using 
 this means of taking care of it as the rational one, then we have no reason to re- 
 open the ground in order to discuss a merely cognate question. But my strongest 
 objection is it has been tried and it has not worked well. In other words, again, "I 
 am from Missouri." I have a theory like this as to my own country, and I have 
 sufficient knowledge of Canada, and sufficient admiration of it, so that I will in- 
 clude Canada in the statements I made about my own country — I believe we have 
 as good people and as good institutions as can be found anywhere, and therefore I 
 believe if I find anything which has been done well anywhere else we can do it 
 as well; but if I find it has been tried repeatedly elsewhere and it has not done 
 well, and no good purpose has been served by it, then I am very slow to believe 
 that if we tried it we would have good success with it. I quite appreciate if we 
 have as good people and as good institutions as anywhere else we might succeed where 
 they have failed, but I never feel sure" of it. Now, they have required the employees 
 to contribute to accident funds in Austria for very nearly a quarter of a century. 
 I think it was commenced in 1887. The contribution to begin with was whittled 
 down to ten per cent., altogether too small to really have any influence upon the 
 workmen towards prevention. A very large proportion of the employers do not 
 collect it. Those who did collect it, in any event, received the ill-will of their 
 employees. It does not amount to enough to be really worth while, and it is pretty 
 generally the opinion there that it has not been a good feature. It has adhered to 
 it, however. The Austrian Government is very much disposed to do what it 
 pleases and it has been adhering to it, but it is not regarded anywhere as having 
 done well. 
 
 The Commissioner: The principal reason in which it would be justifiable, if 
 at all, would be as the price which the workman pays for his insurance against his 
 own carelessness. 
 
1912 WORKMKX'S COMPENSATION" COMMISSION. 439 
 
 Mr. Dawson: Yes, but even on that theory, as I pointed out, he pays a big 
 price already. 
 
 The Commissioner: That is the strongest argument I have heard yet. The 
 mass of them pay that. 
 
 Me. Dawson: That is true. 
 
 Me. Wegenast: What objection would there be to this, Mr. Dawson, as I 
 have suggested, a clause making it optional with the employer on due notice, and 
 perhaps with the consent of the Board, permitting the employer to deduct a cer- 
 tain percentage of the insurance premium? 
 
 The Commissionee: No matter what the opinions were, I would not recom- 
 mend anything like that. 
 
 Me. Dawson : It seems to me, too, your Lordship, that it is objectionable on 
 this ground : that it puts a very big discriminating power in the hands of that 
 Board, which I should think would draw it into politics. I mean there would be 
 tremendous influences brought to bear. 
 
 The Commissionee : Then you would always have the employer making regu- 
 lations and forcing the men to agree to them. 
 
 Me. Wegenast : If a clause like that were contained in the act the employers 
 in this Province, no more than the employers in Austria, would be disposed to en- 
 force that unless occasion arose. It would be in every case a term in the contract 
 of employment whether the deduction was to be made or not. It would be under- 
 stood between the men and the employer when they entered the employment 
 whether that was lo be deducted or not. Otherwise, my proposition is that there 
 would have to be a notice, a month or whatever you want to make the length of 
 time, before the rule cuild be enforced. Now, suppose the employer found that 
 the employees were careless in removing safety appliances, or whatever other form 
 the carelessness might take, he could post up a notice in his shop, or the foreman 
 could, warning the men that this contribution would be enforced unless the rules 
 were observed. Do you see any objection to a power of that kind in the act under 
 those circumstances? I can see myself there might be some objection, and it is 
 only because I want to leave it open and be as reasonable as I possibly can that 
 I suggest the consent of the Board. I would rather not have it, of course. 
 
 Mr. Dawson : I do see objections, and yet there is some force in the propo- 
 sition, that it might have a deterring effect at times. Let us consider it first from 
 the standpoint of no consent of the Board being required. The thing I fear about 
 it is that it would be something which would be done, not by the wisest employers, 
 but by the meanest. If the consent of the Board was required I would expect they 
 would be bombarded with applications for consent, and having once consented for 
 a few employers they could scarcely refuse it to others without being charged with 
 discriminating. Then, again, their lives would be made miserable without any 
 good result. 
 
 The Commissionee : Surely when once you have settled upon the principle 
 you want it plain and simple, with practically no exceptions. 
 
 Me. Dawson : I quite concur in that, your Lordship. It seems to me so. I 
 do not, of course, pass upon the applicability of the thing to this country, but in 
 general I would not like it. 
 
 The Commissionee: It would be at once said, from what we have seen here, 
 that the men had been, perhaps not directly, but indirectly forced to agree to this. 
 The veo-y thing you want to bring about, a better state of feeling between em- 
 ployers and workmen, would be imperilled by such a thing as that. 
 
440 MINUTES OF EVIDENCE: Xo. 65 
 
 Mr. Miller : It would cause friction and irritability between the parties. 
 
 Mr. Gibbons: Didn't Mr. Wegenast make the statement the other night that 
 laws were not made for honest men? 
 
 The Commissioner : Laws are made for everybody to obey. 
 
 Mr. Gibbons : That was his statement, that it would be only necessary to make 
 a law to check those who would be dishonest, or something to that effect. 
 
 The Commissioner: 1 think it would be very well, Mr. Wegenast, to make 
 a provision that where a particular manufacturer made a better provision than 
 the act makes for his workmen he should be outside the act. 
 
 Mr. Dawson: If you put in an insurance system such as we have been dis- 
 cussing I do not think any employer would want to be outside of the act. The 
 ■only cases in Germany where they found there was such a thing were cases like 
 the great Krupp works where they already 1 id started systems which really were 
 more liberal than the German laws, and Krupp kept it up, and so have his suc- 
 cessors. They were taken out of the act so long as they maintained that. But I 
 very much doubt if any employer in Ontario would wish to be ouside it. 
 
 The Commissioner: I think you told us your information was that the cor- 
 responding provision in the British Act is a dead letter. 
 
 Mr. Dawson: It is, and the proposed provision in the Federal Act which I 
 have been asked to draft is certainly a dead letter if it is drawn in a form like 
 that of the British Act. 
 
 Mr. Wegenast : Just in order to preserve my submission, which of course I 
 want to stand, 1 put it in this way to Mr. Dawson: Do you consider that the 
 highest degree of preventive care can be attained without contribution, or with- 
 out having the pecuniary interest of the employee enlisted as directly as possible 
 on the side of prevention? 
 
 Mr. Dawson : I am inclined to believe if you could devise a plan under which 
 during the first week the benefits were taken care of as in Germany from a fund 
 to which both parties contributed, provided that contributions also covered benefits 
 fully equal to the employees' contributions other than occupational accidents, 
 1 do believe it would have the very effect it has in Germany, namely, of strongly 
 enlisting the employees to prevent accidents and prevent sickness, and generally 
 to improve their conditions in those regards, and it would be a very good thing. 
 
 Mr. Wegenast: You have observed the provision in the draft Washington 
 Act, which was left out for reasons we need not discuss. You have observed the 
 provision for a first-aid fund? 
 
 aIr. Dawson: I have an indistinct recollection of it, but in general I think 
 ii was this: That there was to be a contribution towards that fund, and it was to 
 cover something beyond occupational accidents. Am I right as to the second 
 point ? 
 
 Mi;. Wegenast: Xo, I don't think so as to the second point. 
 Mi;. Dawson: Then I should not approve of it personally. 
 
 Mr. Wegenast: The provision is this, that a fund is created in the State 
 treasury to be known as the First-Aid Fund, into which shall be paid by each 
 employer on or before the 15th day of November, 1911, and each month there- 
 after, the sum of four cents for each day's work or fraction thereof done by each 
 workman for him during the preceding calendar month or part thereof, and the 
 sum of such four cents shall be deducted by the employer from the pay of the 
 workman. Mr. Preston tells me that his intention was to have an equal contri- 
 
1912 WORKMEN'S COMPENSATION COMMISSION. -Ill 
 
 bution from employers and employees. It might be well to explain tbe reason 
 Mr. Preston gave me for culling that out. lie said tbe time was exceedingly sbort 
 for the adjournment of the legislature, and a good deal of objection was raised 
 because tbe contribution of two cents a week was as large in such industries, for 
 instance, of mattress makers as it was in iron working industries. Now, for tbe 
 sake of making tbe contribution definite Mr. Preston bad put in tbe sum of four 
 cents, two cents to be deducted from tbe wages paid. His idea was that they 
 should contribute in equal proportion, but there was not sufficient time to re- 
 draft tbe section as it was going through the legislature. It had to be abandoned 
 in order to get the act through. 
 
 The Commissioner: That was limited to accidents? 
 
 Mr. Wegenast: It was a first-aid fund to take care of the employees in case 
 of accident. 
 
 The Commissioner: Only? 
 
 Mr. Wegenast: I think so. The draft act gives the scope of the fund. 
 
 Mr. Bancroft: Would you mind explaining? Does this mean occupational 
 or non-occupational accidents? 
 
 Mr. Wegenast: I am looking for that. "Upon the occurrence of any injury 
 to a workman he shall receive from the First-Aid Fund proper medical, surgical 
 and hospital service, and compensation for the period of temporary or other dis- 
 ability in the sum of $5 per week, but not to exceed three weeks, payable at the 
 end of each week. It shall be the duty of the employer to see to it that the 
 immediate medical and surgical services are rendered, and transportation to the 
 hospital provided, and all charges therefore shall be paid out of the First-Aid 
 Fund." There is something further there than simply the money compensation 
 of $5 per week, which is on the same basis as the $20 per month. There is the 
 surgical attendance and transportation and hospital expenses in addition to that, 
 but there is nothing of course about occupational diseases. 
 
 What would you say, Mr. Dawson, to a proposition which I am making in 
 my brief as an alternative to a money contribution by way of a deduction from the 
 wages ? I may say that I have stated in my brief that contribution from the work- 
 men may take three forms. 
 
 The Commissioner: Perhaps you had better not go into your brief, as our 
 time is short. 
 
 Mr. Wegenast: I would like to put the three alternative forms before Mr. 
 Dawson. The first was a money contribution, the second a contribution by way 
 of a waiting period, of say four weeks, which I proposed to suggest, during which 
 the injuries would be taken care of by a first-aid fund along the lines suggested 
 by Mr. Preston's draft act. 
 
 Mr. Dawson : I should very greatly favour it if it was extended to take care 
 of all accidents, whether occupational or not, and still more if it would take care 
 of sickness. I have this impression that a great many employers, if they would 
 sit down and consider the matter, are out of money a good deal on account of 
 sickness and non-occupational accidents, through voluntary assistance, and through 
 loss of time in the factory or shop which could have been avoided if it had been 
 given attention, and so on, and they could very well afford to thus extend it. I 
 very much doubt its wisdom otherwise. Experience in other countries has been 
 this : For -instance, in Norway they left thirteen weeks off just like they did in 
 Germany in the hopes that there would be voluntary forms of sickness insurance,. 
 
442 MIXUTES OF EVIDENCE: Xo. 65 
 
 but after waiting some sixteen or seventeen years for those voluntary societies which 
 should have been formed they had to pass a Sickness Insurance Act and provide 
 for compulsory contribution from both employers and employees to fill that gap. 
 I think that something like that would he extremely desirable. I would very 
 much rather see it, for instance, than to begin at the first day or the end of the 
 first week, or even the second. 
 
 Mr. Wegenast: You would rather have the period extended a little and start 
 that fund ? 
 
 Mr. Dawson: That is it. 
 
 The Commissioner : The experience of Xorway does not give much hope of 
 it being vountarily undertaken? 
 
 Mr. Dawson : I quite concur, and that exjDerience has been the same in other 
 countries too. 
 
 Mr. Wegenast : Would it be possible to frame the act in such a way that 
 there would be a stronger inducement for the formation of these funds? 
 
 Mr. Dawson : Well, the inducement was made pretty strong. Every en- 
 couragement they could give was given in Xorway. I really cannot think of any- 
 thing that could be put into the act itself. 
 
 Mr. Wegenast : One thing I am thinking seriously about, your Lordship, is 
 the question of preserving the first-aid and sickness schemes already in existence. 
 One very good example of those schemes is that operated by the McClary Com- 
 pany of London, which I think you were told about by Mr. Gartshore. That 
 scheme carries not only accidents but also sickness, and includes the services 
 of a nurse, who is sent out in case a man does not turn up in the morning 
 for work. He says, by the way, that this man often reports reasons for the 
 absence of the workman which leads to the discharge of the workman. 
 Mr. Dawson : That will sometimes happen. 
 
 Mr. W t egenast : But in other cases it is found the workman is absenting him- 
 self because of illness in the family, and the nurse very often takes charge in a 
 case of illness of the wife or children and lets the man go to his work. That will 
 indicate something of the scope of the work of these institutions,, and I am ex- 
 ceedingly anxious personally, and I think I am representing my colleagues, when 
 I advocate something that will preserve some scope for those institutions and there 
 are a great number of them. There are far more than I realized when this in- 
 vestigation began. 
 
 The Commissioner: Would the practical way of meeting that not be to as- 
 certain whether the large body you represent would be willing to make it part of 
 the Act that there should be a first-aid scheme such as Mr. Dawson suggests, the 
 employer contributing half and the employee the other half. That would be a 
 pratical way of geting at it. 
 
 Mr. Dawson: You would be far in advance of anything that has been done 
 in this continent if you did it, and I am certain it would work well. I have had 
 a number of years personal experience of those things, and I know it would work 
 well. 
 
 The Commissioner : That would help to relieve the unions of some of the 
 burdens they now bear. 
 
 Mr. Dawson: Yes, and if it were done under the compulsion of the law there 
 would not be the objection 1" the voluntary schemes that you have, that they are 
 
1912 WORKMEN'S COMPENSATION COMMISSION. 1 i:; 
 
 used to break up the union, which objection is nol entirely visionary by any 
 means. 
 
 Mr. Wegenast: I cannot off-hand commit mv colleagues. 
 
 The Commissioner: Mr. Dawson has thrown it out, and I am suggesting 
 that for your consideration. 
 
 Mi;. Wegenast: I simply said that to qualify what I intended to say, that 
 I would think that such a proposition would be supported by the Manufacturers' 
 Association. 
 
 Mr. Dawson : I certainly would take great pride in its being done, and re- 
 gard it as highly creditable to your Association and to your Province. 
 
 Mr. Wegenast: You would not carry your objection to the workmen's con- 
 tributions so far as to condemn a scheme of that kind, if we put that scheme in 
 operation? 
 
 Mr. Dawson: I should heartily favour it. 
 
 Mr. Bancroft: To get that matter clear as far as compensation for acci- 
 dents is concerned " arising out of and in the course of employment," it is not 
 based on experience to say that workmen should be required to contribute? 
 
 Mr. Dawson: The contribution of the employer and the employee in a plan 
 which covers sickness and non-occupational accidents, as well as occupational 
 accidents, would be nearer fair to the employer if it was two-thirds from the em- 
 ployee and one-third from the employer. 
 
 Mr. Bancroft : If it covered them all ? 
 
 Mr. Dawson : Yes, because sickness is more numerous. 
 
 Mr. Bancroft : Supposing in the Province of Ontario we should have a Com- 
 pensation Act which just covered injuries and accidents arising out of and in the 
 course of employment, it would not be justice according to the experience of other 
 countries to ask the workmen to contribute? 
 
 Mr. Dawson: I have already stated that. 
 
 Mr. Bancroft: If it was extended in its scope? , 
 
 Mr. Dawson : So as to cover during the earlier weeks sickness of all kinds 
 and accidents of all kinds, then I think it would be fair and just. 
 
 The Commissioner : Would it not be pretty difficult to get at a financial basis 
 in that? 
 
 Mr. Dawsox : That is easier than the accident. 
 
 Mr. Bancroft: We would really be going further than they have gone any- 
 where else. According to the terms that are used all over the world in those 
 matters, in that case we would really be going further than Workmen's Compen- 
 sation; we would be taking on social insurance. 
 
 Mr. Dawson : You would be taking on sickness insurance for the early weeks. 
 
 The Commissioner: Supposing that was not adopted and it was simply a 
 scheme on your lines with disability lasting only a week or two weeks, should there 
 be any compensation for that period? 
 
 Mr. Dawson: I should say not certainly for the first week, but in that case 
 undoubtedly the idea that is being accepted over in the States, where they wish to 
 give waiting periods of two weeks or longer, I think ought to be adopted. That 
 is, that the actual necessary hospital or physician's expenses should be assumed. 
 
 The Commissioner : I suppose the main object of that is to avoid having to 
 pay for trivial things that really need not interfere with the man going on with his 
 work, and to guard against malingering. 
 
444 MINUTES OF EVIDENCE: No. 65 
 
 Me. Dawson : And also to guard against a man going on working that is not 
 able- to work. 
 
 The Commissioner : If you limit it to paying for the actual hospital and 
 medical expenses there would not be any temptation to incur those expenses. 
 
 Mr. Dawson : Undoubtedly that is true. 
 
 Mr. Bancroft: Would I be right in saying, Mr. Dawson, that your views are 
 in the case of a Compensation Act, where there was a waiting period of any kind 
 whatever which Avas covered by a sickness insurance, that the burden of the com- 
 pensation should be borne by the industry, or a tax, without contribution to the 
 workmen, but in case of the other things being covered through a fund for sick- 
 ness then the workmen should contribute to that, but not to the other. 
 
 Mr. Dawson : Let me make it clear. I would be utterly opposed to the work- 
 men being required to contribute to a pure plan of workmen's compensation for 
 industrial accidents, absolutely, but if there was coupled with that during the 
 early weeks, for instance, a protection against sickness and non-occupational acci- 
 dents out of a fund contributed both by workmen and employers, so that the results 
 of occupational accidents, non-occupational accidents and sickness would be taken 
 care of during those early weeks, I should then consider it would be entirely proper 
 to ask the workmen to contribute, for the reason that they would be receiving 
 benefit from that fund other than the occupational accident benefit. 
 
 Mr. Bancroft: In that case it would be like the German system? 
 
 Mr. Dawson : Yes. 
 
 Mr. Bancroft : Then in the administration of the fund for sickness insur- 
 ance the workmen should have representation according to the percentage they 
 pay? 
 
 Mr. Dawson : Surely, and in fact every employer has found, as I have ex- 
 plained already, it is wiser to have that representation. 
 
 Mr. Kingston: Has there not been some change made in the German Beich- 
 stag on that question ? 
 
 Mr. Dawson : Yes, previously the employee was required to contribute two- 
 thirds and the employer one-third, and the change has been to increase the em- 
 ployers' contribution to half and also to increase his representation to half. 
 
 The Commissioner : No question of that kind would arise under such a Board 
 as you have suggested? 
 
 Mr. Dawson: No, but you would hardly take these early weeks of the sick- 
 ness, too, and charge the Board with its entire management. 
 
 The Commissioner : It would have to supervise it, and do it under a sub- 
 ordinate body, I suppose. 
 
 Mr. Dawson : You would set up in each locality perhaps a little organization 
 of its own, and the representatives would be selected by the employers on the one 
 side and the employees on the other, under the strict supervision of the Board. 
 Then it would be democratic in its operation, and experience has found that is 
 the best. 
 
 Mr. Wegknast: Your idea is the body which would govern this benefit fund 
 should be local ? 
 
 Mr. Dawson: It certainly should be local. Whether there might not also be 
 permitted bodies connected with large industries as an entirely separate matter 
 should be left to that Board, but in the absence of membership in any such body 
 
1912 WORKMEN'S COMPENSATION COMMISSION. 445 
 
 the man should be considered a member of the local body. That is the only way 
 you could handle it. 
 
 The Commissioner: If there was a difference of opinion between the two re- 
 presentatives, who would settle? What is the German system where there is equal 
 representation ? 
 
 Me. Dawson : They have not had equal representation until now, but I think 
 with equal representation there is this provision put in, that the Government 
 supervising authorities appoint a referee who acts as chairman of the Board. 
 
 Mr. Miller : There would have to be something of that sort. 
 
 Mr. Dawson : Notwithstanding, they have made a good deal out of getting 
 equal representation, the experience I know in Germany has been generally that 
 the decisions of the Board have been pretty nearly unanimous. The exception is 
 rare. I think there would not have been a change at all, your Lordship, if it had 
 not been that the German workmen are pretty nearly to a man Socialists, and 
 the Socialist parties have been utilizing the two-thirds control of these insurance 
 societies. 
 
 The Commissioner: They would probably do what the humane employer 
 does voluntarily. 
 
 Mr. Dawson : Yes. That is, where he is able to do it. 
 
 Mr. Miller : I would like to ask a question with regard to the disturbance 
 that would be created among the fraternal societies if this insurance was brought 
 in to cover that waiting period. We have a great many fraternal societies here 
 to which members contribute for the sake of getting benefits in the case of sick- 
 ness. Do you know anything about the disturbance to those societies on a scheme 
 of this sort being inaugurated? 
 
 Mr. Dawson : I am very glad, indeed, that the question is asked, if you have 
 a large number of societies furnishing sick benefits. In the States our fraternal 
 societies are mostly only furnishing death benefits, though there are some of the 
 others. There may be many more here in proportion. The way in which that was 
 done in Germany was this. There were already quite a good many sickness in- 
 surance societies of the voluntary type, and the Government set up the following 
 rules for its supervising department. First, there must be a communal society. 
 That society must admit everybody who is not a member of some other kind of 
 society, and if any person is found who comes within these rules who is not in- 
 sured anywhere else he must be recorded by the communal society. Second, there 
 may be also societies connected with particular trades such as a trades-union 
 society. Third, there may be also particular societies connected with given in- 
 dustries, such as, we will say. a particular iron works or steel company, or what- 
 ever it may be. I have omitted some minor classifications. Last there may be 
 voluntary sickness insurance societies. If the employee is insured in any one of 
 these, that is sufficient. The German Government discriminated against the 
 voluntary insurance society in one respect, however, that if the employee presented 
 his card to his employer and showed he was insured there the employer was not 
 required to contribute. If he was insured in any one of the others the employer 
 had to contribute. Mow, what they have done recently I don't know. I know 
 there was talk in Germany of requiring the employer to contribute even when the 
 insurance was in a voluntary society, as it was felt that was unfair. The way that 
 contribution is made under compulsion in Germany is interesting, and while, of 
 course, it is in the book, it is not so clear that one usually understands it well. 
 
446 MINUTES OF EVIDENCE: Xo. 65 
 
 The employee never contributes anything except to these voluntary societies, and 
 there he makes the payment himself. If he insures in any one of the others the 
 employer makes the payment. He does not make his own, but the employer takes 
 it from the employee's wages. The result is that all these books of membership 
 are in the employer's hands and it is his duty to see that the payments are kept 
 up, and he makes the deduction. In case an employer fails to make those deduc- 
 tions or makes the payments to the sickness insurance society and his employee 
 falls ill, it is the duty of the communal society, when informed by the physician 
 who attends that man, to take charge of the case just as if he had been a regular 
 member in full standing and dues all paid. Then they go to the employer and 
 make an investigation and require him to pay all back dues both of himself and 
 the employee for which he is liable, and they require him to pay the benefits they 
 have had to pay in the case of this particular man, and in the event of its being 
 a recalcitrant case, not merely a careless one, they make him pay that in addition. 
 
 The Commissioner : How would they work that out ? Supposing a man was 
 insured in the Foresters, or the Ancient Order of United Workmen, how would 
 that work out? 
 
 Mr. Dawson : If he is insured in a private society like that the Government 
 does not interest itself in the matter, unless the society fails to make a payment. 
 
 The Commissioner: What would they do in a case where there is a contri- 
 bution by the employer to this sick fund? How would they treat the case? Would 
 they pay any attention to that? 
 
 Mr. Dawson : I am afraid 1 do not quite gather your meaning. 
 
 The Commissioner : A man is insured against sickness and he has a sick 
 benefit in one of these societies. I understood you to say that where he was in- 
 sured in these societies you mentioned he might pay the contribution into the fund 
 provided by the act. 
 
 Mr. Dawson : No, what I said was that the emplo} r er must contribute if the 
 employee is insured in any kind of society but the private society. 
 
 The Commissioner: What does he contribute? 
 
 Mr. Dawson : Under the law that is existing one-third of the whole amount. 
 
 The Commissioner: Of what his contribution to that society is? 
 
 Mr. Dawson : Yes, and the employee two-thirds. 
 
 Mr. Doggett : I would like to know under the present German Act. take for 
 instance a seafaring man working away from the German Empire on a German 
 merchant ship, or a railroad man going outside the German Empire, but he is 
 working outside the German Empire, or a man working for a German building 
 contractor outside the German Empire. Would he come within the German Act, 
 although working outside the Empire? 
 
 Mi;. Dawson: In answering your question, I will only be giving you an im- 
 pression, because I am not absolutely positive as to all those three things. The 
 first one, of a sailor or seaman working outside the German Empire, I know abso- 
 lutely he is. I think the railroad man is covered, and I think the contractor is 
 covered. I have a recollection of seeing both of these things. The first of them I 
 know to be true. 
 
 Mi;. MILLER: These men that Mr. Doggett refers to are only supposed to be 
 out of bhe German Empire temporarily. 
 
 Mi;. DAWSON: Yes, T BO understand it. 
 
 Mi;. Miller: They certainly should remain under the provision of that Act, 
 on the understanding that they arc only out for a temporary time. 
 
1912 WORKMAN'S COMPENSATION COMMISSION. 447 
 
 Me. Dawson: Not only temporarily, but also in the employment of a Gor- 
 man employer whose headquarters are in Germany, and who has paid the rate. 
 
 The Commissioner: Supposing an American contractor was to come over 
 here and bring his men, would he not come under such an act as you suggest 
 here ? 
 
 Me. Dawson: lie would in the absence of an international treaty. 
 The Commissioner: Why should he pay at both ends? 
 Mb. Dawson: He wouldn't. I might apply it in Europe where conditions 
 actually exist, because there are such treaties. There has been a good deal of 
 trouble about the matter, but I think it is now pretty thoroughly adjusted. 
 The Commissioner: He certainly should not get double compensation? 
 Mr. Dawson : No. 
 
 Mr. Bruce: What is the position taken by Mr. Dawson on the question of 
 payment to dependants outside the Province or State where the act is in oper- 
 ation ? 
 
 Mr. Dawson : Well, on humanitarian grounds there isn't any question that 
 the same benefits should be paid. Considering it merely as a matter of the com- 
 munity dealing in one capacity with itself in another capacity there does not 
 seem any reason why it should be paid. I should be disposed personally to say 
 that the law should take such a form as this, that where the beneficiaries are 
 situated in a nation giving similar rights substantially to people in Canada the 
 compensation should not be withheld. 
 
 The Commissioner : The favoured nation clause. 
 
 Mr. Dawson : Canada would be as just to other countries as they were to her. 
 Mr. Bruce: Take the act as at present in operation in British Columbia, 
 where the miners who live just inside the border of Alberta and their dependants 
 are refused compensation. Those are just two States bordering on one another. 
 The Commissioner: We could not help that in any legislation of ours. 
 Now, the scale of living in these countries is very much lower than it is here, 
 and why would it not be reasonable, where the dependants are living in a country 
 where $1,000 would be as much as $2,000 here, to allow the Board to scale the 
 compensation down ? 
 
 Mr. Dawson : I think it would not be unreasonable, but the simple issue in 
 my mind was whether we ought not to get these things in such form that we could 
 deal with them by treaty on an equal basis. 
 
 The Commissioner : We cannot enter into any treaty. This Province, and no 
 State in the Union, could enter into such a treaty. 
 
 Mr. Dawson : But Great Britain does enter into treaties which would em- 
 brace it. The thing that occurs to me about the matter, as your Lordship puts it, 
 is as follows: If a man is working in Toronto and has a wife and child in Italy 
 and is contributing to their support, he is contributing after all a percentage or 
 portion, and perhaps a proper portion, of his Canadian wages. It may be that 
 that enables his family to live much better there than if he remained there, but 
 that is the measure of the damage done. 
 
 The Commissioner: He probably lives better himself also. 
 Mr. Dawson : I think that is so. 
 
 Mr. Miller: With reference to the question of compensation to dependants 
 of a man whose family is living in another country, his compensation is based on 
 the wages that he is earning here, and I do not think the compensation should be 
 
448 MINUTES OF EVIDENCE: No. 65 
 
 any different because the damage to the man or his dependants is in proportion 
 to his earning powers here, and not to what their expenses are in the other country. 
 
 Mk. Dawson : In the absence of some clear understanding with the other 
 nation either by treaty or by some trade agreement {here is one very serious 
 reason why a difference should be made, and that is if you undertake to keep 
 track of a Avidow and children off in some distant country with which there is 
 very little communication and very few means of checking up matters you may 
 be making a payment to people who have been dead for some time. 
 
 The Commissioner: There is another thing, too. There would not be much 
 room for reciprocity with the Mongolians or Bulgarians or Macedonians, for there 
 isn't a Canadian working in any of those countries. 
 
 Mr. Dawson : Of course I hadn't any idea of putting it upon reciprocity. In 
 case a nation itself does not recognize these things we should not recognize it as 
 to it. It is now pretty well covered by treaty in Europe. They had difficulties 
 by reason of the great differences in the laws, but they have it pretty well covered 
 now. 
 
 The Commissioner: Why should that make a difference, because a nation 
 is unfair enough not to provide for its working men ? Why should a discrimin- 
 ation be made? 
 
 Mr. Dawson : That was not what I had in mind. Suppose the other nation 
 took an exceptional view towards beneficiaries residing in your country. 
 
 The Commissioner: There would not be one case in ten thousand in the 
 nations I have mentioned. 
 
 Mr. Wegenast : Take between the United States and Canada. 
 
 The Commissioner: We have good laws which prevent your people coming 
 over here and good laws which prevent our people going over there — either good 
 or bad laws. 
 
 Mr. Doggett: I have just thought of a case we are now talking about. A 
 certain firm came over here and a man, a carpenter, met with an accident, and I 
 believe the case has been adjourned from time to time for over twelve months, but 
 I understand from what I read in the papers the other day that the judge who 
 was sitting on the case told the lawyer that he would make him the defendant 
 if he did not get in touch with his client soon. That was a case similar to the 
 one we are discussing. 
 
 The Commissioner : No, that is the other side. That is the employer coming 
 here. You can't get at him. 
 
 Mr. Dawson: Under the insurance plan you would have got a premium out 
 of him. 
 
 The Commissioner: If you caught him at the right time. 
 
 Mr. Doggett: But the action was taken before he left Toronto. 
 
 The Commissioner: You cannot get blood out of a turnip. If he is not 
 amenable to our law we cannot get at him. 
 
 Mr. Doggett: Then there are those racing rinks that they built down there 
 at the Exhibition Grounds. 
 
 The Commisstonek : If he has means you can get at it. We are talking about 
 paying compensation to dependants of a man who is living out of the country. 
 
 Mi;. Dawson: What they propose to do under the Federal Act is in case the 
 beneficiaries are not resident in the United States or Canada there should be paid 
 to the resident widow, or if no widow or no resident child then to any such non- 
 Ident child or children a sum equal to one year's wages. 
 
1912 WOKKMEN'S COMPENSATION COMMISSION. 449 
 
 Mr. MacMuechy: That is instead of eight years. 
 
 The Commissioner: 1 do not like the look of that. 
 
 Mr. Dawson : Personally, I do not favour it myself. 
 
 Mi;. MacMuechy: Under the ordinary scale it is eight years. 
 
 Me. Dawson: Yes, but it is eight years at half wages, which is equivalent to 
 four. 
 
 Mr. Wegenast: I have not asked Mr. Dawson to come here as my wit- 
 ness, and I have not treated him as such, but I think perhaps it is fair that I should 
 be permitted to round him up on some points. 
 
 The Commissioner:- He won't be rounded up. 
 
 Me. Wegenast: You recommend then, Mr. Dawson, a State system of in- 
 surance ? 
 
 Mr. Dawson; I recommend a mutual insurance under State compulsion. 
 Whether the control should be in a Board such as has been proposed, or in mutual 
 associations of employers as in Germany, in my judgment is a question to be 
 solved in each individual instance according to the requirements. If it covers all 
 Canada very likely I would recommend the latter. If it covers only Ontario, 
 unless you find it would work out well, your Lordship, in your judgment, I fancy 
 the single Board would be wiser. 
 
 Mr. Wegenast : At all events, Mr. Dawson, and I am putting these questions 
 in a leading form because it is quicker, you do not recommend an extension of 
 the individual liability of the employer along the lines of the British Act? 
 
 Mr. Dawson: I do not. 
 
 Mr. Wegenast: Not even temporarily? 
 
 Mr. Dawson: I should regard it as unwise. I think, as I stated last night, 
 the principles in general, with some modifications that could properly be made, 
 perhaps, of employers' liability are right on the proposition that it rests on. That 
 is to say, if it really was between man and man the principles as already reasoned 
 out, with some moderate modifications, are in my judgment correct, and we ought 
 not to muddle things by changing that situation. 
 
 Mr. Wegenast : You regard then, the obligation of the employer and the 
 rights of the employee as social in their nature rather than individual as against one 
 another ? 
 
 Mr. Dawson : I think it is a matter of the community, and the fact that 
 there is a relationship by which that tax or assessment may be levied is quite in- 
 cidental. I would like to say in that connection, and perhaps it is very familiar 
 to your Lordship, that the original Bill brought by Mr. Asquith, who is now Pre- 
 mier, was to remove all the defences, and that was the thing that was strongly 
 supported in Great Britain at the time that the Gladstone Government went down. 
 I presume your Lordship well recollects that the Asquith Bill was defeated shortly 
 before the Home Rule, and instead of going before the people on that they went 
 on the Home Pule. A compensation system was introduced by the Conservative 
 party there, and it was strongly supported by Chamberlain, but it was the adop- 
 tion of the Ministry. Lord Salisbury's speeches on that Compensation Act, and 
 the principles on which it was based, are among the very finest things I am 
 acquainted with on the subject. 
 
 Mr. Wegenast : But Lord Salisbury's idea was to work out a system such as 
 that of Germany by an indirect voluntary method, was it not? 
 
 Mr. Dawson : It was the idea so revealed in the speeches that if thev imposed 
 29 l. 
 
450 MINUTES OF EVIDENCE: No. 65 
 
 a direct liability upon the employer for compensation precisely the same in nature 
 as in Germany was imposed through mutual insurance, it would result in mutual 
 insurance of two kinds. It was expected first that these establishment funds or 
 mutual associations where the employer contributed part and the employees part 
 would practically spread over the country, and secondly that the employers would 
 unite in mutual associations voluntarily for the purpose of carrying the remainder 
 of that insurance. 
 
 Mr. Wegenast: That has not been realized? 
 
 Me. Dawson : While I understand the mutual societies have been maintained 
 there have been very few organized. 
 
 Mr. Wegenast : Then you have already said that the individual liability sys- 
 tem, as in England, does not tend to prevent accidents? 
 
 Mr. Dawson : That is the opinion of the Eoyal Commission that investigated 
 in Great Britain, and the opinion of Englishmen with whom I have talked. 
 
 Mr. Wegenast : And it is your opinion and the opinion of the rest of the ob- 
 servers in the United States? 
 
 Mr. Dawson : Yes, but that opinion is based upon British information. 
 
 Mr. Wegenast: By the way, Mr. Dawson, am I safe in saying, as I propose 
 to say in my brief, that there has been during the last year, or perhaps even the 
 last six months, a unanimity of opinion upon this question amongst the leading 
 thinkers in America take yourself, Mr. Emery, Mr. Preston, Mr. Cary (of the New 
 York Central), Mr. Hoffman, and others I might mention, am I safe in saying 
 that there is practically unanimity amongst these men upon the leading features 
 you have presented here? 
 
 Mr. Dawson: It is undoubtedly true that the trend has been strongly in 
 that direction. Of course there is nothing like unity, because there are a great 
 many men who still argue the other way. 
 
 Mr. Wegenast: I am speaking of these men. 
 
 Mr. Dawson: Of the men you have mentioned that is undoubtedly true, and 
 there are many others besides them. 
 
 Mr. Wegenast: I am speaking of these as outstanding men and writers on 
 the subject. The objections to the State insurance idea, the collective insurance 
 idea, comes largely from the liability insurance companies. 
 
 Mr. Dawson: There is a great deal of opposition on the part of the liability 
 insurance companies and their agents. That opposition is open at times and at 
 other times it shows itself through insidious influences on account of the directors 
 and officers appearing in other capacities elsewhere, and it is all the more remark- 
 able because those companies have always lost money in every country — there is 
 no exception practically at the present moment — and they quite understand they 
 are going to lose money if they go on with this. I take it it is mainly due to the 
 agency force already engaged in employers' liability insurance, and the mere fact 
 that the organization itself is disposed to oppose it. 
 
 The Commissioner: Perhaps you could tack on to this proposed bill some- 
 thing to provide for these unemployed agents. 
 
 Mr. Dawson: My impression is they would not be unemployed. The fact is 
 the development of public liability insurance, as your Lordship is well aware through 
 the trials that come into court, that the field is very imperfectly covered with in- 
 surance, and while employers' liability is quite widely covered, it is sometimes 
 very unsatisfactorily covered, and it would be a great advantage if they would 
 
1912 WORKMEN'S COMPENSATION COMMISSION. 451 
 
 devote their attention largely to protecting the puhlic through public and general 
 liability, and I really think these agents would be quite as well off if this par- 
 ticular field were not open to them. 
 
 Mr. Wegenast: Then what do you say as to excepting the larger employers, 
 such as railways, from the general scheme? 
 
 .Mi:. Dawson: I should regard that as unwise. In the first place there is one 
 thing the railroad company should think about. I understand you mean making 
 them directly liable instead of bringing them into the insurance scheme? 
 
 Mr. Wegenast : Yes. 
 
 Mr. Dawson : If the railroad company comes into the insurance scheme it 
 will only have to meet its assessment for the current cost like anybody else, start- 
 ing very low. In Germany it started in at 38 cents per $100 of pay-roll, if 
 I remember rightly. Now, the normal experience is about $1.80 per $100 of 
 pay-roll, according to Germany. They are starting, therefore, at the easy end. 
 It was eleven years before they reached $1.80. It would have gone very much 
 higher, because we do not expect it to reach its maximum short of twenty-five 
 years, but at the end of twenty-five years they are running along practically at 
 $1.80 still, showing they have made very great gains in prevention. Had 
 they started the other way, they would have had to set up in their balance-sheets 
 the present value of all claims that would be payable in the future, all amounts 
 that would be payable in the future on account of claims that arose that year, 
 and there would be an accumulation of them until they had a reserve charged 
 against them of anywhere from five to ten per cent, of a year's pay-roll. Now, 
 there cannot be any advantage to a railroad in having that situation to embarass 
 it right from the start. 
 
 Mr. Wegenast: Still, a railroad company could notfbe trusted to run its 
 insurance system without putting up reserves, or without working in the reserve 
 idea in their bookkeeping. 
 
 Mr. Dawson: Well, let us see whether they could. In the first place they 
 would make a dishonest balance-sheet, it would not tell the truth about their lia- 
 bilities. Liabilities that are certainly payable in the future are just as much 
 liabilities as if they were due to-day, and they must be reported if they are to tell 
 the truth in tne statement. In the next place, there would be still a liability which 
 in all probability you make a first lien on their properties, because wherever an 
 individual liability is created you well know the payment of that particular thing 
 is made a first lien on the property. There is another difficulty. We brought 
 that out before the Commission, and it was an embarrassment to the proposed 
 Bill at Washington. The railroad companies said if this is to be a first lien on 
 our property, how can we sell a locomotive? Well, sure enough, how can you? 
 How could we sell a branch line? Well, sure enough, how can you? Well, they 
 proposed then that it be made a first lien only in the case of insolvency, but in 
 that case the railroad company could sell all its property. 
 
 Mr. Wegenast: So there is really no way of working the first lien idea? 
 
 Mr. Dawson: If you don't leave it a first lien you have postponed it to all 
 the other claims, because wages are first liens, and mortgages and bonds, and all 
 that sort of thing, and there you are again. 
 
 Mr. Wegenast: I am not representing the railroad, but it occurs to me, what 
 about the argument in collecting all the railroads into one system that you penalize 
 
452 MINUTES OF EVIDENCE: No. 65 
 
 the better class of railroads who have superior preventive devices and make them 
 bear the burden of the less progressive railroads. 
 
 Mk. Dawson : I have heard that very argument was addressed privately to 
 
 Mr. Brown, President of the New York Central Railroad, and influenced him . 
 
 Mr. Wegenast: Who is Mr. Brown? 
 
 Mr. Dawson: He is a member of the Federal Commission and President of 
 the New York Central Railroad, and it influenced him as a member of the Com- 
 mission and other railroad officers to oppose the idea of insurance, although Mr. 
 Cary, the Chief Attorney, had personally favoured it, and favoured it as the only 
 'constitutional method at that. 
 
 The Commissioner: But this Province has already declared its policy in 
 "that respect. It has refused to allow the railroads in regard to the liability to 
 <'inplo3 r ees to stand on any other footing than any other employer. 
 
 Mr. Dawson: That is good. But in this matter of there being discrimin- 
 ation: As a matter of fact, under any good system I assume, your Lordship, 
 you would have power to penalize a railroad company that did not adopt proper 
 devices for the proper protection of its employees, and also to give a lower rate to 
 those which did it. In other words, it would not be true that the road that was well 
 managed in this respect would be paying more than its fair share of these claims. 
 The Commissioner : It would only differ in degree from the case that Ave were 
 discussing before, of one manufacturer having a better system than another. 
 
 Mr. Dawson : The same sort of thing precisely, and would be dealt with the 
 same way. 
 
 Mr. Wegenast: Will you explain a little further, because I have seen 
 your explanation in the brief before the Federal Commission, how the current cost 
 plan of insurance tends to induce preventive care and activity ? 
 
 Mr. Dawson : The current cost plan starts out the first year by paying only 
 
 the money that needs to be paid that year. That is, for instance, for men who had 
 
 been injured during the year. You only pay such weeks' payments after the 
 
 accident occurs as fall due during that year. If all accidents were of a permanent 
 
 character it would only average six months, for instance. That is the whole 
 
 period of it, because all accidents on the average would happen in the middle of 
 
 the year, and the whole duration would only be six months. The first payment 
 
 would be low because it only represents the accidents of one year, and that portion 
 
 of it which actually falls clue in that year. The next year there will fall upon 
 
 the fund payments because of the accidents of the previous year as well as the year 
 
 you are in. The next year will be on account of accidents of both the previous 
 
 years as well as the year you are in, and so on. Consequently you have naturally 
 
 an increasing rate which is estimated to increase pretty rapidly for perhaps about 
 
 ten years, and then rather slowly and with increasing slowness for at least fifteen 
 
 years longer, and if there is no improvement in conditions relating to trade and 
 
 industry it will still very slowly increase for twenty-live years beyond that, because 
 
 .-Mine of (he people that were injured the first year may have been totally and per- 
 
 manently injured and may remain so fur a maximum period of fifty years, we will 
 
 say. The way that induces prevention is this: in spite of the natural tendency 
 
 of this thing to increase in this way, that increase may be off-set by causing the 
 
 number of accidents to be fewer and fewer relatively, thereby having something 
 
 at work which lends to reduce I he cos! precisely as the other tends to increase 
 
 it. A good instance of thai is the railroad, and perhaps I can turn that up for you. 
 
1912 WORKMEN'S COMPENSATION COMMISSION. 453 
 
 Me. Wegenast: I think there is the beer bottling industry, too? 
 
 Mi;. Dawson: The railroads started in at 38 cents. 
 
 Mr. Wegenast: 39-100 of one per cent, on the pay roll. The next year 
 79-100 of one per cent. 
 
 Mr. Dawson: That is in my statement there. 39-100 the first year; next 
 year. 79-100; third year, $1.25; fourth year, $1.38; and by the end of the eighth 
 year it was $1.80. Then prevention began to effect it gradually, and it declined 
 for a few years, notwithstanding the burden caused by accidents in the previous 
 years, to as low a figure as $1.26. 
 
 Me. MacMurchy: What year was that? 
 
 Mr. Dawson: I haven't the exact year, but I think it was about the 15th or 
 16th. After twenty-four years it has been standing about $1.80 for a number of 
 years and showing no signs of rising. 
 
 Mr. Wegenast : So that the rapid rise in the rates for the first few years calls 
 the attention of the employer to the necessity of prevention. 
 
 Mr. Dawson : Exactly. There is a standing impetus there under that system 
 to cause him to do everything in the world he can to reduce it, and it has so oper- 
 ated always. 
 
 Mr. Wegenast: You have given several examples of rates which reached 
 their maximum within ten or fifteen years, instead of running as they would 
 under the actuarial tables to a maximum in twenty-five, thirty, or forty years. 
 
 Mr, Dawson : Yes, there are several other instances besides the railways 
 where that has been true. 
 
 Mr. Wegenast: You also made the statement, I think, that the initial 
 rate would be in the neighbourhood of twenty per cent, of what the normal rate 
 should be? 
 
 Mr. Dawson: That is not far from the fair average. In some industries 
 where a larger proportion of the accidents result in serious disability it might even 
 he a little less than that, and in some industries where a larger proportion of the 
 accidents result in death it might be somewhat more. 
 
 Mr. Wegenast : Then the current cost plan has this advantage, that it is not 
 so great an immediate strain upon the employers? 
 
 Mr. Dawson : That is one of its most marked advantages and believed to be 
 one of the reasons why it has operated so well in Germany. 
 
 Mr. Wegenast : Then you are an actuary of experience and standing through- 
 out the continent of course? 
 
 Mr. Dawson: Thou sayest it, not I. 
 
 The Commissioner: We take that for granted. 
 
 Mr. Wegenast : You are quoted in these briefs and are now making a state- 
 ment that you deem this plan consonant with correct actuarial practice? 
 
 Mr. Dawson: Under a compulsory system it is not only in my judgment as 
 sound as the capitalized value plan, but sounder, and a more reliable and wiser 
 plan. 
 
 Mr. Wegenast: So that from the actuarial standpoint alone it is superior 
 to the capitalized plan? 
 
 Mr. Dawson: Under compulsion it is in my opinion. 
 
 Mr. Wegenast : Then what about the objections to it as being an assessment 
 form of insurance, and the parallel that may be drawn between it and assessment 
 life insurance? 
 
454 MINUTES OF EVIDENCE: No. 65 
 
 Me. Dawson: I stated it last evening, that assessment life insurance would 
 be perfectly safe under compulsion, and would also be almost level in cost, the vari- 
 ations merely being those variations that take place in the death rate in the com- 
 munity or province or country from year to year owing to better sanitary or better 
 health conditions. 
 
 Mk. Wegenast : What would you say as to this feature, Mr. Dawson ? Would 
 you regard it as advisable to begin a system which would include certain classes 
 of employers, we will say, or employers employing a certain number of em- 
 ployees ? 
 
 The Commissioner: He told us that last night. 
 
 Mr. Wegenast: I am getting at something a little different, your Lordship. 
 Would you regard it as advisable to establish a system along the lines which you 
 recommend covering only a part of the employers rather than to introduce an in- 
 dividual liability system covering all employers? 
 
 Mr. Dawson : I regard an individual liability system covering all employers 
 as a mistake in every sense, and as necessarily perpetrating a number of very 
 serious injustices. I might give you an instance such as this: suppose a law 
 passed rendering all employers liable for injuries, say even to household servants 
 and other household employees. It is quite conceivable that some working man 
 who had never had an employee before on account of the sudden illness of his 
 wife would call one in, utterly ignorant that he was incurring any liability at all, 
 and an accident occurred, and this man has his little home swept away by the 
 liability thrust upon him. Now, that is not at all what society intends, and I 
 cannot look on it with any real favour at all. 
 
 Mr. Wegenast : If a partial system, or a partially satisfactory system is to be 
 introduced as .preliminary to a larger system, or a system giving better satisfac- 
 tion, you would rather have a system on this plan which you advocate applying 
 to only a limited number of employers, than to have the larger system at once on 
 the individual liability basis? 
 
 Mr. Dawson: Personally, I should say yes. 
 
 Mr. Wegenast : What would you say as to a law covering four or five em- 
 ployees and over as a beginning? 
 
 Mr. Dawson: It might not be objectionable as a beginning. I, personally, 
 do not see any necessity for making that distinction. If a man is an employing 
 contractor, for instance, he may employ only one or two men, but I see no reason 
 why he should not be covered by an insurance law. 
 
 Mi,\ Wegenast: I was not thinking of the logic of it so much as the prac- 
 tical difficulty of setting the scheme in operation. Would you have any objection 
 from a practical standpoint of beginning a system with five persons and over, and 
 wIkmi the insurance department gets fairly under way adding the rest -as it was 
 found desirable, and as public opinion called for it? 
 
 Mr. Dawson: I am not convinced of the necessity for it. 
 
 Tin; Commissioner: I have some figures here which perhaps might help. It 
 is estimated that in this Province there are eight hundred factories employing over 
 five hands, and the aggregate of the number of the employees is 90,000. There 
 are only 400 of the smaller industries employing less than five, and the total num- 
 ber of employees is 2,000. You see. if these figures are at all accurate, they show 
 it is only a small percentage (hat would not come under it. 
 
1912 WORKMEN'S COMPENSATION COMMISSION. 455 
 
 Mr. Dawson : That makes it more nearly a practical thing to omit them, and 
 at the same time it renders it not very difficult to include them. 
 
 The Commissioner: Would you not have a very serious condition if a man 
 is worMng in one place with five hands and he is provided for, and a man next 
 door with four, and he gets nothing? It would make the law unpopular at once. 
 
 Mr. Dawson: Your Lordship has put the matter very much better than I 
 could. It is an arbitrary distinction which will not be satisfactory in the end. 
 
 The Commissioner:. The only thing would be whether it was expedient on 
 account of the smallness of it, but that leaves the employee in trouble. 
 
 Mi;. Wegenast: If there is to be any restriction in the act at present you 
 would prefer to make the difference between occupations rather than on the basis 
 of the number of employees? 
 
 Mi;. Dawson: Yes, 1 should think that would be perhaps very desirable. 
 
 Mr. Wegenast: Excluding in the meantime such occupations as domestic 
 servants and agricultural employees? 
 
 Mr. Dawson: Possibly both of those depending upon the sentiment of the 
 community, whether it is ready for it or not. 
 
 The Commissioner: There is one class you have got to exclude if you want 
 to get a law, and that is the farmer. 
 
 Mr. Dawson: They did exclude them in many countries when the laws first 
 went in, and in some countries they are still excluded. One of the most peculiar 
 things about the farmers is what has taken place in Bavaria. The kingdom of 
 Bavaria, in Germany, has extended the insurance law further than the regular 
 insurance law of the empire, by embracing the employing farmer, as well as the 
 employee, and requiring payment accordingly, and that made it in a very short 
 time popular with the farmer. The employing farmer found the insurance for him- 
 self exceedingly convenient to have, and they considered the thing had worked par- 
 ticularly well, and I think it has been copied in some of the other kingdoms. I 
 have not examined the new draft of the German law, but I should not be surprised 
 if it were not extended over the empire. 
 
 The Commissioner: How did thev arrange the contribution? 
 
 Mr. Dawson: It is only an impression, but my impression is that it was 
 fixed at so much per head, and where employees were employed but a portion of 
 the year it was pro-rated for the actual length of time they were employed. 
 
 Mr. Wegenast : Then you maintain your general view as to the collective 
 system or State system, whichever you choose to call it, notwithstanding Dr. Frie- 
 densburg ? 
 
 Mr. Dawson: Dr. Priedensburg is the one man in Germany who has such 
 prejudices. I don't know of any other. He was a reactionary who was appointed 
 on the insurance Board because he was a reactionary. He was very much opposed 
 to anything being done about this thing, and has always been opposed to anything 
 being done about it. I am informed by Dr. Zacher that he retired from the Board 
 on account of what is rather euphemistically called extreme nervousness, and on 
 accottnt of his attack he jumbles all sorts of criticisms of mere methods of doing 
 this little thing or that little thing with a constant tirade against the whole idea 
 of Workmen's Compensation, and he ascribed the failure of Germany to assume her 
 proper place in the world's market to that, which is something of a joke to all 
 the rest of the world, and then he ended by stating that he would be in favour of 
 it being a pure State insurance. 
 
456 MINUTES OF EYIDEXCE : No. 65 
 
 Me. YVegexast : I was going to say that his argument ends up with a com- 
 plete enclorsation of both the voluntary associations of employers idea and the 
 State insurance. 
 
 Me. Dawson: Yes. 
 
 Me. Wegenast : I do not know that there is anything else of particular value 
 that I wish to take up with Mr. Dawson. 
 
 The Commissioner : Would your plan involve capitalizing the payments under 
 proper restrictions in certain cases,, and paying the capital sum? Take the case 
 of where death followed arid where it was desirable to give the payment so as to 
 give them a start in life? 
 
 Mr. Dawson : I think I would not favour that, your Lordship, for this reason, 
 that I very much doubt that any of these are ever in a good position to decide that 
 it is desirable, and if it is allowed there will be constant pressure brought, and 
 constant application for it. You see the amount that will be supplied is small. It 
 is not a liberal living, and people who are in receipt of those little incomes are 
 certain to have pressure for a little more money, and they are very enthusiastic 
 about the future, but the present is the present, and consequently your Commis- 
 sion will have constant pressure brought to bear upon them to give way on that 
 point, and it has not been deemed wise to do it, but wherever it has been at- 
 tempted it has been a matter of great annoyance. 
 
 The Commissioner : My experience for a long time as lawyer and judge has 
 been that very often a father does a great deal of harm to his family 
 by tying up his property, in such a way that it cannot be used to the best advantage 
 for his children, or for those who are his beneficiaries. Yery often cases have 
 occurred where the property has had to be kept, and these people have been prac- 
 tically in a position of penury when the capital sum, if it might be drawn on, 
 might have eased them to some extent at all events. 
 
 Me. Dawson : I have seen a great many cases myself, 
 
 The Commissioner: Does the same principle not apply here? 
 
 Mr. Dawson : It seems to me not quite, because if the father had lived, for 
 instance, all that he was to that family from a financial standpoint was one able 
 to furnish an income to support them, and we are undertaking to replace him from 
 a financial standpoint, not completely, but as completely as we deem wise, under 
 such an act in the same position which he occupied. Now, there is another ques- 
 tion arises in that connection. There would be pressure wherever they thought 
 that the person who was receiving this income might die soon. That is one of the 
 things that would cause them to come and ask for it. There are circum- 
 stances under which I think it might be done, but those circumstances 
 should be, if possible, clearly laid down in the law, or should be such as to cause 
 the Board to act on its own motion and not on appeal from anybody. For in- 
 stance, it has been deemed wise to make everybody so7ue payment for certain kinds 
 of injuries, such as maiming, and the situation clearly arises that the person is 
 capable of making a living, even in his maimed condition, and perhaps it might 
 be all right to remunerate for that in a lump sum and be done with it, but with 
 that sole exception \ am of the opinion that extremely few things would war- 
 rani it. 
 
 The COMMISSIONER: I was thinking more of total dependence? A man is 
 injured and has to leave the vocation Hint he has been brought up to, nnd he sees 
 an opportunity if he has a little capita] thai he is quite able to undertake and he 
 
1912 WOKKMEN'S COMPENSATION COMMISSION. 157 
 
 could earn as good a livelihood as he did before. Would it not be a hard thing to 
 have that money there and not be able to use it? 
 
 Mr. Dawson: It is, but we have to deal with the principle, not the specula- 
 live case. I read to you the note of a British judge that these things were loop- 
 holes. You must realize it is a peculiar situation when the judge finds all parties 
 there of the same opinion. One of the difficulties under the British law, of course, 
 is that it is the employer himself on one side, or the insurance company that he is 
 insured in, and the workman on the other, entirely agreeing that this is what we 
 want to do. Of course under this plan that would not quite be the case, because 
 there would not be any employer on the one side, but it would be a constant source 
 of resistance on the part of this Board of Appeals from the very persons who are 
 receiving the benefits. 
 
 The Commissioner : Well, every day the court is doing this thing with the 
 fund belonging to the infant. 
 
 Mr. D wvson: Yes. 
 
 The Commissioner : Advancing part of the money for the benefit of the 
 infant. 
 
 Mi;. Dawson: But this income should be sufficient in a very modest and 
 moderate way actually to support. 
 
 The Commissioner: We have such applications as this. Perhaps if you limit 
 the age to sixteen when the payment would stop it would not be so important. A 
 young woman wants to be a school teacher or wants to be a music teacher, or a 
 young man wants to be a doctor. It would be very important to them that they 
 should have something to enable them to get into that profession or calling. 
 
 Mr. Dawson: Yes, but as you are limited they really would not come within 
 the range. If you stop at 16 or 18 it would not be within the range. There is one 
 thing I think warrants a lump sum, and that is a very good thing indeed, and in 
 all countries that have used it T think they are satisfied with it, and that is to 
 offer the reward of the lump sum of two or three years' compensation to a widow 
 upon re-marriage. 
 
 The Commissioner: Encourage her to do that? 
 
 Mr. Dawson: Yes. It has worked well, and it has worked with a great deal 
 of satisfaction. Yet. notwithstanding that feature in the German law. where it 
 is three years, the average widowhood is, to the best of my recollection, a little 
 over fourteen years. Then they have either remarried on the average, or they die, 
 so that the average is fourteen years. 
 
 The Commissioner : Well, if that system were adopted and the lump sums 
 paid, I suppose this annual assessment would have to cover the capital sums that 
 were so paid. 
 
 Mr. Dawson: Yes, it would. 
 
 Mr. Wegenast: There is one other feature with regard to the current cost 
 system that I would like to raise. How do you justify throwing the burden of 
 present accidents on the future? 
 
 Mr. Dawson: I made some reference to that last evening. In the first place, 
 1 think it is justified by the fact that the community is now carrying and will 
 continue to carry for nearly a generation to come the burden of caring for those 
 who have been injured, and the families of those who have been killed, and it 
 seems unfair, therefore, to superimpose this burden of an advance payment on 
 top of that which would gradually be running on. That is just as real as if we 
 
458 MINUTES OF EVIDENCE: No. 65 
 
 were able to measure it; it is actually going on. Another reason is that when the 
 premium reaches its highest point it is, outside of merely the consideration of 
 the discounts on the payments to be made in the future, no higher than the pre- 
 mium of a capitalized value plan would start at, and if you figure the payments 
 would continue for a period of about six or seven years the discount is a very 
 small amount, and therefore it can be dropped out of consideration. That is to 
 say you do not get any lower premium on the capitalized value plan because of 
 having put it into effect, outside of the interest that the accumulated fund may 
 earn, than you do on this assessment plan or current cost plan when it has reached 
 its maximum. 
 
 Mr. Wegenast: It reduces its maximum as it runs along. 
 
 Mr. Dawson: As it would have been from the start the other way. You see 
 the thing that you have done is to enable the thing to be passed, like all taxation 
 is to a large extent, on to the future generation, that generation being enabled by 
 the same compulsion to pass a part of this on to the next generation, a system 
 which is absolutely unsound except under compulsion. 
 
 Mr. Wegenast: Mr. P. W. Ellis is here, and I had thought he might have 
 addressed the Commission to-night. 
 
 Mr. P. W. Ellis : His Lordship read some figures as to there being some 800 
 industries employing some 90,000, and 400 employing 2,000. In those 
 industries there is a large number of workmen who will be setting up in business 
 for tbemselves, and the number of industries employing from two to four men is 
 going to be enormously increased. In some places there are what are called out- 
 workers, and in many instances their factory is their home, and what I wanted 
 to know, Mr. Dawson, was if you felt it wise to exempt these people? I have 
 noticed conditions in Birmingham where large factories are idle to-day, and those 
 who were formerly producers and employing a large number of hands are pur- 
 chasing their wares from these outworkers, who can produce them cheaper than 
 they can produce them in their own factories. These workers will work long hours 
 in their own homes when they will not for an employer, and they make their own 
 conditions much more onerous, and the consequence is the employer who has to 
 have restricted hours and all kinds of appliances, is being pushed out of business 
 by these outworkers, and if they were to be exempted from any workmen's com- 
 pensation and the burden placed upon industry that would still further enhance 
 the inability of the employer who is carrying on th regular factory system to 
 compete with the out- workers. 
 
 Mr. Dawson: I already stated last evening that I am not in favour of ex- 
 empting them. His Lordship has given a very cogent reason that has not occurred 
 to me, and that is the same employer would have five for instance one day, and 
 the next day he might have four, and his employees could not understand any 
 such situation as that, of course. If I happened to be injured yesterday I would 
 be compensated, but because I am injured to-day I am not, right in the same em- 
 ployment. 
 
 Mr. Ellis: Take this out-worker. He has three members of his own family 
 working for him. I suppose they would be employees? 
 
 Mr. Dawson: Well, that depends on whether they are working for wages. If 
 they are members of the family and simply clothed and fed by their father it is 
 simply a family affair, not coming within Ihe range of wage-workers. 
 
 Mr. Ellis: I was quite impressed in France with the number of small em- 
 
1912 WORKMEN'S COMPENSATION COMMISSION. 459 
 
 ployers. Of course industries which require large plants like the iron industry 
 ■we do not find small industries, for the investment is too great, but there are a 
 great many industries that require very little capital. 
 
 Mr. Dawson : We have what they call sweat shops in the United States, but 
 they have been growing into larger places. 1 think it would average ten at least. 
 
 Mr. Wegexast: Mr. Ellis has been desirous of appearing before the Com- 
 missioner, and has found it difficult, owing to the pressure of other engagements, 
 and it might be as well to hear from Mr. Ellis now, 
 
 Mr. Kingston: Just one suggestion- Take the casual contractor, the man 
 for example who comes from another country to execute a large contract involving 
 half a million, such as the erection of a very large building. He comes in, and 
 he goes away leaving us a legacy of a number of accidents which will take years 
 to work out. How would you justify the current cost plan in such a case as that? 
 
 Mr. Dawson : Well, I think that is closer to a poser than anything that has 
 been asked, and I would like to give it further consideration. 
 
 The Commissioner: How would you get that man on the tax roll? 
 
 Mr. Dawson: There would be no difficulty I think about that, your Lord- 
 ship, because he would be subject to precisely the same liability as everybody else 
 in this community. 
 
 The Commissioner: But in the laws in the States they have adopted this 
 plan so far, they have a day in the year upon which they collect taxes, October 
 or November. 
 
 Mr. Dawson ■ That does not necessarily follow as to contractors. It is 
 easy enough to require an investigation of how much labour is involved on that 
 contract, and accurately base his premium on that and collect it. 
 
 The Commissioner : No doubt if you find him you could collect your rate ? 
 
 Mr. Dawson : Contractors are generally open enough and prominent enough. 
 You could make a registration law. 
 
 The Commissioner: Isn't the answer this, that it does not fall on the 
 back of the employer, it falls upon the body of the community? 
 
 Mr. Dawson : That is unquestionably the case, and that is perhaps the 
 correct answer. I had never considered the particular type of thing which was 
 there described to me, although I know it must be happening in every country. 
 My impression is that in Germany they have always treated it just like every 
 other case. 
 
 Mr. Kingston : Could you not make a system somewhat elastic so that in 
 a case of that sort the Board might have discretion to charge a rate which would 
 represent a capitalized value? 
 
 Mr. Dawson: Of course it could be specified in the act if an alien con- 
 tractor had come into the Province, and I am afraid it would mean a foreign 
 contractoT from some other Province, that the premium collected from him should 
 be on a capitalized basis and should correspond to the labour involved in his con- 
 tract. That could be done. T think it would work out all right on the whole 
 anyway. I don't think it would make any great difference. 
 
 Mr. Kingston: You could make it so that such a contractor could not 
 get another contract in the country unless he paid the premium? 
 
 Mr. Dawson: Under the new contract he would be paying the rate, and 
 if the rates were increased he would be paying the increased rate. 
 
 The Commissioner: Is this not so big a scheme that these things do nol 
 count much? 
 
160 MIXUTES OF EVIDENCE: Xo. 65 
 
 Mr. Dawson : I think they cannot have counted much or me issue would 
 have been raised to me in some way, either in writing or in conversation. 
 
 The Commissioner : If Mr. Wegenast is right about the four to six millions 
 what would this little thing amount to in that amount? 
 
 Mr. Kingston: The instance I raised was possibly where it would mean 
 half a million dollars in the contract. 
 
 Mr- Miller: You see we have the Fuller Company erecting the C.P.E. 
 offices, and that is a very big contract. 
 
 Mr. Doggett: He would be in a similar position to the employer who 
 went out of business? 
 
 Mr. Dawson: Yes, the only difference would be that the employer who 
 went out of business would be succeeded by some employer, probably, in the 
 Province who would go on with some of the business, either that business or a 
 similar one, and in addition the employer would not go into business with the 
 intention of going out, while this contract is only entered into for a limited 
 number of months, and then is over. I am not sure that it would be improper 
 to put into the bill some provision dealing with special cases of that sort. 
 
 Mr. Doggett : There is generally a sub-contractor working, or different sub- 
 contractors. The sub-contractors might invariably be local men, and you could 
 get them. 
 
 Mr. Kingston : The difficulty only arises the first years. As the years 
 increase the amount is getting nearer to the capitalized rate. 
 
 Mr. Bancroft : The point has been raised, and the question was asked 
 Mr. Boyd as to whether he had, and I would like to ask you whether you had 
 found in your investigations at any time where a workman was proved to have 
 injured himself for the purpose of getting compensation? 
 
 Mr. Dawson: There have been such cases, but they are not numerous. It 
 was expected there would be a tremendous amount of simulation, but there 
 has not been so much. 
 
 Mr. Ellis : Take a case like this, in localities where short work is pre- 
 valent and continued year after year, and where men are suffering from starvation 
 almost. You can realize the uninjured man without the wherewithal might be 
 a charge on charity, and you would have his neighbour who had been injured 
 enjoying a pension. 
 
 Mr- Dawson: Yes. You remind me of one thing that is evident in the 
 German system. They used to attribute the enlarged claims against the sickness 
 insurance societies particularly to simulation and malingering. That is a large 
 claim arising where there was considerable unemployment, and of course some 
 part of it is undoubtedly attributable to that, but they tell me that as a result of 
 very careful investigation which has been conducted by both employers and em- 
 ployees, the following is the true explanation of the larger part of it, that while 
 full work is going on the poor fellow that really ought to have laid off keeps 
 going because he can get full wages, and the fact is that in most cases they ought 
 to have been been laid up longer than they were. 
 
 The Commissioned Thai is hardly the case Mr. Ellis is putting. He is 
 putting the case of a time when there is nut much work, and one man who has 
 been on the fund gets compensation, and the able-bodied man who is able to 
 work lias to go starving. It seeems to me the answer to that is that if this 
 principle is sound the corollary of it is insurance againsl unemployment. 
 
 Mi;. Dawson - : In the end I think thai is true, bu1 it will take quite a 
 time to read] it. 1 would like to sec the British experiment carried further 
 
1912 WORKMEN'S COMPENSATION COMMISSION. 461 
 
 before I would like to see anybody copy it. I may say, your Lordship, before 
 the British system was even thought of, I had stated to the highest authority 
 on employment insurance, a gentleman in Belgium, that in my judgment the 
 way to Jo it was compulsory and national, that the trouble with all local systems 
 was they were very much more liable to local depressions that would ruin the 
 tiling than a depression through a whole nation- 
 
 Mr. Bancroft : The man would not get compensation unless he was injured 
 either permanently or temporarily. 
 
 Mr. Dawson : But I understood Mr. Ellis to say whether there might not 
 be an increased amount of simulation and malingering due to decreased employ- 
 ment, and I have answered there always has been under all these systems an 
 increased number of applications for benefits on funds when there was a consider- 
 able amount of unemployment. There is no question about that. At first it 
 was supposed that nearly all of that was simulated or pretended accidents or 
 pretended sickness, but the conclusion now is that while some part of it is that, 
 a very considerable part of it is due to the employee having kept at work desper- 
 atelv in order to get his wages when he ought really already to have been on the 
 sick list. That does not apply so much to accidents because unless the employee 
 has purposely caused himself to be injured to get on the list there is no such 
 thing as getting on the list. 
 
 Mr. Ellis: Mr. Bancroft raised the point that it was hardly conceivable 
 that any man would wish to injure himself for the sake of the pension that would 
 arise from it. A case occurred in Toronto, I believe, where a person allowed a 
 street railway car to run over him in order that he might collect his accident 
 insurance. He was in distress. The accident insurance company set up the de- 
 fence that it was apparently an accident, but that as a matter of fact it was 
 intentional on his part. 
 
 The Commissioner : Would that not be one case in a hundred thousand? 
 
 Mr. Bancroft: Mr. Boyd I think said one per cent. 
 
 Mr. Dawson : The simulation and malingering together would be more than 
 one per cent., simulation meaning either actually causing yourself to be injured, 
 or else setting up a pretence to be injured, and malingering meaning hanging on 
 after you were really ready to go to work. Those undoubtedly involve more than 
 one per cent., but actual maiming or serious injuries to a workman for the pur- 
 pose of obtaining the benefit is very rare. That is very much less than one per 
 cent., but it does happen once in a while. You take outside of unemployment 
 and conditions such as you speak of and it is a moral condition. There are some 
 shirks in the world, and we must acknowledge that fact- They are no good at 
 work, and probably the employer would be better off to put him on a pension and 
 turn him out, and such people sometimes have been known to maim themselves in 
 order to get on these lists, and when those facts are discovered they do not get on, 
 that is all. 
 
 Mr. Bruce: In your investigations. Mr. Dawson, a minute ago you made 
 a statement there was an increase in the claims. Is that not really due to the 
 application of the Act to a man, instead of his having to go to litigation to claim 
 for his injuries? Take a man losing two or three fingers in some machine, he 
 could draw his benefits, and go back to work and receive his remuneration from 
 his work, rather than take the smaller remuneration that he would get under the 
 act? 
 
 Mr. Dawson : Under the German rule he would be paid full benefits during 
 
462 MINUTES OF EVIDENCE: No. 65 
 
 the time he was unable to work, and when he did go back to work he would still 
 be paid some benefit for his impaired condition. 
 
 The Commissioner: Even though he were earning full wages? 
 
 Mr. Dawson : If he were able to earn absolutely full wages the benefit would 
 stop. In Austria he would get some benefit, because they determine the com- 
 pensation on the fact of the injury. 
 
 Mr. Wegenast: Do you approve of that? 
 
 Mr. Dawson: The associations of Germany so far have been unwilling to 
 adopt it. In Austria they are loud in its praises. They say they had all sorts 
 of difficulty in determining the amount of impairment of earning power and 
 holding it over. For myself I besitate to say. 
 
 Mr. Wegenast : Take the case of a young man who is injured, who perhaps 
 loses his arm, and is forced thereby into some profession, would the systems in 
 Germany and Austria, for instance, pay him his pension? 
 
 Mr. Dawson: Under the system in Germany as soon as by the assistance 
 of the employers' associations he had been put in a position so he could reliably 
 and continuously earn as much money, or more money, than before, he would go 
 off the list entirely. In Austria on the contrary the amount of his benefit would be 
 a certain percentage of his wages, which in the case you speak of, the loss of an 
 arm. whenever it was found he was capable of supporting himself continuously, 
 even on a much lower scale, would be cut off entirely, but given a capitalized 
 value for it, a commuted value. That is the difference between the two systems. 
 
 The Commissioner: What do you think of the British system that pro- 
 vides for periodical revision of the rates? 
 
 Mr. Dawson: All good systems do that. I certainly should favour it. 
 
 Mr. Bancroft : We find probably the most important conference that has 
 ever happened in Great Britain is happening to-day in the Labour Party. 
 
 The Commissioner: That is a pretty strong assertion, Mr. Bancroft. 
 
 Mr. Bancroft: What I should have said is as far as the workers are con- 
 cerned. There has been a resolution submitted by probably the most important 
 Trades Council, which says something like this, if I remember the words correctly, 
 that owing to the injustice under the individual insurance of employers and lia- 
 bility companies we press the parliamentary Labour Party to seek for legislation 
 to make compulsory insurance by employers in this State. 
 
 Now, if that was done would the British Act then meet with your views on 
 workmen's compensation? 
 
 Mr. Dawson: The British Act on the whole is a pretty liberal act if it 
 were carried on a State system. I personally feel that one of the serious defects 
 of the act has been clothing the local judges with power to approve settlements 
 or lump sums, and that is the opinion of those judges themselves. In some other 
 respects it might require revision, but it would be a pretty good act if it were 
 operated through a compulsory system. 
 
 The Commissioner: I thought you started with "if." 
 
 Mr. Dawson: I say if it were operated on a State insurance system. 
 
 The Commissioner: That is what he means. I understand it means the 
 employer being required to insure against his liability to the State. 
 
 Mr. Dawson: That is what he said, but T think the other is what he meant- 
 
 The Commissioner: Practically it is the same scheme as has been outlined. 
 
 Mr. Bancroft: Exactly. What I wanted to get at is, if 'that was put 
 into the legislation does Mr. Dawson think that that would be the means of 
 
1912 WORKMEN'S COMPENSATION COMMISSION. 463 
 
 inducing the employers over there to form the same mutual trade associations as 
 they have in Germany? 
 
 Mr. Dawson: Well, I should say if they introduced any system at all of 
 State insurance in Great Britain, a country with a very large population, and 
 of highly developed industries, they in all probability would follow the German 
 system with such changes as were found to be desirable under British conditions. 
 
 Mr. Bancroft: Then the argument against the British Act that it does 
 not make for the prevention of accidents by invention as it does in Germany 
 would be removed? 
 
 Mr. Dawson: Undoubtedly, if they had those associations. 
 
 Mr. Wegenast: Is it your idea to compel the employer to insure in a private 
 company? 
 
 Me. Dawson: No, to insure in an organization set up by the State, not 
 necessarily with a State Board, because it may be these mutual associations which 
 the Government requires to be formed as in Germany. 
 
 The Commissioner: But not individual collective insurance? 
 
 Mr. Dawson : Not individual collective. 
 
 Mr. Doggett : Take the case of two employers. One uses dangerous ap- 
 pliances in his factory, and another manufacturer manufacturing the same com- 
 modity does not use those dangerous appliances. Do you think those two manu- 
 facturers should both pay the same rate for State insurance? 
 
 Mr. Dawson : No, indeed. There should be given power to the Commission 
 which would have charge to make, within reasonable limits, lower rates for those 
 who equip their factories with the best appliances, and higher rates for those 
 who have dangerous conditions. 
 
 Mr. Bancroft: I think this is one of your works along with Mr. Frankel. 
 Would you mind explaining those two features, the State Executive Boards for 
 State employees. 
 
 Mr- Dawson: Well, that is very plain. The State itself insures it? own 
 employees, you see, and sets up a State Board. 
 
 Mr. Bancroft: They have representatives if they contribute? 
 
 Mr. Dawson: I am not positive, but I think not. 
 
 Mr. Kingston: You would include State employees in such a system as 
 you speak of? 
 
 Mr. Dawson: I think so. I think it would be only fair. 
 
 The Commissioner: Would the argument with which you have supported 
 your thesis apply at all or with the same force to municipalities or Governments 
 employing labour? 
 
 Mr. Dawson: Yes, except of course if you desire to do it you could omit 
 them from the insurance plan. I do not know but it would be quite as well to 
 omit them and allow the municipality and the State to make its adjustments 
 directly. If you took that course perhaps it would be well to clothe this Com- 
 mission with power to make adjustments because it would have the best machinery 
 for it, and then simply let the money paid out be raised by taxation in such man- 
 ner as may be deemed proper- 
 
 Mr. Wegenast : That would not work where they compete with private 
 concerns. 
 
 Mr. Dawson: It would not make any difference. They would pay just as 
 much one way as the other. The only reason I speak of it is they would have a 
 sufficiently large number of employees to get averages. It would work out all 
 right. 
 
464 MINUTES OF EVIDENCE: Xo. 65 
 
 Me. Kingston : If they know how much they have to pay they know how 
 much to levy. 
 
 Me. Dawson: It might be better to include them in an insurance scheme, 
 but I can understand that private employers might complain very bitterly if the 
 State contributed more claims than it did money for even a single year. 
 
 The Commissioner: How long would it take for an actuary, the data being 
 given to him, to give a financial basis for this, a rate to start with, and classify 
 the industries? 
 
 Mr. Dawson: Oh, I should think it could be done in ninety days clear- 
 It would be, of course, as suggested already to your Lordship, merely a rough thing, 
 and the correctness of it would be judged by its efficiency, not by its being accurate. 
 It might even be done in a shorter period if all the material were at hand It is 
 mainly a matter which would call for careful consideration and discrimination. 
 It might be hit off in a few clays correctly, but I should feel I should like to 
 sleep over it, and take it up again, and work over it, and make sure. 
 
 The Commissioner: The classification would take some time? 
 
 Mr. Dawson: Yes, but as already has been suggested it would not take so 
 long as would be the case if there were not elaborate classifications already in 
 existence that could be used as a basis, though I would not like to accept them 
 absolutely. 
 
 Mr. Wegenast: There is this obvious remark which I would like to have 
 you confirm, Mr. Dawson, that the systems we have in some of our Provinces now 
 based on the British Act are not likely to be permanent, judging from experience 
 in other countries. 
 
 Mr. Dawson: I think that is true. For instance, at the International 
 Conference in Eome a few years ago, representatives from countries that had 
 strongly opposed the idea of compulsory insurance, distinguished men who had 
 attended that Congress session after session, arose one after another and acknow- 
 ledged they were entirely persuaded that was the way to deal with this question. 
 and as you know the tendency in Great Britain in the last two years has gone 
 tremendously in that direction, even so far as to awaken some apprehensions as 
 to whether it has not gone too rapidly- 
 
 Mr. Bancroft: Which direction do you think it will take? 
 
 Mr. Dawson : Towards State insurance or national insurance. 
 
 Mr. Bancroft: That is the tendency all over the world. 
 
 Mr. Dawson: I thinks so. 
 
 The Commissioner : Do I understand, Mr. Dawson, that you had to do with 
 the drafting of this act? 
 
 Mr. Dawson : jSTo, I had been requested to draft the bill with those mutual 
 associations. 
 
 The Commissioner: I see they favour the French system of dissecting the 
 human body into its parts. 
 
 Me. Dawson: It is based rather on the Austrian system- It is imperfectly 
 done. 
 
 The Commissioner: Quebec has done the same thing here. 
 
 Mr. Kingston: Would you favour clothing such a Commission as suggested 
 with a sort of quasi-judicial discretion dealing with such cases as malingering 
 and simulation? 
 
 Mr. Dawson: Oh yes, I should clothe them with power to revise at the 
 end of fixed intervals, and more frequently if some special occasion arose for it. 
 
1912 WORKMEN'S COMPENSATION COMMISSION. 465 
 
 The Commissioner: Surely that would arise in determining whether there 
 was a claimant on it. 
 
 Mr. Dawson: It would be very uncomfortable if the Commission had 
 granted a certain amount as a disability benefit deeming that the man was per- 
 manently disabled and then they heard that tins same fellow had gone to work 
 and was earning as large wages as before. It would be peculiar if they could 
 not call that case up and stop it. 
 
 Mi;. Gibbons: Supposing they had granted a certain compensation and 
 found out the accident was more serious than they at first considered? 
 
 Mr. Dawson : They would revise in that case also. 
 
 The Commissioner : That is provided for in the British Act. 
 
 Mr. Wegenast: Does it work out in the British Act? 
 
 Mr. Dawson: Not so much because there is such a strong tendency over 
 there to get the lump sum settlement confirmed. You see the Employers' Lia- 
 bility Insurance Company is interested in getting off as cheaply as possible. This 
 is anything but strange, especially when they are losing money already on the 
 husiness. 
 
 Mr. Kingston : It is not so much that as to get the obligation off the books. 
 
 Mr. Dawson : Partly that, too. They start right out on the basis that they 
 want to get settlement, and just as a fire insurance adjuster generally does, they 
 generally use the argument, namely, we don't think your injuries as great as you 
 think they are. and they also raise questions as to whether it comes under the 
 act. and whether you haven't done something that will exclude you from it, 
 and they use that as a means of getting a compromise. Then on the other side 
 you have the great anxiety of the average person to get a bunch of money, and 
 the two things bring them up before the judge with a proposition, and they say, 
 we are all agreed on it : everybody has gone into this and we are quite satisfied 
 that this is the right amount. Then usually a man, as your Lordship suggested, 
 thinks he can go into some little business with it, or do something, and there you 
 are. 
 
 The Commissioner: You gave us the figures as to the percentage of the 
 premium, I think that goes to the place that it is intended to go, or was that Mr. 
 Boyd ? 
 
 Mr. Dawson: I think Mr. Boyd did, and I think I did also. I can send 
 you the last report on that subject published by a leading insurance journal in 
 Great Britain. In Great Britain the avowed expense is about 36 to 38 per cent, 
 of the premiums. They do not, however, include the expense of adjusting claims, 
 or litigation, and it is estimated, I am reliably informed, that that is nearly if not 
 quite another 15 per cent. In the United States it is 51 per cent- There was 
 an investigation made by myself of the figures for 1909. 
 
 The Commissioner: I think Mr. Boyd told us it was a minimum of 6 
 to a maximum of 16 per cent, of the premiums that went into the pockets of the 
 workmen. 
 
 Mr. Davvsox: I do not know on what he would base that. I will tell you 
 my own judgment about it. The amounts that the workmen are actually receiv- 
 ing is hard to get at because we do not know how much has been lost between the 
 company and the workman because of payments to the workman's attorneys, and 
 his costs, and all those things, but the total proportion of the premiums paid the 
 liability companies in the United States which in the year 1909 went to the 
 workmen, or went in the payment of claims, was about 35 per cent. Of the 
 35 per cent, even most of the employers' liability companies acknowledged that 
 30 l. 
 
±66 MINUTES OF EVIDENCE: No. 65 
 
 nearly if not quite ten per cent, is lost by the workman in the process of adjust- 
 ment in one way or another, leaving about twenty-five per cent, of the total 
 premium which probably reaches the workmen and their families- That is how- 
 ever, only a rough estimate; nobody knows 
 
 Mr. Kingston : Is there anything in any of the European acts which deals 
 with the question of an extra allowance for medical expenses or hospital expenses 
 other than by that first aid plan that you suggested? 
 
 Mr. Dawson: In Norway they always required, after they had passed a 
 Workmen's Compensation Act, the employer to pay hospital and medical expenses 
 during the first thirteen weeks that there was no compensation. It was pretty 
 severe, but they were trying to foster the building up of sick societies, but they 
 did require the employer to pay the medical expenses directly. 
 
 Mr. Kingston : Take a case where compensation practically begins after the 
 accident. Is there any law which provides for medical and hospital expenses in 
 addition to the schedule of compensation? 
 
 Mr. Dawson : I think most of the continental laws do. That is a mere re- 
 collection. I could look it up very easily. 
 
 Mr. Kingston: That would add quite a substantial item to the compen- 
 sation? 
 
 Mr. Dawson : It does, no doubt, but that is the general rule on the continent. 
 
 Mr. Kingston: Is it not true that a lump sum settlement is not inconsistent 
 with any current cost system? 
 
 Mr. Dawson: I should think the lump sum settlement is a thing not to be 
 indulged in except in very rare cases, and those very distinctly set out in the Act 
 itself, because if a large measure of discretion were given to a Board in that re- 
 spect in my judgment the pressure upon them would be the greatest torment of 
 their lives to start with, and in the next place all those lump sum settlements 
 would mean that this theory of current cost with its gradually increasing burden 
 would be to that extent disturbed and destroyed. 
 
 Mr. Wegenast : What about leaving that feature out of the Act in the initial 
 stages altogether? 
 
 Mr. Dawson : I would like to compare carefully the different Acts and give 
 some consideration as to whether there are some special cases where it should be 
 provided before answering. I have named one. I think you ought to offer the 
 reward of three or two or one year's benefit to a widow upon re-marriage. 
 
 The Commissioner: That is hard on the children. 
 
 Mr. Dawson: It might greatly advantage the children, and probably does in 
 a great many cases. 
 
 .Mr. Miller: There is a danger that the fund may be squandered if you give 
 a lump sum by their going into some business. 
 
 Mr. Dawson : In reference to being a disadvantage to the children, your Lord- 
 ship, you should remember the children get their benefits until they are 16 years 
 of age. It only stops the widow's benefit. 
 
 The Commissioner: There is one thing I wanted to ask with reference to 
 that suggestion that a period might be fixed during which the employee would be 
 insured against all sickness and accident, whether occupational or otherwise, as 
 to what would happen if the man was out of employment? 
 
 Mr. Dawson: In that case the employee would be required to pay it all if he 
 
1912 WORKMEN'S COMPENSATION COMMISSION. 467 
 
 wished to maintain it, and it would be voluntary on his part. If he did not keep 
 up his payments he would not be insured, and if he kept them up he would be. 
 
 Mi;. Wickxast: It would be an inducement to go to work? 
 
 Me Dawson: And particularly an inducement to pay his insurance. 
 
 Mr. Doggett: Supposing a man had been paying for twenty years and then 
 gets out of work? 
 
 Mr. Dawson : He has only paid for what time he has already been insured, 
 and he is not entitled to more unless he pays on, and certainly he cannot expect 
 the employer to pay it when he is not in his employment. That is an argument in 
 favor of unemployment insurance, but not an argument against this. 
 
 Mr. Bancroft: Hasn't that argument been used as an argument in favour of 
 insurance against unemployment? 
 
 Mr. Dawson : Yes. The only question about that is its practicability. It is 
 generally regarded as desirable if it is practicable. 
 
 The Commissioner: It is getting very late, and, although I would like to 
 hear Mr. Ellis now, I think we had better adjourn. I will arrange a meeting 
 to suit Mr. Ellis' convenience, when we will be very glad to hear what he has to say. 
 
 I am sure we are very much obliged to Mr. Dawson. He has given us a great 
 deal of information, and I think we all feel he has endeavoured to tell us what he 
 thinks is the best, regardless of employer or employee. I shall be glad if he will 
 furnish us as soon as possible with the information he has kindly promised to send. 
 
 Mr. Dawson : I shall do so, your Lordship. It has been a great pleasure for 
 me to appear before you, and if I have been of any service, however small, I am 
 exceedingly gratified. 
 
 Mr. Bancroft : If it is not out of place to say it, I would like to say that we 
 have looked forward to Mr. Dawson's coming, and he has not disappointed us. 
 
 Mr. Gibbons : I think we ought to give the Canadian manufacturers credit 
 for bringing Mr. Dawson here as their witness. I think they have shown an im- 
 partial spirit, and we as labour men, are very well satisfied with the information we 
 have got. 
 
 The Commissioner : The figures I gave some little while ago I am told refer 
 to Toronto and not to the whole Province. 
 
 Mr. Dawson: That is the 175,000? 
 
 The Commissioner: Yes, that only referred to Toronto. 
 
 Mr. Dawson: If you could give me the total number of employees for the 
 whole Province it would be better. I judge you would like to get an idea of how 
 much expense it would involve the Province for administration? 
 
 The Commissioner : Yes. 
 

 468 LIST OF WITNESSES: No. 65 
 
 Alphabetical List of Witnesses. 
 
 Mr. Archer London, Ont 272 
 
 Mr. Fred. Bancroft Vice=Pres., Trades and Labour Cong, Canada 168 et passim 
 
 Mr. James A. Bastle President, Trades and Labour Council, London, Ont. . . 266=276 
 
 Mr. Botley Miner, Cobalt, Ont 176=196 
 
 Mr. J. H.Boyd Counsellor=at=Law, Toledo, 309=383 
 
 Mr. Bruce Amal. Asso. Plumbers, Steam and Gas Fitters 206=252 
 
 307=355, 447, 461 
 Mr. J. T. Burke Chief Factory Inspector, Toronto 366 
 
 Mr. Cohen Mines Manager, Cobalt, Ont 178,196 
 
 Mr. E. T. Corkill Inspector of Mines, Ont 166 
 
 Mr. Miles M.Dawson Counsellor=at=Law, New York, N.Y 392=467 
 
 Mr. Dempster Toronto, Ont 218=221 
 
 Mr. Dillon Toronto, Ont 210=222 
 
 Mr. Doggett Amalgamated Society Carpenters and Joiners 170, 171 
 
 204=217, 252=260, 309=329 
 
 Mr. P. W. Ellis P. W. Ellis & Co., Toronto, Ont 452, 461 
 
 Mr. J. Firstbrook President, Firstbrook Box Co., Toronto, Ont 164 
 
 Mr. Atwell Fleming Fleming Printing Co., Toronto, Ont 299=307 
 
 Mr. George Gander President, Builders' Exchange, Toronto, Ont 169 
 
 Mr. W. A. Gartshore.... Manager, McClary Manufacturing Co., London, Ont. 269=276 
 
 Mr. Gauthier Miner, Cobalt, Ont 178, 191 
 
 Mr. James Gibbons Toronto Street Railway Union 150=169 
 
 206=223, 356=390, 422, 423, 440, 465 
 
 Mr. Gorman Cobalt, Ont 193, 195 
 
 Mr. Charles Gould London, Ont 263=273 
 
 Mr. S. R. Gourlay Vice=President, Canadian Manufacturers Association 163 
 
 Mr. Sam. Harris Harris Lithographing Co., Toronto, Ont... 258, 304, 326=331 
 
 Mr. E. C. Hunt Toronto, Ont 134, 135, 148 
 
 Mr. John Jones Builders' Exchange, Toronto, Ont 260, 261, 276 
 
 Prof. D. R. Keys University of Toronto 252=260 
 
 Mr. G. A. Kingston Union Trust Co., Toronto, Ont 229=258, 418, 434=466 
 
 Mr. Kingswell Cobalt, Ont 185=195 
 
1912 WORKMEN** COMPENSATION COMMISSION. 469 
 
 LIST OF WITNESSES— Continued. 
 
 Mr. C. Lawrence Locomotive Engineer 151, 153 
 
 Mr. Lothian Cobalt, Ont 193, 194 
 
 Mr. A. Claude Macdonell, K.C., M.P., Toronto, Ont 135=139 
 
 Mr. Angus MacMurchy, K.C., Toronto, Ont 449 
 
 Mr. D. L. McCarthy, K.C., Toronto, Ont 138 
 
 W 
 
 Mr. J. P. Maguire Cobalt, Ont 187=195 
 
 Mr. J. W. Mahon Timiskaming Mines Managers' Association 179=194 
 
 Mr. Marks Editor, " Industrial Banner" 267=269 
 
 Mr. Martin London, Ont 261=273 
 
 Mr. Meredith Railway Trainmen's Union 142=154, 204=218, 244=258 
 
 Mr. J. Q. Merrick Employers' Association 164, 362=369 
 
 Mr. Andrew Miller Carpenters' Union.... 148, 205=224, 303, 440=447, 460, 466 
 
 Mr. Q. M. Murray Secretary, Canadian Manufacturers' Association 159=162 
 
 Mr. C. H. Neely General Manager, Ocean A. & G. Insurance Co 230=250 
 
 Mr. Nutkins London, Ont 261=272 
 
 Mr. O'Connell Mines Manager, Cobalt, Ont 184=192 
 
 Mr. J. Ransford Manufacturer, Clinton, Ont 309, 310, 328 
 
 Mr. Reesor London, Ont 271=276 
 
 Mr. Sangster Toronto, Ont 359 
 
 Mr. Simpson London, Ont 266 
 
 Mr. James Simpson Typographical Union 305, 306, 357=360 
 
 Mr. A. Smith Cobalt, Ont 189 
 
 Mr. W. T. Stewart Toronto, Ont 137=139 
 
 Mr. Stratfold London, Ont 262, 263 
 
 Mr. N. Taber Toilet Laundry Co 149, 150 
 
 Mr. W. B. Tindall Parry Sound Lumber Co 369 
 
 Mr. Gordon Waldron Barrister, Toronto, Ont 226=259 
 
 Mr. Ware Miners' Union, Porcupine, Ont 172, 176, 189=192 
 
 Mr. G. W. Watts Canada Gen. Electric Co 330, 353=360 
 
 Air. F. W. Wegenast Solicitor, Canadian Alanufacturers' Assoc 139 et passim 
 
 Mr. J. Wha'en Cobalt, Ont 192, 194, 195 
 
i: • SYNOPSIS OF ME. J. H. BOYD'S BRIEF: No. 65 
 
 A SHORT SYNOPSIS OF 
 
 THE BRIEF OF MR. JAMES HARRINGTON BOYD, 
 
 OF TOLEDO, OHIO, COUNSELLOR=AT=LAW. 
 
 The brief contains an argument in favour of the view that the legislature 
 of the State of Ohio (or any of the States of the United States) has power to 
 substitute without the consent of the employer or his employees, industrial insur- 
 ance, as made and provided in the Workmen's Compensation Act — an act "To 
 create a state insurance fund for the benefit of injured, and the dependants of 
 killed employees, and to provide for the administration of such fund by a State 
 Liability Board of Awards." The act is an adaptation of the German Industrial 
 Insurance Law, a plan of insurance between employer, employees and the State, 
 authorized by law to insure workmen and their dependants against the loss of 
 wages arising out of industrial accidents. The Ohio law is in fact a contract 
 between these parties in the nature of an insurance policy. 
 
 An analysis is made of what is believed t^ be the true theory of industrial 
 insurance, namely, that under all circumstances it is in fact a tax levied by the 
 state, both upon the employer and employee, and accepted by the employee class 
 for the public welfare. This is necessarily so, for were the new obligation of 
 the employer deemed to be created with the sole object of establishing in the 
 employee a new private right and remedy in substitution of his former right to 
 sue in tort for damages, then an industrial insurance law would be as unfair to the 
 employee as to the employer. This proposition is true, because in lieu of a possible 
 opportunity formerly belonging to the injured employee to be made whole in a sum 
 for damages fully commensurate with his peculiar loss, he would be compelled 
 under an industrial insurance act to accept a stipulated amount admittedly having 
 no relation to his injury, but measured on the basis of his relative economic 
 position in the community, viz. : — the amount of his wage. This is not a just 
 basis to compensate the employee for his injury, if his new right is to be classified 
 in the same category in which his old right belongs, viz. : a means to redress a 
 private wTong. 
 
 The law should require the employee to accept, in lieu of his former pre- 
 carious right to adequate damages, a stipulated sum computed not independently 
 as to each party injured on the basis of loss peculiar to his own personal injury, 
 but relatively as to all in accordance with their respective earning capacities. Its 
 sole justification is the public welfare, and whatever its form it must be in effect 
 an arbitrary levying and administration of a tax fund. 
 
 On this theory, it is argued, the position of employer and employee are 
 altered, that no new statutory privity of relationship is created, but that each is 
 required to perform a new duty toward the Slate the employer to pay an adequate 
 tax, and the employee to surrender a chose in action: each for the public welfare, 
 ami hi exchange for specific benefits, to surrender la the State certain rights and 
 to look to a State agency alone fur reciprocal benefits. 
 
1912 WORKMEN'S COMPENSATION COMMISSION. 471 
 
 - . _ — , 
 
 Brief Historical Review of the German Plan of Insurance of Workman 
 
 against Accidents, of the English Compensation Act, of the 
 
 Operation of Employers' Liability in England and 
 
 !\ the United States., and their Economical 
 
 Results. 
 
 Frederick the Great claimed to be the king of the poor, and to have the 
 right to use the state for their protection and uplifting. The Prussian law of a 
 century ago stated: 
 
 "It is the duty of the state to provide sustenance and support for those of 
 its citizens who cannot provide for themselves. Work adapted to their strength 
 and capacities shall be supplied to those who lack means and opportunities of 
 earning a livelihood for themselves and those dependent upon them. 
 
 '"Those who from laziness, love of idleness, or other irregular proclivities, do 
 not choose to employ the means offered them of earning a livelihood, shall be 
 kept to useful work by compulsion and punishment under proper control. 
 
 "The State is entitled and is bound to take such measures as will prevent 
 the destitution of its citizens and check excessive extravagance. 
 
 "The police authorities of every place must provide for all poor and destitute 
 persons whose subsistence cannot be insured in any other way. 1 
 
 In England prior to 1837 the principles of the common law of negligence or 
 fault formed the only basis of recovery by a workman from his employer, on 
 account of accident. 
 
 In that year Priestly v. Fowler, 3 M. and W. 1, established the fellow-servant 
 rule, that the master is not bound to respond in damages for an injury to his 
 servant in the course of his employment the cause of which was due to the 
 negligence of a fellow-servant. 
 
 Prussia in 1838 initiated the principle of the liability of railway companies to 
 provide compensation for industrial accidents. The companies had only the de- 
 fences of the negligence of the person injured, or the "act of God." 
 
 In 1842 Shaw, J. of Massachusetts, in Farwell v. B. & W. E. R. Co. 4 Metcalf 
 49, laid down the doctrine of assumed risks. 
 
 In 1854 statutes were passed in Germany compelling certain classes of em- 
 ployers to contribute one-half of the subscriptions to the sickness association fund, 
 formed according to local statutes. 
 
 The obligation was imposed upon independent mechanics and manufacturers 
 to advance the contributions of their journeymen and assistants, with the proviso 
 for charging it to the next payment of wages. As compensation for his share 
 in the payment, the employer is assured a proportionate influence in the admin- 
 istration of the fund. 
 
 Brunswick, Mecklenburg and Saxony, went even further than Prussia in 
 requiring all employers to belong to some kind of mutual association. 2 
 
 The act of 18'69, for the North German Confederacy had the effect of releasing 
 the bond of compulsory contributions to the sickness fund by employers provided 
 by the act of 1854. 
 
 In 1876 there were in all Prussia 5,239 compulsory societies, with 869,304 
 
 1 Fourth Special Report of the Commissioner of Labour of the United States, p. 2$. 
 
 2 Fourth Special Report of the Commissioner of Labour of Ignited States, 1893, p. 35. 
 
472 SYNOPSIS OF MR. J. H. BOYD'S BRIEF: No. 65 
 
 members. In 1880 Prussian official statistics showed 830,602 members of regis- 
 tered friendly societies, 220,000 of miners' societies, and 200,000 of non-registered 
 friendly societies; in all, 1,250,702 out of 2,400,000 employed in mines and in- 
 dustries within the law. So little effective was the act that half of those for 
 whom the societies (sickness, relief, and burial) were meant were still uninsured. 
 
 In England the first employers' liability act was passed in 1880. Its most 
 important provision was the extension of the doctrine of vice-principal, but the 
 relief appears to have been slight and unsatisfactory. The unimpaired rigour 
 of the rule as to assumption of risk became more evident as the use of safety 
 appliances became more general and the number of accidents traceable to the 
 employer's negligence fewer. After an unsuccessful attempt by Mr. Asquith, in 
 1893, to do away with the common employment rule and the implied contract of 
 assumption of risk, the time was ripe for the introduction, in 1897, of Mr. 
 Chamberlain's Workmen's Compensation Act, the gist of which is to provide un- 
 failing compensation for injured workmen, without regard to negligence. 
 
 The efficiency of the British compensation act as compared with the em- 
 ployers' liability act is conclusively shown by statistics. In 1904 there were 3,065 
 deaths of employees in industrial accidents covered by the compensation act, 
 524 claims came before the county courts, and 112 were brought under the em- 
 ployers' liability act. 
 
 In Germany after investigation by the police, the compensation is fixed 
 officially, and without delay, by the organs of the trade associations. 
 
 From the decision of the trade association the applicant may. within a month 
 appeal to an arbitration court composed of two representatives chosen by the 
 employer, two by the employees, and a state official as chairman. Arbitration 
 courts for both accidents and invalidity insurance have been in operation since 
 1901.* 
 
 As the trade associations have a strong interest in diminishing the number 
 of accidents, the law confers on them the important privilege of making regula- 
 tions for the prevention of accidents, compelling employers, under penalty of 
 higher assessments, to adopt measures necessary for safety, and by fines forcing 
 observance of these measures upon the workman. 
 
 Statistics for the last twenty-five years, particularly German and American 
 statistics, show that from 50 to 55 per cent, of accidents to workmen, injured 
 or killed in the course of their employment, are due to the natural hazard of the 
 business, i.e.. to the inevitable risk of the business plus the combined negligence 
 of the employer and employee; that from 18 to 20 per cent are due to the neg- 
 ligence of the employer; and 25 to 30 per cent, to the negligence of the workman. 
 The common law action, based upon fault of the employer, furnishes compen- 
 sation in less than 20 per cent, of the cases; in less than 12 per cent, in the State of 
 New york, in 8 per cent, in Illinois, and in 6 per cent, in each of the States of Ohio 
 and Pennsylvania. Even if all the common law defences were abrogated, an 
 average of only 12l^> per cent, of workmen in industrial employments ivould re- 
 cover any compensation. From social and economic points of view, the common 
 law action, based upon fault of the employer, is a failure^ and is being abandoned 
 in Washington, Ohio, Wisconsin, Massachusetts and Montana. 
 
 * Dr. George Zacher, Guide, etc., p. 13. 
 
 1 Report of Employers' Liability Commission of Ohio, Pt. 1, pp. 25 to 75. Annals of 
 the American Academy of Political and Social Science, July, 1911. 
 
1912 
 
 WORKMEN'S COMPENSATION COMMISSION. 
 
 173 
 
 Statistics of Compulsory State Insurance in Germany. 
 
 In 1887 there were insured against sickness and accidents in Germany 
 3,8G1,560 workmen among 319,453 establishments. 1 The number of notices of 
 accidents was 106,101. 
 
 In 1907, insured in Germany against accidents: 2 Persons 
 
 Industrial, building, and marine trade associations (associations, 66; 
 
 establishments, 637,118) 9,018,367 
 
 Agriculture and forestry trade associations (associations, 48; establish- 
 ments, 4,710,401) 11,189 071 
 
 State executive boards (boards, 535 ) 964,589 
 
 21,172,027 
 
 In 1S97, there were insured in .Germany against accidents in the same 
 
 associations, and 409 State executive boards, in round numbers 3 18,500,000 
 
 Table No. X.— Industrial Accident Statistics, 1887 to 1897, 3 and 1897 4 to 1907 
 
 Under the German Law. 
 
 
 1887 
 
 1897 
 
 1907 
 
 (46,000 
 
 accidents). 
 
 
 By fault of — 
 
 Emplover 
 
 Per cent. 
 20.47 
 26.56 
 
 8.01 
 
 Per cent. 
 17.30 
 29.74 
 11.14 
 
 Per cent. 
 16.81 
 
 Employees 
 
 28.89 
 
 Both parties 
 
 9.94 
 
 
 
 Due to inevitable risks of the industries and other 
 
 55.04 
 44.96 
 
 57.18 
 42.82 
 
 55.64 
 44.36 
 
 
 
 
 100.00 
 
 100.00 
 
 100.00 
 
 Summarized : 
 
 Inevitable risks 
 
 8.01 
 44.96 
 
 10.14 
 42.82 
 
 9.94 
 44.36 
 
 Natural hazard 
 
 52.97 
 
 52.96 
 
 54.30 
 
 
 
 Average, 53.41 per cent. 
 
 This table, covering a period of 20 years, shows the elements of fault which 
 enter into the problem, and supplies a valuable basis for improvement in pre- 
 ventive measures, since from 55 to 57 per cent, of all accidents are due either to 
 the fault of the employer, of the employee, or of the two combined. 
 
 In the opinion of the writer, the scientific and economic value of the statistics 
 in Table X are of the greatest importance; the conclusions are new discoveries 
 in the field of political economy. 
 
 'Fourth Special Report of the Commissioner of Labor, 1893, p. 83. 
 
 2 Workingmen's insurance in Europe, Frankel and Dawson, 1910, p. 101. 
 
 3 Dr. George Zacher, Introduction to Workmen's Insurance in Germany. 
 
 4 Bulletin of Bureau of Labor, 1908, p. 120. 
 
474 SYNOPSIS OF ME. J. H. BOYD'S BRIEF: No. 65 
 
 The statistics of Minnesota and of Wisconsin show that 40 to 50 per cent, 
 of all industrial accidents are due to the inevitable risks of the business; Austrian 
 tables show 70 per cent. 5 
 
 During the decade 1887-1897 there came under the German law 12,500,000 
 workmen, in agriculture, forestry, and the building trades. 6 These workmen were 
 the most ignorant and the most poorly trained of all workmen insured under the 
 law. The percentage of accidents attributable to the negligence of the workman 
 increased from 25.56 per cent, in 1887 to 29.74 per cent, in 1897, an increase of 
 almost 3 per cent. During the period 1897-1907 this element of fault fell from 29.74 
 per cent, to 28.39 per cent., while the number of such workmen remained prac- 
 tically unchanged. The decline is due to accident prevention, which has been so 
 carefully studied in Germany, and to the greater intelligence of workmen. The 
 percentage of accidents attributable to the employer was in 1887 20.47 per cent.; 
 in 1897, 17.30 per cent.; and in 1907, 16.81 per cent. The percentage of accidents 
 due to natural hazard remains practically constant at 53.41 per cent. 
 
 In 52 per cent, of all cases of injury, and in 81.80 per cent, of cases due to 
 natural hazard and the fault of the workman, there is at common law no relief, — 
 none for the workman, none for the dependants. To provide relief for the injured 
 workman, and for his family and dependants, is the immediate purpose of industrial 
 insurance laws. Whether the injury be attributable to the negligence of the 
 employer, or of the employee, or to the natural hazard of the business, the effect 
 on family and dependants is the same, and where common law remedies fail 
 equitable remedies must be sought. 
 
 At common law in Great Britain and the United States, a workman can 
 recover damages for injuries due to the negligence of the employer, when the 
 workman's own acts have not contributed to the accident. 
 
 The plaintiff can not recover if the defendant proves — 
 
 (a) That the plaintiff's negligence contributed to the cause of the accident; or 
 
 (b) That the negligence of a fellow-servant was the cause of the accident; or 
 
 (c) That the plaintiff assumed the risk. 
 
 In the years 1906, 1907, and 1908, ten employers' liability insurance com- 
 panies doing business in the State of New York: — 
 
 Received in premiums from employers $23,524,000 
 
 Paid to injured employees 8,560,000 
 
 Waste : $14,964,000 
 
 For every $100 paid out by employers for protection against liability to their 
 injured workmen, less than $37 gets to those workmen; $63 goes in salaries to 
 attorneys and to agents whose business it is to defeat claims, to the cost of soliciting 
 business, to the expenses of administration, in court fees, and to profits. The 
 injured workman pays his attorney 26.13 per cent, of the amount received. This 
 investigation covers 46 cases, in each of which the recovery was $1,500 and over. 
 In smaller recoveries attorneys' fees take a larger proportion. Actually, no1 more 
 than 20 to 25 per rent, of the money paid by the employer reaches the injured work- 
 man or his dependants. 
 — ^ 
 
 5 Report of the New York Commission, p. 25. 
 
 * Frankel & Dawson's Workingmen's Insurance in Europe, p. 101. 
 
 7 First Report of the Employers' Liability Commission of New York, p. 31. 
 
1912 
 
 WORKMEN'S COMPENSATION COMMISSION. 
 
 475 
 
 GERMANY -.—Causes 
 
 of Accidents in 
 
 1887. 
 
 
 Attributable Causes. 
 
 Per cent. 
 
 Number. 
 
 Fault of the employer : 
 
 10.64 
 7.03 
 2.09 
 
 1,700 
 
 Defective arrangement for carrying on business 
 
 1,122 
 
 Lack of directions or improper ones 
 
 
 
 334 
 
 
 
 
 
 Totals 
 
 19.76 
 
 3 156 
 
 
 
 
 
 Fault of injured : 
 
 Awkwardness or inattention 
 
 16.49 
 5.17 
 1.98 
 1.76 
 
 .24 
 
 2,634 
 825 
 
 
 Heedlessness 
 
 316 
 
 Failure to make use of protective apparatus 
 
 
 
 281 
 
 Unsuitable clothing 
 
 
 
 38 
 
 
 
 
 
 Totals 
 
 25.64 
 
 4,094 
 
 
 
 
 
 Fault of the employed and injured 
 
 4.45 
 
 3.28 
 
 3.47 
 
 43.40 
 
 711 
 
 Fault of third person, particularly a co-labourer 
 
 524 
 
 No fault which can be assigned 
 
 554 
 
 Inevitable risk when at work , 
 
 6,931 
 
 
 
 
 
 Totals 
 
 54.60 
 
 8,720 
 
 
 
 Of these 15,970 accidents, in 3,156, less than 20 per cent., would the injured 
 workman he entitled to receive damages, damages of such uncertain amount as a 
 jury might award. In 12,814, over 80 per cent., neither the workman, his family, 
 nor dependants would be entitled to recover anything. 
 
 Prior to compulsory state insurance in Germany, workmen at common law 
 and under liability laws received compensation in 10 per cent, only of accident 
 
 cases 
 
 29 
 
 Results of 
 
 Accidents 
 
 in 
 
 1887. 
 
 
 
 Results. 
 
 Per cent. 
 
 Number. 
 
 Death 
 
 18.52 
 
 17.70 
 50.88 
 
 2,956 
 
 Permanent incapacity : 
 
 Entire 
 
 2,827 
 
 Partial , 
 
 8,126 
 
 
 
 
 
 
 Totals 
 
 68.58 
 12.90 
 
 10,953 
 
 Incapacity for a time longer than 13 weeks 
 
 
 
 
 2,061 
 
 
 
 
 
 
 The bulletin of the United States Bureau of Labour, January, 1908, p. 120, 
 gives statistics, collected by the German Imperial Insurance Office, of 46,000 in- 
 dustrial accidents. 
 
 The classification of the causes of these accidents is as fellows: 
 
 Due to — Per cent. 
 
 1. Negligence or fault of employer . . ; 16.81 
 
 2. Joint negligence of employer and employee 1.66 
 
 3. Negligence of co-employees (fellow-servants) 5.28 
 
 4. " Act of God " 2.31 
 
 5. Fault or negligence of employee 28.89 
 
 6. Inevitable accidents connected with the employment 42.05 
 
 Total 100.00 
 
 29 Fourth Special Report of Commissioner Wright, in 1893. 
 
476 SYNOPSIS OF ME. J. H. BOYD'S BBIEF : Xo. 65 
 
 _ \ 
 
 These figures grouped to correspond to those for one year, 1887, are: 
 
 Due to — Per cent. 
 
 1. Employer 16.81 
 
 2. Employees 28.89 
 
 3. The inherent risks of the business 54.30 
 
 Total 100.00 
 
 Under the German insurance plan, there was paid out during the twenty 
 3'ears ending in 1904: — 
 
 On account of — 
 
 Sickness $555,750,000 
 
 Accidents 232,750,000 
 
 Invalidity and Old Age 13,500,000 
 
 Total $802,000,000 
 
 Of this sum contributions were : — 
 
 From — 
 
 Employers $424,500,000 
 
 Workmen 377,000,000 
 
 $801,580,000 
 
 The Imperial Government defrayed the cost of administration, and to the 
 invalidity and old age fund contributed fifty marks ($12.50) in each case insured. 
 
 Employers. Workmen, 
 
 per cent. per cent. 
 
 To sickness insurance 33 67 
 
 To accident insurance 85 15 
 
 To invalidity and old-age insurance 50 50 
 
 Population in 1907 62,000,000 
 
 Workmen insured 27,172,000 
 
 Under the British system the number of workmen insured in 1908 was 13,000,000. 
 
 Compensation for death : 
 
 (a) A sum equal to three years' earnings, but not less than £150 ($730) 
 nor more than £30,0 ($1,460). 
 
 (h) A sum less than above amount to partial dependants. 
 
 (c) Medical and funeral expenses, not to exceed £10 ($49), if no de- 
 pendants. 
 
 Compensation for disability: 
 
 A weekly payment during disability of not more than 50 per cent, of the 
 workman's average weekly earnings, but not exceeding £1 ($4.87) a 
 week; if the incapacity lasts loss than two weeks, no compensation is 
 allowed the first week. 
 
 Liability for payment of compensation is on the employer, and he is not 
 obliged to insure. From both the German and English systems have been elimin- 
 ated the three common law doctrines — contributory negligence, assumption of 
 risk, fellow-servant — and only in the case of proved malicious negligence ("serious 
 and wilful misconduct") is compensation disallowed. 
 
ISIS WORKMEN'S COMPENSATION COMMISSION. \\] 
 
 — j 
 
 Statistics show that in the United States social and economic conditions are 
 gravely threatened by the industrial insecurity of the workman under the common 
 law and liability acts. Compulsory State insurance seeks to conserve the workman's 
 normal capacity and to bring it to the highest efficiency. 
 
 Industrial accidents in the United States are due to: 
 
 Inherent risks of business 50 per cent. 
 
 Negligence of employer 20 per cent. 
 
 Negligence of workman 12 % per cent. 
 
 In 1909, the killed and injured workmen in the United States numbered 
 536,000. At common law for 80 per cent, there would be no ielief. 
 
 Ohio recognizes the State's duty to provide for its injured and helpless work- 
 men and their families. Whether this can be better done under the older laws or 
 under the present act the following comparative statement will show: 
 
 1. (a) Under the older laws, the average payment for death is $344.88 
 (&) Under the act, an average of $2,200. 
 
 2. (a) Older laws, average cost of collection, 24 per cent. 
 (b) New act, no deductions. 
 
 3. (a) 36 per cent, receive something; 64 per cent, nothing. 
 (b) 80 to 95 per cent, receive compensation. 
 
 4. (a) Of the 36 per cent, who get something, 60 per cent, get from $50 to 
 
 $500, and 12 per cent, get more than 50 per cent, of the actual amount 
 paid. 
 (b) The average of $2,200 is paid without deductions. 
 
 5. (a) There is delay in payment, from one to five years, with resultant 
 
 hardships for the family. 
 (&) No delay. As a rule the compensation is not paid in a lump sum, 
 but, in general, as the wages had been paid. 
 
 6. (a) 56 per cent, of the widows, and 18 per cent, of the children, are 
 
 forced to work. 
 (b) The percentages will be reduced, probably to 10 and 4 respectively. 
 
 The act provides in case of death for minimum and maximum payments of 
 $1,500 and $3,400, with $150 allowance for medical and funeral expenses. 
 
 Where the injury results in total disability payment is made of 60 per cent, 
 of wages for not more than 300 weeks. For partial disability, 60 per cent, of 
 impaired earning capacity during the continuance of the disability, or from $5 to 
 $12 a week. 
 
 An employer who elects not to come under the act forfeits his right to the 
 usual common law defences. The workman of an employer within the act is him- 
 self within the act, but in the event of being denied all right to compensation, or 
 where his injury is due to the wilful negligence of the employer, or to the em- 
 ployer's violation of a statutory duty, the workman is not precluded from other 
 legal remedies. 
 
 The employer contributes ninety per cent, of the premium, the worker ten 
 per cent. The cost to the workman will probably be from one to two dollars a 
 year. The argument for making the employer and the workman joint contributors 
 is that it will create in each a vital interest in accident prevention. 
 
 The Treasurer of State is the custodian of the fund, and all disbursements there- 
 from are. upon duly signed vouchers, paid by him. 
 
478 SYNOPSIS OF MR. J. H. BOYD'S BRIEF: No. 65 
 
 The Ohio Act is an adaptation of the German Industrial Accident Insurance 
 Law of 1884, which, in more or less modified form, has been followed by all the 
 countries of Europe. 
 
 Dr. Laband, analysing the industrial insurance legislation of Germany and 
 of other European countries, says (Droit Public de l'Imperial Allemand, IV., 12) : 
 
 "The Imperial legislation starts from this idea — that the undertaker of an 
 enterprise who employs workmen in order to appropriate to himself the economic 
 value of the fruits of their labour owes them not only the agreed wages for their 
 labour, but ought also to bear with them the risks of accident resulting from 
 this labour. This conception has not taken the shape of a principle of private 
 law which governs the relations resulting, in a judicial sense, from the labour 
 contract; it has become the duty of the State to take care of the victim of an in- 
 dustrial accident and of his dependants; and this duty is effected by means of 
 public law. The right of the workman to the solicitude of the State is wholly in- 
 dependent of and unaffected by any contract between him and his employer. The 
 right is tiot founded on, nor is it affected by fault in either employer or workman, 
 unless fault in either of them has been proved intentional. The obligation to aid 
 the workman is not a legal obligation, or what is called a State obligation, of the 
 master to his workman, for master and workman are not set against one another as 
 debtor and creditor, and they are powerless to vary the right of the one to aids and 
 the obligation of the other to give them. The workman and his dependants receive 
 the aids through an intermediary delegated by the State who performs a purely 
 administrative function, and who has no private legal relation with either the work- 
 man or his dependants !* 
 
 The distinction between the principles applicable to the common law of torts 
 and to employers' liability acts, and the principles applicable to industrial insurance 
 or workmen's compensation may be stated in the following propositions : 
 
 1. "The body of law involved in the law of torts and in employers' liability acts 
 results in the payment to the employee of damages intended to be commensurate 
 with the injury suffered. Such law has for its sole object and end the regulation of 
 private rights, that is, the readjustment of relationship between individuals, to 
 reproduce the parity presumptively existing between them. 
 
 2. "The obligations of Industrial Insurance and Workmen's Compensation Acts 
 arise from contingencies not dependent upon nor within the control of the parties; 
 have no relationship whatever to the conduct of the parties; are not based upon 
 wrongs. It folloivs then that they must pertain to the subject of government regu- 
 lations, and are in the nature of economic provisions in the form of indirect taxation 
 levied to regulate occupations. On what other basis would the government be justi- 
 fied in writing an insurance policy into the labour contract? Were this not so, 
 industrial insurance and workmen's compensation would be free from the stand- 
 point of both, employee and employer, without basis of justice or equity, for the 
 theory is that compensation is not to be commensurate with injury, but 
 is to be based upon wages, thus substituting for the former obligations based upon 
 tort, a purely arbitrary sum. Such a scheme can have no relation to the adjustment 
 of private wrongs. If justifiable, it must be on the sociologic and economic theory 
 of the right of the State to levy a tax for the purpose of protecting the community 
 as a whole." 
 
 * R. J. Cary Brief on Industrial Insurance Law. 
 

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 - aavoa iNaoioov -iviaisnow- 
 FINAL REPORT 
 
 ON 
 
 
 Laws Relating to the 
 Liability of Employers 
 
 To Make Compensation to their Employees for 
 Injuries received in the course of their employment 
 which are in force in other countries. 
 
 AND 
 
 SECOND INTERIM REPORT 
 
 ON 
 
 Laws Relating to the 
 Liability of Employers 
 
 WITH DRAFT OF 
 
 An Act to provide for Compensation to Workmen 
 for Injuries sustained and Industrial Diseases con- 
 tracted in the course of their employment. 
 
 BY 
 
 THE HON. SIR WILLIAM RALPH MEREDITH, C.J.O., 
 
 COMMISSIONER. 
 
 PRINTED BY ORDER OF 
 THE LEGISLATIVE ASSEMBLY OF ONTARIO 
 
 TORONTO : 
 Printed and Published by L. K. CAMERON, Printer to the King's Most Excellent Majesty 
 
 19 13 
 
INDUSTRIAL ACC1DLNI BUAtty 
 
 OF THE 
 
 STATE OF CALIFORNIA 
 
 FINAL REPORT 
 
 ON 
 
 Laws Relating to the 
 Liability of Employers 
 
 To Make Compensation to their Employees 
 for Injuries received in the course of their 
 employment which are in force in other 
 countries. 
 
 By 
 THE HON. SIR WILLIAM RALPH MEREDITH, C.J.O., 
 
 COMMISSIONER. 
 
 PRINTED BY ORDER OF 
 
 THE LEGISLATIVE ASSEMBLY OF ONTARIO 
 
 TORONTO : 
 Printed and Published by L. K. CAMERON, Printer to the King's Most Excellent Majesty 
 
 19 13. 
 
Printed by 
 
 WILLIAM BRIGGS 
 
 29-37 Richmond Street West 
 
 TORONTO 
 
Final Report 
 
 ON 
 
 LAWS RELATING TO THE LIABILITY OF EMPLOYERS TO MAKE COMPENSA- 
 TION TO THEIR EMPLOYEES FOR INJURIES RECEIVED IN THE COURSE 
 OF THEIR EMPLOYMENT WHICH ARE IN FORCE IN OTHER 
 COUNTRIES, AND AS TO HOW FAR SUCH LAWS 
 ARE FOUND TO WORK SATISFACTORILY. 
 
 By 
 
 THE HON. SIR WILLIAM RALPH MEREDITH, C.J.O., Commissioner 
 
 To His Honour Sir John Morison Gibson, K.C.M.G., K.C.. LL.D., Lieutenant- 
 Governor of the Province of Ontario. 
 
 s 
 
 May it Please Your Honour : 
 
 T have the honour to report that I have concluded the enquiries which I was 
 by Your Honours Commission bearing date the 30th day of June, 1910, appointed 
 to make " as to the laws relating to the liability of employers to make compensation 
 to their employees for injuries received in the course of their employment which 
 are in force in other countries, and as to how far such laws are found to work 
 satisfactorily,'' and on the first day of April, 1913, I submitted to Your Honour a 
 draft bill embodying such changes in the law as in my opinion should be adopted 
 in this Province, and I now proceed to state my reasons for recommending that 
 the draft bill should be passed into law. 
 
 At the outset of the enquiry it was contended by those who spoke on behalf 
 of the workingmen : (1) That the law of Ontario is entirely inadequate in the 
 conditions under which industries are now carried on to provide just compensation 
 for those employed in them who meet with injuries, or suffer from industrial 
 diseases contracted in the course of their employment; and (2) that under a just 
 law the risks arising from these causes should be regarded as risks of the industries 
 and that compensation for them should be paid by the industries. 
 
 With these two propositions those representing the employers expressed their 
 agreement, though it is fair to say that it was probably not intended to agree 
 that compensation should be paid in respect of industrial diseases. 
 
 Agreeing as I did with the contention of the workingmen there remained 
 only to be considered in what form and by what means the compensation should 
 be provided. 
 
 For the purpose of reaching a conclusion as to this, and in obedience to the 
 directions of the Commission, I made enquiry as to the laws in force in the principal 
 European countries, in the United States of America and in the Provinces of 
 Canada. I also visited Belgium, England, France, and Germany, and con- 
 sulted those concerned in administering the laws of those four countries, and others 
 
 [3] 
 
1 FINAL REPORT OP THE COMMISSIONER. No. 53 
 
 qualified to judge as to whether they have beeu found to work satisfactorily. Much 
 evidence has been taken bearing upon the general question, all of which appears 
 in the appendix to my first interim report, dated the 27th day of March, 1912, 
 and the appendix to this report. 
 
 Before referring to the different systems in operation it may be proper to say 
 that most of these laws, and perhaps all of them except the German, have not been 
 in force long enough to enable a conclusive opinion to be formed as to their merits 
 or demerits. 
 
 There are two main types of compensation laws. By one of them the em- 
 ployer is individually liable for the payment of it, and that is the British system. 
 By the other, which may be called the German system, the liability is not individual 
 but collective, the industries being divided into groups, and the employers in the 
 industries in each group being collectively liable for the payment of the compen- 
 sation to the workmen employed in those industries — practically a system of com- 
 pulsory mutual insurance under the management of the State. The laws of other 
 countries are of one or other of these types, or modified forms of them, and in 
 most, if not all of them, in which the principle of individual liability obtains, 
 employers are required to insure against it. 
 
 Those representing the workingmen at the beginning of the enquiry appeared 
 to favour the adoption of the British system. Mr. F. W. Wegenast, who represented 
 the Canadian Manufacturers Association, strongly urged the adoption of the Ger- 
 man system, and his view was supported by most of the other employers who ap- 
 peared or were represented before me, and later on in the enquiry the representa- 
 tives of the workingmen fell in with Mr. Wegenast' s views. 
 
 There were, however, differences of opinion as to details. The employers 
 insisted that a part of the assessments to provide for the payment of the com- 
 pensation should be paid by the employees, and this was vigorously opposed by 
 the representatives of the workingmen. The employers desired that no compen- 
 sation should be payable where the injury to the workman did not disable him 
 from earning full wages for at least seven days, and to this the representatives 
 of the workingmen objected. The employers also desired that, as the British act 
 provides, an employee should not be entitled to compensation if his injury was due 
 to his own serious and wilful misconduct, but the representatives of the working- 
 men objected to any such limitation of the right to compensation. 
 
 As stated in my first interim report, 1 had then come to no conclusion as to 
 these matters, or as to what system of compensation I should recommend for 
 adoption, nor had I reached a conclusion as to the industries to which the law 
 should be made applicable, nor as to certain other details which I enumerated in 
 my report. 
 
 After the best consideration I was able to give to the important matters as to 
 which I was commissioned by Your Honour to make recommendations, I came to 
 the conclusion, to which I still adhere, that a compensation law framed on the 
 main lines of the German law with the modifications I have embodied in my draft 
 bill is better suited to the circumstances and conditions of this Province than the 
 British compensation law, or the compensation law of any other country. 
 
 I have had the benefit of hearing the opinions of Mr. Miles M. Dawson, Mr. 
 S. H. Wolfe, Mr. P. Tecumseh Sherman, and Mr. F. W. Wegenast, all of whom 
 have given special attention to the subject of compensation laws and industrial 
 accident insurance, as to the operation of those laws, and as to the best form of 
 compensation law to be adopted under the conditions which obtain in this Province, 
 
1914 WORKMEN'S COMPENSATION COMMISSION. 5 
 
 and also of hearing the opinions of Mr. James Harrington Boyd, who had a large 
 part in framing the compensation law passed by the Legislature of the State of 
 Ohio, and of Mr. F. W. Hinsdale, the chief auditor of the Industrial Insurance 
 Board of the State of Washington, as to the operation of the compensation laws of 
 those States, and also upon the general question as to the best form of compen- 
 sation law for this Province." 
 
 These gentlemen differed widely in their opinions as to the best form of 
 compensation law, as will be seen from their testimony and arguments which appear 
 in the appendices to my report, and from the memoranda submitted by Mr. Wolfe 
 and Mr. Sherman, although they are practically unanimous as to the industries 
 bearing the burden of the compensation, and, with the exception of Mr. Wegenast, 
 they are all of opinion that this burden should be borne equally by the employer 
 and employed. 
 
 Mr. Sherman is opposed to the system of collective liability, which he character- 
 izes as unjust because it imposes upon the individual employer the obligation ot 
 sharing the burden of accidents in other establishments than his own and, as he 
 assumes, notwithstanding that by the introduction of the best machinery and ap- 
 pliances and safeguarding against accident he has reduced the number of accidents 
 in his establishment to a minimum, he is placed as respects his liability to pay com- 
 pensation on the same footing as an employer whose machinery and appliances are 
 defective and who takes little or no precaution to guard against accidents in his 
 establishment. 
 
 If a uniform rate were payable by all the employers in a class or sub-class, 
 regardless of these considerations, I agree that there would be the injustice which 
 Mr. Sherman points out, but I have in the draft bill which I have submitted in- 
 troduced provisions (sec. 71, s.s. 2 and 4) which, in my opinion, will provide againsl 
 that happening. 
 
 The arguments presented by Mr. Dawson and Mr. Wegenast, and perhaps those 
 of Mr. Wolfe, in favour of the collective system are, I think, unanswerable if, as I 
 believe, the true aim of a compensation law is to provide for the injured workman 
 and his dependants and to prevent their becoming a charge upon their relatives or 
 friends, or upon the community at large. 
 
 It is in my opinion essential that as far as is practicable there should be cer- 
 tainty that the injured workman and his dependants shall receive the compensation 
 to which they are entitled, and it is also important that the small employer should 
 not be ruined by having to pay compensation, it might be, for the death or per- 
 manent disability of his workmen caused by no fault of his. It is, I think, a serious 
 objection to the British act that there is no security afforded to the workman and 
 his dependants that the deferred payments of the compensation will be met, and 
 that objection would be still more serious in a comparatively new country such as 
 this, where many of the industries are small and conditions are much less stable 
 than they are in the British Isles. 
 
 This objection could, of course, be met by making it obligatory upon the 
 employer to insure his workmen against accident to the maximum amount to 
 which they or their dependants would be entitled under the act, but if insurance 
 is to be compulsory I see no reason why the cheapest form of it— mutual insurance 
 — should not be prescribed. 
 
 I agree also with Mr. Dawson that the ultimate burden of paying the com- 
 pensation under such a law as is proposed falls upon the community and that 
 
FINAL REPORT OF THE COMMISSIONER. X... 5 
 
 o 
 
 whatever the employer has to pay, whether directly by way of compensation, or 
 if he insures against his liability by paying insurance premiums, forms part of 
 the cost of that which he produces and is added to the selling price. 
 
 Mr. Sherman's view is that insurance should be made compulsory "only if 
 and when reasonably necessary in order to assure to the injured workmen the 
 payment of their compensation," and that "in no event should those concerns 
 that are amply able to carry their own insurance be required to buy insurance 
 or contribute to a State scheme, for that," he says, "would be pure economic waste." 
 
 I do not understand the latter argument or how there can be said to be 
 economic waste if the "concerns" he mentions are not required to do more than 
 contribute with other employers to the payment of compensation according to the 
 hazard of their respective businesses. I could understand that there might be 
 economic waste if it were incumbent on such an employer to insure with a joint 
 stock company which would require him to pay a premium sufficient to provide 
 for the cost of securing the business and a reasonable dividend to its shareholders 
 as well as to indemnify against the risk undertaken. 
 
 There was much discussion as to the basis on which the assessments to provide 
 the compensation should be made. The German law provides for assessing only 
 for the amounts required to meet the payments of compensation which fall due 
 during the year next preceding that in which the assessments are made, with an 
 added percentage to provide a reserve fund to meet deficiencies in the accident fund 
 in the event of an unusual catastrophe or a depression in trade, but no assessment 
 is made beyond that to meet the deferred payments of compensation, i.e., the 
 paymenlts which are to become due in future years. This plan, popularly called 
 the current cost plan, is that proposed by the Canadian Manufacturers Associa- 
 tion, and Mr. Dawson favours it as not only expedient because it does not involve 
 making the heavy assessments which would have to be made at the outset if the 
 capitalized value of the deferred payments had to be provided for by the assess- 
 ments, but also as "not unfair to the employers in future years, or economically 
 unsound." 
 
 On the other hand the current cost plan is vigorously denounced by Mr. 
 Sherman, who contends that it is manifestly unfair to the employer of the future 
 because it shifts upon his shoulders part of the burden of compensating for acci- 
 dents which have happened before he became an employer, and that it results in 
 low assessments in the early years of the operation of the law, and necessarily 
 increases in the later years, until in a measurable period of time they become a 
 burden too oppressive for the employer of the future to bear. 
 
 In support of his view Mr. Sherman referred to the rates in Germany, which 
 he said, "now average about double what they were at the beginning," and lie 
 added that "it is calculated that they will not reach their stable maximum for 
 some twenty years more. How much more they will then be no one knows, but 
 the majority guess is they will then double." 
 
 Mr. Wolfe is equally emphatic in his condemnation of the current cost plan, 
 and in addition to his oral testimony presented a table which appears on page 147 
 of the appendix to this report, and which he contended demonstrates the accuracy 
 of his conclusions. 
 
 The views of Mr. Sherman and Mr. Wolfe were controverted by Mr. Wegenast, 
 who contended that statistics prove that in some instances the stable maximum 
 has already been reached and that there i^ nothing to justify the gloomy fore- 
 bodings of Mr. Sherman :is to the future. 
 
1914 WORKMEN'S COMPENSATION COMMISSION. 1 
 
 Mr. Wegenast's contention is hardly supported by Mr. Dawson, whose opinion 
 (page io'l, appendix to first interim report) is that there will be an increasing rate 
 "which is estimated to increase pretty rapidly for about ten years and then rather 
 slowly and with increasing slowness for at least fifteen years longer, and if there 
 is no improvement in the conditions relating to trade and industry, it will still 
 very slowly increase for twenty-five years beyond that." 
 
 I am not convinced that the German plan affords an adequate safeguard against 
 the dangers which Mr. Sherman anticipates, nor am I satisfied that it does not do 
 so. I have, therefore, concluded that the act should not lay down any hard and fast 
 rule as to the amount which shall be raised to provide a reserve fund and that it is 
 better to leave that to be determined 'by the Board which is to have the collection 
 and administration of the accident fund as experience and further investigations 
 may dictate. I have therefore made provision in the draft bill to that end, by mak- 
 ing it '"'the duty of the Board at all 'times to maintain the accident fund so that with 
 the reserves it shall be sufficient to meet all the payments to be made out of the fund 
 in respect of compensation as they become payable and so as not unduly or unfairly 
 to burden the employers in any class in future years with payments which are to be 
 made in those years in respect of accidents which have previously happened," 
 (sec. 7.0), and by authorizing the Lieutenant-Governor in Council if in his 
 opinion the Board has not performed that duty to require the Board to make a 
 supplementary assessment of such sum as in his opinion is necessary to be added 
 to the fund. (sec. 90), and these provisions I deem essential to the safety and 
 adequacy of the scheme of compensation for which the draft bill provides. 
 
 I may here point out that the act of the State of Washington upon which 
 the draft bill submitted by the Canadian Manufacturers Association, to which I 
 shall afterwards refer, is modeled, requires that for every case of injury resulting 
 in death or permanent total disability there shall be set apart out of the accident 
 fund the estimated present value of the monthly payments to which the workman 
 or his dependants are entitled, the total in no case to exceed $1,000. 
 
 Mr. Sherman also takes strong grounds against the administration of' the 
 act being committed to a Board appointed 'by the State, his view being that such 
 a Board will be influenced by partisan political considerations in practically all its 
 doings. I have no such fear. Whatever else may he doubtful as to the workings of 
 the act there is no doubt, I think, that the members of the Board appointed by the 
 Crown will impartially and according to the best of their ability discharge the 
 important duties which will devolve upon them in the event of the draft bill 
 becoming law. Whatever may be the experience of other countries the experience 
 of Canada does not justify the view which Mr. Sherman entertains. There are 
 now two Provincial Commissions appointed by the Crown discharging very im- 
 portant duties— the Ontario Railway and Municipal Board and the Hydro-Electric 
 Power Commission — and one appointed by the Governor-General also discharging 
 very important duties — the Railway Commission of Canada. Whatever criticisms 
 there may have been of the action of these Boards, no one, as far as I have heard, 
 has ever charged or even suggested that any member of them has been actuated 
 or influenced by partisan political considerations in any action that has been taken 
 by him and I know of no reason why the Board which i< provided for by the 
 draft bill may not be expected to be as free from political partisanship as either 
 of the Boards I have mentioned. 
 
 I proceed now to state the general plan upon which the bill has been drafted. 
 The bill is divided into Parts. In Part I the liability of employers to contri- 
 bute to the accident fund or to pay the compensation individually is dealt with. 
 
8 FINAL REPORT OP THE COMMISSIONER. No. 53 
 
 The bill does not provide for making all employers liable to pay compensation, 
 but only those in the industries enumerated in schedules 1 and 2, and provision is 
 made for industries enumerated in schedule 2 being added to schedule 1 when- 
 ever the Board deems it expedient to add them. Schedule 1 includes all the 
 industries which it is proposed by the draft bill of the Canadian Manufacturers 
 Association to bring within the scope of the act, except those enumerated in 
 schedule 2. 
 
 The inclusion of railways in schedule 1 was opposed by the three principal 
 steam railway companies and by some of the other railway companies, and I saw 
 no reason why their wishes should not be met if by meeting them the act would 
 not be rendered less beneficial to the employees and no injustice would he done 
 to the employers in the industries included in the schedule. The draft bill has 
 been framed so as, in my opinion, to work no injustice to anyone and not less 
 beneficially to the employees owing to railways being excluded from the schedule. 
 
 The only difference between the operation of the act as to industries in 
 schedule 1 and those in schedule 2 is that employers in the former contribute to 
 the accident fund and in that way pay collectively the compensation, while em- 
 ployers in the latter do not contribute to the accident fund but are liable individ- 
 ually for the compensation payable to their employees. In other respects the 
 operation of the act is the same in both cases. The Board determines the amount 
 of the compensation in both cases and its orders when filed in a County or District 
 Court become orders of the court and may be enforced as judgments of it. 
 
 The reasons for adopting the collective system have practically no application 
 to railways, especially when, as has already been done in Ontario and will, I do 
 not doubt, be done when the Parliament of Canada meets, provision is made that 
 all sums payable for compensation shall form part of the working expenditure of 
 the railway company, which is a first charge upon its revenues. 
 
 It is manifest, I think, that schedule 1 should not include industries of 
 Municipal Corporations or Commissions, Public Utilities Commissions, Trustees 
 of Police Villages and School Boards, and they have therefore been included in 
 schedule 2. 
 
 Schedule 2 also includes the industries of telephone companies and navigation 
 companies. These industries, like those of railway companies, are exceptional in 
 their character, and the reasons for adopting the collective system have no appli- 
 cation to them. 
 
 In order that additional security may be afforded that the compensation to 
 wiiich employees in the industries in schedule 2 and their dependants may become 
 entitled will be paid, provisions are embodied in the draft bill enabling the Board 
 to require an employer in any industry included in the schedule to commute the 
 weekly or other periodical payments of compensation, (sees. 27 and 28), and also 
 to insure his workmen and keep them insured against accidents in a company 
 approved of by the Board for such sum as the Board may direct. 
 
 If it had been practicable to do so without impairing the efficiency of the 
 collective system I should have preferred to include a larger number of industries 
 in schedule 2 in order that with the two systems working side by side experience 
 might demonstrate whether the collective system or that of individual liability 
 was preferable, but I have not been able to satisfy myself that the exclusion from 
 schedule 1 of any considerable number of the industries included in it would not 
 impair the efficiency of the collective system, and I have therefore excluded from 
 
1914 WORKMEN'S COMPENSATION COMMISSION. 
 
 it only the industries enumerated in schedule 2. Although but a small number 
 of industries are included in that schedule the operation of the two systems will 
 afford some evidence as to which is the better. 
 
 Another reason why it is not expedient to bring these omitted industries 
 within the scope of the act is that by doing so the initial work of the Board would 
 he very greatly augmented and the risk would be run that it would be so over- 
 burdened as practically to paralyze its operations. It is. in my opinion, nine!; 
 better that if these industries are to be brought in that should be done later on. 
 
 As what 1 have said has indicated, I have not thought it advisable at the 
 outset to bring within the scopeof Part I all employments. The principal indus- 
 tries excluded are the farming, wholesale and retail establishments, and domestic 
 service. There is, I admit, no logical reason why, if any, all should not be in- 
 cluded, but I greatly doubt whether the state of public opinion is such as to justify 
 such a comprehensive scheme, and it is probable that when the question of bringing 
 these industries within the scope of the act has to be considered, it will he found 
 that provisions somewhat different from those which are applicable to the indus- 
 tries which it is proposed now to bring within it will be necessary. 
 
 I have however made provision for bringing any of these excluded industries 
 within the scope of Part I if and when the Board deems it proper to do so, and its 
 regulation or order bringing them in is approved by the Lieutenant-Governor in 
 Council. 
 
 The bill would, in my opinion, fail to do justice to a large body of em- 
 ployees who will not be entitled to compensation under Part I, if it did not 
 provide for a substantial modification of the common law as to the liability of the 
 employer to answer in damages to an employee who is injured owing to the 
 negligence of the employer or his servants. 
 
 According to the common law it is a term of the contract of service that the 
 servant takes upon himself the risks incidental to his employment (popularly called 
 the assumption of risk rule), and that this risk includes that of injury at the 
 hands of fellow-servants, (popularly called the doctrine of common employment). 
 The doctrine of common employment is an exception to the general rule that the 
 master is responsible for the acts of his servants when engaged in his work, and 
 has rightly, I think, often been declared unfair and inequitable. The reasoning 
 upon which the exception was justified in the celebrated case of Priestley v Fowler 
 does not commend itself to me as satisfactory, and I doubt whether if the 
 question were to arise now for the first time the same conclusion would be reached. 
 The case was decided at a time when very different views as to the respective 
 rights and duties of employer and employed prevailed than are entertained at the 
 present day, and at a time not far removed from that in which there was upon the 
 Imperial statute book a law which made it a criminal offence punishable with 
 imprisonment for " journeymen manufacturers or others " to agree together for 
 obtaining an advance of the wages of themselves or of any one else, or for lessening 
 or altering their usual hours or time of working. 
 
 The unfairness of this doctrine has been recognized by the Imperial Parlia- 
 ment and by the Legislature of this Province in the enactment of employers' 
 liability acts which have modified it but to a very limited extent. 
 
 In referring to the legislation of this Province my reference is to the act 
 called the Workmen's Compensation for Injuries Act, which is erroneously so 
 styled, for it is really an employers' liability act. 
 
10 FIXAL REPOKT OF THE COMMISSIONER. No. 53 
 
 In my opinion there is no reason why this objectionable doctrine should not, 
 as one of the provisions of Part II of the draft bill provides, be entirely abrogated. 
 
 The draft bill also provides for the abrogation of the assumption of risk rule. 
 
 The rule is based upon the assumption that the wages which a workman 
 receives include compensation for the risks incidental to his employment which he 
 has to run. That is, in my judgment, a fallacy resting upon the erroneous assump- 
 tion that the workman is free to work or not to work as he pleases and therefore 
 to fix the wages for which he will work, and that in fixing them he will take into 
 account the risk of being killed or injured which is incidental to the employment 
 in which he engages. 
 
 Another rule of the common law is unfair to the workman. Although the 
 employer has been guilty of negligence, if the workman has been guilty of what 
 is called contributory negligence and his injury was occasioned by their joint 
 negligence the employer is not liable. The injustice of this rule consists in this, 
 that though the employer may have been guilty of the grossest negligence, if 
 the workman has been guilty of contributory negligence, however slight it may 
 have been) and his injury was occasioned by the joint negligence, the employer 
 is not liable. 
 
 It is proposed by the draft bill to substitute for this rule that of comparative 
 negligence as it is called, and provide that contributory negligence shall not be 
 a bar to recovery by the workman or his dependants but shall be taken into 
 account in the assessment of damages. 
 
 That in making these recommendations I am not advancing any novel proposi- 
 tion is shown by the fact that what I propose should be done in this Province 
 has already been done in some of the States of the neighbouring Republic, and 
 that the rules which it is proposed to abrogate or modify no longer meet the 
 requirements of modern industrial conditions and are unjust as applied to the 
 complex relations of master and servant as now existing, and to the use of com- 
 plicated machinery and the great and dangerous forces of steam and electricity 
 of to-day is the generally accepted view, and was the unanimous opinion of the 
 Employers' Liability and Workmen's Compensation Commission of the United 
 States (Report of Commission, Vol. I, pages 1,213 and 1,214). 
 
 Having outlined the provisions of the draft bill I have submitted to Your 
 Honour and stated my reasons for recommending their adoption I proceed to a 
 consideration of those provisions of the draft bill submitted on behalf of the 
 Canadian Manufacturers Association and which, I assume, embodies its views as 
 to the form which a proper compensation law should take, which differ from 
 those of my draft bill, omitting such of the points of difference as I have already 
 discussed. 
 
 The compulsory provisions of the draft bill of the Association apply only to 
 industries in which three or more persons are regularly employed, but the option 
 is given to employers in industries in which less than three persons are employed 
 to come under the provisions of the act. The application of the act is not so 
 limited in my draft bill, but provision is made (sec. 73) that the Board may 
 withdraw or exclude from a class industries in which not more than a stated 
 number of workmen arc employed, and that an employer in any industry so with- 
 drawn or excluded may nevertheless elect to become a member of the class to 
 which but for the withdrawal or exclusion he would have belonged. 
 
 In my opinion it is most undesirable that there should be any such limitation 
 of the application of the act as the Association proposes. As I have already pointed 
 out, it is to industries in which a small number of workmen arc employed that 
 
1914 WORKMEN'S COMPENSATION COMMISSION. 11 
 
 the provisions of such an ad arc peculiarly applicable — as to the small employer, 
 to prevent his being ruined as the result of an accident in his establishment, and as 
 to his workman to insure that he will be compensated if he meets with an accident. 
 
 I am very doubtful whether it is desirable to adopt the provisions of section 
 73 of my draft bill. My object in introducing them was to make easier the work 
 of the Board at the outset, and not with any idea that the power would be 
 exercised except as a temporary expedient to lessen the work of the Board in the 
 early stages of the administration of the act. 
 
 The proposition advanced on behalf of the Association in the early stages of 
 my enquiry, that employees should he required to contribute to the accident fund, 
 has apparently been abandoned, as I do not find in its draft bill any provision of 
 that kind. I find in it, however, a provision (sec. 43) that the Board, if satisfied 
 that in any employment the workmen are " desirous of an increase in the scale of 
 compensation and are willing to pay the necessary increase in premiums, may by 
 order sanction any such increased scale and may provide the method of collecting 
 the increase in the premiums from the workmen in such employment." 
 
 In my opinion it is not desirable to complicate the act by the introduction 
 of any such provision. It would not, I think, be taken advantage of by workmen, 
 and it is difficult for me to understand exactly what it means. Is it intended 
 that it shall be applicable to a single establishment or only to a class? Are the 
 workmen to be unanimous, or can the power which the section confers be exercised 
 if a majority of them desires an increase in the scale of compensation on the 
 prescribed condition? If the workmen must be unanimous, the section, I have 
 no doubt, will be a dead letter. If it is intended that a majority shall suffice, the 
 provision is, in my judgment, highly objectionable. Sub-section 2 of the section 
 seems to be inconsistent with sub-section 1 or incomplete, in not providing that 
 if the employer pays the increased premium he may deduct it from the wages 
 of the workmen. 
 
 The mode in which the assessments are to be collected proposed by the 
 Association differs somewhat from that provided for by my draft bill. The mode 
 which I provide for is, I think, the simpler. 
 
 I do not like the term "premium" which is used in the Association's draft 
 bill to designate the rate at which the employer is to be assessed. I prefer the 
 terminology which I have used. What is levied by the Board is not a premium 
 but an assessment. 
 
 The draft bill of the Association has hut one schedule of industries to ail of 
 which the act applies, and it makes no provision for abrogating or modifying the 
 rules of the common law as to employers who are not within the scope of the act. 
 How my draft bill differs from this will be apparent from what I have said in 
 dealing with the general plan upon which it has been drafted. 
 
 By my draft bill (sec. 60) the Board is given exclusive jurisdiction as to all 
 matters and questions arising under Part I, and subject to its power to rescind, 
 alter or amend any of its decisions or orders, its action or decision is final and is 
 not subject to appeal. 
 
 It is difficult to understand from the Association's draft bill what the juris- 
 diction of the Board is intended to be. Section 21 provides that the Board shall 
 have jurisdiction to enquire into, hear and determine all matters and questions of 
 fact and law necessary to he determined in connection with compensation payments 
 and the administration thereof and the collection and management of the funds 
 thereof. 
 
12 FINAL EEPOET OF THE COMMISSIONEE. No. 53 
 
 This language would confer on the Board a rather limited jurisdiction and 
 probably, judging from the provisions of section 22, less than the draftsman 
 intended it should have. The decisions and findings of the Board upon questions 
 of fact are made final and conclusive, but on questions of law an appeal is allowed. 
 
 In my opinion it is most undesirable that there should be the appeal for 
 which the draft bill provides. A compensation law should, in my opinion, render 
 it impossible for a wealthy employer to harass an employee by compelling him to 
 litigate his claim in a court of law after he has established it to the satisfaction of 
 a Board such as that which is to be constituted, and which will be probably quite as 
 competent to reach a proper conclusion as to the matters involved, whether of fact 
 or law, as a court of law. 
 
 I may point out that section 23, which allows an appeal from the decision of 
 the Board on "questions of law," appears to be inconsistent with section 22, 
 for in the determination of the questions enumerated in that section which are to 
 be deemed questions of fact it may be necessary to decide questions of law, and 
 I confess that I do not quite understand what kind of questions, if those enum- 
 erated in section 22 are eliminated, it is intended to make appealable. 
 
 In a note to section 22 it is stated that " it is submitted that it would not be 
 wise to entirely shut out appeals and place in the hands of the Board the sole 
 right to interpret the act ... . and the right to define its own jurisdiction." 
 What danger is to be apprehended from conferring these rights I do not under- 
 stand, nor do I see what questions as to the construction of the act are likely to 
 arise other than those enumerated in section 22. 
 
 In my judgment the furthest the Legislature should go in allowing the inter- 
 vention of the courts should be to provide that the Lieutenant-Governor in Council 
 may state a case for the bpinion of a Divisional Court of the Appellate Division 
 of the Supreme Court of Ontario, if any 'question of law of general importance 
 arises and he deems it expedient it should be settled by a decision of a Divisional 
 Court. Although I say this my judgment is against the introduction of any such 
 provision, as it is probable that if any form of appeal to an appellate court is 
 allowed, a defeated litigant will have the right to take his case to the Judicial 
 Committee of His Majesty's Privy Council. 
 
 Section 10 of my draft bill, which deals with the case of sub-contractors and 
 is applicable only to industries mentioned in schedule 2, is taken from the British 
 Compensation Act. As'the Association's draft bill does not provide for individual 
 liability in any case, no provision corresponding to section 10 is found in it. 
 
 Sections 66, 67, and 68 of the Association's draft hill deal with the case of 
 sub-contractors. They are, in my opinion, unnecessary and undesirable. 
 
 The draft bill of the Association is made to apply to the Crown. My draft 
 bill is not. Apart from the question of the jurisdiction of a Provincial Legis- 
 lature to affect the Crown as represented by the Dominion, it is in my opinion 
 inexpedient that the act should apply to the Crown. It would be quite anomalous 
 to group the Crown in respect of road-making, for instance, with other road- 
 makers, and to make a — <-smcnts upon the Crown as in the case of private persons. 
 
 T have no doubt that in case of injury- to an employee of the Crown, for which 
 if his employer were a private person he would be entitled to compensation. 
 the Crown would make the like compensation lo him and avail itself of the services 
 of (ho Board for the determination of the amount and nature of the compensation. 
 
 The Association's draft hill (sec. 4) disentitles the workman and his depend- 
 ants to compensation if his injury was, in the opinion of the Board, intentionally 
 
1914 WORKMEN'S COMPENSATION COMMISSION. 13 
 
 caused 'by the workman, or was due wholly or principally to intoxication or serious 
 and wilful misconduct on the part of the workman. My draft bill provides that 
 compensation shall not be payable where the injury is attributable solely to the 
 serious and wilful misconduct of the workman unless the injury results in death 
 or serious disablement. 
 
 The provisions of section -i of the Association's bill are, in my opinion, 
 objectionable. There is no need for the provision as to intentional injury as an 
 injury purposely caused to himself by a workman is not an accident, and com- 
 pensation is payable only in cases of accident and industrial diseases. In addition 
 to this the definition of " accident " in the interpretation section of my draft bill 
 (sec. 2) makes this abundantly clear; nor is there any reason for introducing a 
 reference to intoxication, the provision as to serious and wilful misconduct being 
 sufficient to cover any case in which drunkenness ought to bar the right to com- 
 pensation. Section 4 applies whatever may be the result of the injury. The 
 corresponding provision of my draft bill, following the British Compensation Act, 
 does not apply where the injury results in death or serious disablement. 
 
 By my draft bill, following in this respect the British act. industrial diseases 
 are put on the same footing as to the right of compensation as accidents. The 
 Association's bill applies only to accidents. The diseases to which the act is to 
 be made applicable are six in number and are enumerated in schedule 3 to my 
 draft bill, but power is given to the Board by its regulations to add to the schedule. 
 It would, in my opinion, be a blot on the act if a workman who suffers from an 
 industrial disease contracted in the course of his employment is not to be entitled 
 to compensation. The risk of contracting disease is inherent in the occupation he 
 follows and he is practically powerless to guard against it. A workman may to 
 some extent guard against accidents, and it would seem not only illogical but 
 unreasonable to compensate him in the one case and to deny him the right to 
 compensation in the other. 
 
 The last point of difference between the two draft bills to which I shall make 
 any detailed reference is that as to the scale of compensation. 
 
 The scale of compensation proposed by the Association is in my opinion based 
 upon a wrong principle and will not afford reasonable compensation to the injured 
 workman and his dependants ; and indeed I doubt whether, if it were adopted, the 
 workingmen would upon the whole be in a much better position than they would 
 be in without the act, especially if the changes in the common law which I recom- 
 mend are made. 
 
 A just compensation law based upon a division between the employer and the 
 workman of the loss occasioned by industrial accidents ought to provide that the 
 compensation should continue to be paid as long as the disability caused by the 
 accident lasts, and the amount of compensation should have relation to the earning 
 power of the injured workman. 
 
 To limit the period during which the compensation is to be paid regardless 
 of the duration of the disability, as is done by the laws of some countries, is, in 
 my opinion, not only inconsistent with the principle upon which a true com- 
 pensation law is based, but unjust to the injured workman for the reason that if 
 the disability continues beyond the prescribed period he will be left with his 
 impaired earning power or, if he is totally disabled without any earning power 
 at a time when his need of receiving compensation will presumably be greater than 
 at the time he was injured, to become a burden upon his relatives or friends of 
 upon the community. 
 
14 FIXAL EEPOET OF THE COMM1SSIONEB. No. 53 
 
 A uniform rate of compensation which has no relation to the earning power 
 of the workman, except as the Association's bill provides, for the purpose of 
 reducing the rate of 50 per cent, of his wages is, in my opinion, also incon 
 sistent with the principle upon which a just compensation law is based, and un- 
 fair, and a most undesirable mode of fixing the amount of compensation. 
 
 Not only is the scale of compensation proposed by the Association open to 
 these objections, but the amount of the compensation is so small that only the lowest 
 paid workman would be compensated to the extent of 50 per cent, of the loss of 
 his earning power. 
 
 The case of an unmarried locomotive engineer earning $150 a month, not an 
 unusual wage for the engineer of a passenger train, may be taken to illustrate the 
 effect of the Association's proposition. All that he would be entitled to if perm- 
 anent disability resulted from his injury would be $20 a month, or less than 
 14 per cent, of the loss of his earning power, except in the rare ease of his 
 being rendered completely helpless and requiring constant personal attendance, 
 and in that case his compensation would be double that amount. 
 
 There are other provisions which in my judgment are still more objectionable. 
 The limitation to $1,500 of the amount of compensation in case of permanent 
 partial disability is, I think, unreasonable, as is manifest from the illustration 
 just given. 
 
 The payment of lump sums is contrary to the principle upon which com- 
 pensation acts are based and is calculated to defeat one of the main purposes of 
 such laws — the prevention of the injured workman hecoming a burden on his 
 relatives or friends or on the community — and has been generally deprecated by 
 judges in working out the provisions of the British act, and was condemned by the 
 Association itself in the memorandum which it submitted, and which appears in the 
 appendix to my first interim report (pp. 67-60). 
 
 The proposition that the maximum compensation in case of the loss of a 
 major arm shall be $1,500 besides being open to the objection I have just men- 
 tioned would be most unfair in the case of a labourer, to say nothing of the 
 skilled artisan. 
 
 A more unjust and, as it appears to me, extraordinary proposition is that 
 contained in clause (c) of section 31, which provides that in the case of temporary 
 disability no compensation shall be payable unless it results " in the diminution of 
 daily earnings to the extent of at least fifty per cent " ; and as far as I am aware, 
 and as I should expect, there is no precedent for it in the legislation of any 
 country. As far as 1 have been able to ascertain, the furthest that any country 
 has gone in that direction ds to provide, as do the Washington act (s. 5, clause d) 
 and the law of Norway of July 23rd, 1894, amended by acts of December 23rd. 
 1899, and June 12th, 1906 (art. 1, par. 2b), that no compensation shall be pay- 
 able unless iIm '<>-- of earning exceeds five per cent. In my opinion there is 
 no justification for any such exception even if it is limited as in the Washington 
 and Norway laws. 
 
 Tin; scale of compensation which I propose was strongly objected to by the 
 Association as being unfair to the manufacturer, and as imposing upon him a 
 burden that would handicap him in his competition with the manufacturers of 
 the other Provinces and of other countries, and would tend to divert manufactur- 
 ing from this Province to other Provinces in which less onerous laws are in force. 
 Tt was also urged thai the scale of compensation is higher than that of any other 
 country. The lasi objection, if a valid one, means that there can be no progress 
 
1914 WORKMEN'S COMPENSATION COMMISSION. 15 
 
 beyond the point which has now been reached by the country which has provided 
 the highest scale of compensation, for if the objection is valid as to the proposed 
 legislation it would be an equally valid objection to any increase in the compen- 
 sation proposed for the country which now provides for the highest scale. The 
 question, in my opinion, is not what other countries have done, but what does 
 justice demand should be done. I have no fear that if the bill should become law 
 it will handicap the manufacturers of this Province as the Association appears to' 
 think that it will, or that it will divert manufacturing from the Province. There 
 has been in force for some years in the adjoining Province of Quebec a compen- 
 sation law which imposes upon employers greater burdens than they are subjected 
 to by the law of this Province, and yet it has not been suggested that any su'oh 
 results as are prophesied by the Association have followed from the enactment of 
 the Quebec law. 
 
 In order that it may be seen whether the division of the burden between the 
 employer and workman is unfair, it may be well to point out how it will be 
 divided under the provisions of the proposed law. The workman will bear (1) 
 the loss of all his wages for seven days if his disability does not last longer than 
 that, (2) the pain and suffering consequent upon his injury, (3) his outlay for 
 medical or surgical treatment, nursing and other necessaries, (4) the loss of 
 45 per cent, of his wages while his disability lasts; and if his injury results in his 
 being maimed or disfigured he must go through life bearing that burden also, while 
 all that the employer will bear will be the payment of 55 per cent, of the injured 
 workman's wages while the disability lasts. 
 
 The burden which the workman is required to bear he cannot shift upon the 
 shoulders of any one else, but the employer may and no doubt will shift his burden 
 upon the shoulders of the community, or if he has any difficulty in doing that 
 will by reducing the wages of his workmen compel them to bear part of it. 
 
 It is contended that it is unfair to require the employer to pay compensation 
 during the lifetime of the workman because in many cases it will mean that the 
 workman will receive compensation for a period during which if he had not been 
 injured he would have been unable to earn wages. Xo doubt that will be the 
 result in some cases, but on the other hand the workman loses any advantage he 
 would have derived had he not been injured from an increase in his wages owing 
 to an improvement in his position, or to an increase of his earning power, or to 
 a rise in wages from any other cause because, except in the one case of a workman 
 who is under the age of twenty-one years when injured, the compensation is based 
 on the wages the workman was earning at the time of his injury. 
 
 It must also be borne in mind that the workman is required, as the price of 
 the compensation he is to receive, to surrender his right to damages under the 
 common law, if his injury happens under circumstances entitling him by the 
 common law to recover or, if he would be entitled to recover only under the 
 Workmen's Compensation for Injuries Act, his right to the like damages as he 
 would be entitled to at common law limited, however, to an amount not exceeding 
 three years' wages or $1,500, whichever is the larger sum. 
 
 According to the testimony of Mr. Wolfe (page 141), and there is' no reason 
 to doubt the accuracy of his statement, in Germany no less than 84 per cent, of 
 the accidents incapacitate the workmen for less than fourteen weeks. 
 
 The nineteenth report of the Minister of Labour of France shows that the 
 number of declared accidents in that country in the year 1910, after deducting 
 those which occasioned an incapacity of four days or less, and omitting those 
 
16 FINAL REPORT OF THE COMMISSIONER. No. 53 
 
 which happened in mines, mining and quarries, was 412,278, and that of these 
 1,650, or a little more than one third of one per cent., were fatal; 5,452, or about 
 one and one third per cent., resulted in permanent disability, and 399,769, or 
 about 97 per cent., resulted in temporary incapacity lasting for more than four 
 days, and that in the remaining 5,407 cases, or about one and one third per cent., the 
 results of the accidents were unknown. 
 
 In Great Britain the duration of disability in the cases terminating in 1908 
 was as follows : 
 
 Less than two weeks 11.2 per cent. 
 
 From two to three weeks 27.3 per cent. 
 
 From three to four weeks 18.4 per cent. 
 
 From four to thirteen weeks 37.7 per cent. 
 
 From thirteen to twenty-six weeks 4.1 per cent. 
 
 Over twenty-six weeks 1.3 per cent. 
 
 (24th Annual Report of the United States Commissioner of Labour, Vol. II, 
 pp. 1,525-6). 
 
 Similar statistics for Ontario are not available, but it may, I think, fairly 
 be assumed that the great bulk of the accidents for which compensation would 
 be payable under the proposed law will incapacitate the workman for short 
 periods — 84 per cent, probably for less than fourteen weeks — and that the fatal 
 accidents and those causing permanent disability, total and partial, will be 
 comparatively few. If this assumption is warranted there would appear to be 
 not only no reasonable ground for the apprehension of the Association that the 
 employers will be unduly burdened with payments for compensation continuing 
 during the lives of permanently injured workmen, but it is certain that under 
 the proposed law as to the vast majority of accidents in every case in whicb 
 there could be recovery at common law or under the Workmen's Compensation 
 for Injuries Act, the workman will be worse off than he is at present, and his 
 loss will be a direct gain to the employer, amounting annually to a very large sum. 
 
 My conclusion is that for all these reasons there is no valid ground for the 
 objections of the Association to the scale of compensation which I have proposed. 
 
 I have, however, upon further consideration come to the conclusion that as 
 the purpose of the proposed law is to protect the wage earner there is no reason 
 wby highly paid managers and superintendents of establishments, to which Part I 
 is applicable, should be entitled to compensation out of the accident fund to an 
 amount greater than the highest paid wage earner would be entitled to receive, 
 and I therefore recommend that the draft bill be amended by adding the follow- 
 ing to sub-section 1 of section 39: 
 
 "But not so as to exceed in any case the rate of $2,000 per annum." 
 If no such limit is prescribed the result would be that the small employer, 
 in the case of an accident happening in another establishment to a highly paid 
 official, would be unduly burdened. I propose $2,000 as the limit because that 
 sum is probably the maximum amount earned in a year by the highest paid 
 wage earner. 
 
 The only remaining provision of the draft bill to which I shall refer is section 
 68, which provides for a contribution by the Province to assist in defraying the 
 expenses incurred in the administration of the act. I have not ventured to sug- 
 
1914 WORKMEN'S COMPENSATION COMMISSION. i; 
 
 gest what this contribution should be but, in my judgment, it should be a sub- 
 stantial one. The effect of the proposed law will be to relieve the community 
 from the burden of maintaining injured workmen and their dependants in cases 
 in which under the operation of the existing law they are without remedy, and by 
 the transfer from the courts to the Board of the determination of claims for com- 
 pensation, which will lessen very much the cost of the administration of justice. 
 
 There is one matter which should be provided I'm- for which provision has 
 not been made in my draft bill. No provision is made for contribution by employers 
 in the industries mentioned in schedule 2 towards defraying the cost of adminis- 
 tration. This was an oversight, and I recommend that a section be added to the 
 bill providing that "the employers in industries for the time being embraced in 
 schedule 2 shall pay the Board such proportion of the expenses of the Board in 
 the administration of this part as the Board may deem just and determine, and 
 the sum payable by them shall be apportioned between such employers and assessed 
 and levied upon them in like manner as in the case of assessments for contributions 
 to the accident fund, and all the provisions of this part as to assessments shall apply 
 mutatis mutandis to assessments made under the authority of this section." 
 
 It is the purpose of my draft bill to empower the Board in determining the 
 proportions of the contributions to be made to the accident fund by employers to 
 have regard to the hazard of each industry, and to fix the proportions of the 
 assessments to be borne by the employer accordingly, and not to require that the 
 proportions for each class or sub-class should be uniform; and also to permit the 
 Board, if in its opinion the character of any class of industry justifies that being 
 done, to require a larger contribution to the reserve fund by the employers in any 
 such class than is required from employers in other classes. 
 
 The bill as drafted will, T think, accomplish this purpose, but if any doubt 
 is entertained as to it, the bill can be amended by the addition of a section ex- 
 pressly so declaring. 
 
 I may be permitted to say, in conclusion, as the United States Commissioners 
 said with reference to the bill drafted by them, that T submit the proposed law 
 "not believing that it is the most perfect measure which could be devised nor the 
 last word which can be said upon the subject, but as the result of careful investi- 
 gation and the best thought of the Commission and as constituting at least a step 
 in the direction of a just, reasonable, and practicable solution of the problem with 
 which it deals." 
 
 1 regret that some of its provisions do not commend themselves to the judg- 
 ment of the Canadian Manufacturers Association, and on that account I have, 
 since my last interim report, again carefully and anxiously considered those which 
 are objected to and the objections that are urged against them, as well as the pro- 
 visions of the Association's alternative proposition, but have seen no reason for 
 doubting the correctness of the conclusion to which T had come, the results of 
 which are embodied in the draft bill. 
 
 In these days of social and industrial unrest it is, in my judgment, of the 
 gravest importance to the community that every proved injustice to any section 
 or class resulting from bad or unfair laws should be promptly removed by the 
 enactment of remedial legislation and I do not doubt that the country whose 
 Legislature is quick to discern and prompt to remove injustice will enjoy, and 
 that deservedly, the blessing of industrial peace and freedom from social unrest. 
 Half measures which mitigate but do not remove injustice are, in my judgment, 
 to be avoided. That the existing law inflicts injustice on the workingman is 
 
 2 w. 
 
18 FINAL REPORT OF THE COMMISSIONER. No. 53 
 
 admitted by all. From that injustice he has long suffered, and it would, in my 
 judgment, be the gravest mistake if questions as to the scope and character of the 
 proposed remedial legislation were to be determined, not by a consideration of what 
 is just to the workingman, but of what is the least he can be put off with; or if 
 the Legislature were to be deterred from passing a law designed to do full justice 
 owing to groundless fears that disaster to the industries of the Province would 
 follow from the enactment of it. 
 
 All of which is respectfully submitted. 
 
 W. R. Meredith, 
 
 Commissioner. 
 
 Dated at Osgoode Hall, Toronto, 
 
 the 31st day of October, 1913. 
 

 SECOND INTERIM REPORT ON 
 
 Laws Relating to the 
 Liability of Employers 
 
 WITH DRAFT OF 
 
 An Act to provide for Compensation to Work- 
 men for Injuries sustained and Industrial 
 Diseases contracted in the course of their 
 employment. 
 
 By 
 
 THE HON. SIR WILLIAM RALPH MEREDITH, C.J.O., 
 
 COMMISSIONER. 
 
 PRINTED BY ORDER OF 
 
 THE LEGISLATIVE ASSEMBLY OF ONTARIO 
 
 TORONTO : 
 Printed and Publishedby L. K. CAMERON, Printer to the Ki lg's Most Excellent Majesty 
 
 19 13. 
 
5* 
 
 To the Honourable 
 
 Sir John Morison Gibson, K.C.M.G-., 
 
 Lieutenant-Governor of the Province of Ontario, etc., etc., etc. 
 
 The undersigned has the honour to submit a further interim 
 report on the subject of compensation to workmen for injuries 
 sustained in the course of their employment. 
 
 The undersigned has carefully considered the matters into 
 which he was by Your Honour's Commission appointed to 
 inquire, and has embodied his conclusions in a draft Bill which 
 is submitted herewith. 
 
 The blanks for the percentage of wages which appear in the 
 draft Bill should in the opinion of the undersigned be filled in 
 with the figures 55. 
 
 The undersigned has not yet been able to prepare his final 
 report, but hopes to transmit it with the documentary and other 
 evidence taken and a statement of his reasons for the con- 
 clusions at which he has arrived, during the present month. 
 
 All of which is respectfully submitted, 
 
 W. E. MEREDITH, 
 
 Commissioner. 
 
 Osgoode Hall, 
 
 Toronto, April 1st, 1913. 
 
 [21] 
 
BILL 
 
 An Act to provide for Compensation to Work- 
 men for Injuries sustained and Industrial 
 Diseases contracted in the course of their 
 employment. 
 
 HIS MAJESTY, by and with the advice and consent of 
 the Legislative Assembly of the Province of Ontario, 
 enacts as follows: — 
 
 PRELIMINARY. 
 
 1 This Act may be cited as The Workmen's Compensa- Shor t title. 
 Hon Act. 
 
 (1) In this Act: Interpreta- 
 
 v ' tion 
 
 (a) " Accident'' shall include a wilful and an inten- "Accident." 
 tional act, not being the act of the workman and 
 a fortuitous event occasioned by a physical or 
 natural cause; 
 
 (&) " Accident Fund " shall mean the fund provided f^^ ent 
 for the payment of compensation under this 
 Act : 
 
 (c) " Board " shall mean Workmen's Compensation "Board." 
 Board ; 
 
 (d) " Construction " shall include re-construction, re- "Construc- 
 pair, alteration and demolition ; 
 
 (e) " Dependants " shall mean such of the members of ants P " nd " 
 the family of a workman as were wholly or partly 
 dependent upon his earnings at the time of his 
 death or who but for the incapacity due to the 
 accident would have been so dependent; 
 
 23 
 
2± 
 
 SECOND INTERIM REPORT OF THE 
 
 No. 53 
 
 "Employer. 1 
 
 "Employ- 
 ment." 
 
 "Industrial 
 disease." 
 
 'Industry.' 
 
 "Invalid." 
 
 (/) " Employer " shall include every person having in 
 his service under a contract of hiring or appren- 
 ticeship, written or oral, express or implied, any 
 person engaged in any work in or about any 
 establishment, undertaking, business or employ- 
 ment, and where the services of a workman are 
 temporarily let or hired to another person by the 
 person with whom the workman has entered into 
 such a contract the latter shall be deemed to 
 continue to be the employer of the workman 
 whilst he is working for that other person; 
 
 (g) " Employment " shall include employment in any 
 part, branch or department of an establishment, 
 undertaking or business; 
 
 (h) " Industrial disease " shall mean any of the di- 
 seases mentioned in Schedule 3, and any other 
 disease which by the Regulations is declared to 
 be an industrial disease; 
 
 (i) " Industry " shall include establishment, undertak- 
 ing, trade and business ; 
 
 (/) " Invalid " shall mean physically or mentally in- 
 capable of earning; 
 
 "Manufac- 
 turing:." 
 
 (h) " Manufacturing " shall include making, prepar- 
 ing, altering, repairing, ornamenting, printing, 
 finishing, packing, assembling the parts of and 
 adapting for use or sale any article or com- 
 modity ; 
 
 "Medical 
 referee." 
 
 (1) " Medical Referee " shall mean medical referee ap- 
 pointed by the Board; 
 
 "Member 
 of the 
 
 family." 
 
 (m) 
 
 " Member of the Family " shall mean and include 
 wife, husband, father, mother, grandfather, 
 grandmother, stepfather, stepmother, son, daugh- 
 ter, grandson, granddaughter, stepson, step- 
 daughter, brother, sister, half-brother and half- 
 sister, and a person standing in loco parentis to 
 the workman, whether related to him by con- 
 sanguinity or not so related, and where the work- 
 man is the parent or grandparent of an ille- 
 gitimate child, shall include such child, and 
 whore the workman is an illegitimate child shall 
 include his parents and grandparents; 
 
1914 WORKMEN'S COMPENSATION COMMISSION. 25 
 
 (n) " Outworker " shall mean a person to whom ar- "Out- 
 
 v y . . -i i worker." 
 
 ticles or materials are given out to be made up, 
 cleaned, washed, altered, ornamented, finished, 
 repaired, or adapted for sale in his own home 
 or on other premises not under the control or 
 management of the person who gave out the ar- 
 ticles or materials; 
 
 (o) " Regulations " shall mean regulations made by " Re s u , la ~ 
 
 v J ~ ° . tions. 
 
 the Board under the authority of this Act; 
 
 (p) " Workman " shall include a person who has "Workman." 
 entered into or works under a contract of ser- 
 vice or apprenticeship, written or oral, express 
 or implied, whether by way of manual labour, 
 clerical work, or otherwise, but shall not include 
 an out-worker. 
 
 (2) Words in the singular number interpreted by sub- tatiorTof 
 section 1 shall have a corresponding meaning when used in w s e ^ s in 
 
 the plural. number. 
 
 (3) The exercise and performance of the powers and corpora- 8,1 
 
 tions, < 
 and sch 
 boards. 
 
 duties of- tions> etc - 
 
 mines, uj-. and school 
 
 (a) a municipal corporation ; 
 
 (b) a public utilities commission ; 
 
 (c) any other commission having the management and 
 
 conduct of any work or service owned by or oper- 
 ated for a municipal corporation ; 
 
 (d) the board of trustees of a police village ; and 
 
 (e) a school board, 
 
 shall for the purposes of this Act be deemed as the trade or 
 business of the corporation, commission, board of trustees or 
 school board. 
 
26 
 
 SECOXD IXTEPJM PEPOPT OF THE 
 
 Xo. 53 
 
 PART I. 
 
 COMPENSATION. 
 
 Compensa- 
 tion to 
 workmen. 
 
 Exceptions. 
 
 3. — (1) Where in any employment, personal injury by 
 accident arising out of and in the course of the employment 
 is caused to a workman his employer shall be liable to pro- 
 vide or to pay compensation in the manner and to the extent 
 hereinafter mentioned except where the injury: — 
 
 (a) does not disable the workman for the period of at 
 
 least seven days from earning full wages at the 
 work at which he was employed; 
 
 (b) is attributable solely to the serious and wilful mis- 
 
 conduct of the workman unless the injury results 
 in death or serious disablement. 
 
 Presump- 
 tions. 
 
 Compensa- 
 tion to 
 date from 
 iisability. 
 
 Section 
 not to 
 apply to 
 casual em- 
 ployment. 
 
 Employ- 
 ers indi- 
 vidually 
 liable. 
 
 Employers 
 liable to 
 contri- 
 bute to 
 the acci- 
 dent 
 fund. 
 
 (2) Where the accident arose out of the employment, 
 unless the contrary is shown, it shall be presumed that it 
 occurred in the course of the employment, and where the 
 accident occurred in the course of the employment, unless 
 the contrary is shown, it shall be presumed that it arose out 
 of the employment. 
 
 (3) Where compensation for disability is payable it 
 shall be computed and be payable from the date of the dis- 
 ability. 
 
 (4) This section shall not apply to a person whose employ- 
 ment is of a casual nature and who is employed otherwise 
 than for the purposes of the employer's trade or business. 
 
 4. Employers in the industries mentioned in Schedule 2 
 shall be liable individually to pay the compensation. 
 
 5. Employers in industries for the time being embraced in 
 Schedule 1, shall be liable to contribute to the accident fund 
 as hereinafter provided, but shall not be liable individually 
 to pay the compensation. 
 
 Accident 
 happening 
 out of 
 Ontario. 
 
 6. — (1) Where the place or chief place of business of an 
 employer is situate in Ontario and an accident happens while 
 the workman is employed elsewhere than in Ontario which 
 would entitle him or his dependants to compensation under 
 this Part if it had happened in Ontario the workman and his 
 dependants shall be entitled to compensation under this Part 
 if the usual place of employment of the workman is in On- 
 tario and his employment out of Ontario has lasted less than 
 six months. 
 
1914 WOKKMEN'S COMPENSATION COMMISSION. 27 
 
 (2) Except as provided by subsection 1 no compensation 
 shall be payable under this Part where the accident to the 
 workman happens out of Ontario unless it happens on a 
 steamboat, ship or vessel, or on a railway, and the nature 
 of the employment is such that in the course of the work 
 or service which the workman performs it is required to bo 
 performed both within and without Ontario. 
 
 7. — (1) Where by the law of the country or place in where com- 
 which the accident happens the workman or his dependants payable 
 are entitled to compensation in respect of it they shall be foreign ° 
 bound within three months after the happening of the acci- workman 
 dent or in case it results in death within three months after to elect 
 the death to elect whether they will claim compensation 
 under the law of such country or place or under this Part 
 and to give notice of such election, and if such election is 
 not made and notice given it shall be presumed that they 
 have elected not to claim compensation under this Part. 
 
 (2) Notice of the election, where the compensation under How 
 
 election 
 
 this Part is payable by the employer individually, shall be to be 
 given to the employer, and where the compensation is pay- ma ' 
 able out of the accident fund to the Board and shall be 
 given in both cases within three months after the happening 
 of the accident. 
 
 S. — (1) Where a dependant is not a resident of Ontario nonresident 
 he shall not be entitled to compensation unless by the law in ° ntario - 
 of the place or country in which he resides the dependant* 
 of a workman to whom an accident happens in such place 
 or country if resident in Ontario would be entitled to com- 
 pensation and where such dependants would be entitled to 
 compensation under such law the compensation to which the 
 non-resident dependant shall be entitled under this Part shall 
 not be greater than the compensation payable in the like 
 case under that law. 
 
 (2) Notwithstanding the provisions of subsection 1 the Exception. 
 Board may make such allowance in lieu of compensation to 
 any such non-resident dependant as may be deemed proper 
 and may pay the same out of the accident fund. 
 
 9 — -(1) Where an accident happens to a workman in the where work- 
 
 <• i • i j. j i man entitled 
 
 course of his employment under such circumstances as en- to action 
 title him or his dependants to an action against some person pfrson* 
 other than his employer the workman or his dependants if employer" 
 entitled to compensation under this Part may claim such bebrou n ht y 
 compensation or may bring such action. 
 
28 
 
 SECOND INTERIM EEPOET OF THE 
 
 No. 53 
 
 Workman 
 entitled to 
 difference 
 between 
 compensa- 
 tion under 
 Act and 
 amount 
 collected. 
 
 (2) If an action is brought and less is recovered and 
 collected than the amount of the compensation to which 
 the workman or his dependants are entitled under this Part 
 the difference between the amount recovered and collected 
 and the amount of such compensation shall be payable as 
 compensation to such workman or his dependants. 
 
 Subrogation 
 of employ- 
 er or 
 Board 
 to rights of 
 workman. 
 
 (3) If the workman or his dependants elect to claim 
 compensation under this Part the employer, if he is indi- 
 vidually liable to pay it, and the Board if the compensation 
 is payable out of the accident fund shall be subrogated to 
 the rights of the workman or his dependants and may 
 maintain an action in his or their names against the per- 
 son against whom the action lies and any sum recovered from 
 him by the Board shall form part of the accident fund. 
 
 How 
 Election 
 to be 
 made. 
 
 (4) The election shall be made and notice of it shall be 
 given within the time and in the manner provided by sub- 
 section 2 of section 7. 
 
 Sub -con- 
 tractors. 
 
 10. — (1) Where the compensation is payable by the em- 
 ployer individually and a person, in this section referred to 
 as the principal, in the course of or for the purposes of his 
 trade or business contracts with any other person, in this 
 section referred to as the contractor, for the execution by or 
 under the contractor of the whole or any part of any work 
 undertaken by the principal, the principal shall be liable to 
 pay to any workman employed in the execution of the work 
 the compensation which he would have been liable to pay if 
 that workman had been immediately employed by him. 
 
 (2) Where compensation is claimed from the principal in 
 this Part reference to the principal shall be substituted for 
 reference to the employer, except that the amount of the 
 compensation shall be calculated with reference to the earn- 
 ings of the workman under the employer by whom he is 
 immediately employed. 
 
 (3) Where the principal is liable to pay compensation 
 under this section he shall be entitled to be indemnified by 
 any person who would have been liable to pay compensation 
 to the workman independently of this section and all ques- 
 tions as to the right to and the amount of any such indemnity 
 shall be determined by the Board. 
 
 (4) Nothing in this section shall prevent a workman 
 claiming compensation under this Part from the contractor 
 instead of the principal. 
 
1914 WOKKMEN'S COMPENSATION COMMISSION. 29 
 
 (5) This section shall not apply where the accident hap- 
 pens elsewhere than on or in or about premises on which the 
 principal has undertaken to execute the work or which are 
 otherwise under his control or management. 
 
 11. Where compensation is payable out of the accident Member of 
 fund, a member of the family of an employer shall not employer 
 be entitled to compensation unless he was at the time of ^rkman. as 
 the accident carried on the pay roll of the employer and his 
 
 wages were included in the then last statement furnished 
 to the Board under section 76 nor for the purpose of de- 
 termining the compensation shall his earnings be taken to 
 be more than the amount of his wages, as shown by such pay 
 roll and statement. 
 
 12. Where compensation is payable out of the accident Employer 
 
 j> -I i i» • i i • nj.1 carried on 
 
 fund an employer who is carried on his pay-roll at a salary payroll enti- 
 or wages which the Board deems reasonable shall if such pensation"" 
 salary or wages were included in the then last statement 
 furnished to the Board under section 76 be deemed to be 
 a workman within the meaning of this Act and shall be 
 entitled to compensation accordingly, but for the purpose of 
 determining the compensation his earnings shall not be 
 taken to be more than the amount of his salary or wages as 
 shown by such pay roll and statement. 
 
 13. N"o action shall lie for the recovery of the compen- No action to 
 sation whether it is payable by the employer individually ^ Recover* 
 or out of the accident fund, but all claims for compensation compensa- 
 shall be heard and determined by the Board. 
 
 14. Tf a workman receiving a weekly or other periodical workman 
 payment ceases to reside in Ontario he shall not thereafter compensa- 
 be entitled to receive any such payment unless a medical ing n out S of" 
 referee certifies that the incapacity resulting from the injury ° ntano - 
 is likely to be of a permanent nature and if a medical referee 
 
 so certifies the workman shall be entitled quarterly to the 
 amount of the weekly or other periodical payment accruing 
 due if he proves in such manner as may be prescribed by 
 the Regulations his identity and the continuance of the in- 
 capacity in respect of which the same is payable. 
 
 15. The right to compensation provided for by this Part compensa- 
 shall be in lieu of all rights and rights of action, statutory in Heu of 
 or otherwise, to which a workman or his dependants are ana lights 
 or may be entitled against the employer of such workman against " 
 for or by reason of any accident which happens to him while employer, 
 in the employment of such employer, and after the 
 
 day of 191 , and no action in respect thereof 
 
 shall thereafter lie. 
 
30 
 
 SECOND INTEK1M PEPOKT OF THE 
 
 No. 53 
 
 Right to 
 compensa- 
 tion may 
 not be 
 waived. 
 
 Agreement 
 as to 
 
 compensa- 
 tion not 
 valid 
 
 unless ap- 
 proved by 
 the 
 Board. 
 
 Exception. 
 
 Deduction 
 not to 
 be made 
 from 
 wages. 
 
 16. It shall not be competent for a workman to agree 
 with his employer to waive or to forego any of the benefits 
 to which he or his dependants are or may become entitled 
 under this Part and every agreement to that end shall be 
 absolutely void. 
 
 17. — (1) Where the compensation is payable by an em- 
 ployer individually no agreement between a workman or 
 dependant and the employer for fixing the amount of the 
 compensation or by which the workman or dependant accepts 
 or agrees to accept a stipulated sum in lieu or in satisfaction 
 of it shall be binding on the workman or dependant unless it 
 is approved by the Board. 
 
 (2) Subsection 1 shall not apply to compensation for tem- 
 porary disability lasting for less than four weeks. 
 
 18. — (1) It shall not be lawful for an employer, either 
 directly or indirectly, to deduct from the wages of any of 
 his workmen any part of any sum which the employer is, or 
 may become liable to pay to the workman as compensation 
 under this Part or to require or to permit any of his work- 
 men to contribute in any manner towards indemnifying the 
 employer against any liability which he has incurred or may 
 incur under this Part. 
 
 Penalty. 
 
 (2) Every person who contravenes any of the provisions 
 of subsection 1 shall for every such contravention incur a 
 penalty not exceeding $50 and shall also be liable to repay 
 to the workman any sum which has been so deducted from 
 his wages or which he has been required or permitted to pay 
 in contravention of subsection 1. 
 
 Compensa- 
 tion not 
 assignable 
 or liable to 
 attachment. 
 
 Notice of 
 accident to 
 be given. 
 
 19. Unless with the approval of the Board no sum pay- 
 able as compensation or by way of commutation of any 
 weekly or other periodical payment in respect of it shall be 
 capable of being assigned, charged or attached, nor shall 
 it pass by operation of law except to a personal representa- 
 tive nor shall any claim be set off against it. 
 
 20. — (1) Subject to subsection 5 compensation shall not 
 be payable unless notice of the accident is given as soon as 
 practicable after the happening of it and before the work- 
 man has voluntarily left the employment in which he was 
 injured and unless the claim for compensation is made with- 
 in six months from the happening of the accident or in case 
 of death within six months from the time of death. 
 
 Nature of 
 notice. 
 
 (2) The notice shall give the name and address of the 
 workman and shall bo sufficient if it states in ordinary Ian- 
 
1914 WOKKMEN'S COMPENSATION COMMISSION. 31 
 
 guage the cause of the injury and where the accident hap- 
 pened. 
 
 (3) The notice may be served by delivering it at or send- service of 
 ing it by registered post addressed to the place of business 
 
 or the residence of the employer, or where the employer is a 
 body of persons, corporate or unincorporate, by delivering 
 it at or sending it by registered post addressed to the em- 
 ployer at the office or if there are more offices than one at 
 any of the offices of such body of persons. 
 
 (4) Where the compensation is payable out of the acci- 
 dent fund the notice shall also be given to the Board by 
 delivering it to or at the office of the Secretary or by sending 
 it to him by registered post addressed to his office. 
 
 (5) Failure to give the prescribed notice or any defect Failure to 
 or inaccuracy in a notice shall not bar the right to compen- feet ' irT no*-" 
 sation if in the opinion of the Board the employer was not afftct°right 
 prejudiced thereby or where the compensation is payable pension 
 out of the accident fund if the Board is of opinion that the in certain 
 
 J. P9 9PR. 
 
 claim for compensation is a just one and ought to be allowed. 
 
 cases. 
 
 21. — (1) A workman who claims compensation, or to workman to 
 whom compensation is payable under this Part shall if so IxarnlnaUon. 
 required by his employer submit himself for examination 
 by a duly qualified medical practitioner provided and paid 
 for by the employer and shall if so required by the Board 
 submit himself for examination by a medical referee. 
 
 (2) A workman shall not be required at the request of in accord- 
 his employer to submit himself for examination otherwise regulations. 
 than in accordance with the Regulations. 
 
 22. — (1) Where a workman has upon the request of lri case of 
 his employer submitted himself for examination, or has between 
 been examined by a duly qualified medical practitioner a^nine?s. f 
 selected by himself, and a copy of the report of the medical ence may" 
 practitioner as to the workman's condition has been fur- m e ™cai e t0 
 nished in the former ^ase by the employer to the workman referee, 
 and in the latter case by the workman to the employer the 
 Board may, on application of either of them, refer the matter 
 to a medical referee. 
 
 (2) The medical referee to whom a reference is made of medical 
 under the next preceding subsection or who has examined k e n f a e i ree 
 the workman by the direction of the Board under subsection 
 1 of section 21, shall certify to the Board as to the condition 
 of the workman and his fitness for employment, specifying 
 
32 
 
 SECOND INTERIM REPOET OF THE 
 
 No. 53 
 
 where necessary the kind of employment and his , certificate 
 shall be conclusive as to the matters certified. 
 
 submit to (3) If a workman does not submit himself for examina- 
 
 pr a obSruc°t- ^ on w hen required to do so as provided by subsection 1 of 
 ing it. section 21, or on being required to do so dot not submit 
 
 himself for examination to a medical referee under 
 that subsection or under subsection 1 of this section, 
 or in any way obstructs any examination, his right to com- 
 pensation or if he is in receipt of a weekly or other periodical 
 payment his right to it shall be suspended until such ex- 
 amination has taken place. 
 
 Review 
 of com- 
 pensation. 
 
 23. Any weekly or other periodical payment to a work- 
 man may be reviewed at the request of the employer or of 
 the workman, if the compensation is payable by the employer 
 individually, or, if the compensation is payable out of the 
 accident fund, of the Board's own motion or at the request 
 of the workman and on such review the Board .may .put an 
 end to or diminish or may increase such payment to a sum 
 not beyond the maximum hereinafter prescribed. 
 
 of C com- e 24. Where the workman was at the date of the accident 
 
 Fo'woVkrnan un der twenty-one years of age and the review takes place 
 under 2i. more than six months after the accident the amount of a 
 
 weekly payment may be increased to any sum not exceeding 
 per cent, of the weekly sum which if he had remained 
 
 uninjured he would probably have been earning at the date 
 
 of the review. 
 
 Commuta- 
 tion of 
 payments 
 for lump 
 sum. 
 
 Lump 
 sum to be 
 paid to 
 Board. 
 
 Applica- 
 tion of 
 lump 
 sum. 
 
 25. — (1) Where the compensation is payable by an em- 
 ployer individually, the employer may, with the consent of 
 the workman or dependant to whom it is payable and with 
 the approval of the Board, but not otherwise, and where it 
 is payable out of the accident fund the Board may commute 
 the weekly or other periodical payments payable to a work- 
 man or a dependant for a lump sum. 
 
 (2) "Where the lump sum is payable by the employer 
 individually it shall be paid to the Board. 
 
 (3) The lump sum may be: — 
 
 (a) applied in such manner as the workman or de- 
 
 pendant may direct; 
 
 (b) paid to the workman or dependant; 
 
 (r.) invested by the Board and applied to meet the 
 future payments as they become due; 
 
1914 WOKKMEN'S COMPENSATION COMMISSION. 
 
 (d) r aid to trustees to be used and employed upon and 
 
 subject to such trusts and for the benefit of such 
 persons as, in case it is payable by the employer 
 individually, the workman or dependant directs 
 and the Board approves, or, if payable out of 
 ie accident fund, as may be desired by the 
 workman or dependant and approved by the 
 Board ; 
 
 (e) applied partly in one and partly in another or 
 
 others of the modes mentioned in clauses (a), 
 (6), (c) and (d), 
 
 as the Board may determine. 
 
 26. — (1) Where a weekly or other periodical payment Commuta- 
 is payable by the employer individually and has been con- 1 f° I weekiy 
 tinued for not less than six months, the Board may on the P a y ments - 
 application of the employer allow the liability therefor, to be 
 commuted by the payment of a lump sum of such an amount 
 as, if the incapacity is permanent, would purchase an im- 
 mediate annuity from a life insurance company approved 
 by the Board, equal to seventy-five per cent, of the annual 
 value of the weekly or other periodical payment, and in other 
 cases of such an amount as the Board may deem reasonable. 
 
 (2) The sum for which a payment may be commuted ^tp 1011 
 under subsection 1, shall be paid to the Board and shall be sum 
 dealt with in the manner provided by section 25. 
 
 27. — (1) Where an employer insured by a contract of company 
 insurance of an insurance company or any other underwriter commute 
 is individually liable to make a weekly or other periodical blither 
 payment to a workman or his dependants and the payment payment 11 
 has continued for more than six months the liability shall, 
 if the Board so directs before the expiration of twelve 
 months from the commencement of the incapacity of the 
 workman or his death, if the accident resulted in death, be 
 commuted by the payment of a lump sum in accordance 
 with the next preceding section, and the company or under- 
 writer shall pay the lump sum to the Board, and it shall be 
 dealt with in the manner provided by section 25. 
 
 (2) This section shall not apply to a contract of insur- 
 ance entered into before the passing of this Act. 
 
 28. The Board may require an employer who is in- require 
 dividually liable to pay the compensation to pay to the to pay sum 
 Board a sum sufficient to commute in accordance with sec- to commute, 
 tion 26, any weeklv or other periodical payments which are 
 3 w. 
 
34 
 
 SECOND INTERIM EEPORT OP THE 
 
 No. 53 
 
 payable to the workman during his life or to his widow dur- 
 ing her widowhood and such sum shall be applied by the 
 Board in the payment of such weekly or other periodical 
 payments as they from time to time become payable, but 
 if the sum paid to the Board is insufficient to meet the 
 whole of such weekly or other periodical payments the em- 
 ployer shall nevertheless be liable to make such of them as 
 fall due after the sum paid to the Board is exhausted. 
 
 ?equire may ^* The Board may require an employer who is indi- 
 fn^ur° y his to ^dually liable to pay the compensation to insure his work- 
 workmen, men and keep them insured against accidents in respect 
 of which he may become liable to pay compensation in a 
 company approved by the Board for such amount as the 
 Board may direct and in default of his doing so the Board 
 may cause them to be so insured and may recover the ex- 
 pense incurred in so doing from the employer. 
 
 Where em- 
 ployer in- 
 sured Board 
 may require 
 insurer to 
 pay amount 
 payable to 
 employer 
 directly to 
 injured 
 workman. 
 
 30. — (1) Where an employer who is individually liable 
 to pay the compensation is insured against his liability to 
 pay compensation, the Board may require the insurance 
 company or other underwriter to pay the sum which under 
 the contract of insurance such company or underwriter would 
 be liable to pay to the employer in respect of an accident to 
 a workman who becomes, or whose dependants become en- 
 titled to compensation under this Part, directly to the Board 
 in discharge or in discharge pro tanto of the compensation 
 to which such workman or his dependants are found to be 
 entitled. 
 
 Notice to 
 be given to 
 insurer. 
 
 (2) In any case to which subsection 1 applies where a 
 claim for compensation is made notice of the claim shall be 
 given to the insurance company or other underwriter and 
 to the employer and the Board shall determine not only the 
 question of the right of the workman or dependant to com- 
 pensation but also the question whether the whole or any 
 part of it should be paid directly by the insurance company 
 or other underwriter as provided by subsection 1. 
 
 Sect. 25 
 to apply. 
 
 (3) Section 25 shall apply to the compensation payable 
 to the Board under subsection 1. 
 
 In case of 
 permanent 
 disability 
 employer 
 may be 
 required to 
 pay capital 
 ■um, 
 
 31. — (1) Where the accident causes permanent dis- 
 ability, either total or partial or the death of the workman' 
 and the compensation is payable by the employer individ- 
 ually the Board may require the employer to pay to the 
 Board such sum as in its opinion will be sufficient with the 
 interest thereon if invested so as to earn interest at the 
 rate of 5 per cent, per annum to meet the future payments 
 to be made to the workman or his dependants, and such 
 
1914 WOEKMEN'S COMPENSATION COMMISSION. 35 
 
 sum when paid to the Board shall be invested by it and 
 shall form a fund to meet such future payments. 
 
 (2) The Board, instead of requiring the employer to >r to give 
 
 ^ ' security for 
 
 make the payment provided for by subsection 1, may re- payment 
 quire him to give such security as the Board may deem pensation 
 sufficient for the future payments. 
 
 32. Where a right to compensation is suspended under compensa- 
 the provisions of this Part no compensation shall be payable payable 
 
 £ - . i £ . during 
 
 in respect ol the period ol suspension. suspension. 
 
 SCALE OF COMPENSATION. 
 
 case 
 
 33. — (1) Where death results from an injury the amount £°™? n n ca< 
 of the compensation shall be : — of death 
 
 (a) The necessary expenses of the burial of the work- 
 
 man not exceeding $75. 
 
 (b) Where the widow or an invalid husband is the sole 
 
 dependant a monthly payment of $20. 
 
 (c) Where the dependants are a widow or an invalid 
 
 husband and one or more children, a monthly 
 payment of $20, with an additional monthly 
 payment of $5 for each child under the age 
 of 16 years, not exceeding in the whole $40. 
 
 (d) Where the dependants are children a monthly pay- 
 
 ment of $10 to each child under the age of 
 16 years, not exceeding in the whole, $40. 
 
 (e) Where the workman was under the age of 21 years, 
 
 and the dependants are his parents or one of 
 them, a monthly payment of $20, ceasing when 
 the workman would have attained the age of 21 
 years. 
 
 (/) Where the sole dependants are persons other than 
 those mentioned in the foregoing clauses a sum 
 reasonable and proportionate to the pecuniary 
 loss to such dependants occasion! d by the death, 
 to be determined by the Board, but not exceed- 
 ing in the whole $40 per month. 
 
 Compensa- 
 
 (2) Where permanent total disability results from the tion in 
 injury the amount of the compensation shall be a weekl; 
 payment during the life of the workman equal to pe 
 
 cent, of his average weekly earnings during the previou 
 
36 
 
 SECOND INTERIM REPORT OF THE 
 
 No. 53 
 
 Duration of 
 payments 
 under 
 clause (f) 
 of subsec- 
 tion 1. 
 
 twelve mouths if he has been so long employed, but if not 
 then for any less period during which he has been in the 
 employment of his employer. 
 
 (3) In the case provided for by clause (/.) of subsection 
 1, the payments shall continue only so long as in the opinion 
 of the Board it might reasonably have been expected had the 
 workman lived he would have continued to contribute to the 
 support of the dependants. 
 
 Marriage 
 of widow. 
 
 Exception. 
 
 Where 
 workman 
 leaves no 
 dependant, 
 expense of 
 medical at- 
 tendance 
 and burial 
 may be 
 ordered 
 to be paid. 
 
 Partial or 
 temporary 
 disability. 
 
 34. — (1) If a dependant widow marries the monthly 
 payments to her shall cease, but she shall be entitled in lieu 
 of them to a lump sum equal to the monthly payments for two 
 years and such lump sum shall be payable within one month 
 after the day of her marriage. 
 
 (2) Subsection 1 shall not apply to payments to a widow 
 in respect of a child. 
 
 35. Where a workman leaves no dependants such sum as 
 the Board may deem reasonable for the expenses of his medi- 
 cal attendance and of his burial shall be paid to the persons 
 to whom such expenses are due. 
 
 36. Where the disability is partial or temporary the 
 compensation shall be a weekly payment of a sum propor- 
 tionate to the impairment of the earning capacity of the 
 workman not exceeding in any case per cent, of his average 
 weekly earnings ascertained in the manner provided by sec- 
 tion 39, and the compensation shall be payable while the 
 disability lasts. 
 
 Compensa- 
 tion not to 
 exceed 
 percentage 
 of wages in 
 certain cases 
 
 When pay- 
 ments to 
 child to 
 cease. 
 
 37. The compensation payable as provided by subsection 
 1 of section 33, shall not in any case exceed per cent, of 
 the average monthly earnings of the workman calculated in 
 the manner provided by section 39, and if the compensation 
 payable under that subsection would in any case exceed that 
 percentage it shall be reduced accordingly, and where several 
 persons are entitled to monthly payments the payments shall 
 be reduced proportionately. 
 
 38. A monthly payment in respect of a child shall cease 
 when the child attains the age of 16 years. 
 
 39. — (1) Average earnings shall be computed in such 
 
 How aver- 
 age earn- 
 ings to a manner as is best calculated to give the rate per week or 
 
 month at which (lie workman was remunerated. 
 
1914 WOKKMEN'S COMPENSATION COMMISSION. 37 
 
 (2) Where owing to the shortness of the time during Shortness' 
 which the workman was in the employment of his employer of service 
 
 ' J l • « . or its casual 
 
 or the casual nature of his employment or the terms of it, nature, 
 it is impracticable to compute the rate of remuneration as of 
 the date of the accident regard may be had to the average 
 weekly or monthly amount which during the twelve months 
 previous to the accident was being earned by a person in 
 the same grade employed at the same work by the same 
 employer, or if there is no person so employed then by a 
 person in the same grade employed in the same class of em- 
 ployment and in the same locality. 
 
 (3) Where the workman has entered into concurrent con- where two 
 tracts of service with two or more employers under which employers 
 he worked at one time for one of them and at another time 
 
 for another of them his average earnings shall be computed 
 as if his earnings under all such contracts were earnings in 
 the employment of the employer for whom he was working 
 at the time of the accident. 
 
 (4) Employment by the same employer shall mean em- Meanin& ot 
 ployment by the same employer in the grade in which the employment 
 workman was employed at the time of the accident uninter- employer, 
 rupted by absence from work due to illness or any other rentiy!" 
 unavoidable cause. 
 
 (5) "Where the employer was accustomed to pav the work- special 
 
 d . 1 ./ • . . . expenses 
 
 man a sum to cover any special expenses entailed on him by not to be 
 the nature of his employment that sum shall not be reckoned * 
 as part of his earnings. 
 
 40. In fixing the amount of a weekly or monthly payment Matters to 
 regard shall be had to any payment, allowance or benefit ered in 
 which the workman may receive from his employer during payments, 
 the period of his incapacity, including any pension, gratuity 
 
 or other allowance provided wholly at the expense of the 
 employer. 
 
 41. The amount of the weekly payment in the case of nofto 6 
 partial incapacity shall in no case exceed the difference be- dffferen 
 tween the average weekly earnings of the workman before ^ e e s en 
 the accident and the average weekly amount which he is what ed may d 
 earning or is able to earn in some suitable employment or be earned, 
 business after the accident but shall bear such relation to 
 
 the amount of that difference as under the circumstances 
 appears just. 
 
 42. W 7 here there are both total and partial dependants the Sn ^de- 
 compensation may be allotted partly to the total and partly Dendants - 
 to .the partial dependants. 
 
 ce 
 
38 
 
 SECOND IXTEE1M KEPOET OF THE 
 
 No. 53 
 
 Board may 
 apply pay- 
 ment for 
 benefit of 
 children 
 
 43. Where the Board is of opinion that for any reason 
 it is necessary or desirable that a payment in respect of a 
 child should not be made directly to its parent, or where a 
 dependant child has no parent or guardian, the Board may 
 direct that the payment be made to such person or be applied 
 in such manner as the Board may deem best for the advan- 
 tage of the child. 
 
 THE WORKMEN S COMPENSATION BOARD. 
 
 Workmen's 
 Compensa- 
 tion Board, 
 how consti- 
 tuted. 
 
 44. There is hereby constituted a Commission for the ad- 
 ministration of this Part to be called "The Workman's Com- 
 pensation Board," which shall consist of three members to be 
 appointed by the Lieutenant-Governor in Council and shall 
 be a body corporate. 
 
 Chairman, 
 
 Vice-chair- 
 man. 
 
 45. One of the Commissioners shall be appointed by the 
 Lieutenant-Governor in Council to be the Chairman of the 
 Board and he shall hold that office while he remains a mem- 
 ber of the Board and another of the Commissioners shall be 
 appointed by the Lieutenant-Governor in Council Vice- 
 Chairman of the Board. 
 
 When vice- 46. In the absence of the Chairman or in case of his 
 may act. inability to act or if there is a vacancy in the office, the Vice- 
 chairman may act as and shall have all the powers of the 
 Chairman. 
 
 Presumption 47. Where the Vice-Chairman appears to have acted for 
 
 where vice- 
 
 chairman or instead of the Chairman it shall be conclusivelv pre- 
 sumed that he so acted for one of the reasons mentioned m 
 
 the next preceding subsection. 
 
 omce'of com- 48. Each Commissioner shall, subject to section 40 hold 
 missioners. flp lC . e during good behaviour for a period of ten years but 
 may be removed at any time for cause. 
 
 Age limit. 49. Unless otherwise directed by the Lieutenant-Gover- 
 
 nor in Council a Commissioner shall cease to hold office 
 when he attains the age of 75 years. 
 
 Re-appoint- 
 ment. 
 
 50. A Commissioner if not disqualified by age shall be 
 
 eligible for re-appointment. 
 
 Commission- 51 J/;.,,.], f (] 10 Commissioners shall devote the whole of 
 
 ers to fcive 
 
 whole time his time to the performance of his duties under this Part. 
 
 to duties. 
 
 salaries 52. The salary of the Chairman shall be $ 
 
 per annum, and the salary of each of the other Commis- 
 sioners shall be $ per annum. 
 
1914 WORKMEN'S COMPENSATION COMMISSION. 39 
 
 53. The presence of two Commissioners shall he neces- Quorum, 
 sary to constitute a quorum of the Board. 
 
 54. A vacancy in the Board shall not if there remain two vacancy not 
 members of it impair the authority of such two members to authority if 
 
 two mem- 
 act, bers re- 
 main. 
 
 55. The Board shall have the like powers as the Supreme g°^ r e d rs of 
 Court for compelling the attendance of witnesses and of 
 examining them under oath, and compelling the production 
 
 of books, papers, documents and things. 
 
 56. — (1) A Commissioner shall not directly or indirect- ^o^Sto bo 
 
 ly . disqualified 
 
 in certain 
 cases. 
 
 (a) have, purchase, take or become interested in any 
 
 industry, to which this Part applies or any 
 bond, debenture or other security of the person 
 owning or carrying it on; 
 
 (b) be the holder of shares, bonds, debentures or other 
 
 securities of any company which carries on the 
 business of employers' liability or accident in- 
 surance ; 
 
 (c) have any interest in any device, machine, appliance, 
 
 patented process or article which may be re- 
 quired or used for the prevention of accidents. 
 
 (2) If any such industry, or interest therein, or any such 
 share, bond, debenture, security, or thing comes to or be- 
 comes vested in a Commissioner by will or by operation of 
 law and he does not within three months thereafter sell and 
 absolutely dispose of it he shall cease to hold office. 
 
 57. The offices of the Board shall be situated in the city Boa^d 5 
 of Toronto and its sittings shall be held there, except where tings 3 "" 
 it is expedient to hold sittings elsewhere, and in that case sit- 
 tings may be held in any part of Ontario. 
 
 58. The Commissioners shall sit at such times and con- Proceed- 
 duct their proceedings in such manner as they may deem Board, 
 most convenient for the proper discharge and speedy despatch 
 
 of business. 
 
 59. — (1) The Board shall appoint a Secretary and a ^p ^ 1 ^"* 
 Chief Medical Officer and may appoint such auditors, actu- and officers, 
 aries, accountants, inspectors, medical referees, clerks and 
 servants as the Board may deem necessary for carrying out 
 the provisions of this Part and may prescribe their duties 
 
40 
 
 SECOXD INTERIM REPORT OF THE 
 
 Xo. 53 
 
 Tenure 
 of office. 
 
 Jurisdiction 
 of Board. 
 
 Power to 
 
 reconsider. 
 
 and, subject to the approval of the Lieutenant-Governor in 
 Council, may fix their salaries. 
 
 (2) Every person so appointed shall hold office during 
 the pleasure of the Board. 
 
 60. — (1) The Board shall have exclusive jurisdiction to 
 examine into, hear and determine all matters and questions 
 arising under this Part and the action or decision of the 
 Board thereon shall be final and conclusive and shall not be 
 open to question or review in any court and no proceedings 
 by or before the Board shall be restrained by injunction, 
 prohibition or other process or proceeding in any court or 
 be removable by certiorari or otherwise into any court. 
 
 (2) Xothing in subsection 1 shall prevent the Board 
 from reconsidering any matter which has been dealt with by 
 it or from rescinding, altering or amending any decision or 
 order previously made, all which the Board shall have author- 
 ity to do. 
 
 61. The Board may award such sum as it may deem 
 reasonable to the successful party to a contested claim for 
 compensation or to any other contested matter as compensa- 
 tion for the expenses 'he has been put to by reason of or 
 incidental to the contest and an order of the Board for the 
 payment by an employer of any sum so awarded when filed 
 in the manner provided by section 63 shall become a judg- 
 ment of the Court in which it is filed and may be enforced 
 accordingly. 
 
 62. The Board may act upon the report of any of its 
 officers and any enquiry which it shall be deemed necessary 
 to make may be made by any one of the Commissioners or 
 by an officer of the Board or some other person appointed 
 to make the enquiry, and the Board may act upon his report 
 as to the result of the inquiry. 
 
 63. An order of the Board for the payment of compensa- 
 tion by an employer who is individually liable to pay the com- 
 pensation or any other order of the Board for the payment 
 of money made under the authority of this Part, or a copy 
 of any such order certified by the Secretary to be a true 
 copy may be filed with the clerk of any county or district 
 court and when so filed shall become an order of that court 
 and may be en forced as a judgment of the court. 
 
 Regulations. 64.- -( \) The Hoard may make such Regulations as may 
 be deemed expedient for carrying out the provisions of this 
 Part and a certified copy of everv regulation so mad^ 
 
 Power of 
 Board as 
 to award- 
 ing Com- 
 pensation 
 for Ex- 
 penses. 
 
 Board may 
 act on 
 report of 
 officers. 
 
 Enforce- 
 ment of 
 orders of 
 Board. 
 
1914 WORKMEN'S COMPENSATION COMMISSION. 41 
 
 shall be transmitted forthwith to the Provincial Secretary Eieutenant- 
 and any regulation may within one month after it has been p°^ rn ,°, r 
 
 ~ , " , to disallow. 
 
 received by the Provincial Secretary be disallowed by the 
 Lieutenant-Governor in Council. 
 
 (2) After the period for disallowance has expired every publication. 
 regulation which has not been disallowed shall become effec- 
 tive and shall be forthwith published in the Ontario Gazette. 
 
 (3) Every person who contravenes any such regulation Penalty. 
 
 after it has become effective or any rule of an association 
 formed as provided by section 97, which has been approved 
 and ratified as provided by that section shall for every con- 
 travention incur a penalty not exceeding $50. 
 
 65. The accounts of the Board shall be audited by the Audit of 
 Provincial Auditor or by an auditor appointed by the Lieu- 
 tenant-Governor in Council for that purpose and the salary 
 or remuneration of the last mentioned auditor shall be paid 
 by the Board. 
 
 66. — (1) The Board shall on or before the day of Report to 
 
 v . , , T . d Lieutenant- 
 
 in each year make a report to the Lieutenant- Governor. 
 Governor of its transactions during the next preceding calen- 
 dar year and such report shall contain such particulars as 
 the Lieutenant-Governor in Council may prescribe. 
 
 (2) Every such report shall be forthwith laid before the j^ 1 ^ t0 
 Assembly if the Assembly is then in session and if it is not A efore bl 
 then in session within fifteen days after the opening of the 
 next session. 
 
 of 
 
 67. The Superintendent of Insurance or an officer of his superin 
 
 r . p tendent „ 
 
 Department named by him for that purpose shall once in insurance 
 each year and oftener if so required bv the Lieutenant-Gov- into affairs 
 
 1 • /-a .-. . . ,-, '„. . -i-i- p and business 
 
 ernor m Uouncil examine into the affairs and business ot f Board, 
 the Board for the purpose of determining as to the suffi- . 
 ciency of the accident fund and shall report thereon to the 
 Lieutenant-Governor in Council. 
 
 CONTRIBUTION BY THE PROVINCE. 
 
 68. To assist in defraying the expenses incurred in the Provincial 
 
 ' ' firrsint to- 
 
 administration of this Part there shall be paid to the Board wards costs 
 out of the Consolidated Revenue Fund such annual sum not tration. 
 exceeding $ as the Lieutenant-Governor in Council 
 
 may direct and such sum shall be payable in equal quar- 
 terly sums on the first day of each quarter commencing on 
 the' day of 19 . 
 
42 
 
 SECOND IXTEB1M EEPOET OF THE 
 
 No. 53 
 
 ACCIDENT FUND. 
 
 How acci- 
 dent fund 
 to be 
 provided. 
 
 Compensa- 
 tion pay- 
 able out of 
 accident 
 fund in 
 certain 
 cases. 
 
 69. — (1) An accident fund shall be provided by contri- 
 butions to be made in the manner hereinafter provided, by 
 the employers in the classes or groups of industries, for the 
 time being embraced in Schedule 1, and compensation pay- 
 able in respect of accidents which happen in any industry, 
 embraced in any of such classes or groups, shall be pay- 
 able and shall be paid out of the accident fund. 
 
 Industries 
 in Schedule 
 2 not to 
 contribute. 
 
 (2) Notwithstanding the generality of the description of 
 the classes mentioned in Schedule 1 none of the industries 
 embraced in Schedule 2 shall form part of or be deemed to 
 be included in any of such classes, unless it is added to 
 Schedule 1 by the Board under the authority conferred by 
 this Part. 
 
 Sufficiency 
 of accident 
 fund to be 
 maintained. 
 
 70. It shall be the duty of the Board at all times to main- 
 tain the accident fund so that with the reserves it shall be 
 sufficient to meet all the payments to be made out of the fund 
 in respect of compensation as they become payable and so as 
 not unduly or unfairly to burden the employers in any class 
 in future years with payments which are to be made in those 
 years in respect of accidents which have previously happened. 
 
 Industries 
 not specific- 
 ally in- 
 cluded in 
 classes. 
 
 71. If any trade or business connected with the indus- 
 tries of : — 
 
 Lumbering, mining, quarrying, fishing, manufacturing, 
 building, construction, engineering, transporta- 
 tion, operation of electric power lines, water- 
 works and other public utilities, navigation, 
 operation of boats, ships, tugs and dredges, opera- 
 tion of grain elevators and warehouses ; team- 
 ing, scavenging and street cleaning; painting, 
 decorating and renovating, dyeing and cleaning; 
 
 or any occupation incidental thereto or immediately con- 
 nected therewith, not included in Schedule 2, is not em- 
 braced in any of the classes mentioned in Schedule 1, the 
 Board shall assign it to an appropriate class or form an addi- 
 tional class or classes embracing the trades or businesses not 
 so embraced, and until that is done such trades and businesses 
 shall together constitute a separate group or class and shall 
 be deemed to be included in Schedule 1. 
 
1914 WORKMEN'S COMPENSATION COMMISSION. L3 
 
 72.— (1) The Board shall have jurisdiction and author- SbS^ " 
 
 ity to : — 
 
 (a) re-arrange any of the classes for the time being, As t0 re " . 
 
 i i • n i t i -. t • i t . ^" arrangement 
 
 embraced m (Schedule 1, and withdraw from any of classes, 
 class any industry embraced in ii and transfer 
 it wholly or partly to any other class or form it 
 into a separate class; 
 
 (b) establish other classes embracing any of the indus- Sjfothe?" 
 
 tries which are mentioned in Schedule 2, or are classes - 
 not embraced in any of the classes in Schedule 
 
 i; 
 
 (c) add to any of the classes mentioned in Schedule 1 ^sLef t0 
 
 1, any industry which is not embraced in any 
 of such classes. 
 
 (2) Where in the opinion of the Board the hazard to work- n \e n £ r of° n 
 men in any of the industries embraced in a class is less than assessment 
 that in another or others of such industries, or where for fo h^zarcf 
 any other reason it is deemed proper to do so, the Board may of busi- 
 
 ness etc 
 
 sub-divide the class into sub-classes and if that is done the 
 Board shall fix the percentages or proportions of the contri- 
 butions to the accident fund which are to be payable by the 
 employers in each sub-class. 
 
 (3) Separate accounts shall be kept of the amounts col- Separate 
 
 ill ii- <• i , accounts 
 
 lected and expended in respect oi every class and sub-class, to be kept 
 but for the purpose of paying compensation the accident c i ass an( j 
 fund shall, nevertheless, be deemed one and indivisible. sub-class. 
 
 (4) Where a greater number of accidents has happened in varying of 
 any industry than in the opinion of the Board ought to have assessment 
 
 . . in certain 
 
 happened if proper precautions had been taken for the pre- cases, 
 vention of accidents in it, or where in the opinion of the 
 Board the ways, works, machinery or appliances in any in- 
 dustry are defective, inadequate or insufficient the Board 
 may add to the amount of any contribution to the accident 
 fund for which an employer is liable in respect of such in- 
 dustry such a percentage thereof as the Board may deem 
 just and may assess and levy the same upon such employer, 
 or the Board may exclude such industry from the class in 
 which it is embraced, and if it is so excluded the employer Additional 
 shall be individually liable to pay the compensation to pe 
 which any of his workmen or their dependants may there- 
 after become entitled. 
 
44 
 
 SECOND INTERIM REPORT OF THE 
 
 Xo. 53 
 
 Collection 
 and applica- 
 tion of ad- 
 ditional per- 
 centage. 
 
 (5) Any additional percentage levied and collected under 
 the next preceding subsection shall be added to the accident 
 fund or applied in reduction of the assessment upon the 
 other employers in the class or sub-class to which the employer 
 from whom it is collected belongs as the Board may de- 
 termine. 
 
 Withdraw- 
 ing classes. 
 
 73. — (1) The Board may in the exercise of the powers 
 conferred by the next preceding section withdraw or exclude 
 from a class industries in which not more than a stated num- 
 ber of workmen are usually employed and may afterwards 
 add them to the class or classes from which they have been 
 withdrawn, and any industry so withdrawn of excluded shall 
 not thereafter be deemed to be included in Schedule 1 or 
 Schedule 2. 
 
 Employers 
 in indus- 
 tries with- 
 drawn 
 under s.s. 
 1 may 
 elect to 
 become 
 •members 
 of class. 
 
 (2) Where industries are withdrawn or excluded, from a 
 class under the authority of subsection 1, an employer in 
 any of them may, nevertheless, elect to become a member 
 of the class to which, but for the withdrawal or exclusion 
 he would have belonged, and if he so elects he shall be a 
 member of that class and as such liable to contribute to the 
 accident fund, and his industry shall be deemed to be em- 
 braced in Schedule 1. 
 
 Powers 
 may be 
 exercised 
 as occasion 
 requires. 
 
 When 
 Regula- 
 tions 
 become 
 effective. 
 
 1'ublication. 
 
 (3) Notice of the election shall be given to the Secretary 
 of the Board and the election shall be deemed to have been 
 made when the notice is received by him. 
 
 74. The powers conferred by. the next preceding two sec- 
 tions may be exercised from time to time and as often as in 
 the opinion of the Board occasion may require. 
 
 75. A regulation or order made by the Board under the 
 authority of clause (a) or clause (b) of subsection 1 of sec- 
 tion 72, shall not have any force or effect unless approved by 
 the Lieutenant-Governor in Council, and when so approved 
 it shall be published in the Ontario Gazette and shall take 
 effed "ti the expiration of one month from the first publica- 
 tion of it in the Ontario Gazette. 
 
 STATEMENTS TO BE FUM XI SUED BY EMPLOYERS. 
 
 Statements 
 to be fur- 
 nished by 
 employers. 
 
 76. — (1) Every employer shall on or before the 
 day of next and yearly thereafter, on or before 
 
 ili" clay of , or on or before such date 
 
 as shall be prescribed by the Board prepare and transmit to 
 the Board a statemenl in detail of the names and ages of all 
 his employees and the amount of the wages earned by each 
 
1914 WORKMEN'S COMPENSATION COMMISSION. 45 
 
 of them during the year then last past verified by the statu- 
 tory declaration of the employer or the manager of the 
 business, or where the employer is a corporation by an officer 
 of the corporation having a personal knowledge of the mat- 
 ters to which the declaration relates. 
 
 (2) Where the business of the emp 7 ~yer embraces more statements 
 than one branch of business or class of industry the Board branches, 
 may require separate statements to be made as to each branch etc - 
 
 or class of industry, and such statements shall be made, veri- 
 fied, and transmitted as provided by subsection 1. 
 
 (3) If any employer does not make and transmit to the furnish 
 Board the prescribed statement within the prescribed time 
 
 the Board may base any assessment or supplementary assess- 
 ment thereafter made upon him on such sum as in its opinion 
 is the probable amount of the pay roll of the employer and the 
 employer shall be bound thereby, but if it is afterwards as- 
 certained that such amount is less than the actual amount of 
 the pay roll the employer shall be liable to pay to the Board 
 the difference between the amount for which he was assessed 
 and the amount for which he would have been assessed on 
 the basis of his pay roll. 
 
 (4) If an employer does not comply with the provisions of Penalty - 
 subsection 1 or subsection 2, or if any statement made in 
 pursuance of their provisions is not a true and accurate state- 
 ment of any of the matters required to be set forth in it the 
 employer for every such non-compliance and for every such 
 statement shall incur a penalty not exceeding $500. 
 
 .Assess men t 
 
 77. — (1) If a statement is found to be inaccurate the as- may be 
 sessment shall be made on the true amount of the pay roll as correspond 
 ascertained by such examination and enquiry or if an assess- roils, 
 ment has been made against the employer on the basis of 
 his pay-roll being as shown by the statement the employer 
 shall pay to the Board the difference between the amount for 
 which he was assessed and the amount for which he would 
 have been assessed if the amount of the pay-roll had been p 
 truly stated, and by way of penalty a sum equal to such 
 difference. 
 
 (2) The Board if satisfied that the inaccuracy of the ?e°feve may 
 statement was not intentional and that the employer honestly penTity. 
 desired to furnish an accurate statement, may relieve him 
 from the payment of the penalty provided for by subsec- 
 tion 1 or any part of it. 
 
46 
 
 SECOND IXTEKIM EEEOET OE THE 
 
 No. 53 
 
 Examina- 
 tion of ac- 
 counts and 
 books of 
 employer. 
 
 8 Ed. VII., 
 C. 8. 
 
 78. — (1) The Board and any member of it, and any 
 officer or person authorized by it for that purpose shall have 
 the right to examine the books and accounts of the employer 
 and to make such other enquiry as the Board may deem 
 necessary for the purpose of ascertaining whether any state- 
 ment furnished to the Board under the provisions of section 
 76 is an accurate statement of the matters which are re- 
 quired to be stated therein or of ascertaining the amount of 
 the pay-roll of any employer, and for the purpose of any such 
 examination and enquiry the Board and the person so ap- 
 pointed shall have all the powers which may be conferred 
 on a commissioner appointed under The Public Inquiries 
 Act. 
 
 Penalty for 
 obstruction. 
 
 Board to 
 have right 
 to inspect 
 premises of 
 employer. 
 
 (2) An employer and every other person who obstructs or 
 hinders the making of the examination and inquiry men- 
 tioned in subsection 1, or refuses to permit it to be made shall 
 incur a penalty not exceeding $500. 
 
 79. — (1) The Board and any member of it and any offi- 
 cer or person authorized by it for that purpose shall have 
 the right at all reasonable hours to enter into the establish- 
 ment of any employer who is liable to contribute to the 
 accident fund and the premises connected with it and every 
 part of them for the purpose of . ascertaining whether the 
 ways, works, machinery or appliances therein are safe, ade- 
 quate and sufficient and whether all proper precautions are 
 taken for the prevention of accidents to the workmen em- 
 ployed in or about the establishment or premises and 
 whether the safety appliances or safeguards prescribed by 
 law are used and employed therein, or for any other purpose 
 which the Board may deem necessary, for the purpose of 
 determining the proportion in which such employer should 
 contribute to the accident fund. 
 
 Penalty for 
 obstruction. 
 
 Information 
 obtained 
 not to be 
 divulged. 
 
 Penalty. 
 
 (2) An employer and every other person who obstructs 
 or hinders the making of any inspection made under the 
 authority of subsection 1, or refuses to permit it to be made, 
 shall incur a penalty not exceeding $500. 
 
 80. — (1) No officer of the Board mid no person author- 
 ized to make an inquiry under this Part shall divulge or allow 
 to 1)0 divulged except in the performance of his duties or 
 mider the authority of the Board any information obtained 
 by him or which has come to his knowledge in making or in 
 connection with an inspection or inquiry under this Part. 
 
 (2) Every person who contravenes any of the provisions 
 of subsection 1 -hall incur a penalty not exceeding $50. 
 
1914 WORKMEN'S COMPENSATION COMMISSION. 47 
 
 81. The penalties imposed by or under the authority of and appii- 
 this Part shall he recoverable under The Ontario Summary penalties. 
 Convictions Act and when collected shall be paid over to 
 
 the Board and shall form part of the accident fund. 
 
 ASSESSMENTS. 
 
 82. The Board shall on or before the day of 2E5£ onal 
 
 , 19 , make a provisional assessment on the em- ment - 
 plovers in each class of such sum as in the opinion of the 
 Board will be sufficient to meet the claims for compensation 
 which will be payable by that class during the then calendar 
 year, and to provide a reserve fund of such amount as the 
 Board may deem necessary to pay the compensation payable 
 in future years in respect of claims in that class for acci- 
 dents happening in that year and also to meet the expenses 
 of the Board in the administration of this Part for the year. 
 
 83. The sums to be so assessed may be either a ijercent- How assess- 
 
 £ 1 -iiffi i i nient may 
 
 age oi the pay-rolls ol the employers or a specific sum as the be based. 
 Board may determine. 
 
 84. The Board shall in every year thereafter assess and fsSs^ Uent 
 levy upon the employers in each of the classes a sum sufficient ments - 
 
 to pay the compensation which was paid in the next preced- 
 ing calendar year in respect of injuries to workmen in in- 
 dustries within the class and to provide a reserve fund of 
 such amount as the Board may deem necessary to pay the 
 compensation payable in subsequent years in respect of 
 claims in that class which arose during such next preceding 
 year and also to pay the expenses of the Board in the ad- 
 ministration of this Part for that year and such assessments 
 may be based upon the pay rolls of the employers. 
 
 85.— (1) The Board shall determine and fix the propor- g°£S2? 
 tion or part of the sum for which a class is so assessed under ™ b e 1 e t b P y y ' 
 the provisions of either of the next preceding two sections employer 
 which is to be paid by the employers within the class or 
 within any sub-class and every employer shall pay to the 
 Board the sum payable by him within 15 days after notice 
 of the assessment and of the amount so payable has been Notice of as- 
 given to him. sessment. 
 
 (2) The notice may be sent by registered post to the em- How notlce 
 ployer and shall be deemed to have been given to him on the ™rv e J} e 
 day on which the notice was posted. 
 
 Insufficient 
 
 86. If the amount intended to be provided for by the tTbTmadl 
 assessment in any year is by reason of the failure of an em- pfementary 
 
 assess- 
 ments. 
 
48 
 
 SECOND IXTEE1M EEPOET OF THE 
 
 Xo. 53 
 
 ployer to pay his proportion of it or from any other cause 
 insufficient for the purpose for which it was made, the Board 
 may make supplementary assessments to make up the de- 
 ficiency and section 85 shall apply to such assessments. 
 
 may be as- 87. Where the payments made by the employers in any 
 
 defic1ency r in class are insufficient to meet the amount of any assessment 
 
 f them. U p 0n t k e employers embraced in it the deficiency shall be 
 
 made up by supplementary assessments upon the employers 
 
 in all the classes and the provisions of section 85 shall apply 
 
 to such assessments. 
 
 Where defi- 
 ciency made 
 good by 
 employer, 
 mode of ap- 
 plication of 
 payment. 
 
 88. — (1) If and so far as any deficiency mentioned in 
 the next preceding two sections is afterwards made good 
 wholly or partly by the defaulting employer the amount 
 which shall have been made good shall be apportioned be- 
 tween the other employers in the proportions in which the 
 deficiency was made up by them by the payment of supple- 
 mentary assessments upon them and shall be credited to 
 them in making the next assessment. 
 
 Employer 
 not as- 
 sessed 
 liable to 
 pay 
 
 amount 
 for which 
 he should 
 have been 
 assessed. 
 
 Amount 
 collected 
 to be 
 taken 
 into ac- 
 count in 
 making 
 subse- 
 quent as- 
 sessment. 
 
 Employer 
 liable to 
 pay unpaid 
 sums. 
 
 I .i'-iitenant- 
 Governor- 
 in-Council 
 may require 
 supplement- 
 ary assess- 
 ments to 
 be made. 
 
 (2) If for any reason an employer liable to assessment 
 is not assessed in any year he shall nevertheless be liable 
 to pay to the Board the amount for which he should have been 
 assessed, and payment of that amount may be enforced in 
 the same manner as the payment of an assessment may be 
 enforced. 
 
 (3) Any sum collected from an employer under subsec- 
 tion 2 shall be taken into account by the Board in making 
 an assessment in a subsequent year on the employers in 
 the class or sub-class to which such employer belonged. 
 
 89. Notwithstanding that the deficiency arising from a de- 
 fault in the payment of the whole or part of any assessment 
 has been made up by a special assessment a defaulting em- 
 plover shall continue liable to pay to the Board the amount 
 of every assessment made upon him or so much of it as re- 
 mains unpaid. 
 
 90. Whenever the Lieutenant-Governor in Council is of 
 opinion Ihat the condition of the accident fund is such that 
 with the reserves it is not sufficient to meet all the payments 
 to be made in respect of compensation as they become payable 
 and so as not unduly or unfairly to burden the employers 
 in any class in future years with payments which are to be 
 made in those years in respect of accidents which have hap- 
 pened in previous years, he may require the Board to make 
 ;i supplementary assessment of such sum as in his opinion 
 
1914 WOKKMEN'S COMPENSATION COMMISSION. 49 
 
 is necessary to be added to the fund, and when such a require- 
 ment is made the Board shall forthwith make such supple- 
 mental assessment and it shall be made in like manner as is 
 hereinbefore provided as to other special assessments and 
 all the provisions of this Part as to special assessments shall 
 apply to it. 
 
 91. In order to maintain the accident fund as provided ofl^ervei. 
 1 ly section 70 the Board may from time to time and as often 
 
 as may be deemed necessary include in any sum to be 
 assessed upon the employers and may collect from them such 
 sums as may be deemed necessary for that purpose and the 
 sums so collected shall form a reserve fund and shall be in- 
 vested in securities in which a trustee may by law invest 
 trust moneys. 
 
 92. If an assessment or a special assessment is not paid Jo£fpjJ_ for 
 at the time when it becomes payable, the defaulting em- ^j^JntT"" 
 ployer shall be liable to pay and shall pay as a penalty for 
 
 his default such a percentage upon the amount unpaid as 
 may be prescribed by the Regulations or may be determined 
 by the Board. 
 
 93. Where default is made in the payment of any assess- J° "^u 
 ment, or special assessment, or any part of it the Board may jjj* 8 ^- 
 issue its certificate stating that the assessment was made, the 
 amount remaining unpaid on account of it and the person 
 
 by whom it was payable and such certificate or a copy of it 
 certified by the Secretary to be a true copy may be filed with 
 the clerk of any county or district court and when so filed 
 shall become an order of that court and may be enforced as 
 a judgment of the court against such person for the amount 
 mentioned in the certificate. 
 
 94. — (1) If an assessment or a special assessment or anv Board may 
 
 v ; r i i» • i i collect as- 
 
 part of- it remains unpaid for 30 days after it has become sessment 
 payable, the Board, in lieu of or in addition to proceeding as municipal 
 provided by the next preceding section, may issue its cer- 
 tificate stating the name and residence of the defaulting em- 
 ployer, the amount unpaid on the assessment, the establish- 
 ment in respect of which it is payable, and upon the delivery 
 of the certificate to the clerk of the municipality in which 
 the establishment is situate he shall cause the amount so 
 remaining unpaid as stated in the certificate to be entered 
 upon the collector's roll as if it were taxes due by the de- 
 faulting employer in respect of such establishment, and it 
 shall be collected in like manner as taxes are levied and 
 collected and the amount when collected shall be paid over 
 by the collector to the Board. 
 
 4 w. 
 
50 
 
 SECOND INTERIM REPOET OE THE 
 
 No. 53 
 
 Collector 
 entitled to 
 
 (2) The collector shall be entitled to add five per cent, 
 thereof to the amount to be collected and to retain such per- 
 centage for his services in making the collection. 
 
 Employers 
 to give 
 notice of 
 accidents. 
 
 Penalty. 
 
 RETURNS OF ACCIDENTS. 
 
 t 
 
 95. — (1) Every employer shall within three days after 
 the happening of an accident to a workman in his employment 
 by which the workman is disabled from earning full wages 
 notify the Board by registered post of the : — 
 
 (a) happening of the accident and nature of it ; 
 
 (&) time of its occurrence; 
 
 (c) Name and address of the workman; 
 
 (d) place where the accident happened; 
 
 (e) name and address of the physician or surgeon, if 
 
 any, by whom the workman was or is attended 
 for the injury. 
 
 (2) For every contravention of subsection 1 the employer 
 shall incur a penalty not exceeding $50. 
 
 Certain 
 industrial 
 diseases to 
 be deemed 
 accidents. 
 
 By whom 
 compensa- 
 tion pay- 
 able. 
 
 INDUSTRIAL DISEASES. 
 
 96. — (1) Where a workman suffers from an industrial 
 disease and is thereby disabled from earning full wages at the 
 work at which he was employed or his death is caused by an 
 industrial disease and the disease is due to the nature of any 
 employment in which he was engaged at any time within 
 twelve months previous to the date 'of his disablement, 
 whether under one or more employments the workman or 
 his dependants shall be entitled to compensation as if the 
 disease were a personal injury by accident and the disable- 
 ment were the happening of the accident, subject to the 
 modifications hereinafter mentioned, unless at the time of 
 entering into the employment he had wilfully and falsely 
 represented himself in writing as not having previously 
 suffered from the disease. 
 
 (2) Where the compensation is payable by an employer 
 individually it shall be payable by the employer who last em- 
 ployed the workman during such twelve months in the em- 
 ployment to the nature of which the disease was due. 
 
1914 WORKMEN'S COMPENSATION COMMISSION. 51 
 
 (3) The workman or his dependants if so required shall ^mer ° f 
 furnish the employer mentioned in the next preceding sub- ®™P l0 ^® r r s _ 
 section with such information as to the names and addresses of nished by 
 
 . claimants. 
 
 all the other employers by whom he was employed in the 
 employment to the nature of which the disease was due dur- 
 ing such twelve months as such workman or his dependants 
 may possess, and if such information is not furnished or is 
 not sufficient to enable that employer to take the proceedings 
 mentioned in subsection 4 that employer upon proving 
 that the disease was not contracted while the workman was 
 in his employment shall not be liable to pay compensation.. 
 
 (4) If that employer alleges that the disease was in fact pioyer may 
 contracted while the workman was in the employment of some fornfer" 
 other employer he may bring such employer before the Board em P lo y ers - 
 and if the allegation is proved that other employer shall be 
 
 the employer by whom the compensation shall be paid. 
 
 (5) If the disease is of such a nature as to be contracted disease 
 by a gradual process any other employers who during such gradual 
 twelve months employed the workman in the employment to mer^mpioy- 
 the nature of which the disease was due shall be liable to ers^to con- 
 make to the employer by whom the compensation is payable 
 
 such contributions as the Board may determine to be just. 
 
 (6) The amount of the compensation shall be fixed with pemsation" 
 reference to the earnings of the workman under the em- t0 be fixe " 
 pioyer by whom the compensation is payable and the notice 
 provided for by section 20 shall be given to the employer 
 
 who last employed the workman during such twelve months 
 in the employment to the nature of which the disease was 
 due and the notice may be given notwithstanding that the 
 workman has voluntarily left the employment. 
 
 (7) If the workman at or immediately before the date of ^ n S s u Ts P "to 
 the disablement was employed in any process mentioned in f^| e au e e \o~ 
 the second column of Schedule 3 and the disease contracted n * tu £ e _ of 
 is the disease in the first column of the schedule set opposite ment. 
 
 to the description of the process the disease shall be deemed 
 to have been due to the nature of that employment unless 
 the contrary is proved. 
 
 (8) Nothing in this section shall affect the right of a Ri *ht to 
 
 \ y c _ ..... i-i compensa- 
 
 workman to compensation in respect of a disease to which tion where 
 this section does not apply if the disease is the result of an result of 
 injurv in respect of which he is entitled to compensation un- not to "be 7 
 der this Part. affected - 
 
52 
 
 SECOND IXTEEIM KEPORT OF THE 
 
 Xo. 53 
 
 FORMATION OF ASSOCIATIONS. 
 
 Associa- 
 tions of 
 employers 
 may be 
 formed. 
 
 Rules of 
 Associa- 
 tions if 
 approved 
 by Board 
 and Lieu- 
 tenant Gov- 
 ernor in 
 Council to 
 be binding 
 on the 
 members 
 of the 
 class. 
 
 Where 
 Inspector 
 or Expert 
 appointed 
 by an As- 
 sociation 
 his salary 
 may be 
 paid out 
 of the ac- 
 cident fund 
 
 Applica- 
 tion of 
 Part 1. 
 
 97. — (1) The employers in any of the classes for the 
 time being included in Schedule 1 may form themselves 
 into an association for accident prevention and may make 
 rules for that purpose. 
 
 (2) If the Board is of opinion that an association so 
 formed sufficiently represents the employers in the indus- 
 tries included in the class, the Board may approve such 
 rules, and when approved by the Board and by the Lieuten- 
 ant-Governor in Council they shall be binding on all the em- 
 ployers in industries included in the class. 
 
 (3) Where an association under the authority of its rules 
 appoints an inspector or an expert for the purpose of acci- 
 dent prevention, the Board may pay the whole or any part 
 of the salary or remuneration of such inspector or expert 
 out of the accident fund or out of that part of it which is 
 at the credit of any one or more of the classes as the Board 
 may deem just. 
 
 98. This Part shall apply only to the industries men- 
 tioned in Schedules 1 and 2 and to such industries as may 
 be added to Schedule 1 under the authority of this Part. 
 
 PABT II. 
 
 Applica- 
 tion of 
 Sections 
 100 to 102. 
 
 Liability 
 of Employ- 
 er for de- 
 fective 
 ways. 
 
 works, etc., 
 and for 
 negligence 
 of his 
 servants. 
 
 99. Sections 100 to 102 shall until the day of 
 
 191 , apply to every industry and to every workman 
 employed in it, and after that day shall apply only to the 
 industries to which Part I. does not apply and to the work- 
 men employed in such industries. 
 
 100. Where personal injury is caused to a workman by 
 reason of any defect in the condition or arrangement of the 
 ways, works, machinery, plant, buildings or premises con- 
 nected with, intended for or used in the business of his em- 
 ployer or by reason of the negligence of his employer or 
 <>1 any person in the service of his employer, the workman or 
 if the injury results in death the legal personal represen- 
 tatives of the workman and any person entitled in case of 
 death shall have an action against the employer, and if the 
 action is brought by the workman he shall be entitled to 
 recover from the employer the damages sustained by the 
 workman by or in consequence of the injury, and if the 
 action is broughl l.v (he legal personal representatives of the 
 
1914 WORKMEN'S COMPENSATION COMMISSION. 53 
 
 workman or by or on behalf of persons entitled to damages 
 
 under The Fatal Accidents Act they shall be entitled to re- \ ®f- v - 
 
 cover such damages as they are entitled to under that Act. 
 
 101. A workman shall hereafter be deemed not to have certain 
 undertaken the risks incidental to his employment or those faw Tuils 
 due to the negligence of his fellow workmen and contributory abro & ated - 
 negligence on the part of a workman shall not hereafter be 
 
 a bar to recovery by him or by any person entitled to dam- 
 ages under The Fatal Accidents Act in an action for the re- 1 Geo. v. 
 co very of damages for an injury sustained by or causing 
 the death of the workman while in the service of his em- 
 ployer for which the employer would otherwise have been 
 liable. 
 
 102. Contributory negligence on the part of the workman C ontribu- 
 shall nevertheless be taken into account in assessing: the tory ne &ii- 
 
 ^ E"6nC6 tO D6 
 
 damages in any such action. considered 
 
 in assess- 
 ing dam- 
 ages 
 
 PART III. 
 
 KEPEAL. 
 
 The Workmen's Compensation for Injuries Act, R.S.O. Repeal. 
 1897, c. 160, is hereby repealed. 
 
54 SECOKD IXTEBIM REPOKT OF THE No. 53 
 
 SCHEDULE 1. 
 
 Industries the Employers in which are Liable to Contribute to 
 
 the Accident Fund. 
 
 Class 1. — Lumbering; logging, river-driving, rafting, booming; saw- 
 mills, shingle-mills, lath-mills; manufacture of veneer and of 
 excelsior; manufacture of staves, spokes, or headings. 
 
 Class 2. — Pulp and paper mills. 
 
 Class 3. — Manufacture of furniture, interior woodwork, organs, 
 pianos, piano actions, canoes, small boats, coffins, wicker and rattan 
 ware; upholstering; manufacture of mattresses, or bed-springs. 
 
 Class 4. — Planing mills, sash and door factories, manufacture of 
 wooden and corrugated paper boxes, cheese boxes, mouldings, win- 
 dow and door screens, window shades, carpet sweepers, wooden toys, 
 articles and wares or baskets. 
 
 Class 5. — Mining; reduction of ores and smelting; preparation of 
 metals or minerals. 
 
 Class 6. — Quarries; sand, shale, clay or gravel pits, lime kilns; 
 manufacture of brick, tile, terra-cotta, fire-proofing, or paving 
 blocks, manufacture of cement, asphalt or paving material. 
 
 Class 7. — Manufacture of glass, glass products, glassware, porce- 
 lain or pottery. 
 
 Class 8. — Iron, steel or metal foundries; rolling mills; manu- 
 facture of castings, forgings, heavy engines, locomotives, machinery, 
 safes, anchors, cables, rails, shafting, wires, tubing, pipes, sheet 
 metal, boilers, furnaces, stoves, structural steel, iron or metal. 
 
 Class 9. — Car shops. 
 
 Class 10. — Manufacture of small castings or forgings, metal 
 wares, instruments, utensils and articles, hardware, nails, wire 
 goods, screens, bolts, metal beds, sanitary, water, gas or electric 
 fixtures, light machines, typewriters, cash registers, adding ma- 
 chines, carriage mountings, bicycles, metal toys, tools, cutlery, 
 instruments, sheet metal products, buttons of metal, ivory, pearl 
 or horn. 
 
 Class 11. — Manufacture of agricultural implements, threshing 
 machines, traction engines, waggons, carriages, sleighs, vehicles, 
 automobiles, motor trucks, toy waggons, sleighs or baby carriages. 
 
 Class 12. — Manufacture of gold or silverware, platedware, 
 watches, watch-cases, clocks, jewellery, or musical instruments. 
 
 Class 13. — Manufacture of chemicals or explosives, corrosive 
 
 acids or salts, ammonia, calcium carbide, gasoline, petroleum, 
 
 petroleum products, celluloid, gas, charcoal, artificial ice, gun- 
 powder or ammunition. 
 
 Class 14. — Manufacture of paint, color, varnish, oil, japans, turpen- 
 tine, printing ink, printers' rollers, tar, tarred, pitched or asphalted 
 paper. 
 
 Class 15. — Distilleries, breweries; manufacture of spirituous or 
 malt liquors, alcohol, wine, vinegar, mineral water or soda waters. 
 
1914 WORKMEN'S COMPENSATION COMMISSION. 55 
 
 Class 16. — Manufacture of non-hazardous chemicals drugs, 
 medicines, dyes, extracts, pharmaceutical or toilet preparations, 
 soaps, candles, perfumes, non-corrosive acids or chemical prepara- 
 tions; shoe-blacking or polish. 
 
 Class 17. — Milling; manufacture of cereals or cattle foods, ware- 
 housing or handling of grain or operation of grain elevators. 
 
 Class 18. — Packing houses, abattoirs, manufacture or preparation 
 of meats or meat products or glue. 
 
 Class 19. — Tanneries. 
 
 Class 20. — Manufacture of leather goods and products, belting, 
 saddlery, harness, trunks, valises, boots, shoes, gloves, umbrellas, 
 rubber goods, rubber shoes, tubing, tires or hose. 
 
 Class 21. — Manufacture of dairy products, butter, cheese, con- 
 densed milk or cream. 
 
 Class 22. — Canning or preparation of fruit, vegetables, fish or 
 food stuffs; pickle factories and sugar refineries. 
 
 Class 23. — Bakeries; manufacture of biscuits or confectionery, 
 spices or condiments. 
 
 Class 24. — Manufacture of tobacco, cigars, cigarettes or tobacco 
 products. 
 
 Class 25. — Manufacture of cordage, ropes, fibre, brooms or brushes; 
 work in manilla or hemp. 
 
 Class 26. — Flax mills; manufacture of textiles or fabrics, spin- 
 ning, weaving and knitting manufactories; manufacture of yarn, 
 thread, hosiery, cloth, blankets, carpets, canvas, bags, shoddy or felt. 
 
 Class 27. — Manufacture of men's or women's clothing, white 
 wear, shirts, collars, corsets, hats, caps, furs or robes. 
 
 Class 28. — Power laundries; dyeing, cleaning or bleaching. 
 
 Class 29. — Printing, photo-engraving, engraving, lithographing, 
 embossing; manufacture of stationery, paper, cardboard boxes, 
 bags or wall-paper; and book-binding. 
 
 Class 30. — Heavy teaming or cartage; safe-moving or moving of 
 boilers, heavy machinery, building stone and the like; warehous- 
 ing, storage. 
 
 Class 31. — Stone-cutting or dressing; marble works; manufac- 
 ture of artificial stone. 
 
 Class 32. — Steel building and bridge construction; installation of 
 elevators, fire-escapes, boilers, engines or heavy machinery. 
 
 Class 33. — Brick-laying, mason work, stone-setting, concrete work, 
 plastering; and manufacture of concrete blocks. 
 
 Class 34. — Structural carpentry. 
 
 Class 35. — Painting, decorating or renovating; sheet metal work 
 and roofing. 
 
 Class 36. — Plumbing, sanitary or heating engineering, operation 
 of passenger or freight elevators, theatre stage or moving pictures. 
 
 Class 37. — Sewer construction, deep excavation, tunnelling, shaft- 
 sinking and well-digging. 
 
56 SECOND INTERIM REPORT OF THE No. 53 
 
 Class 38. — Construction, installation or operation of electric 
 power lines or appliances, and power transmission lines. 
 
 Class 39. — Construction of telegraph or telephone lines. 
 
 Class 40. — Road-making or repair of roads with machinery. 
 
 Class 41. — Construction of railways. 
 
 Class 42. — Shipbuilding. 
 
 Class 43. — Navigation. 
 
 Class 44. — Dredging, subaqueous construction or pile driving. 
 
1914 WORKMEN'S COMPENSATION COMMISSION. 57 
 
 SCHEDULE 2. 
 
 Industries the Employers in which are Individually Liable to 
 
 Pay the Compensation. 
 
 1. The trade or business, as denned by subsection 3 of section 2, 
 of a municipal corporation, a public utilities commission, any other 
 commission having the management and conduct of any work or 
 service owned by or operated for a municipal corporation, a board 
 of trustees of a police village and a school board. 
 
 2. The construction and operation of railways operated by steam, 
 electric or other motive power, street railways and incline railways, 
 but not their construction when constructed by any person other 
 than the company which owns or operates the railway. 
 
 3. The construction and operation of car shops, machine shops, 
 steam and power plants and other works for the purposes of any 
 such railway or used or to be used in connection with it when con- 
 structed or operated by the company which owns or operates the 
 railway. 
 
 4. The construction and operation of telephone lines and works 
 for the purposes of the business of a telephone company or used or 
 to be used in connection with its business when constructed or op- 
 erated by the company. 
 
 5. The construction and operation of telegraph lines and works for 
 the purposes of the business of a telegraph company or used or to 
 be used in connection with its business when constructed or operated 
 by the company. 
 
 6. The construction and operation of steam vessels and works for 
 the purposes of the business of a navigation company or used or to 
 be used in connection with its business when constructed or operated 
 by the company. 
 
58 
 
 SECOND INTERIM EEPOET. 
 
 No. 53 
 
 SCHEDULE 3. 
 
 Description of Disease. 
 
 Description of Process. 
 
 Anthrax. 
 
 Lead poisoning 
 sequela?. 
 
 or 
 
 Mercury poisoning or 
 sequelae. 
 
 Phosphorus poisoning 
 its sequela?. 
 
 Arsenic poisoning or 
 sequelae. 
 
 Ankylostomiasis. 
 
 its 
 its 
 or 
 
 its 
 
 handling of wool, hair, bristles, hides, 
 and skins. 
 
 Any process ..nvolving the use of lead or 
 its preparations or compounds. 
 
 Any process involving the use of mercury 
 or its preparations or compounds. 
 
 Any process involving the use of phos- 
 phorous or its preparations or com- 
 pounds. 
 
 Any process involving the use of arsenic 
 or its preparations or compounds. 
 
 Mining. 
 

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