n\oz U5B7 UC-NRLF B 3 Oflfl MTfl ^^'l-'f^ ' « Workmen's Compensation, or Insur- ance Against Loss of Wages Arising Out of Industrial Accidents ADDRESS BY JAMES HARRINGTON BOYD, A. B., A. M., Dr. Sc. President Ohio Employers" Liabilit}' Commission DELIVERED BEFORE OHIO STATE BOARD OF COMMERCE Columbus, Ohio, November 17, 1910 With Prefatory Note and Appendices 4 ~> i 4 > a Published by BOARD OF LIBRARY COMMISSIONERS J. F. McGrew John McSvveeney Frank N. Svveitzer Columbus, Ohio : The F. J. Heer, Printing Co. 1911 ■> • • •• • C 9 c • • • PREFATORY NOTE. The increasing interest in legislation to secure vvorkingmen against loss arising from industrial accidents was attested in the appointment last winter of employers' liability commissions by the states of Connecticut, Illinois, Massachusetts, Minnesota, Montana, New Jersey, New York, Ohio, and Wisconsin, to investigate workingmen's compensation and insurance with a view to remedial legislation. These commissions re- cently met in Chicago to exchange views and to plan, so far as prac- ticable, uniformity of action. The report of their proceedings, which is now passing through the press, will be the latest, and from the American viewpoint, probably the most important contribution to the subject. The Illinois commission has hnished its work anJ its report has been published. In speaking of this tiie secretary of tlie commission de- clares, "For the first time in the history of Illinois, if not in the United States, we liave a text-book on the subject of employers' liability. More than 5,000 individual accidents were investigated and recorded, to- gether with comparative figures and analyses." Reports ;of other state commissions, embracing as some of them will the testimony of experts who have investigated conditions in this country and the ex- perience of European nations, will constitute a most valuable addition to the literature on this subject. The Ohio commission at this time has not completed its work, and no attempt will be made to anticipate its report. It has had ninuerous and well attended public hearings in which employers, employes and other interested parties have spoken freely on almost every phase of compensation for accident. Indeed the discussions have taken a much wider range and have included sickness, invalidity and old age insur- ance. The systems and experiences of European nations, especially those of Germany and Great liritain, have been presented by experts who recently returned from abroad, \vhere they had made exten led and systematic investigation. In general it may be said that manufacturers have favored a single compensation or accident insurance, similar to that of Germany. There have, however, been a few dissenting opinions. One manufacturer de- clared, among other things, that "it is just as impossible to enact a compulsory compensation act that would be constitutional as it would be to pass a valid compulsory arbitration law." "Both," he insisted, "are palpably unconstitutional. A compulsory compensation act would interfere with the right of contract. The only alternative, then, is a 4 LEGISLA?iVE iRfiFERENCE DEPARTMENT, OHIO STATE LIBRARY. law that would make optional the acceptance by the employer or em- ploye, and drawn so that it would naturally appeal to both." Labor organizations seem to be generally opposed to the employes" bearing any part of the financial burden incident to an accident com- pensation law. The fund should be maintained, they claim, by the em- ployer, who would provide for it by a slight increase in the price of the manufactured product. This does not differ widely from the Ger- man theory of compensation for accidents, although this theory is some- what modified by the fact that incapacity for work, resulting from a non-fatal accident, for the first thirteen weeks, is considered sickness and is paid from the sick insurance fund to which employes contribute. There is much literature on employers' liability and workingmen's insurance. Two bibliographies, containing extended lists of references to books and documents on each of these subjects, have been published by the Library of Congress. They may be had from the Superintendent of Documents, Washington, D. C, for ten cents each. Supplemental lists in manuscript form, with references to magazine articles, may be consulted in the Ohio State Library. We note here only a select few of the works published on the subject under consideration. "Com- pulsory Insurance in Germany," fourth special report of the U. S. Bureau of Labor, 1892, is a most important document as it contains a practically complete translation of the German law, with many eluci- dating comments and valuable statistical tables. "Workingmen's in- surance," by W. F. Willoughby, a valuable contribution to the sub- ject, was published in 1898. Perhaps the best work available, as well for its intrinsic merit as for its timely appearance, is "Workingmen's Insurance in Europe," by Lee K. Frankel and Miles M. Dawson, is- sued by the Charities Publication Committee, New York, 1910. It is a volume of 477 pages, an illuminating and impartial treatment of the subject to date, with numerous statistical tables, a biblography, and a conspectus presenting in parallel summary the operations and results of workingmen's insiu'ance in Europe. The address on the following pages was delivered by Hon. James Harrington Boyd, chairman of the Ohio Employers' Liability Commis- sion, at the recent meeting of the Ohio State Board of Commerce. To this address are appended the workmen's liability laws and the recently adopted workmen's compensation act of the State of New York, with a decision sustaining the act, the law providing "accident and total dis- ability insurance for coal miners" of Montana, and extracts, from the work described in the preceding paragraph, on workingmen's insurance in Germany. It is hoped that this publication may be helpful to mem- bers of the General Assembly of Ohio and that it may not be without interest to other citizens of the state. — C. B. G. WORKMEN'S COMPENSATION, OR INSURANCE AGAINST LOSS OF WAGES ARISING OUT OF INDUSTRIAL ACCIDENTS. By James Harrington Boyd. INTRODUCTORY, James J. Hill, on September 20, 1906, published his famous memoir on the conservation of coal, iron, and minerals and the soil. James Gar- field, Theodore Roosevelt and Mr. Pinchot have been advocating the conservation of the national resources. I stand here today the advocate of the conservation of the human being, the conservation of the laboring man, who is the corner-stone of the state. The object of this address is to formulate from an historical, economic and statistical point of view the problem which the Legislature of Ohio has propounded to the Employers' Liability Commission for a solution or for helps to a solution. Employers' liability to and the compensation of employes for in- juries received in industrial accidents is an old problem. It has its roots embedded in a hundred years of political, philosophical, econom- ical and legal discussion. The great philosophers, economists and states- men under whose guidance the German Empire was erected, gave their solution of this problem to the world more than twenty years ago. All the nations of Europe (except Turkey), Australia, New Zealand, and British Columbia, for some years have had their plans for handling this problem in operation. They have one and all abrogated the rules of common law defences excepting malicious negligence. We approach this problem under changed and changing condi- tions. The world has grown more in the industrial relations during the last fifty years than it did in the two thousand years preceding. As James J. Hill pointed out, in the short span of forty years from to- day, the United States will have a population of at least 250,000,000^. Already, in fact we may say since 1900, our public domain has substantially passed into the hands of private ownership. Prior to this time a farm could be had by the courageous for the asking. Under these changed economic conditions, the real struggle for existence in the United States has begim. It is intensified by the addition of a mil- lion strangers to our numbers every year. 'James J. Hill. Address, St. Paul, Sept. 20, 1910. (5; 6 LEGISLATIVE REFERENCE DEPARTMENT, OHIO STATE LIBRARY. Let US not forget that in 1870, 70 per cent of our population lived on the land and only 30 per cent in towns and cities-. But today more than 65 per cent live in towns and cities and only 35 per cent live on the land. Under these conditions have our remedies for personal injuries been operating. It is now asked, What plan for compensation of em- ployes for injuries received in industrial accidents will you recommend for the immediate and near future when we shall have from 150,000,000 to 250,000,000 inhabitants in the United States? Census Report. 1870. workmen's compensation, etc. Under our common law procedure and that of England an employe injured in an industrial accident, without fault and able to prove that his employer was negligent, can recover damages for his injuries. The plaintiff cannot recover if the defendant can prove: (a) That the plaintiff's negligence contributed to the cause of the accident; or (b) That the negligence of a fellow servant contributed to the cause of the accident ; or (c) That the plaintiff assumed the risk, even though the defendant was negligent. With what efficiency do the common law remedies operate in com- pensating persons injured in industrial accidents? We give the i-esult of five investigations of wide scope, towit: I. The report of the Employers' Liability Commission of New York State. II. The Pittsburg Survey, six volumes, The Russell Sage Founda- tion, 1910. III. Wisconsin Bureau of Labor and Industrial Statistics. Report for 1909. IV. The report of the Employers' Liability Commission of Illinois, 1910. V. European experience, that of Germany in particular. I. During the years of 1906-7-8 ten insurance companies which keep Employers' Liability records, doing business in New York, received in premiums from Employers $23,524,000 They paid to injured employes 8,560,000 Waste $14,964,000' Nothing could more strikingly set forth the waste of the present system. Only 36.34 per cent of what employers pay in premiums for liability insurance is paid in settlement of claims and suits. Thus, for every $100 paid out by employers for protection against liability to their injured workmen, less than $37 is paid to those workmen; $63 goes to pay the salaries of attorneys and claim agents whose business s First report of the Employers' Liability Commission of New York, p. 31. 8 LEGISLATIVE REFERENCE DEPARTMENT, OHIO STATE LIBRARY. it is to defeat the claims of the injured, to the cost of soliciting busi- ness, to the cost of administration, to court costs, and to profit. Out of this 36.34 per cent the injured employe must pay his at- torney. The same report shows that the attorney gets 26.13 per cent of what is paid to the injured employe. This investigation covers forty- six cases where the recovery was above $1500 each. In small recov- eries the attorney fees take a larger proportion. This report shows that not more than somewhere between 20 and 25 per cent of the money paid by the employing class goes actually into the pockets of injured workmen for their dependent families in death cases*. II. The investigation recently conducted in Allegheny County, Pa., under the direction of the "Pittsburgh Survey," showed that out of 355 cases of men killed in industrial accidents, all of whom were contri- buting to the support of others and two-thirds of whom were married, eighty-nine of the families left received not a dollar of compensation from the employer, 113 families received not more than $100.00, and sixty-one families received something more than this $100.00. In other words 57 per cent of these families were left by their employers to bear the entire burden of income loss ; and granting that all unknown amounts zvould be decided for the plaintiffs, only 26 per cent received, in compensation for the death of a regular income provider, more than $500.00, a sum which would approximate one year's income of the lowest paid of the workers killed. The proportion of the loss borne by employers in injury cases does not differ greatly from that in death cases. Thus, out of 288 injury cases, of the married men alone, 56 per cent received no compensation; of single men contributing to the sup- port of others, 69 per cent received no compensation ; of single men without dependents, 80 per cent received no compensation. III. The great financial losses borne by the workingmen are set forth by the Wisconsin Bureau of Labor and Statistics in the following report of 306 non-fatal cases of injuries : Received nothing from employer Received amomit of doctor bill only Received amount of part of doctor bill only Received something in addition to doctor bills... Received something but not doctor bills 306 100.00 Cases. Per cent. 72 23.5 99 32.4 15 4.9 91 29.7 29 9.5 * First report of the Employers' Liability Commission of New^ York, p. 31. "Work accidents and their costs, by Crystal Eastman, Charities and Com- mons, Mar.. 1909. WORKMEN S COMPENSATION, ETC. y In Other words, we may say that in two-thirds of the cases part or all of the doctor bills were paid, but in less than one-third was anything more paid, and in about one-fourth of the cases nothing whatever was paid. Of 131 non-fatal cases in Wisconsin, concerning which reports were secured by factory inspectors, the following disposition was made : Cases. Per cent. Received nothing from employer 28 21.37 Received doctor bills only 56 42.75 Received something — doctor bills 10 7.63 Received something but not doctor bills 34 25.96 Not settled 3 2.29 Total 131 100.00 IV. The Employers' Liability Commission of the State of Illinois has recently made a report of its investigation of industrial accidents and employers' liability at a cost of $10,000. I give you a condensed state- ment of the results of the investigation of the Illinois Commission in the language of Edwin R. Wright, Secretary of the Commission. "So much has been said and written regarding the work of the Em- ployers' Liability Commission that I wish to go into the matter at some length — setting forth the whole story in as few words as possible. I'^or the first time in the history of Illinois, if not in the United States, we have a text-book on the subject of Employers' Liability. ]\forc th."n 5.000 individual accidents were investigated and recorded, together with comparative figures and analyses. A few words as to what the report shows may be of value : Six hundred and fourteen fatal accidents are recorded. The families of two hundred and fourteen of these w'orkers re- ceived nothing in return for the loss of the breadwinner. One hundred and eleven damage suits are pending in court. Twenty-four cases have been settled through court proceedings. Two hundred and eighty-one families settled direct with the em- ployer. Skilled railroad employes, in settlement for death claims, averaged about $1 ,000 Steel workers 874 Railroad laborers 617 Skilled building tradesmen 348 Skilled electric railway employes ■ 310 Unclassified workmen 311 Miscellaneous trades •. 292 Packing house employes 234 10 LEGISLATIVE REFERENCE DEPARTMENT, OHIO STATE LIBRARY. General laborers 154 Mine workers 155 Electric railway laborers 75 Teamsters 000 Building laborers 000 These figures were not gathered indiscriminately. They are au- thentic and have been carefully verified. No attempt was made to "stack the cards." As secretary of 'the Commission I knew that condi- tions were so bad that any attempt at exaggeration would be folly. A further summary may be offered : Of every loo industrial ac- cidents, fifteen go to court, seven are lost and eight won. Ninety-two injuries out of every one hundred receive no compensation. (This in- cludes both fatal and non-fatal accidents.) Another interesting feature is this : A search through the record reveals fifty-three fatal cases of recent date. In fatal cases, the usual defenses of the employer — the fellow-servant doctrine, assumption of risk, etc. — did not apply or there would not have been a recovery at all. For these — the very pick of industrial cases — the average recov- ery for death was only $1,877.36. Of this an average amount of $750.95 was paid to attorneys or expended in court fees, etc.. leaving an actual payment of $1,126.41 to the family of the dead worker. Thirty-four widows were compelled to seek employment and sixty-five children left school to help keep the wolf from the door. Nor is this the only complaint of labor. Another section of the report shows where one injured workman is re-employed, two do not return to their former employer. The average age of workmen meet- . ing with accidents is thirty-two years. Most of them are married. What becomes of the injured workman and his family God only knows. The above is only the faintest outline of the work of the Commis- sion. The report is valuable enough for every delegate to take home and study. It means a direct financial return to every citizen of Il- linois, if the text is understood. It means civilization and progress and good citizenship. It means fewer hospitals and poorhouses. It means food and clot lies and education for little children. Issues are raised and pages are printed and speeches are made on a hundred subjects which becloud the issue. Workers have been gulled into following false prophets into the wilderness of specious reasoning. We are often robbed of just dues for our labor, our liberties are restrict- ed, and our sensibilities degraded, but until we crystallize the attention of our unions upon a proper valuation of human life, all else seems futile. The State Federation of Labor should demand the conservation of human life, surrounding our membership with every known safeguard. This will reduce the number of injuries to a minimum. Then throw workmen's compensation, etc. 11 the burden upon the industry. While we may not reaHze ideal condi- tions at once, we can at least place our state in the forefront of progres- sive legislation." V. In 1887 there were insured in Germany 3,861,560 workingmen among 319.453 establishments, and the number of notices of accidents was 1 06, 10 r. Tlie German analysis of the 15,970 accidents which incapacitated workmen for more than thirteen weeks, shows : That 19.76 per cent of the 15,970, or 3,156 injuries, were attribut- able to the fault of the employers. That 25.64 per cent of the 15.970, or 4.094 injuries, were attri- butable to the fault of the injured. That 54.60 per cent of the 15,970, or 8,720 injuries, were attri- butable to the fault of the injured and employer and inevitable risk when at work*^'. Thus 80.24 P s re O •=• +J o _ o rt-2 rs C d E o u u P-. c rt 2 .-I re re c ■ .913 .912 .904 .744 .631 .577 .494 .422 .373 .332 .311 .299 .285 .238 .233 .175 .174 .988 .923 .734 .723 .701 .635 .520 .439 .424 .409 .405 .387 .313 .277 .227 .160 .135 1- ^ ?; c u . re-o "re " o n in 5 < ^ S > < O a erf U C/2 a H t3 fc O O •s U} u a H H o C^ a O ^ CL. Z w o p^ £-1 kJ a < H M u rri 1— 1 2 O 2 O !— i <; u 5 a o •iiosjad J3J o tM — 1 -^ o 4r -H Qc 5: oc 5: C-. CM .-H .— I .— 1 ^^ .— 1 'IK^ox CO o> o t- !o o Ci 0> -^ (M <0 CM c ic <« oc -H o> i^ — >- '-r cc 03 o -^ o o ^ C-. <» ^ C-. ^ to CT CM O O CO c^ 00 ?j CO CO CM CC. (M O] to o •uosiad J3d 5S03 ccrr — rr rHcj r^M i-*ri r-*?) !M ~ — — O (M E I ISOO lE^OX CC CO O lO t- CO «0 (Xj ^r 0> to ^- c: C-. Lo -TH -^ t~ c: to oj -* ^] O O i-H (M ■— I ■—! "-H CO' Siuappoy •pajnfui suosj3(j CS C30 •— I 00 CO' CO 'Tf c: ■— I ~ ^r ^ o 1-H H U W CO CO CM 00 c: 00 o CO- WORKMEN S COMPENSATION, ETC. 19 COST OF ADMINISTRATION OF ACCIDENT INSURANCE, BY INDUSTRIES. (From official statistics for 1891, published by the imperial insurance office, Berlin.) Industry. Cost of Administration. en u u Ph Ol u p^ n C ,000.00 hl2.852.000.00 h25, 75 1,600. 00 Accumulate funds Benefit per case Charges per person i26. 180.000.00 8.3:j 3.332 124.038.000.00 44.03 .714 i38,758,300.00 f28.56 f2.142 a. Persons employed for wages or salary in trade and commerce, partly in agriculture (forestry) and domestic service. b. Persons employed in industry and agriculture (forestry) — not in com- merce, handicrafts, and petty trades — including about 4,000,000 small farmers (with areas under 24.71 acres) and as many persons insured in Setaoineta or double employments. c. Workers of all trades and servants, likewise (industrial and agricultural) officials and commercial assistants with regular year's earnings up to $470. d. Persons having received legal assistance in money or in kind (free medical or hospital treatment, medicines, etc.) provided by the workmen's insurance laws for disability caused by sickness, accident, invalidity, old age. e. Including balance on hand at the commencement of the year, and interest on investments. f. Including state subsidies. g. Including the current costs of the whole organization, h. Including the year's addition to the funds. i. Provided by law in order to secure the payments named. 22 LEGISLATIVE REFERENCE DEPARTMENT, OHIO STATE LIBRARY. FOURTH SPECIAL REPORT OF THE COMMISSIONERS OF LABOR — 1893. PAGE 280. STATISTICS OF ACCIDENT INSURANCE IN 189I, BY INDUSTRIES. (From official statistics for 1891, published by the imperial insurance office, BerHn.) Industry. c w p to .4-1 in w 3 u B o o o -r. < o (L) in c W Mining 2,0(0 Quarrying 15,383 M e c h a nical in- strument mak- ing 2,258 Iron and steel 23,834 Metal work (pre- cious and other metals) ! 4,3191 Al u s i cal instru- ment making... 824 Glass 716 Pottery 897 Brick and tile making ....... 12,547 Chemical in- dustries 5,273 Gas and water works 1 , 138 Textile trades.... 9,342 Silk 666 Paper making. .. . 1,287 Stationery 2,072 Leather work 2 , 424 Wood cutting and carving 34 , 442 Flour mills 37,637 Food purveying.. 11,738| Sugar refining.... 464 Distilling 8,028 Brewing 5,635 Tobacco 4,708 Clothing 2,967 Chimney sweep- ing 3,215 Building 120,118 Printing 4,295 Railway transpor- tation (private) 116 Tramways 197 Packing and des- patch of goods. 19,599 D r i V ing of ve- hicles ....| 26.551 River navigation. 16,276 Maritime naviga- | tion I 1,711 Well digging I 12,504 Agriculture and] forestrv I 4,776,520 421,137 253,250 64.172 592,783 101,966 23,557 56,357 60,455 254,102 101,134 5,8041 992,7351 69,806! 26,8861 31,8531 69,3971 ■ 55,1571 43,3001 164,9931 13 , 255 4,297 665 15,104 990 188 510 381 2,278 2,410 26,873 463 601,764 6.106 43,899 160 58,489 1,718 60,668 553 46,289 657 214,596 6,295 86,439 2,729 58,161 977 99,097 1,665 41,569 913 72.517 3,142 109,111 176 104,748 540 52 17,259 424 568 218 80,3481 2,527 2,181 1,039 740 3,066 12,289,4151 34,338 $1,667,818 456,864 80,158 1,500,961 105,518 18,565 55,513 41,294 252,186 303,276 81,323 461,684 17,770 149,561 69,074 72,223 475,198 316,541 80.938 160,533 107,181 385,920 26,297 41,825 16,708 1,918,254 51,249 72,721 36,510 481,375 265,857 149,387 105,443 1,346,3071 $l,549,143i$3,646,979 369,030 783,152 57,874 125,440 1,336,2491 2,834,051 83,773 18,216 50,431 30,678 212,108 258,024 63,831 388,7101 14,2201 131,711] 40,4561 62,654 445,705 248,685 75, 864 I 141,581 84.424 343,6161 16.973 38,733 10,527 1.824,304 42,202 72,721 29,360 289,681 I 232,1211 123,6641 I 87,8271 265,0841 184,19!) 28,154 95,011 63,217 371,120 524,808 132,487 846,332 27,433 278,612 87,960 112,051 839,319 527,784 122,313 296.947 166,736 931,257 34,622 56,207 20,505 3,110,244 76,279 152,911 77,843 518,571 329,838 225,686 132,952 1,179,738 1,463,3341 1,334,8881 572,668 I I workmen's compensation, etc. 23 Dr. Zacher says that already "in tlie few years since these measures became law nearly a thousand millions of marks ($238,000,000) — al- most one-half contributed by the employers — have been expended in the interests of the workingmen." He says of the old age and invalidity in- surance alone that eventually 1,500,000 persons will get annuities to the amount of 330,000,000 marks ($78,500,000). It is true that the number of recipients reaches the high tigure 43,- 149,800 (2,752,000 sick causes, 210,000 accidents, and 187,800 old age pensioners). If the whole amount spent in relief, $35,676,200, is divided among so vast a number, the average benefit per person is exceedingly small — a trifle over $11 each. The amount does not, however, affect the nature of the problem. Even if $100,000,000 are eventually dis- tributed under these three laws, where is the ultimate burden finally to fall ? If the larger portion of the burden could be kept upon the shoulders of the well to do and the machinery of expenses economically administered, clearly the insured working classes could maintain by their wage a higher standard of comfort. The difficulty of the answer begins at this point. The relation of direct to indirect taxation alone makes anything like a definite answer impossible, if no other difficulty wdiatever were in the way. It is main- tained by some authorities that the dift'erent uses to which direct and in- direct taxes are put prove that the indirect taxes will have to take the larger burden of such portion of the insiu'ance fund as is brought into the cpiestion at issue. REMEDIES. Let us turn our attention for a moment to remedies. The Ger- man plan of insurance against sickness, accidents, invalidism and old age in industrial pursuits has paid out during the last twenty years, ending in 1903. $802,000,000. Of this total sum, $555,750,000 was paid on account of sick insurance, $232,750,000 on account of accidents and $13,500,000 on account of invalidism and old age. To the fund necessary to make these payments the employer con- tributed $424,500,000. The employes contributed $377,000,000, and the Imperial Government paid the entire cost of administration and a small portion of the funds necessary to take care of invalidism and old age. The general rules are, in respect to the raising of the insurance fund, that the employes shall pay two-thirds of the fund necessary to take care of sick insurance which lasts for thirteen weeks, and the em- ployers pay one-third. In the case of accident insurance the employers pay substantially all of it. In the case of invalidism and old age insur- ance the Imperial Government pays $12.50 for each person injured and the remainder of the funakeries — (contra) Lochner v. X'^ew York, 189 U. S. 45. 8. Statutes are not unconstitutional because they require persons engaged in certain occupations to take out licenses, if they are a proper exercise of the police power. People, etc. v. Warden, et., 144 N. Y. 529; Gundling v. Chicago, 177 L'. S. 183; Grainger v. Douglas Park Jockey Club, 148 Fed. 513. But see Bossette v. people 62 X[. E. 215. 9. A 'contract by which an employee exempts his employer from legal liability for injuries sustained is void as against public policy. Johnston v. Fargo, 184 X"^. Y. 2)79- Finally to quote from Professor Freund in his work on the Police Power : "The principle that inevitable loss should be borne, not by the per- son on whom it may happen to fall, but by the person who profits by the dangerous business to which the loss is incident, embodies a very intelligible idea of justice. The system being responsible for the loss, why should it not be constitutional to distribute the loss among the beneficiaries of the system? In a large sense the community is cer- tainly interested in averting sudden and unexpected losses as well as the destitution following from sickness and disease, and the distribu- tion of these losses over a large number through insurance is a legiti- mate end of governmental policy. There is no warrant for denying the State the power to adopt compulsory measures for the purpose." Freund on Police Power, Sec. 435. 437. 28 LEGISLATIVE REFERENCE DEPARTMENT, OHIO STATE LIBRARY. CONCLUSION. The entire problem which has been presented to the Employers' Liability Commission of Ohio, to devise a compensation act or a plan of insuring employes against loss of wages arising out of industrial ac- cidents, which we are discussing today, may be formulated in a single paragraph by quoting from the message of Emperor William I to the Reichstag on November 17, 1881, as he spoke by the hand of Prince Bismarck : "We regard it as our imperial duty once more to lay upon the heart of the Reichstag the promotion of the welfare of the workmen, and we would look back with all the more satisfaction on all of the successes with which God has visibly blessed our reign, if we might carry with us the consciousness that we could leave behind us new and permanent assurance of inward peace and to those who need help greater security and comfort to which they have a claim. In our efforts directed to that end we are sure of the co-operation of all of the federated states and we look for the support of the Reichstag without regard to parties. First of all to this end a sketch of a law relating to the insurance of workmen against loss by accidents in industry has been prepared. By its side and supplementing it will be offered a method of organizing sickness insurance funds. Likewise those who by reason of age or dis- ability have become unable to earn a living have a well founded claim upon the community for a larger measure of state care than has hither- to been given them. To find the right way and means for this care is a difficult task, but it is one of the highest duties of every state, which rests upon the Christian life of the people. The close union of the real forces of this people's life with incorporated societies under state pro- tection and state help, will, as we hope, make possible the solution of problems for which the power of the government alone would not in the same degree be adequate. "^ On February 19, 1907, Emperor William II, in his throne speech before the newly elected Reichstag confirmed the policy of his grand- father, saying: "That legislation rests upon the principle of social duty to the working classes and is therefore independent of parties. The federated states are firmly decided to carry out this social work in the exalted spirit of Emperor William the Great. -^ Jas. Harrington Boyd, Aftorney-at-Lazv, Toledo, Ohio. ' W. F. Willoughby's Workingmens' Insurance (1898). ^° C. R. Henderson's Hist, of Industrial Ins., p. 6. APPENDIX I. COMPENSATION ACTS IN THE UNITED STATES. We have in the United States two examples of compensation acts. One of these was adopted by the state of New York; the other by Mon- tana. The former was recommended by the Employers' Liability Com- mission of New York. This act has been tested and held to be consti- tutional. On the following pages we present the full text of the laws of the two states on this subject, together with the decision on the New York law. THE EMPLOYERS' LIABILITY LAW OF NEW YORK STATE. Article 14 of the Labor Law (Chapter 31 of the Consolidated Laws) ; Formerly Chapter 600 of the Laws of 1902. ARTICLE 14. Employers' Liability. Section 200. Emploj'ers' liability for injuries. 201. Notice to be served. 202. Assumption of risks; contributory negligence, when a question of fact. 203. Defense ; insurance fund. 204. Existing rights of action continued. Section 200. Employers' liability for injuries. When personal in- jury is caused to an employee who is himself in the exercise of due care and diligence at the time ; 1. By reason of any defect in the condition of the ways, works or machinery connected with or used in the business of the employer which arose from or had not been discovered or remedied owing to the negli- gence of the employer or of any person in the service of the employer and intrusted by him with the duty of seeing that the ways, works or machinery were in proper condition; 2. By reason of the negligence of any person in the service of the employer intrusted with and exercising superintendence whose sole or principal duty is that of superintendence, or in the absence of such su- perintendent, or any person acting as superintendent with the authority or consent of such employer ; The employee, or in case the injury results in death, the executor or administrator of a deceased employee who has left him surviving a husband, wife or next of kin, shall have the same right of compensa- (29) 30 LEGISLATIVE REFERENCE DEPARTMENT, OHIO STATE LIBRARY. tion and remedies against the employer as if the employee had not been an employee of nor in the service of the employer nor engaged in his work. The provisions of law relating to actions for causing death by negligence, so far as the same are consistent with this article, shall ap- ply to an action brought by an executor or administrator of a deceased employee suing under the provisions of this article. 201. Notice to be served. No action for recovery of compensation for injury or death under this article shall b'e maintained unless notice of the time, place and cause of the injury is given to the employer with- in one hundred and twenty days and the action is commenced within one year after -the occurrence of the accident causing the injury or death. The notice required by this section shall be in writing and signed by the person injured or by some one in his Ijehalf, but if from physical or mental incapacity it is impossible for the person injiuxd to give no- tice within the time provided in this section, he may give the same within ten days after such incapacity is removed. In case of his death without having given such notice, his executor or administrator may give sucli notice within sixty days after his appointment, b'ut no notice under the provisions of this section shall be deemed to b'e invali 1 or insufficient solely by reason of any inaccuracy in stating the time, place or cause of the injury if it be shown that there was no intention to mis- lead and that the party entitled to notice was not in fact misled there- by. The notice required by this section shall be served on the employer, or if there is more than one employer, upon one of such employers, and may be served by delivering the same to or at the residence or place of business of the person on whom it is to be served. The notice may be served by post by letter addressed to the person on whom it is to be served, at his last known place of residence or place of business, and if served by post shall be deemed to have been served at the time when the letter containing the same would be delivered in the ordinary course of the post. When the employer is a corporation, notice shall be served by delivering the same or by sending it by post addressed to the office or principal place of business of such corporation. 202. Assumption of risk ; contributory negligence, tvhen a question of fact. An employee by entering upon or continuing in the service of the employer shall be presumed to have assented to the necessary risks of the occupation or employment and no others. The necessary risks of the occupation or employment shall, in all cases arising after this article takes effect, be considered as including those risks, and those only, inherent in the nature of the business which remain after the em- ployer has exercised due care in providing for the safety of his em- ployees, and has complied with the laws affecting or regulating such business or occupation for the greater safety of such employees. In action maintained for the recovery of damages for personal injuries to an employee received after this article takes eff'ect. owing to any cause workmen's compensation, etc. 31 for which the employer would otlierwise be liable, the fact that the em- ployee continued in the service of the employer in the same place and course of employment after the discovery by such employee, or after he had been informed of the danger of personal injury therefrom, shall not as a matter of law, be considered as an assent by such employee to the existence or continuance of such risks of personal injury therefrom, or as negligence contributing to such injury. The question whether the employee understood and assumed the risk of such injury, or was guilty of contributory negligence, but his continuance in the same place and course of employment with knowledge of the risk of injury, shall be one of fact, subject to the usual power of the court in a proper case to set aside a verdict rendered contrary to the evidence. An employee, or his legal representative, shall not be entitled under this article to any right of compensation or remedy against the employer in any case where such employee knew of the defect or negligence which caused the injury and failed, within a reasonable time, to give, or cause to be given, information thereof to the employer, or to some person superior to himself in the service of the employer who had intrusted to him some general superintendence, unless it shall appear on the trial that such defect or negligence was known to such employer, or superior person, prior to such injuries to the employee. 203. Defense ; insurance fund. An employer who shall have con- tributed to an insurance fund created and maintained for the mutual purpose of indemnifying an employee for personal injuries, for which compensation ma}- b'e recovered under this article, or to any relief so- ciety or benefit fund created under the laws of this State, may prove in mitigation of damages recoverable by an employee under this article such proportion of the pecuniary benefit which has been received by such employee from such fund or society on account of such contribu- tion of the employer, as the contribution of such employer to such fund or society bears to the whole contribution thereto. 204. Existing rights of action continued. Every existing right of action for negligence or to recover damages for injuries resulting in death is continued and nothing contained in this article shall b'e con- strued as limiting any such right of action, nor shall the failure to- give the notice provided for in section two hundred and one of this ar- ticle be a bar to the maintenance of a suit upon any such existing right of action. 32 LEGISLATIVE REFERENCE DEPARTMENT, OHIO STATE LIBR.\RY. THE RAILWAY LIABILITY LAW OF XEW YORK STATE. Section 42-A of the Railroad Law (Chapter 39 of the General Laws) Added by Chapter 657 of the Laws of 1906. 42-A. In all actions against a railroad corporation, foreign or domestic, doing business in this State, or against a receiver thereof, for personal injury to, or death resulting from personal injury of any per- son, while in the employment of such corporation, or receiver, arising from the negligence of such corporation or receiver or any of its or his officers or employees, every employee, or his legal representatives, shall have the same rights and remedies for an injury, or for death, suffered by him. from the act or omission of such corporation or receiver or of its or his officers or employees, as are now allowed by law. and, m addition to the liability now existing by law. it shall b'e held in such ac- tions that persons engaged in the service of any railroad corporation, foreign or domestic, doing business in the State, or in the service of a receiver thereof, who are entrusted by such corporation or receiver, with the authority of superintendence, control or command of other persons in the employment or such corporation or receiver, or with au- thority to direct or control any other employee in the performance of the duty of such employee, or who have, as a part of their duty, for the time being, physical control or direction of the movement of a signal, switch, locomotive engine, car, train or telegraph office, are vice- principals of such corporation or receiver, and are not fellow-serv^ants of such injured or deceased employee. If an employee, engaged in the service of any such railroad corporation, or of a receiver thereof, shall receive any injury by reason of any defect in the condition of the ways, works, machinery, plant, tools or implements, or of any car. train, loco- motive or attachment thereto belonging, owned or operated, or being run and operated by such corporation or receiver, by reasonable and proper care, tests or inspection, such corporation or receiver shall be deemed to have had knowledge of such defect before and at the time such in- jury is sustained; and when the fact of such defect shall be proved upon the trial of any action in the courts of this State, brought by such em- ployee or his legal representative, against any such railroad corporation or receiver, on account of such injuries so received, the same shall be prima facie evidence of negligence on the part of such corporation or receiver. This action shall not effect actions or causes of action now existing; and no contract, receipt, rule, or regulation between an em- ployee and a railroad corporation or receiver shall exempt or limit the liability of such corporation or receiver from the provisions of this sec- tion. workmen's compensation, etc. 33 STATE OF NEW YORK. (Compensation Act.) Chap. 674. AN ACT to amend the labor law , in relation to workmen's compensation in cer- tain dangerous employments. Became a law June 25, 1910, with the approval of the Governor. Passed, three- fifths being present. The People of the State of New York, represented in Senate and Assembly, do enact as follozvs : Section i. Chapter thirty-six of the laws of nineteen hundred and nine, entitled "An act relating to labor, constituting chapter thirty-one of the consolidated laws," is hereby amended by inserting therein a new article, to be article fourteen-a thereof, to read as follows : Article 14-A. workmen's compensation IX CERTAIN DANGEROUS EMPLOYMENTS. Section 215. Application of article. 216. Definitions. 217. Basis of liability. 218. Rights of action not affected. 219. Notice of accident. 219-a. Scale of compensation. 219-b. Medical examinations. 219-c. Incompetency of workman. 219-d. Settlement of disputes. 219-e. Preferences and exemptions. 219-f. Attorneys' liens. 219-g. Liability of principal contractors. Section 215. Application of article. This article shall apply only to workmen engaged in manual or mechanical labor in the following employments, each of which is hereby determined to be especially dan- gerous, in which from the nature, conditions or means of prosecution of the work therein, extraordinary risks to the life and limb of work- men engaged therein are inherent, necessary or substantially unavoid- able, and as to each of which employments it is deemed necessary to establish a new system of compensation for accidents to workmen. 1. The erection or demolition of any bridge or building in which there is. or in which the plans and specifications require, iron or steel frame work. 2. The operation of elevators, elevating machines or derricks or hoisting apparatus used within or on the outside of any bridge or build- ing for the conveying of materials in connection with the erection or demolition of such bridge or building. 3 w. c. 34 LEGISLATIVE REFERENCE DEPARTMENT, OHIO STATE LIBRARY, 3. Work on scaffolds of any kind elevated twenty feet or more above the ground, water, or floor beneath in the erection, construction, painting, alteration or repair of buildings, bridges or structures. 4. Construction, operation, alteration or repair of wires, cables^ switchboards or apparatus charged with electric currents. 5. All work necessitating dangerous proximity to gunpowder, blasting powder, dynamite or any other explosives, where the same are used as instrumentalities of the industry. 6. The operation on steam railroads of locomotives, engines, trains, motors or cars propelled by gravity or steam, electricity or other mechanical power, or the construction or repair of steam railroad tracks and road beds over which such locomotives, engines, trains, motors or cars are operated. 7. The construction of tunnels and subways. 8. All work carried on under compressed air. Section 216. Definitions. The words, "employer," "workman," and "employment," or their plurals, used in this article, shall be con- strued to apply to all the employments above described. Section 217. Basis of liability. If, in the course of any of the employments above described, personal injury by accident arising out of and in the course of the employment after this article takes effect is caused to any workman employed therein, in whole or in part, or the damage or injury caused thereby is in whole or part contributed to by a. A necessary risk or danger of the employment or one inherent in the nature thereof ; or ' ■ b. Failure of the employer of such workman or any of his or its officers, agents or employees to exercise due care, or to comply with any law affecting such employment ; then such employer shall, subject as hereinafter mentioned, be liable to pay compensation at the rates set out in section two hundred and nineteen-a of this title ; provided that the employer shall not be liable in respect of any injury which does not disable the workman for a period of at least two weeks from earning full wages at the work at which he was employed, and provided that the employer shall not be liable in respect of any injury to the workman which is caused in whole or in part by the serious an 1 willful miscon- duct of the workman. Section 218. Rights of action not affected. The right of action for damages caused by any such injury, at common law or under any statute in force on January one, nineteen hundred and ten, shall not be aft'ected by this article, and every existing right of action for negligence or to recover damages for injuries resulting in death is continued, and nothing in this article shall be construed as limiting such right of action, but in case the injured workman, or in event of his death his executor or administrator, shall avail himself of this article, either by accepting any compensation hereunder in accordance with section two hundred and workmen's compensation, etc. 85 nineteen-a hereof or by beginning proceedings therefor in any manner on account of any such injury, he shall be barred from recovery in and deemed thereby to have released every other action at common law or under any other statute on account of the same injury after this article takes efifect. In case after such injury the workman, or in the event of his death his executor or administrator, shall commence any action at common law or under any statute other than this article against the employer therefor he shall be barred from all l;enefit of this article in regard thereto. Section 219. Notice of accident. No proceedings for compensa- tion under this article shall be maintained miless notice of the acci- dent as hereinafter provided has been given to the employer as soon as practicable after the happening thereof and before the workman has voluntarily left the employment in which he was injured, and during such disability, but no want or defect or inaccuracy of a notice shall be a bar to the maintenance of proceedings unless the employer proves that he is prejudiced by such want, defect or inaccuracy. Notice of the ac- cident shall state the name and address of the workman injured, the date and place of the accident, and in simple language the physical cause thereof, if known. The notice may be served personally or by sending difference between the amount of the average weekly earnings of the workman before the accident and the average weekly amount which he is earning or is able to earn in the same employment or otherwise after the accident, but shall amount to one-half of such difference. In no event shall any compensation paid under this article exceed the dam- age suffered, nor shall any weekly payment payable under this article in- any event exceed ten dollars a week or extend over more than eight years from the date of the accident. Section 219-b. Medical examinations. Any workman entitled to re- ceive weekly payments under this article is required, if requested by the employer, to submit himself for examination by a duly qualified medical practitioner or surgeon provided and paid for by the employer, at a time and place reasonably convenient for the workman, within three weeks after the injury, and thereafter at intervals not oftener than once in six weeks. If the workman refuses to submit to such exami- nation, or obstructs the same, his right to weekly payments shall be suspended until such examination has taken place, and no compensation shall be payable during or for account of such period. Section 219-c. Incompetency of zvorkman. In case an injiu-ed workman shall be mentally incompetent at the time when any right or privilege accrues to him under this article, a committee or guardian of the incompetent appointed pursuant to the law may, on behalf of such incompetent, claim and exercise any such right or privilege with the same force and eft'ect as if the workman himself had been competent an! had claimed or exercised any such right or privilege; and na 36 LEGISLATIVE REFERENCE DEPARTMENT, OHIO STATE LIBRARY. limitation of time in this article 'provided for shall run so long as said incompetent workman has no committee or guardian. Section 219-d. Settlement of disputes. Any question which may arise under this act shall be determined either by agreement or by arbitration as provided in the code of civil procedure or by an action at law as herein provided. In case the employer fail to make compensa- tion as herein provided, the injured workman, or his committee or guardian, if such be appointed, or his ex-ecutor or administrator, may then bring an action to recover compensation under this article hi any court having jurisdiction thereof, or in any court which would have had jurisdiction of an action for recovery of damages for negligence for the same injury between the same parties. This article however shall not be construed as extending the jurisdiction of any such court to award judgment for an amount greater than now allowed by law. Such action shall be conducted in the same manner as actions at law for the recovery of damages for negligence. The judgment in such action if in favor of the plaintiff shall be for a sum equal to the amount of pay- ments then due and prospectively due under this article. Such action must be commenced within six months after the happening of the ac- cident or in case of the death of the workman by such accident within six months after the appointment of his legal representative in this state, or in the event of his physical incapacity, within six months after the removal thereof, or in the event of weekly payments by the employer liereunder, within six months after such payments have ceased. In such action by an executor or administrator the judgment may pro- vide the proportions of the award or the costs to be distributed to or b'etween the several dependents. If such determination is not made it shall be determined by the surrogate's court, in which such executor or administrator is appointed, in accordance with this article, on petition of any party interested on such notice as such court may direct. Section 219-e. Preferences and exemptions. Any person en- titled to weekly payments under this article against any employer shall liave the same preferential claim therefor against the assets of the em- ployer as allowed by law for a claim by such person against such em- ployer for unpaid wages or personal services'. Weekly payments due tmder this article shall not be assignable or subject to levy, execution ■or attachment. Section 219-f. Attorneys' Hens. No claim of an attorney-at- law for any contingent interest in any recovery under this article for services in securing such recovery or for disbursements shall be an enforceable lien on such recovery, unless the amount of the same be approved in writing by a justice of the supreme court, or in case the same be tried in any court, by the justice presiding at such trial. Section 219-g. Liability of principal contractors. If an employer who shall be the principal enters into a contract with an independent workmen's compensation, etc. 37 contractor to do part of such employer's work, or if such contractor en- ters into a contract with a subcontractor to do all or any part of the work comprised in such contractor's contract with the employer, the said principal shall be liable to pay to any workman employed in the execution of the work any compensation under this article which he would have been liable to pay if that workman had been immediate- ly employed by him ; and where compensation is claimed from or pro- ceedings are taken against the principal then, in the application of this article, references to the principal shall be substituted for references to the employer, except that the amount of compensation shall be calculated with reference to the earnings of the workman under the contractor or ■employer by whom he is immediately employed. Where such principal is liable to pay compensation 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. Nothing in this section shall he construed as preventing a workman from recovering compensation imder this article from the contractor or subcontractor, instead of the principal ; nor shall this section apply in any case where the accident shall occur elsewhere than on, or in, or about the premises on which the principal has undertaken to execute the work or which are otherwise imder his control or management. Section 2. This act shall take effect September first, nineteen hun- dred and ten. (Foregoing Act — Held Constitutional.) SUPREME COURT— SPECIAL TERM. Erie County, September, 1910. Earl Ives, Plaintiff, v. The South Buffalo Railway Company, Defendant. DEMURRER TO DEFENDANT'S ANSWER. Thomas C. Burke, for Plaintiff; Charles B. Seats, for Defendant. Pound, J. The answer challenges the constitutionality of chapter 674, Laws 1910, entitled "An act to amend the Labor Law in relation to workmen's compensation in certain dangerous employments." This chapter applies only to workmen engaged in manual or mechanical labor in certain employments declared by the act to be dangerous by reason of inherent, necessary or substantially unavoidable risks to life or limb, in which it is deemed necessary to establish a new system of compensation for accidents to workmen (sec. 215). Among such employments is included : 6. "The operation on steam railroads or locomotives, engines, trains, motors or cars propelled by gravity or steam, electricity or other 38 LEGISLATIVE REFERENCE DEPARTMENT, OHIO STATE LIBRARY. mechanical power, or the construction or repair of steam raih-oad tracks and roadbeds over which such locomotives, engines, trains, motors or cars are operated" (sec. 215), Plaintiff brings himself squarely under the provisions of this act by alleging facts that established, as admitted by the answer, that, while employed by defendant as a switchman, he was injured in the prosecu- tion of his work, without negligence on the part of the defendant, and "without serious or wilful misconduct" on his part, but solely by rea- son of a necessary risk or danger of his employment, or one inherent in- the nature thereof (sec. 217). Prior to the enactment of the statute above cited he would have been without remedy. By virtue of its provisions he is entitled to re- cover according to a fixed scale of compensation without establishing that the employer is at fault in any way (sec. 219 a). The plaintiff demurs to the answer on the ground that it is insuf- ficient in law on its face. This act is based on the Workmen's Compensation Act of England, and its enactment is due to the fact that the common law affords no available remedy for injuries occasioned by industrial accidents not at- tributable to the negligence of the employer. Defendant maintains that, under our system of constitutional gov- ernment, the incorporation into our law of the English law of work- men's compensation is beyond the powers of the Legislature. First, be- cause the act in question deprives the defendant of liberty and property without due process of law, and denies it the equal protection of the laws in contravention of the Fourteenth Amendment of the United states Constitution, and article i, section 6, of the Constitution of this State. Second, because it violates the right of trial by jury guaranteed by article i, section 2 of the Constitution of this State. Third, because it limits the amount recoverable in actions to recover damages for in- juries resulting in death in contravention of article i, section 18, of the Constitution of this State. It has well been said by Justice Brown of the Supreme Court of the United States, writing the opinion of the Court in Holden v. Hardy (169 U. S., 366, at p. 587), that "wdiile the cardinal principles of justice are immutable, the methods by which justice is administered are subject to constant fluctuation, and the Constitution of the United States, which is necessarily and to a large extent inflexible and exceed- ingly difficult of amendment should not be so construed as to deprive the States of the power to so amend their laws as to make them conform to the wishes of the citizens as they may deem best for the public welfare without bringing them into conflict with the supreme law of the land." It is well established that statutes applicable solely to railroads do not deny to railroads the equal protection of the laws. A classification workmen's compensation, etc. 39 of "dangerous employments" for the purposes of the act must be up- held (Missouri R'y v. Mackay, 127 U. S., 205). But the act is attacked chiefly because it imposes liability without fault. Our jurisprudence offers examples of legal liability zvithout fault, and the deprivation of property without fault being attributable to its owner. The law of deodand was such an example. The personi- fication of the ship in niarine law is another. Other examples are of- fered in the common law liability of the husband for the torts of the wife, or liability of the master for the acts of his servant (The Osceola, 189 U. S., 158; Chicago, :^. I. & P. R'y v. Zernecke, 183 U. S. 582). In the case last cited a statute making railroad companies liable for all damages inflicted upon the person of passengers while being transported over its road, except in cases where the injury arose through the criminal negligence of the person injured, was upheld, primarily on the ground that the railroad company being a domestic corporation of Nebraska accepted with its incorporation the liability so imposed by the laws of the State and could not complain of it. But the court in its opinion cites with approval the opinion of the Supreme Court of Ne- braska. That court said : "The legislation is justifiable under the police power of the State, so it has been held. It was enacted to make railroad companies insurers of the safe transportation of their pas- sengers as they were of baggage and freight ; and no good reason is suggested why a railroad company should be released from liability for injuries received by a passenger while being transported over its line while the corporation must respond for any damages to his baggage or freight." The Legislature may alter or repeal the common law. It may create new oflrenses, enlarge the scope of civil remedies and foster re- sponsibility for injuries upon persons against whom the common law gives no remedy (Bertholf v. O'Reilly, 74 N. Y., 504). It would seem to follow that it might make those who employ work- men in dangerous callings insurers to some extent of the safety of such workmen. The common law imposed upon the employee entire responsi- bilities for injuries arising out of the necessary risks or dangers of the employment. The statute before us merely shifts such liability upon the employer. That the Legislature has the power to deal with the question of employers' liability on a basis other than faitlt is not clear beyond peradventure, but every presumption is in favor of the constitutional- ity of the act, nor do I find its constitutionality so doubtful as to war- rant this court in holding that such action is not within the constitu- tional powers of the Legislature. I have examined the authorities cited by the learned counsel for the defendant. They merely point out the shifting character of the border line between statutes which are upheld by the court as being a legitimate exercise of the legislative power to pass all manner of neces- 40 LEGISLATIVE REFERENCE DEPARTMENT, OHIO STATE LIBRARY. sary and wholesome acts for the protection and well-being of the pub- lic, although such acts may interfere with personal liberty and the right to do what one will with his own, and statutes which are held by the courts to interfere without warrant with the privilege of pursuing an ordinary trade or calling, and therefore to be unconstitutional and void. In the case of Lockner v. New York (189 U. S. 45) the prevailing and dissenting opinions contain a full discussion. of the principles under- lying the decision of such cases. The court held in that case that there is no reasonable ground on the score of health for interfering with the liberty of the person or the right of free contract by determining hours of labor in the occupation of a baker. The same court had already held in Holden v. Hardy (supra) that there was reasonable ground on the score of health for interfering with the liberty of the person and the right of free contract in determining hours of labor in the occupation of workingmen in smelters. In the former case the public good did not, in the judgment of the court, require the restrictive legislation ; in the latter case it did. In the latter case Justice Brown says that "This court has not failed to recognize the fact that the law is to some extent a progressive science. Classes of persons, particularly those engaged in dangerous or unhealth- ful employments, have been found to be in need of additional protec- tion." As to the objection to the statute that it limits the amount recover- able in death cases, it is enough to say that it is for the plaintiff to make the claim of unconstitutionality in this regard, as it is the plaintiff alone who is prejudiced thereby, and it does not lie in the mouth of the defendant to raise this objection to the statute. Demurrer overruled, with costs, and judgment absolute for the plaintiff directed on the pleadings, with costs. STATE OF MONTANA. Chapter 4. accident and total disal'.ility insurance for coal miners. (Act of March 4. 1909.) SENATE BILL'NO. 56. An Act to create a State Accident Insurance, and Total Permanent Disability Fund, for coal miners and employees at coal washers in the State of Mon- tana, and providing for .the maintenance and management of the same; ex- tending and defining the duties of the State Auditor ; and fixing penalties for the violation of the provisions of this Act. Be it enacted by the Legislature Assembly of the State of Montana : Section i. To Whom Act Applies. All workmen, laborers and employees employed in and arotmd any coal mines, or in and arotmd workmen's compensation, etc. 41 any coal washers in which coal is treated, except office employees, su- perintendents and general managers, shall be insured in accordance with the provisions of this Act, against accidents occurring in the course of their occupations. Section 2. Hoiv Fund Raised — To Whom Paid. All corpora- tions, partnerships, associations or persons engaged in the business of operating any coal mine or coal washers in the State of Montana shall pay to the Auditor of the State, within five days after the monthly wages at the particular mine shall have been paid, one cent per ton on the tonnage of coal mined and shipped, or sold locally, or having been mined is ready for shipment or sale during the month for which the wages were paid ; and all persons mentioned in Section i employed in and about coal mines shall allow to be deducted from their gross month- ly earnings one percent thereof, the deduction to be made by the agent, manager, or foreman of any corporation, association, partnership, per- son or persons engaged in the business of operating any coal mine or coal washer, and paid to the State Auditor wathin five days after such monthly wages have been paid. Section 3. Agents to Report Tonnage Mined — Contracts Waiving Effect of Act Void. The agent, manager, foreman, or accountant of any corporation, partnership, association, person or persons, engaged in min- ing coal in ]\Iohtana, shall on or before the fifth day succeeding the pay day at his respective mine, make report imder oath to the State Au- ditor as to the tonnage mined and subject to the payment of one cent per ton thereon; and stating the gross earnings subject to the one per cent deduction as provided in this Act, accompanied by a certified check in full for the amount of the tax provided in Section 2 of this Act. It shall be unlawful for any person, employer, employe, corporation,, partnership, association or union to make any contract waiving, avoiding or affecting the full legal effect of this Act. Section 4. Receipt of Funds by Auditor — Duties — Liabilities of Sureties State Treasurer — Interest. It is hereby made the duty of the State -Auditor to receive all moneys as provided for in this Act, and to send the proper acknowledgement to the person making such re- mittance. The Auditor shall pay all moneys so received by him to the State Treasurer, who shall keep such sums in safe custody in a distinct fund to be known as the Employers and Employes Co-Operative Insur- ance and Total Permanent Disability Fund. The State Treasm^er must invest the surplus of this fund in safe and convertible State, County or City bonds or bonds of the United States. All interest accruing from such investments shall be accredited to this insurance fund. The bond of the State Treasurer shall be liable for such funds, and it shall be his duty to keep accurate accounts of the receipts and disbursements of such money. 42 LEGISLATIVE REFERENCE DEPARTMENT, OHIO STATE LIBRARY. Section 5. Fayiuciit of Dcatli Claims — To JJlioiii — Duty of Au- ditor — Personal Inquiries — How Compensation Paid. The Auditor of State shall keep full statistics of the operation of this function of liis department in the event of death by accident of an employe insured under this act, who shall have come to his death in the course of his ■employment and by causes arising therein. The Auditor of State upon being satisfied by adequate evidence of such death shall issue a war- rent upon the State Treasurer to persons dependent upon the deceased, these warrants to issue in the following order : (i) To surviving wife and child, or children, in equal shares, and if neither wife or child, or children be alive, then (2) to surviving par- ents who are dependent, or partially so, upon the deceased; if none, then (3.) to such other velatii'e of the deceased as survive Jiim and are de- pendent upon him, in the sum of Three 'Thousand Dollars i$j,ooo.oo). A workman receiving injuries wJdch permanently incapacitate him from the performance of zeork shall receive a compensation monthlw not to exceed One Dollar ($1.00) a day for each zvorking day. Com- pensation for permanent injury shall not be allowed until after the ex- piration of tzvelve weeks from tlie time such injuries zvere sustained, provided that the medical practitioner examines and pronounces the in- jury as being permanent, compensation may then be allowed from com- mencement of disability. The Auditor of State, however, may, when in his judgment he deems it advisable, use so much of the funds as is necessary in the procuring of a medical practitioner, for the purpose of examinafton or treatment under this Act, for such injuries as herein men- tioned compensation shall continue during disability, or until settlement is affected as provided for in Section 9 of this Act. Total or permanent disability shall consist of the loss of both legs or both arms, the total loss of eye sight or paralysis, or other conditions incapacitating him from work, caused by accident, or injuries received during employment as specified by this Act; provided, that if death, as a result of the in- jury, cJisues at a period not longer than one year from date of accident the sum of Three Thousand Dollars {$j,ooo.oo) shall be paid the de- ceased zvorkman's dependents as hereinbefore provided. The representa- tives of a foreigner, except the widow or dependent children, who were not living within the country at the time of the accident, shall have no claim for the compensation provided for in this Act. Such foreign person shall file their foreign address, if married, with the office of their employer with whom they are emplo3^ed and duplicate thereof with the State Auditor, giving their wife's name and dependent children, and such other identification as may be required by the Auditor of State. Loss of any Limb, or eye, caused by accident to a zvorkman while em- ployed as provided for in this Act, shall be compensated for in the sum of One Thousand {$1,000.00) Dollars, provided, that in the event there shall be no funds available in the fund to pay the Auditor's warrant workmen's compensation, etc. 43"- when drawn the same shall draw interest out of the fund at the rate of ten per cent per annum until such warrant is called for payment by the Treasurer which shall be as soon as the fund is sufficient to pay the same with its interest then due. Section 6. Monthly Payments — Applications for. Where a work- man is entitled to monthly payments under this Act, he shall file with the Auditor of State his application for such, together with a certificate from the County physician of the County wherein he resides, attested before a Notary Public. Section 7. Frandnlcnt Claims — Duty of Auditor. If any person or persons, company or corporation who is then paying into this insur- ance fund shall believe that any person or persons are obtaining, or having made application to obtain benefits hereimder improperly or fraudulently and shall file his written request that such person's claim be investigated, the State Auditor must upon the receipt of such re- quest, request the Secretary of the State Board of Health to make an examinataion for the purpose of this Act and his certificate as to the condition of the person or persons with reference to their rights to benefit under this Act shall be conclusive evidence as to his condition. Section 8. Claimant Refusing to Submit to Examination — Effect. If the workman refuses to submit himself to such examination, or in any way obstructs the same, his right to compensation under this Act shall be suspended until such examination takes place, and shall absolutely cease unless he submits for an examination within one month after being required to do so. - Section 9. Monthly Payments — Redemption by Lump Sum — Amount. When any monthly payment has been made to a workman for any period whatever, the liability under this Act, may on the ap- plication by, or on behalf of the w^orkman, be redeemed by the payment of a lump sum, which in no instance shall be in excess of the amount specified as death indemnity, and all monthly payments made prior shall be deducted from such settlement. Section 10. Annual Report of Auditor — Ploiary Pozcer to Ad- just Claims. The Auditor of State shall report in January of each year to the Governor of the experience and business of this function of his department, and shall have plenary power to determine all disputed cases which may arise in its administration not herein provided for. and to recommend in his report the rates or premium necessary in order to preserve such fund, and shall order paid such indemnification as here- in provided. He shall have power to define the insurance provisions of this Act by regulations not inconsistent therewith and shall prescribe the character of the monthly or other reports required of the parties liable hereunder and the character of the proofs of deaths, or to total permanent disability, and shall have power to make all other orders and rules necessary to carry out tlie true intent of this Act. 44 LEGISLATIVE REFERENCE DEPARTMENT^ OHIO STATE LIBRARY. Section ii. Release of Employer — Benefits Exempted — Suit — Forfeiture of Benefits. No money paid or payable in respect of insur- ance or monthly compensation under this Act shall be capable of being assigned, charged, taken into execution or attached, nor shall the same pass to any other person by operation of law ; and the acceptance of pecuniary benefit under the provisions of this Act shall operate to release the person or persons, corporation, partnerships, or associations causing such injuries or death for which benefits are so claimed, who shall have paid the assessment provided in Section 2 of this Act, and also the em- ployer, officers and agents thereof from all liability and claim arising from such injuries or death. The commencement of a suit to recover for such injuries or death shall operate as a forfeiture of the right to benefit under this Act. Section 12. Violations of Provisions of Act — Penalties. A man- ager, agent, foreman, accountant, person or persons who represent any corporation, partnership, association, person or persons, engaged in the mining or managing of any coal mines or coal washers in Montana, or person or persons liable for the payments herein provided for who shall violate the intent of this Act by inaccurate reports of tonnage of coal pro- duced by them, or the earnings of employees in their employ or who in any manner hinders or obstructs the Auditor of State in ascertaining facts bearing upon any case provided for in this Act or who may refuse cor- rectly to make out such reports as are required by this Act, or as re- quested by the Auditor of State, or submit to its provisions, when liable therefor, or who shall fraudulently obtain benefits hereunder shall be fined for each offense the sum of not less than One Hundred ($100.00) Dollars nor more than Five Hundred ($500.00) Dollars and imprison- ment in the County jail for a period of not less than one month nor more than six months, or by both such fine and imprisonment. The proceeds of all fines shall be forwarded to the State Treasurer and by him credited to the Insurance Fund. Section 13. Act Takes Effect — When. This Act to be in full force and effect from and after the first day of October, nineteen hun- dred and ten, benefits to commence four months thereafter. (Approved March 4, 1909.) APPENDIX II. WORKINGMEN'S INSURANCE IN GERMANY. (From "Workingmen's Insurance in Europe," by Lee K. Frankel and Miles M. Dawson.) The most striking fact in the remarkable industrial advance made by Germany during the last half century is the improved condition of the great body of its working people. On all sides are evidences of workmen's compensation, etc. 45 greater effectiveness, contentment and prosperity. Many causes have undoubtedly contributed to this end, but perhaps the most important has been the fostering care of the government. It has met the requirements of its people in an orderly and businesslike manner, looking upon their occupations as both social and individual in character. In nothing is this attitude better shown than in the comprehensive system of insur- ance legislation, the beginning of which was made a quarter of a cen- tury ago. At the close of the war with France, the attention of the govern- ment was directed to the adjustment of the new conditions which the un- foreseen industrial development had brought about. Socialism of the revolutionary type was everywhere making rapid strides among the working classes. To check these forces of discontent, as well as to meet the legitimate demands of the people, Bismarck, with remarkable far-sightedness, presented his plan of obligatory insurance of work- ingmen as a matter of civic duty. This embraced three forms of work- ingmen's insurance ; namely, against sickness, accident and invalidity. In the short period of nine years, 1881-1889, every detail of this com- prehensive scheme was put into operation. Legislation so far-reaching in its consequences had never before been attempted. Though at the time regarded as revolutionary in character, it has served the country even b'etter than its author dreamed possible. Now at the close of a period of twenty-five years, it is recognized as the most effective in- strument for the protection of the great body of the people in the im- portant exigencies of life ; and its merits are warmly appreciated by all who have the welfare of the nation at heart. The wide sphere of its usefulness is shown by the summary of in- surance statistics for 1906 in Table 14. In that year, the population of Germany was 61,200,000,. of whom no less than 15,400,000, or more than one in four, were wage-earners. It must not be supposed, however, that the system inaugurated in 1883, through the efforts of Bismarck, was the creation of any one man or was imposed upon a people unprepared for it. On the contrary, it was the last step in a long historical process in which we find blended the struggle of the working people and the legislative policy of the ruling classes, and was based on political principles matured through de- cades of reflection and discussion. 46 LEGISLATIVE REFERENCE DEPARTMENT, OHIO STATE LIBRARY. TABLE 14 SUMMARY OF ACCIDENT_, SICKNESS, AND INVALIDITY AND OLD AGE INSURANCE STATISTICS, I906. Losses, Receipts, etc. tn tn Cr Q -L u. or. 3» > — 'i UlNIVCr^OII T Wr ^^MLirv^KINIM, DCKIVCLCT FORM NO. DD6 BERKELEY, CA 94720