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 Employers' Liability 
 Insurance 
 
 Report of Committee 
 
 to 
 
 National Metal Trades Association 
 
 ivy 
 
 T'HE 
 
 I UfJfV^^RSITY 
 
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GIFT OF 
 
 I 
 
Report of Committee 
 
 on 
 
 Employers' Liability 
 
 Insurance 
 
 To Thirteenth Annual 
 Convention 
 
 National Metal Trades Association 
 
 f I 
 
 
 i * , , ► » » » 
 
 iSTew York City 
 April 12 and 13, 1911 
 
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 CLEVELAND 
 
We, the Committee on Employers* Liability Insurance, 
 respectfully submit the following report for your consideration. 
 
 William Butterworth. Chairman 
 Deere & Co., Moline, 111. 
 
 Geo. F. Steedman 
 
 Curtis & Co. Mfg. Co., St. Louis 
 
 Henry D. Sharpe 
 
 Brown & Sharpe Mfg. Co., 
 Providence, R. I. 
 
 COMMITTEE 
 
Digitized by the Internet Archive 
 
 in 2008 with funding from 
 
 IVIicrosoft Corporation 
 
 http://www.archive.org/details/employersliabilityOOnatirich 
 
[5] . .^i..: ; 
 
 To Members of National Metal Trades Association. 
 Gentlemen: 
 
 While the question of systematic compensation for indus- 
 trial accidents has been the subject of consideration and legisla- 
 tive action by most civilized states since 1884 when the matter 
 was first treated by Germany, the subject but recently has been 
 under consideration in the United States. At the present time 
 systematic compensation is widely discussed, and has been or is 
 being investigated by Commissions in Wisconsin, New York, 
 Minnesota, Ohio, Massachusetts, New Jersey and Illinois, and 
 by labor bureaus, trade unions, and other organizations. 
 
 Although the subject of systematic compensation has 
 attracted little attention in this country until quite recently, the 
 subject of the legal relation of Employer and Employe, or Mas- 
 ter and Servant, has not escaped attention in this country. All 
 legislation, however, either federal or state, excepting as herein- 
 after noted, has been directed along two lines, viz: 
 
 (a) Legislation requiring safety appliances for the pro- 
 tection of the Employe, or requiring regulations, sanitary or oth- 
 erwise, to improve the working conditions of the Servant and to 
 safeguard his health. 
 
 (b) Legislation modifying the existing rules of law with 
 reference to the liability of the Master for injuries to his 
 Servant. 
 
 In addition to the consideration of the subject which has 
 been given by legislative bodies, in more recent years, many em- 
 ployers of labor have given the question careful study and deep 
 thought with the result that in numerous instances, either through 
 voluntary arrangement on the part of the employer or by co- 
 operation between the employer and employe, benefit systems 
 have been established by means of which some compensation is 
 made, out of a special fund, in case of the injury or death of an 
 employe, without regard to negligence on the part of the employer 
 as the basis of the right to compensation. 
 
 The present system of compensation for industrial accidents 
 is now conceded to be unjust, inadequate, unsatisfactory and 
 wasteful. It is proper, therefore, to consider what the present 
 
i . 
 
 .-% 2 2_*: «':.%••«" 
 
 
 ♦ - •• » •' : «.• :.!:.• 9*4. ^ . [6] 
 
 system is and then to consider and suggest a remedy which will 
 be equitable and just both to the employer of labor and his 
 employe. 
 
 RELATION OF MASTER AND SERVANT 
 
 Under the law. the liability of the master for injury to his 
 servant and the right of the servant for compensation for his 
 injury is found in the common law, except so far as the common 
 law has been modified by some recent legislation directed especially 
 to the safeguarding of employes, in certain industries, or to the 
 certain modification of rules of practice by which the remedy is 
 applied in the courts. 
 
 The legislature of Illinois in 1874 provided by statute that 
 **the common law of England, so far as the same is applicable 
 and of a general nature, and all statutes or acts of the British par- 
 liament made in aid thereof, and to supply the defects of the com- 
 mon law * * * and which are of a general nature and 
 not local to that kingdom shall be the rule of decision, and shall 
 be considered of full force until repealed by legislative authority." 
 
 One of the "defects** of the common law, early to be recog- 
 nized, both in England and in this country, was the fact that 
 where injuries resulted in death no right of action therefor survived 
 to the widow, next of kin or the legal representative of the 
 decedent, and so now in this state by statute it is provided that 
 in such cases the right of action shall survive to the legal repre- 
 sentative of the decedent for the benefit of the widow and next 
 of kin. Like legislation has been enacted in every state in the 
 union. 
 
 The sole right which the employe has to compensation from 
 his employer for his injury under the law of this state is that which 
 is given him by the common law, with the single exception found 
 in the act relating to mines and mining, and no other remedy in 
 case of accident resulting in death is afforded save under the 
 statutes above mentioned. 
 
 Under the common law (which is found only in the deci- 
 sions of the courts), and under the statutes above mentioned, the 
 liability of the employer for injury to his employe, and the right 
 
[7] 
 
 of the employe for compensation for such injury are controlled 
 by certain rules which in substance are as follows : — 
 
 The contract of employment whether oral or written car- 
 ries with it these obligations: — 
 
 On the part of the employer that he will use due 
 care to furnish to the employe — 
 
 (a) a safe place to work, 
 
 (b) safe machinery, tools or appliances with 
 
 which to work, 
 
 (c) reasonably competent servants to assist in 
 
 the work, 
 
 and that upon default of the employer in the observ- 
 ance of any one of the duties enumerated above, injury 
 therefrom resulting to the servant, while the servant 
 was himself in the exercise of due care for his own 
 safety, compensation shall be made to the servant by 
 the employer for such injury. 
 
 On the part of the employe or servant, the con- 
 tract implies that he will assume the ordinary risks inci- 
 dent to the service which he engages to perform, includ- 
 ing risk of injury from the negligence of his fellow 
 servants, and that he himself will use reasonable care 
 to avoid injury. 
 
 It will be observed from the brief summary above that 
 the sole basis of recovery by the servant for injuries received is 
 the negligence of the master in failure in one of the duties on his 
 part incident to the contract of hiring. 
 
 It will also be observed from the summary that it is not 
 universally true that where the master is guilty of negligence the 
 servant can recover compensation, for, if the master be guilty of 
 negligence, and at the time of the injury to the servant he himself 
 was not in the exercise of due care for his own safety (such care 
 as an ordinarily prudent man would exercise for his own safety 
 under the same or like circumstances), or was guilty himself of 
 negligence, and such want of due care, or his own negligence con- 
 tributed in the slightest degree to the injury, the servant forfeits 
 his right to compensation to the master, notwithstanding the mas- 
 ter*s negligence. 
 
[8] 
 
 The usual defenses available to the master to defeat the 
 claims of the servant for injury alleged to result from the mas- 
 ter's negligence are: — 
 
 ( 1 ) That the injury was the result of the neg- 
 * ligence of a fellow servant, 
 
 (2) That the injury was one of the risks which 
 
 the servant had assumed as incident to 
 the employment, 
 
 (3) That the servant was not in the exercise of 
 
 due care or was guilty of contributory 
 negligence. 
 
 These defenses have come commonly to be called **the fel- 
 low servant rule,*' "assumption of risk" and "contributory negli- 
 gence.*' 
 
 While it would appear from the above brief statement that 
 the determination of the rights of the servant and the liability of 
 the master was a comparatively simple process, the contrary is 
 unfortunately the case. The application of the law involves the 
 consideration of questions of both law and fact which has unavoid- 
 ably resulted in great confusion to the end that neither party to 
 a controversy is able to foretell the outcome of a lawsuit involving 
 his right to recovery or liability for damages. 
 
 THE FELLOW SERVANT RULE 
 
 Without going into a minute discussion of the development 
 of "the fellow servant rule** it appears that this doctrine had its 
 first application in England in 1837 in the case of Priestly v. 
 Fowler in the English Court of Exchequer. 
 
 The case involved the liability of the master, who was a 
 butcher, for damages to his servant, by reason of his injury in 
 unloading a wagon which had been carelessly and improperly 
 loaded by another servant of the master. In deciding this case. 
 Lord Abinger said: — 
 
 It is admitted that there is no precedent for the 
 present action by a servant against a master. We are, 
 therefore, to decide the question upon general prin- 
 ciples, and in doing so we are at liberty to look at the 
 consequences of a decision the one way or the other. 
 
[9] 
 
 If the master be liable to the servant in this action 
 the principle of that liabihty will be found to carry us 
 to an alarming extent. He who is responsible by his 
 general duty, or by the terms of his contract for all 
 the consequences of negligence in a matter in which he 
 is the principal, is responsible for the negligence of all 
 his inferior agents. If the owner of the carriage is 
 therefore responsible for the sufficiency of his carriage 
 to his servant, he is responsible for the negligence of his 
 coachmaker, or his harnessmaker or his coachman. The 
 footman, therefore, who rides behind the carriage, may 
 have an action against his master for a defect in the 
 carriage, owing to the negligence of the coachmaker, 
 or for a defect in the harness, arising from the negli- 
 gence of the harnessmaker, or for drunkenness, negli- 
 gence or want of skill in the coachman; nor, is there 
 any reason why that principle should not, if applic- 
 able in this class of events, extend to many others. The 
 master, for example, would be liable to the servant for 
 the negligence of the chambermaid for putting him into 
 a damp bed ; for that of the upholsterer for sending him 
 a crazy bedstead, whereby he was made to fall down 
 while asleep and injure himself; for the negligence of 
 the cook in not properly cleaning the copper vessels 
 used in the kitchen; of the butcher, in supplying the 
 family with meat of a quality injurious to the health; 
 of a builder for a defect in the foundation of the house, 
 whereby it fell and injured both the master and the 
 servant by the ruins. 
 
 The inconvenience, not to say the absurdity of 
 these consequences afford a sufficient argument against 
 the application of this principle to the present case. 
 But, in truth, the mere relation of the master and the 
 servant never can imply an obligation on the part of 
 the master to take more care of the servant than he 
 may reasonably be expected to do of himself. He is 
 no doubt bound to provide for the safety of his servant, 
 in the course of his employment, to the best of his 
 judgment, information and beHef. The servant is not 
 bound to risk his safety in the service of his master, 
 and may, if he thinks fit, decline any service in which 
 he reasonably apprehends injury to himself ; and in most 
 of the cases in which danger may be incurred, if not all, 
 he is just as likely to be acquainted with the probability 
 and extent of it as the master. 
 
[10] 
 
 The doctrine thus announced in this case is much broader 
 than that which is recognized as the law in this state (IlHnois). 
 
 The law has been so modified that in order that the mas- 
 ter be relieved from liability for the injury of one servant by 
 reason of the negligence of another servant the two servants must 
 at the time of the injury have been directly co-operating with each 
 other in the same line of employment, and their duties must have 
 been such as to bring them into habitual association, so that they 
 might exercise a mutual influence upon each other promotive of 
 proper caution. 
 
 This rule, however, cannot be invoked in defense of the mas- 
 ter where the negligence charged is a violation of his duty to use 
 due care to furnish a reasonably competent servant to assist in the 
 work. In other words, the master cannot negligently employ an 
 incompetent servant and then claim immunity from liability for 
 the incompetent servant's negligence under **the fellow servant 
 rule.** 
 
 It is also firmly established in the law that the master will 
 obtain no relief from liability under *'the fellow servant rule*' where 
 the injury is the result of any negligence on the part of the master 
 by reason of his default in any of his duties to the servant implied 
 in the contract of employment even though the negligence of the 
 fellow servant may have contributed to the injury. 
 
 ASSUMPTION OF RISK 
 
 Tlie principle of "the assumption of risk** as recognized by 
 the law is that every risk which an employment still involves 
 after a master has performed his full duty to his servant is 
 assumed as a matter of law, by each of those servants. The 
 risks which are thus considered to have been assumed are those 
 which are commonly described as "ordinary." It is the settled 
 doctrine of the law that the servant may reasonably be presumed 
 to foresee that he will be exposed to the ordinary risks of the 
 business in which he engages, but that he ought not to be charged 
 with anticipating the consequences of risks of an extraordinary 
 character. Ordinary risks and hazards of the employment have 
 been defined by our Supreme Court to be such risks as are usual 
 
[11] 
 
 and ordinary therein after the employer has taken reasonable care 
 to discover and prevent such risks. 
 
 It will be observed that the defense under *'the fellow serv- 
 ant rule*' is really wdthin the scope of and embraced within "the 
 assumption of risk rule," injury from the negligence of a fellow 
 servant being one of the ordinary risks of an employment which 
 the servant impliedly assumes. 
 
 CONTRIBUTORY NEGLIGENCE 
 
 Under the law, as it is in Illinois today, the obligation 
 devolves upon the servant in every suit for damages for personal 
 injuries to allege in his declaration, and also to prove by the 
 evidence, that the master was guilty of a specific act of negligence, 
 and also that at the time of the injury he himself was in the 
 exercise of due or ordinary care for his own safety, as defined 
 above. 
 
 If it should appear from the evidence that at the time of 
 the injury, although the master was guilty of the negligence as 
 charged, the servant was not in the exercise of that degree of 
 care for his own safety which an ordinarily prudent person under 
 the same or like circumstances would exercise, or that he was in 
 fact guilty of some act of negligence, which want of care or act 
 of negligence contributed to the injury in the least degree, the 
 servant cannot recover for the injury received. 
 
 The above has been the rule of law with reference to 
 contributory negligence since 1885 when the Supreme Court of 
 Illinois departed from the earlier decisions recognizing the doc- 
 trine of "comparative negligence.'* 
 
 COMPARATIVE NEGLIGENCE 
 
 What is meant by "comparative negligence'* may be gath- 
 ered from one of the earliest cases in Illinois in which it was 
 defined and applied: — 
 
 Mr. Justice Breese in the case of Galena & C. U. R. Co. 
 v. Jacobs. 20 111. 478 (1858) stated the rule as follows: — 
 
 The question of liability does not depend abso- 
 lutely on the absence of all negligence on the part 
 of the plaintiff, but upon the relative degree of care 
 or want of care, as manifested by both parties, for all 
 
L12J 
 
 care or negligence is at best but relative, the absence 
 of the highest possible degree of care showing the pres- 
 ence of some negligence, sHght as it may be. The true 
 doctrine, therefore, we think is, that in proportion to 
 the negligence of the defendant, should be measured 
 the degree of care required of the plaintiff — that is to 
 say, the more gross the negligence manifested by the 
 defendant, the less degree of care will be required of 
 the plaintiff to enable him to recover. 
 
 The doctrine had been previously recognized and applied 
 in Illinois in the same year in the case of C. & R. I. Co. v. Still, 
 19 111. 499. 
 
 After the decision in these cases "the comparative negligence 
 rule'* continued to form a part of the law of Illinois until the 
 decision in the case of Calumet Iron & Steel Co. v. Martin, 1 1 5 
 111. 358 (1885), when the Supreme Court after a careful review 
 of the previous authorities receded from the position formerly 
 maintained by holding that the authors of the earlier decisions 
 had no intention of announcing any other rule than that the 
 servant must exercise ordinary care. To quote from the decision 
 in the last named case, the court says: — 
 
 Within the contemplation of that rule, where one 
 has observed ordinary care with reference to the par- 
 ticular circumstances involved for his personal safety, he 
 has, even if slightly negligent, observed all the care 
 the law requires of him; and where, having observed 
 this care, he is injured by the negligence of another, 
 that other has been guilty of the degree of neghgence 
 for which the law charges responsibility. 
 
 It has been said that the application of **the comparative 
 negligence rule" to the particular case afforded an opportunity to 
 the court to mitigate in part the harshness of the rules relating 
 to * 'contributory negligence," and made it generally necessary 
 to submit the question to the jury to determine the relative degree 
 of negligence of the master and his servant. The rule was 
 therefore a favorable one for the servant in its particular opera- 
 tion, although there is very little difference, as an abstract propo- 
 sition of law, between the slight negligence permitted to the 
 servant under "the comparative negligence rule," and the ordinary 
 care required of him under the present rule. 
 
L13J 
 
 It seems to us that it should make very little difference to 
 the servant whether in his controversy with the master the rule 
 were applied as stated in the earlier decisions, permitting him 
 to recover though guilty of slight negligence, the jury indulging 
 for that purpose in a comparison of the negligence of the master 
 with his negligence, or the modern rule were applied that the 
 servant could not recover unless at the time of the injury the 
 servant was in the exercise of such a degree of care for his own 
 safety as an ordinarily prudent man would exercise under the 
 circumstances then existing, because the qualification of the modern 
 rule under the circumstances then existing requires the jury in 
 passing upon the question as one of fact and the court in passing 
 upon it as one of the law to keep in mind all the circumstances 
 then existing, including the negligent act of the master and to 
 receive the matter on the basis of the degree of care an ordinarily 
 prudent man would have exercised under those circumstances. 
 
 The attempt to administer the law under the earlier rule 
 had been unsatisfactory because of the obvious impossibility justly 
 to compare negligence against negligence, and to off-set one negli- 
 gent act against another negligent act and to apportion damages 
 accordingly. The modern rule, in the opinion of your committee, 
 has had the desired effect of simplifying the consideration by 
 courts and juries of the question of want of due care or contrib- 
 utory negligence in affecting the right to recovery. 
 
 Notwithstanding the attempt of the court to assist in the 
 administration of justice in adopting a more lucid and rational 
 rule, the question of want of due care or of contributory negligence 
 is still one of great uncertainty in its practical application to a 
 given state of facts for the reason that courts and juries are com- 
 posed of men, and minds of men may differ. 
 
 The substance of the matter is that while we have now a 
 rule of law which is as succinct and concrete a statement as has 
 yet been devised, the question of due care or of contributory 
 negligence in any given case is not thereby settled beyond all 
 controversy, so that those interested can conclusively determine the 
 matter for themselves because the question must be submitted in 
 the first instance to a jury for their determination as a question of 
 
[14] 
 
 fact, and then to the judge as a question of law. The authority 
 of a judge, however, to set aside the verdict of the jury in this 
 connection only obtains when it may be justly said that the 
 jury has been controlled by wrong impulses, either passion or 
 prejudice, or a misunderstanding of the facts, and that the minds 
 of all reasonable men, when considering the question dispassion- 
 ately, would conclude to the contrary. 
 
 STATUTORY LAW 
 
 As supplemental to or in modification of the common law 
 with reference to master and servant, there is the comprehensive 
 law relating to mines and mining hereinabove mentioned, and a 
 child labor law, the statute above referred to causing the right of 
 action for the death of an injured person to survive to the per- 
 sonal representative for the benefit of the widow and next of kin. 
 The rules which control the right of recovery, however, under 
 this statute are the same which would apply to the claim of the 
 injured person if living, and the amount of compensation for death 
 is limited by this statute to $10,000. Prior to the year 1903 
 the amount of liability in Illinois for compensation in case of 
 death was limited to $5,000. It is the theory of this last named 
 law, however, that the compensation shall be commensurate with 
 the actual damage to the widow or dependent next of kin occa- 
 sioned by the death of the decedent, but not in any event, however, 
 to exceed the limitation fixed by the statute. In addition to the 
 statutes above mentioned, there is in force in Illinois, a statute 
 requiring automatic couplers, grab irons and train brakes on all 
 railroads, and the statute requiring blowers on metal polishing 
 machinery, and a further statute requiring guards on all dangerous 
 machinery and fences around dangerous places and all factories 
 and work shops, and another requiring guards and safety devices 
 to be used in the construction, alteration and erection of high 
 buildings, etc. Those engaged in agricultural pursuits are afforded 
 some protection by a statute requiring guards on dangerous por- 
 tions of threshing machinery and corn shellers. In none of these 
 statutes, however, except in the railway safety appliance law, has 
 the legislature attempted specifically to take away any of the 
 
[15J 
 
 common law defenses arising under **the fellow servant rule," 
 "the assumption of risk rule," or that of "contributory negligence.** 
 The courts, however, in construing these various acts with refer- 
 ence to their effect upon the right of the injured servant recovering, 
 have held that as against the specific wilful violation of the provi- 
 sions of these safety appliance acts the defense of **assumed risk'* 
 or of "contributory negligence" would not avail the master. The 
 control of the relation of master and servant rests entirely within 
 the power of the state legislature, and under our system of gov- 
 ernment, as a general proposition, the federal government has no 
 authority to legislate with reference to the rights of the citizens of 
 any state. The federal government, however, under the authority 
 of the federal constitution authorizing the federal government to 
 control commerce between states, has passed an act controlling 
 the rights of master and servant engaged in interstate commerce. 
 The first attempt at this legislation was in 1906 when Congress 
 passed an employers' liability act affecting common carriers, but 
 the Supreme Court pronounced it invalid in respect to carriers 
 doing both interstate and local business within the state, because 
 it did not clearly limit its application to the former. On April 
 Tly 1908, Congress passed a new act in which it attempted to 
 make the segregation of local from interstate commerce required 
 by the decision of the Supreme Court, by substituting for "shall 
 be liable to damages to any of its employes," "shall be liable in 
 damages to any person suffering injury while he is employed by 
 such carrier in such commerce." The new act has been affirmed 
 in the inferior federal courts in the case of Watson v. St. Louis 
 etc. R. Co., 169 Federal Reports, and in the case of Zikes v. 
 O. R. & N. Co., 1 79 Federal, 893. Your committee has not 
 been able to ascertain whether or not the Supreme Court has 
 considered these cases on appeal. 
 
 THE THEORY OF SYSTEMATIC COMPENSATION 
 
 It has come to be considered by those who have given careful 
 consideration to the question, that it is not enough to give to the 
 servant employed by the master compensation only for those 
 injuries resulting from the master's negligence. Under the rules 
 
[16] 
 
 of law just outlined, a very large proportion of the accidents which 
 occur in the industries of the country go uncompensated. In 
 some cases on the other hand the employer is held for substantial 
 amounts and occasionally verdicts are recovered out of all propor- 
 tion to the extent of the damage really sustained; and in other 
 instances compensation awarded for the injury is not adequate or 
 just. In this relation we note a statement of the causes of industrial 
 accident in 1897 in Germany: Fault of employer, 17.30%; 
 of workmen, 29.74%; of both, 4.83%; of fellow servant, 
 5.31%; unavoidable danger, 41.55%; act of God, 1.27%. 
 Applying these figures to the rules of law above set forth, one is 
 impressed with the small proportion of industrial accidents in 
 which a right to recover can be sustained by the servant. The 
 principle which has been adopted in most civilized countries of 
 the world within the last twenty-five years is a radical departure 
 from the theory of compensation which theretofore had been in 
 force and briefly it is as follows : 
 
 In carrying on any given industry for the benefit of those 
 who will enjoy the products of the services supplied thereby, there 
 will be on the whole, taking into account all the various establish- 
 ments engaged in those industries, a more or less stable aggregate 
 amount of loss and damage occasioned by industrial accidents. 
 While each particular accident considered by itself might appear 
 to have been preventable, if an extraordinary degree of caution 
 had been exercised, it will also well appear when the losses are 
 spread over the entire industry, and especially when the experience 
 of many years is combined, that there is a more or less steady 
 ratio between the financial loss and the financial value of the entire 
 product, indicating that accidents are governed by laws of proba- 
 bility and are to a certain degree inevitable. 
 
 In other words, this loss or damage as much as loss and 
 damage by destruction of material or wear and tear of the 
 machinery, is a part of the cost of the commodity in the produc- 
 tion of which the workman was employed at the time the accident 
 took place. 
 
 It follows that the working man, or his family in event of 
 his death, should be compensated in a reasonable amount for the 
 
[17] 
 
 consequences of an industrial accident, not in order that some 
 one shall be mulcted on the ground that he was at fault, but in 
 order that this portion of the cost of the product or services shall 
 not be transferred from the employer and the ultimate consumer 
 to the workingman and his family, crushing them in many cases, 
 and eventually shifting the burden to the community in the most 
 undesirable form of charity. 
 
 Under this theory if justly regulated, there would be and 
 there should be no extraordinary and certainly no excessive ver- 
 dicts. Compensation should be governed by business principles. 
 
 Under the system generally in vogue, unfortunately the 
 servant does not now obtain the full measure of benefit to which 
 he is entitled, even in cases in which he has the right of recovery, 
 for in most instances the compensation is paid to him only after 
 long and expensive litigation and an exceedingly large amount 
 of the money paid by the employer by reason of the accident does 
 not reach the place where it is most needed, that is the purse of 
 the injured servants, but it is consumed in court costs and attor- 
 neys* fees or in premiums for industrial insurance. 
 
 Theoretically, the servant, although now bearing the risk 
 of injury in a given employment, is presumed to be compensated 
 therefor by an increased allowance in wages which is supposed to 
 bear some relation to the risk of injury involved in the occupation. 
 It has also been the idea that the assumption of this risk in lieu 
 of the enhanced compensation was a proper subject of contractual 
 relation between the servant and the master, but this reasoning has 
 now become obnoxious to those who have made a careful study 
 of the subject, because the practical operation of the system is 
 that the enhanced compensation is only paid to those who are not 
 injured. Upon misfortune overtaking the servant in his occupation 
 in which he meets with physical injuries, his enhanced compensa- 
 tion and all compensation ceases; so it will be seen in that appli- 
 cation the money which is compensation for the injury does not 
 reach the proper destination. 
 
 It has also come to be recognized that the assumption of 
 risk for an enhanced compensation is not a proper subject for 
 contract between the master and servant, because as has been 
 
[18] 
 
 recognized by the courts in connection with the question of the 
 right of the servant on entering the employment to release his 
 master from liabilities to him for his injury, the master and the 
 servant do not meet upon a common level. The master has the 
 advantage and the servant the disadvantage. The servant com- 
 pelled by his necessities seeks employment. Perhaps he must 
 take that which is offered or nothing. The master in offering 
 the employment has within his power the granting of that which 
 will raise the servant from the condition of want to one of at 
 least comparative comfort. The allurement of this temporary 
 benefit to the servant is sufficient in the opinion of the court to 
 bring about such an inequality in the relation of the master and 
 servant as to render such a contract in the particular instance 
 above mentioned as a release of liability as against public policy. 
 
 It is also now conceded that it would be exceedingly desir- 
 able both to master and to servant were some basis of liability 
 and compensation established by law of so certain and absolute 
 a character that its benefits to both could be contemplated at the 
 time of the beginning of the relations of master and servant, so 
 that the right of the servant to compensation in case of injury 
 would be known in advance, and the liability of the master for 
 compensation to his servant being also known, could be dealt 
 with as a constant factor of expense in the master's business. 
 
 Another important matter entering into the theory of system- 
 atic compensation is that the uncertainty of htigation of the right 
 of compensation should be removed and that the ascertainment of 
 the right and the application of the remedy by the payment of 
 compensation should be made as nearly automatic as is practical, 
 and that the administration of the law be so simplified as to reduce 
 to the minimum the expense both to the servant and the employer. 
 
 WHAT HAS BEEN DONE WITH REFERENCE 
 TO SYSTEMATIC COMPENSATION 
 
 As has been said earlier in this report systematic compensa- 
 tion for industrial accidents has been the subject of study and of 
 legislative action, principally in European countries up to this 
 time. The idea will at once suggest itself that the action of the 
 
[19] 
 
 law-making bodies of the various European countries which have 
 dealt with, this subject will be of considerable value in suggesting 
 what might be done in this country in dealing with the situation. 
 Upon consideration of the matter, however, it appears that be- 
 cause of the difference in the systems of government of the Euro- 
 pean countries and this country, there are a great many sugges- 
 tions and ideas incorporated in the European acts which are 
 inapplicable and impractical for use in this country because of 
 the constitutional limitations and restrictions obtaining in this 
 country. 
 
 It will be recalled that we have what is known as a dual 
 form of government; the government of the United States exer- 
 cising a limited control under the federal constitution of all the 
 states constituting the Union, and the government of each state 
 exercising control of its citizens and territory embraced within the 
 confines of the state. It will also be recalled that the power of 
 the United States government under the constitution of the United 
 States, being a delegated authority, that government has only such 
 power and authority as comes directly from the people by ex- 
 pressed grant as defined in the federal constitution. The power 
 and authority of the state, however, existing also in its people, 
 the state constitution is not a delegation of authority to the state 
 government, but is a limitation and restriction upon the legislative 
 authority of the state, so that the state possesses unlimited authority 
 except where that authority has been delegated to the federal 
 government or is limited, restricted or defined by the state con- 
 stitution. 
 
 Stated in another way, the federal government has only such 
 powers of control and legislation which are specifically delegated 
 to it by the federal constitution, while the state power of legisla- 
 tion and control is absolute excepting in such matters as have been 
 specifically delegated to the federal government in its constitution 
 or as limited, restricted or defined by the state constitution. The 
 federal constitution and the constitutions of the various states are 
 as they are intended to be, solemn documents, inflexible and sub- 
 stantial in their nature, not to be changed according to the whim 
 or caprice of the moment. 
 
[20] 
 
 The difficulty, if it may be so termed, does not arise in the 
 government of foreign countries where the legislative power does 
 not rest with the people, but in those countries such changes can 
 readily be made by the legislative body in their fundamental or 
 organic laws as occasion or expedience may require. It has even 
 been said that in England, Magna Charta might be altered or 
 amended by parliament should that body deem it necessary, with- 
 out recourse to the people for authority or approval. 
 
 Because of the fact that the question of systematic compen- 
 sation has been the subject of investigation and thought in for- 
 eign countries for a comparatively long space of time, the result 
 of their labors can be of advantage in a general way in suggesting 
 that which would be desirable for like legislation in this country: 
 and, then, it will be necessary to consider to what extent the experi- 
 ences of those countries can be adopted and made available under 
 the peculiar constitutional restrictions in this country. Until 
 wathin the last few months a study of these foreign laws has been 
 an exceedingly difficult matter, because of the fact that no Enghsh 
 translations of them existed; but in September, 1910, the United 
 States bureau of labor issued a bulletin containing a summary of 
 foreign workingmen's compensation acts, which was the first 
 opportunity presented generally in this country for obtaining infor- 
 mation as to what had been done in those states. This document 
 is quite voluminous and to enter into a critical minute examination 
 and discussion of these various acts will involve more time than is 
 at the disposal of your committee in the preparation of this report. 
 
 Mr. Carmen F. Randolph, of the New York bar, has v^it- 
 ten an exhaustive brief on **Legal Aspects of Compensation for 
 Industrial Accidents,'* bearing date November, 1910, and in this 
 connection has taken occasion to present a review of these foreign 
 laws, and we take the liberty of quoting at length from his brief 
 
 EMPLOYMENTS COVERED 
 
 Great Britain excepted, the several countries do 
 not include all employments in their compensation 
 in discussing the provisions of these laws: 
 
[21] 
 
 laws. The major classification is the selection of haz- 
 ardous, as distinguished from non-hazardous employ- 
 ments. 
 
 In some laws the selection is made in brief and 
 more or less general terms. Thus the French law 
 covers workmen **in the building trades, in mills, fac- 
 tories and workyards, in the business of transportation 
 by land and water, in that of loading and unloading, 
 in public storehouses, mines, surface mines, quarries, 
 and, furthermore, in every enterprise or branch thereof 
 in which explosive materials are manufactured or used, 
 or in which a machine operated by a power other than 
 that of man or animal is employed.*' Other laws give 
 elaborate lists of the industries covered. 
 
 The laws agree in covering mining, manufac- 
 turing, transportation, building, etc., but there is some 
 diversity in respect of agriculture. For example, 
 agricultural employment is expressly excepted in the 
 Quebec law. It is expressly included in respect of 
 accident due to the use of mechanical power in Austria, 
 Hungary and Italy, and impliedly in respect of power 
 accidents where these are embraced in general terms as 
 in France and New Zealand. In Germany agricul- 
 tural laborers are insured under a separate statute. 
 
 Some states provide separate statutes or separate 
 treatment for certain employments, e.g., mining, navi- 
 gation, railroading, building. For example, Germany 
 has special laws for navigation and building, and the 
 railroads being operated by the government, are under 
 an official regime. The British act contains special 
 provisions for seamen. 
 
 Few, if any, systems save the British cover the 
 domestic, mercantile and commercial employments, ex- 
 cept so far as the occasional power accidents in these em- 
 ployments fall within a general provision of the law. 
 Petty industry — an establishment employing only 
 several men — is, or may be, excepted from the com- 
 pulsory force of certain compensation laws; for exam- 
 ple, Italy, Germany. The exception seems to be 
 partly based on the theory that the smaller the work- 
 ing body the better the supervision and the lesser haz- 
 ard ; but in view of its results we may fairly treat it as 
 expressing the idea that the small employer may be 
 too nearly in the financial condition of his workmen to 
 warrant the imposition of the burden. 
 
[22] 
 
 Generally speaking the legislature defines once for 
 all the employments affected. But we find here and 
 there a provision authorizing inclusion or exemption 
 by administrative order. For instance, in Germany 
 the federal council may exempt "establishments w^hich 
 do not involve special danger of accident" ; and in Aus- 
 tria, the minister of the interior may exempt or include 
 certain establishments owing to the absence or presence 
 of dangerous features. 
 
 In sharp contrast with the other systems is the 
 comprehensive law of Great Britain. The act of 1 897 
 covered certain hazardous employments only and ex- 
 cepted the "workshop," an establishment not employ- 
 ing more than five men. Agriculture was included 
 by the amendment of 1900. The act of 1906 covers 
 "any employment" without regard to its hazard or to 
 the size of a particular establishment; excepting, how- 
 ever, employment of a "casual nature." 
 
 INJURIES COMPENSATED 
 
 The nature of the injuries calling for compensa- 
 tion, their occasion, cause, and period of disablement, 
 constitute an intricate chapter of the compensation laws, 
 whose main points only will be indicated. 
 
 The injury must be accidental and the broadly 
 remedial purpose of the laws is generally emphasized 
 by a broad definition of "accident." The German 
 imperial insurance office defines an accident as "a hap- 
 pening which, doing injury to the integrity of the human 
 body, is produced by a single stroke and is clearly 
 marked by a beginning and an end." A French pub- 
 licist defines it as "an injury to the human body due 
 to the sudden and violent action of an exterior cause." 
 The House of Lords defines it as "an unlooked for 
 mishap or an untoward event which is not expected 
 or designed." Among the "accidents" embraced in 
 the English law are the projection of an anthrax germ 
 in the eye, a strain rupturing an aneurism, even though 
 too slight to affect a healthy man, a heat stroke in a 
 furnace room, a sun stroke, the murder of a messenger 
 carrying his employer's money. Among those em- 
 braced in the French law are an injury from falling 
 in a fit, from the horse play of a comrade unless 
 the victim began it, from voluntarily taking a risk in 
 
[23] 
 
 the line of humanity or duty. We note here that the 
 British workmen's compensation acts require the em- 
 ployer to compensate the victims of certain "occupa- 
 tional diseases," anthrax, lead, mercury, phosphorus 
 and arsenical poison, for example, to which the home 
 secretary has added others. 
 
 "Occupational disease*' is not, on the Continent, 
 embraced in accident compensation law. The laws 
 broadly agree that workmen shall receive compensation 
 for such accidents only as occur in the master's service 
 — for example, "in the course of their employment,'* 
 in Austria and Germany; "by reason of or in course 
 of their work," in France and Quebec; "in the course 
 of and as a result of fulfilling the labor contract gov- 
 erned by the act of March 10, 1900," in Belgium; 
 "arising out of and in course of the employment," 
 in Great Britain. 
 
 The practical construction of these provisions 
 varies somewhat in the several countries, but as a whole 
 they express the principle that the workman shall re- 
 ceive compensation only for injuries occurring during 
 the actual or constructive performance of his labor 
 contract and connected in some way with the work. 
 Furthermore, the accident must cause disability — dis- 
 figurement is not material unless it actually interferes 
 with employment. 
 
 In Great Britain, "serious and wilful misconduct" 
 of the victim absolves the master unless the injury 
 result in "death or serious and permanent disable- 
 ment." The Qjntinental systems generally provide 
 that compensation shall not be paid for an injury 
 intentionally caused by the victim, though in Hun- 
 gary the dependents are entitled in a case of fatality. 
 Inexcusable fault is more strictly dealt with in Ger- 
 many and Austria than in France, where in such case 
 a judge may award a portion of the regular compen- 
 sation. 
 
 All the laws deny compensation for casualties en- 
 taihng less than a fixed period of disablement, but 
 each falls into one or two grand divisions according as 
 accidents are or are not partially covered by a system 
 of sickness insurance. 
 
 In the first division the periods are comparatively 
 long. In Austria four weeks' and in Germany three 
 
L24J 
 
 months* (ninety-one days) disability elapses before 
 accident compensation becomes due, but in each country 
 a disability of more than three days is compensated 
 through a compulsory sickness insurance system to 
 which the workmen contribute two-thirds of the ex- 
 pense and the employer one-third. 
 
 In the second division they are comparatively 
 brief; for example, two days in the Netherlands, three 
 in Russia, five in France, one week in Belgium, Great 
 Britain, New Zealand, South Australia, two weeks in 
 British Columbia and Queensland. 
 
 WHO RECEIVE COMPENSATION 
 
 The industries embraced in each law broadly indi- 
 cate the parties entitled to compensation, except where 
 discriminations are made, as in singling out workmen 
 engaged on the hazardous side of an employment, e.g., 
 the use of machinery in agriculture. In each country, 
 however, a right to compensation depends more or 
 less upon a maximum rate of wages. Great Britain 
 alone distinguishes here between the manual and the 
 clerical employe, imposing no wage limit upon the 
 former while denying compensation to the latter whose 
 annual wages exceed $1,216. In the other countries 
 the wage limit affects all employes and works in one of 
 two ways. In one group of laws a victim receiving 
 more than a certain annual wage is not compensated: 
 Belgium, $463; Denmark, $645; Germany, $714; 
 Russia, $772; Italy, $1.35 per diem. In the second 
 group, employes in receipt of more than a fixed sum 
 receive a compensation based upon these figures, not tak- 
 ing the excess into account; Austria, $487; France, 
 $463; Hungary, $487; Norway, $321; Nether- 
 lands, $1.61 per diem. 
 
 WHO PAY COMPENSATION 
 
 No state appears to contribute to accident com- 
 pensation (except of course where an industry is oper- 
 ated by the state, e.g., the German railways), the 
 prevalent purpose being, as we shall see, to impose this 
 upon the industries affected and not directly upon the 
 resources of the community at large. We shall see, 
 however, that certain states take a deep interest in the 
 
[25] 
 
 integrity and distribution of compensation funds, act- 
 ing as administrators, insurance agents, etc. ; and in 
 Germany the government actually advances compen- 
 sation through the post offices, these (post offices) 
 honoring orders given by the employers' associations 
 which are thereafter assessed for the sums advanced. 
 
 In Austria workm.en receiving cash wages are re- 
 quired to contribute 1 per cent thereof to the accident 
 fund, the employer making deduction and depositing the 
 amounts. Austria alone requires, in terms, a contribu- 
 tion to accident compensation, and this a small per- 
 centage, but it prescribes that accidents entailing not 
 more than four weeks' disability shall be compensated 
 from the sickness insurance fund, to which workmen 
 contribute two-thirds to the employer's one. 
 
 In Germany a rule of like tenor, save that the 
 four weeks is increased to thirteen, makes the work- 
 men the chief contributors in the majority of casual- 
 ties; for example, in 1907, out of 662,901 accidents 
 only 144,703 fell within the compensation law, but 
 their contribution to the aggregate cost of accident is 
 relatively slight, the estimates for 1 886-95 allotting 
 92 per cent to the employers. All the laws impose upon 
 the employer the immediate, and, excepting the work- 
 m.en's contribution in Austria, the entire liability for 
 whatever is defined as accident compensation. 
 
 Reserving for the present the question whether this 
 statutory liability may be passed on or distributed by 
 some method of insurance, we inquire first whether it 
 excludes liability in every other form, and then whether 
 the employer may substitute a voluntary comj>ensation 
 scheme for the statutory one. 
 
 AS TO EXCLUSION OF LAW SUITS 
 
 The fact that an employer is liable for statu- 
 tory compensation does not, of course, relieve him from 
 prosecution in case the cause of injury falls within the 
 criminal law. Furthermore, as statutory compensa- 
 tion, being graded to cover all accidents regardless of 
 their causes, presumably falls below the damages prob- 
 ably recoverable by the victim of an employer's negli- 
 gence and well below the punitive damages recover- 
 able in case of his gross misconduct, it is material to 
 
[26] 
 
 inquire whether or when the victim may sue instead 
 of claiming compensation. 
 
 As the laws generally agree in denying compensa- 
 tion to the victim of his own misconduct, so generally 
 they leave open a suit for damages to the victim of an 
 employers' gross misconduct, though in Germany suit is 
 maintainable only when the employer or his agent has 
 been subjected to penal sentence. Also gross mis- 
 conduct commonly requires the employer to indemnify 
 third parties for whatsoever liability they have assumed 
 for him or share with him. For example, if he be a 
 member of an association he must make good to it com- 
 pensation paid on this account as in Hungary and Ger- 
 many. 
 
 Beyond agreeing that damage suits may be main- 
 tained in cases of gross or criminal misconduct, the 
 laws divide into two groups in their regard. 
 
 In one group, including Belgium, France, Hun- 
 gary, Germany, the injured workman is barred from 
 action. 
 
 Great Britain heads the other group. The work- 
 men's compensation act leaves intact not only the com- 
 mon law action, but actions under the employers' liabil- 
 ity act of 1 880, but it seems that a workman who loses 
 his suit cannot thereafter institute arbitration proceed- 
 ings under the act. He has made his election and must 
 abide by it. The act provides, however, that where 
 it is determined in an action that the defendant is 
 not liable in damages, but would have been liable for 
 the statutory compensation the court shall, if the plain- 
 tiff request, assess compensation, deducting, however, 
 all or part of the costs of suit. 
 
 In Sweden a workman may both claim indemnity 
 under the "common law or special law" and compensa- 
 tion under the statute, but if he obtain damages the 
 employer may deduct the compensation. 
 
 SUBSTITUTION OF VOLUNTARY SCHEME 
 
 On the theory that a workman in "contracting 
 out" of a benefit allowed by statute is not really a free 
 agent, the laws generally forbid unofficial agreements 
 between employer and workmen whereby the latter 
 
[27] 
 
 waive the benefit of their provisions. Some laws pro- 
 vide, however, that a voluntary compensation scheme 
 approved by the authorities as being of at least equal 
 value to the beneficiaries may be substituted in whole 
 or in part for the compulsory one. 
 
 Workmen's acceptance of the scheme is required 
 in Great Britain; but not in Austria, France, Italy. 
 
 THE COMPENSAl ION 
 
 The laws generally require the employer to pay 
 funeral expenses not exceeding a fixed amount, and first 
 aid to the injured is usually prescribed in one way or 
 another. All the laws base compensation on the 
 victim's earnings, and in computing these any valuable 
 consideration over and above cash payments is gen- 
 erally reckoned, as for example, a workman's board. 
 In an English case a waiter's tips were taken into 
 account. In some countries earnings are calculated on 
 a collective basis for certain classes of workmen; for 
 example, seamen and agricultural laborers in Ger- 
 many. 
 
 In cases of fatality, compensation is paid to de- 
 pendents either in the form of a pension or in a lump 
 sum. A pension of 50 per cent of annual earnings is 
 paid in Norway, 60 per cent in Austria, France, Ger- 
 many, Hungary, the Netherlands; 66 per cent in Rus- 
 sia. Belgium prescribes an annuity of 30 per cent of 
 annual earnings. In the following states these lump 
 sums are paid instead of pensions: Three years' earn- 
 ings, but not under $729 nor over $1,459 in Great 
 Britain and South Australia ; not under $ 1 ,000 or 
 over $1,500 in British Columbia; not under $973 or 
 over $1,946 in New Zealand and Queensland; four 
 years' earnings, but not under $321 nor over $857, 
 in Denmark ; five times the annual earnings in Italy. 
 
 Some laws apportion the death compensation 
 among dependents according to a rigid schedule so that 
 the sum actually paid depends on the existence of 
 persons answering the description; for example, in 
 Sweden, $32 to a widow during widowhood and $16 
 to each child until it reaches fifteen years, the whole 
 not to exceed $80 per year. Other laws require 
 the distribution of a specific amount among whatever 
 dependents may be entitled; for example, Italy. 
 
L28J 
 
 For total disability the following states prescribe 
 these amounts by way of pension: Austria, Denmark, 
 Germany, Hungary and Norway, 66-2/3 per cent of 
 the annual earnings; Belgium, 50 per cent daily wages; 
 Great Britain a weekly payment of not more than 50 
 per cent of average weekly earnings and not over $4.87 
 per week; a weekly payment of not more than 50 per 
 cent of average weekly earnings, not exceeding $1,500 
 altogether, in British Columbia; not exceeding $1,459 
 in New Zealand, South Australia and Western Austra- 
 lia; not exceeding $1,936 in Queensland; in Italy six 
 times annual earnings but not less than $579; in Swe- 
 den an annual pension of not more than $80. In 
 Germany and Hungary the pension is increased to full 
 annual earnings when the victim is so helpless as to 
 require an attendant. 
 
 In case of partial disability certain states expressly 
 prescribe compensation according to an estimated dimi- 
 nution of the victim's earning power; that is to say, he 
 receives the assumed difference between earnings before 
 and after the accident, and it would seem that the 
 laws generally operate along this line. 
 
 Most laws do not grade disability compensation 
 according to a classified list of specific injuries. But 
 Sweden specifies certain evidences of total disability 
 and schedules compensation for partial disability 70 
 per cent of the compensation limit in the case of loss 
 of one eye and impairment of the other, down to 10 
 per cent for deafness of one ear. And the second 
 schedule of the New Zealand law prescribes compen- 
 sation ranging from 100 per cent of the limit in such 
 cases mental incapacity, loss of eyes, both hands or 
 feet, etc., down to 4 per cent for loss of finger joint. 
 
 Whether disabiHty, total or partial, is permanent 
 or temporary gives rise to various provisions which need 
 not be analyzed, but it is important to note that in a 
 case of continuing disability the laws generally pro- 
 vide for revision of the compensation down or up as 
 the condition of the beneficiary changes for better 
 or worse. 
 
 An employer or his insurer who shall become re- 
 sponsible for an accident pension may desire to com- 
 mute it for a lump sum which the beneficiary may be 
 even more desirous of handling. Whether this may be 
 done depends generally upon how keenly the state is con- 
 
[29] 
 
 cerned to assure a continuing aid to the beneficiaries for 
 the handing over of a lump sum may well mean a 
 speedy dissipation of the money and an early recourse 
 to that charitable aid which systematic compensation 
 aims to avoid. The policy of the European states gen- 
 erally is against commutation. For example, in Aus- 
 tria, commutation is allowed only when "the commune 
 legally bound to care for the claimant under the poor 
 laws has consented to the agreement.'* In France, the 
 capital sum cannot, usually, be demanded, but the em- 
 ployer may discharge his obligation by paying the 
 sum into the national retirement fund (which then 
 assumes the pension) and he must do this in case he 
 ceases to do business. In Germany a partial disabil- 
 ity pension of not more than 1 5 per cent of the full 
 amount may be commuted for a capital sum if a request 
 by the beneficiary shall be approved by the authorities. 
 
 CLAIMS FOR COMPENSATION AND 
 SETTLEMENT OF DISPUTES 
 
 The laws generally prescribe that the circum- 
 stance and nature of each casualty be speedily recorded, 
 and that a claim for compensation shall be presented 
 within a fixed time. Establishment of the fact and 
 degree of accidental injury and an accurate estimate 
 of its effect are the essential foundations of every just 
 claim, and the laws endeavor to guard against mistake, 
 simulation and malingering by prescribing an impartial 
 medical service. It would seem that everywhere a claim- 
 ant may be required to submit to an impartial medical 
 examination; and, furthermore, that, as in Great Brit- 
 ain, when a simple surgical operation will relieve or 
 lessen disabiHty the claimant must submit to it or reduce 
 his claim, though he is not called upon to undergo a 
 serious one. In stating that the laws generally pre- 
 scribe the opinion of an impartial expert in case the 
 doctors of the respective parties disagree we simply 
 indicate the general method of deaHng with a branch 
 of the compensation system of vital importance, and 
 one peculiarly open to errors and deceptions whose recti- 
 fication depends largely upon the professional skill and 
 standing of the doctors employed. 
 
 Passing from the special subject of medical dis- 
 putes to the general procedure for the presentation 
 
[30] 
 
 of claims and the adjudication of the serious contro- 
 versies that will arise, we find widely different methods 
 among the several systems. 
 
 In Germany where the compensation system is 
 wholly within the sphere of public law, the judicial 
 tribunals are, it would seem, practically excluded from 
 all participation in its working and even from inter- 
 preting it. The employers* associations determine 
 claims in the first instance, and their decisions may be 
 appealed to specially constituted arbitral tribunals. In- 
 terpretation is the function of the imperial insurance 
 office. TTie general spirit of the German method is 
 followed in Austria and Hungary, though with im- 
 portant differences in form. 
 
 In Great Britain the question whether a par- 
 ticular case is covered by the compensation act is deter- 
 mined by the regular courts in a regular suit, and there 
 is. much litigation over the interpretation of important 
 phrases. When, however, the case is admittedly within 
 the act, the compensation is in the vast majority of 
 instances agreed upon according to a simple formula; 
 and, in case of dispute, the county courts are author- 
 ized to arbitrate or appoint arbitrators. Some such 
 system generally obtains in the British Colonies. In 
 Quebec, however, a claimant must institute an action 
 at law without a jury and the judgment of the court 
 may be appealed. In New Zealand a court of arbitra- 
 tion, whose general powers are defined by the industrial 
 conciliation and arbitration act of 1 908, has jurisdic- 
 tion over all claims for compensation. 
 
 France largely utilizes the civil courts in the ad- 
 justment of compensation claims, though the procedure 
 is of a somewhat summary nature. The accident itself 
 is the subject of a judicial inquiry conducted by a 
 justice of the peace and, if a claim for compensation 
 is not agreed upon before the president of a district 
 court, suit follows in a court chosen by the more dili- 
 gent party. The court shall summarily decide the mat- 
 ter, and the decision may be appealed according to the 
 <:ommon law. 
 
 INSURANCE 
 
 Compulsory compensation is the root of every sys- 
 tem and generally, as we have seen, the compulsion, 
 is addressed to employers. This element of compulsion 
 
[31] 
 
 needs to be emphasized as being fundamental because 
 some writers seem to emphasize compulsion only where 
 insurance of compensation is made obligatory. But 
 in truth, insurance, even though a statute link it with 
 compensation, is essentially a sequent and not an 
 intrinsic factor thereof. It is a method for at once 
 effectuating and distributing a primary obHgation 
 already imposed. In treating insurance, whether com- 
 pulsory or not, as ancillary to compulsory compensa- 
 tion, we do not minimize its real importance; we sim- 
 ply put it in its proper place. 
 
 Insurance of compensation benefits the injured 
 workman by presumably securing to him the payment 
 of whatever sums may become due, and where it is 
 made obligatory we may assume that the workman's in- 
 terest is the prominent motive. But to the party respon- 
 sible for compensation, insurance whether obligatory 
 or not, is of equal or even greater concern. Indeed it 
 is usually a commercial necessity, for only by some 
 method of insurance may the burden of his risk be light- 
 ened through distribution. This need is completely met 
 in the states where the law at once requires insur- 
 ance and ordains the method. It is partly met where 
 the law encourages insurance by indicating institutions 
 to which the employer may transfer his obligations. 
 Where the law is silent he who would insure must do it 
 in his own way and at his own risk. Always bearing 
 in mind that insurance in its passive sense tends to 
 secure the workman, we have also to consider it in 
 its active sense, as something to be done by the respon- 
 sible party for his immediate protection. With this pref- 
 atory word on the double function of insurance, we 
 take up an important and difficult chapter of our sub- 
 ject. 
 
 **State'* insurance means, I take it, insurance at the 
 public expense, a charge on the tax-paying body; and 
 there are those who would thus socialize all insurance 
 under government auspices. At present state insurance is 
 exemplified fully in such legislation as the British old 
 age pension scheme; and, to a degree where, as in 
 Germany, the taxpayers contribute to invalidity and 
 pension annuities; but as yet it has hardly if at all 
 entered into the field of industrial accident. While 
 state insurance in its primary sense plays at present a 
 relatively small part in workmen's compensation, we 
 
L32J 
 
 shall presently mark its appearance in a secondary 
 sense wherever the government acts as the depository 
 and administrator of accident funds created by pri- 
 vate contributions. 
 
 An employer who, under a compensation law, is 
 liable at any moment for an unforeseen sum of money, 
 should be able to anticipate and assuage the contin- 
 gency by some method of insurance. Indeed if the 
 theory of compensation laws that industry should bear 
 the cost of its casualties is to be fairly effectuated, it 
 must be possible approximately to calculate the cost, 
 and this cannot be done if each casualty must be 
 financed separately. We have, therefore, to inquire 
 whether a given law imposes upon employers a col- 
 lective liability which involves distribution of risk, or 
 an individual liability; and how in either case it deals 
 with the matter of insurance ; and whether or how far it 
 permits an employer to shift his liability. In pursu- 
 ing this inquiry the laws may be conveniently classified 
 according as they ignore insurance, as they encourage it 
 or as they compel it. 
 
 The British compensation act imposes individual 
 liability upon every employer within its purview, from 
 the railway company to the small householder. Ex- 
 cept as the act authorizes the secretary of state to order 
 an employer to insure his workmen against industrial 
 disease in an established mutual trade insurance com- 
 pany or society which already comprises a majority 
 of the employers in the particular industry — an excep- 
 tion, be it noted, not affecting "accident" in the ordi- 
 nary sense — the British system takes no account of 
 insurance. The employer is left to insure his risk or not 
 at discretion. He cannot get rid of his personal lia- 
 bility except that in case of a continuing compensation 
 he may purchase an annuity from the post office 
 savings bank — an opportunity which seems to be rarely 
 utilized. The state takes no concern in securing the 
 workman beyond making a compensation claim a first 
 lien in case of the employer's insolvency. 
 
 The British Colonies generally follow the mother 
 country in leaving insurance to the employers* discre- 
 tion, though the recent law of Quebec so far recog- 
 nizes the functions of insurance companies as to require 
 those who assume payment of the "rents*' — pensions — 
 to deposit an adequate fund with the government of the 
 
[33] 
 
 Dominion or the province and to conform to such con- 
 ditions as the lieutenant governor may impose. In the 
 event of a company's default, however, the employer 
 is not relieved. In fine, the British Empire prescribes 
 "workmen's compensation" as distinguished from 
 "workmen's insurance," yet it involves insurance in a 
 broad sense, for, as Lord Morris said; "The liability of 
 the employer * * * becomes that of an insurer 
 against accident to the workmen." 
 
 CONTINENTAL INSURANCE SYSTEMS 
 
 The workmen's compensation systems of continen- 
 tal Europe difFer radically from the British in evincing 
 more or less concern in insurance, and in this relation 
 they are broadly classified according as the insurance is 
 voluntary or compulsory. Insurance is wholly or 
 mainly voluntary in Belgium, Denmark, Sweden and 
 France, and in each country the employers are individ- 
 ually responsible for compensation. 
 
 In Belgium the employer may shift his respon- 
 sibility to an insurance company or a mutual asso- 
 ciation approved by the state. In case he becomes 
 liable for a pension he shall secure its capitalized value 
 by some approved system or deposit or insurance. 
 
 In Denmark individual responsibility of an em- 
 ployer may be transferred to an approved insurance 
 company. 
 
 In Sweden the employer may shift his liability 
 by insuring in a state insurance institute, from which he 
 may also purchase whatever pensions may be charged 
 upon him. 
 
 In France the employer is individually responsible. 
 He may be released from the whole or a part of the 
 cost of illness and the temporary compensation by sat- 
 isfying the authorities that he has insured his work- 
 men in an approved mutual association. 
 
 For securing compensation for death or perma- 
 nent incapacity the French law provides : 
 
 "Art. 24. — Whenever employers who are liable, 
 or the insurance companies, with fixed premiums or 
 mutual, or the guaranty associations whose members 
 
L34J 
 
 are liable jointly or severally, fail to pay, when due, 
 the compensation charged against them as a result of 
 accidents causing death or permanent incapacity for 
 work, the payment shall be secured to the interested 
 parties through the national old age pension fund, by 
 means of a special guaranty fund, established as here- 
 inafter provided, the management of which shall be 
 entrusted to the said fund. 
 
 "Art. 25. — To establish the special guaranty 
 fund there shall be added to the charge for licenses 
 of the industries specified in Article 1 , four centimes 
 (0.8 cents) extra. A tax of five centimes (1 cent) a 
 hectare per mining concession shall be collected on 
 mines. These taxes may be increased or reduced ac- 
 cording to the necessities of the case by the financial 
 law. 
 
 "The national retirement fund may have recourse 
 against the debtor employers for the amounts paid by 
 it on their account under the preceding provisions. 
 
 "For reimbursing itself for its advances, the fund, 
 in case of insurance of the employer, shall enjoy the 
 preference under the provisions of Article 2102 of the 
 civil code relative to the compensation due by the in- 
 surer, and it shall have no recourse against the em- 
 ployer.** 
 
 Compulsory insurance is the rule in the remain- 
 ing systems we shall survey. Workmen "are insured** 
 in Germany; "must be insured'* in Italy; "shall be 
 insured" in Austria, the Netherlands and Norway; 
 are "subject to compulsory insurance'* in Hungary. 
 In such states alone do we find workmen*s "insurance** 
 thoroughly exemplified. 
 
 In the Netherlands, Italy and Norway the em- 
 ployers are individually responsible. The Nether- 
 lands has estabhshed a royal insurance bank, with the 
 post office as branches thereof. Each employer may 
 pay to the bank annually a premium based upon his 
 wage account, the bank paying from the aggregate 
 fund whatever compensation may be due. An em- 
 ployer may, however, be permitted to assume per- 
 sonally his obligation or to transfer it to a company or 
 a mutual association provided he or the transferee shall 
 deposit in the bank a sufficient pledge. It appears that 
 the bank gets the poorer risks and is obliged to make up 
 
L35J 
 
 deficiencies. Norway requires all employers to insure 
 in a state insurance institution. In Italy the employer 
 must insure either in the national fund for insurance of 
 workmen against industrial accidents or in private com- 
 panies approved by the state, unless he shall establish 
 for at least 500 workmen an adequate compensation 
 scheme, or be joined in a mutual insurance association, 
 both being approved by the state. In Germany, Aus- 
 tria and Hungary compulsory compensation and com- 
 pulsory insurance are actually interwoven, for each 
 system imposes upon employers a collective responsi- 
 bility and this involves the basic principle of insur- 
 ance — distribution of risk. The employers' accident 
 association is the backbone of each system. 
 
 THE GERMAN ASSOCIATIONS 
 
 As Germany led off in adopting the principle of 
 workmen's compensation, so in the employers' accident 
 associations she has made the most striking contribu- 
 tion to its machinery. Promising that these associations 
 are subject to regulative and corrective powers imme- 
 diately or finally vested in the imperial insurance office, 
 we shall give a general idea of their organization, 
 functions and responsibilities utilizing largely the literal 
 texts, though not keeping to the statutory order. 
 
 Insurance is undertaken on the mutual plan by 
 the heads of establishments subject to the law, who are 
 for this purpose united into accident associations. These 
 are formed for specified districts and comprise all the 
 establishments of those branches of industry for which 
 they are formed, though the latter provision may be 
 waived in the case of railways. An association may 
 provide for its division into geographical sections. 
 Establishments comprising substantial parts of different 
 branches of industry shall belong to that association 
 to which the main establishment belongs. The asso- 
 ciation shall compensate for accidents in other estab- 
 lishments if these occur in operations for which the 
 order is given and the wages paid by a member. No 
 contributions may be required or expenditures made 
 except for payment of compensation, administration, 
 reserve funds, prizes for rescue and prevention of acci- 
 dents and, with the consent of the imperial insurance 
 office, the establishment of hospitals, sanatoriums, etc. 
 
[36] 
 
 The association may acquire rights, assume obHgations 
 and sue and be sued in its own name, and for its 
 obHgations the property of the association is the only 
 security for creditors. 
 
 The internal law of the association is contained in 
 a constitution enacted by the members at a general 
 meeting and approved by the imperial insurance office. 
 
 The affairs of the association, except as they are 
 within the competency of the general meeting, are ad- 
 ministered by a board of directors and by agents who 
 shall be members and shall serve without compensation 
 save for expenses. It is represented by its board of 
 directors and is bound by all lawful acts of the board. 
 
 Every owner of an establishment belonging to 
 those branches of industry for which the association 
 is established is a member of the association if the 
 establishment is located in the district of the associa- 
 tion. The ownership begins when the establishment 
 opens or when it becomes subject to insurance. The 
 owner shall present to the lower administrative author- 
 ities a declaration stating inter alia the nature of his 
 establishment, the number of insured persons therein 
 and the accident association to which it belongs; and 
 in case of mistake in the latter respect the authorities 
 shall assign it to the proper association. Every mem- 
 ber has a vote and is eligible to election as a director 
 and an agent of the association, which honorary (un- 
 salaried) offices cannot be declined under penalty of 
 fine, except for reasons justifying declination of guar- 
 dianship. 
 
 The law of June 30, 1900, amending the acci- 
 dent insurance laws, thus provides for the institution 
 of new associations and the rearrangement of existing 
 ones. The establishment of accident association for the 
 branches of industry newly subjected to accident insur- 
 ance according to article 1 of the industrial accident 
 insurance law, or their assignment to existing accident 
 associations, is accomplished by the federal council 
 after consultation with the representatives of the 
 branches of industry and the associations concerned. 
 Until the constitution of the accident associations estab- 
 lished under this law shall have been approved, 
 branches of industry may be withdrawn by decree of 
 the federal council, after consultation with the boards 
 of directors of th6 associations concerned, from one 
 
[37] 
 
 of the accident associations established under the law 
 of July 6, 1 884 ; of May 28. 1 885 ; of July 1 1 . 
 1887; and of July 13, 1887, and assigned to an- 
 other association, without reference to the provisions of 
 these laws. 
 
 In the newly established accident association the 
 constitution shall be adopted by a constituent general 
 meeting. This consists of delegates from chambers of 
 commerce, chambers of industry or similar represen- 
 tative economic organizations to which the employers 
 of the branches of industries concerned belong. The 
 central state authorities designate those bodies which 
 are authorized to send delegates and determine the 
 number of delegates for each according to its economic 
 importance. If the territory of the accident association 
 covers the territory of more than one state, the bodies 
 authorized to send delegates and the number of dele- 
 gates which each may send are determined by the 
 imperial chancellor after agreement with the state gov- 
 ernments concerned. The imperial insurance office shall 
 call the constituent general meeting and shall conduct 
 the proceedings until a provisional board of directors 
 shall have been elected. The general meeting con- 
 sists of all the members, unless the constitution places 
 it on a representative basis, as where the association 
 is divided into sections. The general meeting elects 
 directors, amends the constitution, audits and accepts 
 the annual balance sheet unless it confides this to a 
 committee, determines the rules respecting the legal 
 relations and the appointment of officials, establishes 
 rules for classifying establishments according to the 
 degree of accident risk in them and for determining 
 the amount of contributions in the different establish- 
 ments (i.e., the risk tariff). 
 
 The board of directors determines the compensa- 
 tion. The fund for compensation and expenses is 
 raised annually by contributions assessed on the basis; 
 first, of the wages earned in their respective establish- 
 ments by the persons insured, or, in certain cases, of the 
 local daily wage of the adult day laborer ; and, second, 
 of the risk tariff provided for in the constitution. When- 
 ever an accident is caused by an employer intentionally 
 or "through negligence, with omission of that degree 
 of caution which is especially required" of him in 
 virtue of his position the association shall in the first 
 
[38] 
 
 case, and may in the second, hold him liable for its 
 
 outlay. 
 
 Contributions may be collected in advance for the 
 first year. Unless the constitution provides otherwise, 
 these shall be made in proportion to the number of 
 persons who are employed by the members of their 
 respective establishments. When the association is 
 divided into geographical sections the constitution may 
 require not more than 75 per cent of the compensation 
 to be borne by the section wherein the accident occurs. 
 Associations may unite for the joint payment of com- 
 pensation for which they are jointly responsible. 
 
 The risk tariff, which is framed by the general 
 meeting subject to the approval of the imperial insur- 
 ance office, is the basis for classifying the several estab- 
 lishments according to the degree of accident risk and 
 for determining the amount of their contributions. After 
 the first two years the tariff shall be revised every five 
 years in the light of the accidents that have occurred 
 in the different establishments. The revision is sub- 
 mitted to the general meeting with a statement of the 
 compensated accidents in each establishment and may 
 be adopted if the imperial insurance office shall ap- 
 prove. The general meeting may then for the ensu- 
 ing period impose supplementary contributions or grant 
 returns of contribution to employers according to the 
 accidents that have occurred in their establishments. 
 
 Compensation is advanced to the beneficiaries by 
 the postal administration upon orders of the accident 
 associations. Once a year the central postal authorities 
 send to the association statements of payments made and 
 designate the postal banks to which the amounts due 
 shall be paid. These amounts are then collected from 
 the members by the board of directors. 
 
 The accident association shall accumulate a re- 
 serve fund. For its accumulation there shall be levied, 
 when the first period for the payment of insurance 
 contributions arrives, a supplementary assessment of 
 300 per cent of such contributions ; at the second period 
 200 per cent; at the third, 150 per cent; at the fourth 
 100 per cent; at the fifth, 80 per cent; at the sixth, 
 60 per cent; and thereafter 10 per cent less at each 
 period imtil the eleventh period. After the close of 
 the first eleven years, or provided that the eleventh 
 year has already been passed at the time this law goes 
 
[39] 
 
 into effect, from the latter time, the accident associa- 
 tion shall annually add to the amount of the legal 
 reserve, for three years 1 per cent, and then for each 
 succeeding period of three years I per cent less down to 
 4 per cent, including the interest each time. After the 
 expiration of this time such amounts shall be taken 
 from the interest of the reserve fund as may be re- 
 quired to prevent a further increase in the average 
 amount of the contribution required per insured per- 
 son. The rest of the interest is again to be added to 
 the reserve fund. 
 
 In case of stringent need, the association, with the 
 approval of the imperial insurance office, may use the 
 interest of the reserve and even encroach on the prin- 
 cipal of the reserve before the accumulation required 
 above has been attained. Restitution to the reserve 
 shall then take place as may be required by the imperial 
 insurance office. 
 
 The associations issue regulations for arrange- 
 ments to be made and orders to be issued by the mem- 
 bers for the prevention of accidents in their establish- 
 ments, under threat of punishment for failure to comply 
 by fines of not more than 1 ,000 marks or by listing the 
 establishment in a higher risk class, or, if it is already 
 in the highest class, by the imposition of surtaxes of not 
 more than twice the amount of the contribution. Hie 
 association also prescribes rules of conduct for the 
 insured workmen in order to prevent accidents with 
 a penalty of not more than six marks for violation. 
 The regulations shall be submitted to the imperial insur- 
 ance office and shall be made with the co-operation of 
 representative workmen. The number of these repre- 
 sentatives shall be equal to the directors participating 
 and they shall have full voting power. There shall 
 be sent to the representative of the workmen a draft 
 of the rules which are to be submitted to them for their 
 consideration and adoption. The imperial office may 
 consult workmen's representatives before approving the 
 rules. Associations shall enforce the regulations and 
 to this end may authorize inspectors and accountants to 
 investigate the establishments. If the employer fears 
 that the inspection of his business by the technical in- 
 spectors of the association may result in the disclosure of 
 a trade secret or in injury to his business interests he may 
 claim the privilege of having the inspection conducted 
 
[40J 
 
 by other experts. Technical experts and accountants 
 shall be sworn and shall not disclose any information, 
 "and shall refrain from copying any arrangement or 
 method of operation within the establishment which are 
 kept secret by the owner, but which come to their 
 knowledge, provided that these are trade secrets.'* 
 
 The compulsory associations of Austria and Hun- 
 gary differ in many respects from the German model 
 but we shall show only certain radical differences in 
 organization. In Hungary employers and employes are 
 grouped in an association called the national workmen's 
 sickness and accident insurance fund to which are affil- 
 iated district insurance funds of local operation. The 
 association is a ** self-governing organization of the 
 employes insured against sickness and accident and of 
 their employers" under the supervision of a state work- 
 men's insurance office. Austria follows Germany in 
 segregating accident from sickness insurance but the 
 employments are not, as in Germany, grouped by indus- 
 tries. They are grouped by districts conterminous with 
 the territorial provinces of the state and for each district 
 there is an insurance institution of whose directors one- 
 third represent the employers, one-third the workmen 
 and one-third are appointed by the state. Several 
 states prescribe the compulsory association of employ- 
 ers in certain circumstances. In Italy, for example, 
 the state may order the employers in a particular indus- 
 try to form a mutual association provided there be 
 at least 15,000 workmen employed therein. 
 
 PERMISSIVE INSURANCE 
 
 We have remarked that most Continental states 
 differ from Great Britain in exempting a large number 
 of employers from compulsory compensation either 
 because the industry is non-hazardous or the plant 
 small. But some of them offer not only to the exempt 
 employer but to workmen at large an opportunity to 
 participate in the insurance system, an inducement to 
 the former being release from civil liability for acci- 
 dent, and to the latter an increased compensation if 
 he be already covered by the law, and if not an assur- 
 ance of indemnity. This opportunity is, for example, 
 given by the laws of Germany, France and Hungary. 
 
[41] 
 
 INTERNATIONAL QUESTIONS 
 
 A compensation system, being part of the muni- 
 cipal law of the state, its benefits and burdens may 
 be presumed to affect all persons within the jurisdic- 
 tion, whether they be foreigners or citizens, and none 
 without the jurisdiction. This general rule is, how- 
 ever, frequently supplemented by modifications devised 
 in view of the ramification* of industrial enterprise and 
 the migration of workmen. 
 
 Considering first the case of the employers, we 
 find that an employer coming in from abroad is, under 
 some systems, subject to peculiar obligations. For 
 example, in Germany a foreigner temporarily engaged 
 in business may be required to double the normal 
 contributions to the proper association and give security. 
 The Hungarian law provides that an undertaking whose 
 plant extends beyond the country is subject to insur- 
 ance in one state only — the location of the principal 
 office being the controlling factor. If, however, the 
 undertaking has a permanent representative in Hun- 
 gary the local law governs the Hungarian workmen. 
 A treaty between Germany and the Netherlands, Au- 
 gust 27, 1907, deals with compensation in undertak- 
 ings carried on in both states. 
 
 Coming to migratory workmen we first consider 
 the case of citizens. Several systems provide that when 
 a domestic employer employs a citizen beyond the ter- 
 ritory the compensation law follows the person unless 
 he is entitled to compensation under the foreign law, 
 for example, Hungary. The position of a workman 
 or his dependents who leave the country during the 
 term of an accident pension depends on the statute. 
 Germany continues payment so long as the pensioner • 
 reports to the German consul. Great Britain stops 
 payment except in case of permanent injury. In Swe- 
 den a pension is suspended during absence. In some 
 countries a lump sum may be reclaimed in settlement, 
 for example, Hungary. 
 
 In the relation the rule in federated nations is of 
 interest, and we note that the German Empire is, 
 for this purpose, one country. The Prussian, Bava- 
 rian, the Saxon, moving about within the Empire, may 
 draw his pension wherever he happens to reside. 
 
[42] 
 
 Foreign workmen are, as a rule, within the bene- 
 fits of the law, and if they become pensioners are on 
 the footing of citizens so long as they remain. Some 
 laws provide that if they leave the country they may 
 receive lump sums in settlement — sums amounting to 
 three times the annual pension in Germany and France. 
 The dependents of a foreign workman, if they are also 
 residents, usually stand in his shoes, but their position 
 may depend upon the practice in their own country; 
 for example, France, Sweden and Germany. In this 
 connection we note that recent development of inter- 
 national law — conventions dealing with various indus- 
 trial conditions. Among them are several which con- 
 fer reciprocal benefits in the matter of workmen's com- 
 pensation. 
 
 PARTIES TO ADMINISTRATION 
 
 The parties interested in a workman's compensa- 
 tion scheme are the state, which orders compensation, 
 the employer, who pays it, and the workman, who re- 
 ceives it, and it is of interest to understand to what 
 extent each participates in the administration of rep- 
 resentative systems. 
 
 Under the British workman's compensation act the 
 home secretary may appoint medical referees and cer- 
 tifying surgeons, and may add to the hst of industrial 
 diseases. County court judges act as, or appoint, 
 arbitrators in a compensation case where the parties do 
 not agree. The registrar of Friendly Societies is au- 
 thorized to decide whether a compensation arrange- 
 ment between employer and employe shall be substi- 
 tuted for the act. The post office offers, but does not 
 force, its assistance in the matter of providing armui- 
 ties. In short, the act operates with comparatively 
 little intervention by the state — a condition accounted 
 for by anti-bureaucratic traditions which, though some- 
 what weakened of late, are not yet abandoned. On 
 the continent of Europe, where bureaucracy is thor- 
 oughly established, the functions of government are 
 more or less intimate. 
 
 Coming to the other parties interested, we find 
 that neither the British nor the French systems afford 
 room for either employer or workmen to undertake 
 formal responsibility for administration, with the impor- 
 
[43] 
 
 m 
 
 tant qualification that the British law provides for a 
 registered agreement between them by which most 
 claims are settled. Germany gives to the employers 
 the prominent place in administration. Their associa- 
 tions are the keystone of the whole system and, whilst 
 efficiently supervised, are granted a large measure of 
 self-government. In Austria and Hungary employ- 
 ers are substantially represented in the associations. 
 While the German workman is not admitted to the 
 employers' associations, representative workmen co- 
 operate with them in framing regulations for the pre- 
 vention of accidents, and are given a place in the arbi- 
 tration courts to which are made the first appeals. In 
 Hungary workmen are represented on both the major 
 and the minor insurance associations — the national and 
 the district funds — and in Austria, in the trade associa- 
 tions of each district. 
 
 REVIEW OF FOREIGN LAWS 
 
 Our survey of foreign laws, short as it is, needs 
 an accentuation of several points. Each country has, 
 generally speaking, legislated with deliberation — in 
 many instances after years of study and discussion. All 
 the systems confer upon the workmen within their pur- 
 view a legal right to fixed compensation for industrial 
 accidents not caused by their willful act, but except 
 the English, which covers all workmen except the 
 "casual,*' they generally exclude workmen who are not 
 engaged in "hazardous" employments. 
 
 The right to compensation everywhere revolution- 
 izes the old law limiting employer's liability to cases 
 involving his actual or at most his constructive fault. 
 It is based upon the novel economic dogma that indus- 
 try should bear the burden of its accidents by compen- 
 sating the victims. There is no disposition to make 
 good to the victim the entire loss. Partial indemnity 
 only is prescribed, and this is generally based on his 
 earning capacity as evidenced by his wages. The 
 compensation is usually paid by the employer (with the 
 important exception of the German sickness insurance 
 funds covering a large proportion of accidents and cre- 
 ated largely by workmen's contributions) and the out- 
 lay is supposed to be charged to cost of production. 
 
[44] 
 
 All the leading countries, except Great Britain, 
 deny actions for damages to workmen entitled under a 
 compensation law, except where the master is in gross 
 fault. 
 
 All countries eliminate trial by jury from the pro- 
 cedure in disputed claims; and, France excepted, the 
 more important countries do not prescribe a special 
 action in the ordinary courts but provide a scheme 
 of arbitration. In short, the maxim *'he gives twice who 
 gives quickly*'* so conspicuously pertinent in the case 
 of injured workmen, is reflected in as summary and 
 untechnical a procedure as is deemed compatible with 
 justice to both parties. 
 
 The wider the distribution of the burden of com- 
 pensation the lighter, of course, is its incidence upon 
 individual employers and the greater the security of the 
 beneficiaries. Distribution implies the employment of 
 some method of insurance, and the several systems are 
 broadly classified according to their attitude toward 
 insurance. 
 
 Great Britain typifies the systems which officially 
 take no account of insurance — each employer may in- 
 sure or not at discretion and does not shift his per- 
 sonal liability by so doing. 
 
 France typifies another sort of voluntary insur- 
 ance whereby the employer may shift his liability by 
 insuring in an approved institution. 
 
 In systems of the third class insurance is compul- 
 sory and may, as in Germany, be necessarily involved 
 in the collective liability imposed upon groups of 
 employers. Or, as in the Netherlands, employers may 
 be required to insure in designated institutions. 
 
 Except in Great Britain and some of her depend- 
 encies it is, generally, the rule that insurance by a pre- 
 scribed or approved method discharges the employer 
 from personal responsibility for compensation. 
 
 The systems of continental Europe are, as a rule, 
 more highly organized and more thoroughly worked out 
 than the British system, which, indeed, is crude in com- 
 parison. And a reason for this difference is that the 
 state socialism, which underlies all systems, thrives 
 best in communities accustomed to paternalism and dis- 
 ciplined to bureaucracy. 
 
[45] 
 
 The laws of the several countries agree in their 
 general aim. Certain classifications by groups are more 
 or less marked. Instances of borrowing and adaption 
 are many. But in the last analysis each country has 
 gravitated to a system whose spirit and form are com- 
 mended by racial and political characteristics, by local 
 habits and customs. Broadly speaking it appears that 
 those systems work most smoothly where existing insti- 
 tutions of one kind and another capable of facilitating 
 their purpose have been skillfully utilized to this end. 
 
 COMPULSORY COMPENSATION IN THE UNITED 
 
 STATES 
 
 As stated heretofore in this report three states have lately 
 enacted compulsory compensation laws. 
 
 A New York law of June 25. 1910, entitled "An act to 
 amend the labor law, in relation to workmen's compensation in 
 certain dangerous employments" provides (Article 14 a): 
 
 Sec. 215. This article shall apply only to work- 
 men engaged in manual or mechanical labor in the fol- 
 lowing employments, each of which is hereby deter- 
 mined to be especially dangerous, in which from the 
 nature, conditions or means of prosecution of the work 
 therein, extraordinary risks to the life and limb of 
 workmen engaged therein are inherent, necessary or 
 substantially unavoidable, 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 ma- 
 chines or derricks or hoisting apparatus used within or 
 on the outside of any bridge or building for the con- 
 veying of materials in connection with the erection 
 or demolition of such bridge or building. 
 
 3. Work on scaffolds of any kind elevated 
 twenty feet or more above the ground, water, or floor 
 beneath in the erection, construction, painting, altera- 
 tion or repair of buildings, bridges or structures. 
 
L46J 
 
 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 instrumentahties 
 of the industry. 
 
 6. The operation on steam railroads of loco- 
 motives, 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. 
 
 Sec. 217. If, in the course of any of the em- 
 ployments 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 employ- 
 ment 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 employes to exercise 
 due care, or to comply with any law affecting such em- 
 ployment; then such employer shall, subject as herein- 
 after mentioned, be liable to pay compensation at the 
 rates set out in 219-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 and willful misconduct of the workman. 
 
 Sec. 219-a. The amount of compensation shall 
 be in case death results from injury: 
 
 (a) If the workman leaves a widow or next 
 of kin at the time of his death wholly dependent on his 
 earnings, a sum equal to twelve hundred times the daily 
 
L47] 
 
 earnings of such workman at the rate at which he was 
 being paid by such employer at the time of the injury 
 subject as hereinafter provided, and in no event more 
 than $3,000. Any weekly payments made under this 
 article shall be deducted in ascertaining such amount. 
 
 (b) If such widow or next of kin at the time 
 of his death are in part only dependent upon his earn- 
 ings, such proportionate sum not exceeding that pro- 
 vided in sub-division (a) as may be determined accord- 
 ing to the injury to such dependents. 
 
 (c) If he leaves no dependents, the reasonable 
 expenses of his medical attendance and burial, not ex- 
 ceeding $ 1 00. 
 
 Whatever sum may be determined to be payable 
 under this article in case of death of the injured work- 
 man shall be paid to his legal representative for the 
 benefit of such dependents, or if he leaves no such 
 dependents, for the benefit of the persons to whom the 
 expenses of medical attendance and burial are due. 
 
 2. Where total or partial incapacity for work 
 at any gainful employment results to the workman 
 for the injury, a weekly payment commencing at the 
 end of the second week after the injury and contin- 
 uing during such incapacity, subject as herein provided, 
 equal to 50 per centum of his average weekly earnings 
 when at work on full time during the preceding year 
 during which he shall have been in the employment 
 of the said employer, or if he shall have been in employ- 
 ment of the same employer for less than a year, than 
 a weekly payment of not exceeding three times the aver- 
 age daily earnings on full time for such less period. In 
 fixing the amount of the weekly payment, regard shall 
 be had to the difference between the amount of the 
 average earnings of the workman before the accident 
 and the average amount he is able to earn thereafter 
 as wages in the same employment or otherwise. In 
 fixing the amount of the weekly payment, regard shall 
 be had to any payment, allowance or benefit which 
 the workman may have received from the employer 
 during the period of his incapacity, and in the case of 
 partial incapacity the weekly payment shall in no case 
 exceed the difference between the amount of the aver- 
 age weekly earnings of the workman before the acci- 
 dent and the average weekly amount which he is earn- 
 
[48] 
 
 ing 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 com- 
 pensation paid under this article exceed the damage 
 suffered, nor shall any weekly payment payable under 
 this article in any event exceed $10 a week or extend 
 over m.ore than eight years from the date of the acci- 
 dent. 
 
 The act further provides inter alia that no existing rights 
 of action shall be affected thereby, but that one who brings 
 an action shall forfeit claim to compensation; also that "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** which 
 action "shall be conducted in the same manner as actions at law 
 for the recovery of damages for negligence.** 
 
 By the Montana act of 1910, an act creating a state acci- 
 dent insurance and permanent disability fund for coal miners, it 
 is provided that "all workmen, laborers and employes employed 
 in and around any coal mines or in and around any coal washers 
 in which coal is treated, except office employes, superintendents 
 and general managers, shall be insured in accordance with the 
 provisions of this act, against accidents occurring in the course 
 of their occupation.*' The operators shall pay to the auditor of 
 this state within five days after the monthly payment of wages 
 1 cent per ton on the tonnage of coal mined and shipped or ready 
 for shipment, and operatives shall submit to a deduction of 1 
 per cent, of their gross monthly earnings which shall be paid by 
 the operators to the state auditor within five days after the pay- 
 ment of monthly wages. The amount so paid to the auditor is 
 called a "tax.** The auditor shall pay the moneys to the state 
 treasurer, who shall place them in a distinct fund called the 
 employes co-operative insurance and total permanent disability 
 fund. The auditor "upon being satisfied by adequate evidence of 
 accidental death** shall issue a warrant upon the treasurer to the 
 dependents of the deceased in the sum of $3000. A workman 
 receiving permanent injury shall receive a monthly compensation 
 of not more than $1 per day for each working day. Loss of a 
 
[49] 
 
 limb or an eye shall be compensated for in the sum of $1000. 
 **If there are no funds available to pay the auditor's warrant this 
 shall draw interest at the rate of 10 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 inter- 
 est then due.** When any monthly payment has been made, the 
 beneficiary may claim a lump sum not in excess of $3000, from 
 which any payments already made shall be deducted. The auditor 
 "shall have plenary power to determine all disputed cases which 
 may arise in his administration not herein provided for and to 
 recommend in his report the rates or premiums necessary to pre- 
 serve such fund and shall order paid such indenmifications as 
 herein 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 hable hereunder and the character of the 
 proofs of deaths or total permanent disability, and shall have 
 power to make all other orders and rules necessary to carry out 
 the true intent of this act.** Acceptance of benefits shall relieve 
 the employers from liability to suit and the commencement of a 
 suit shall operate as a forfeiture of the right to benefits. 
 
 The preamble to a Maryland statute reads as follows: 
 
 An act to create a fund for the relief and sus- 
 tenance of employes injured in coal and clay mining in 
 Alleghany and Garrett counties, and the dependents of 
 employes injured or killed in such mining, and provid- 
 ing for the imposition of a tax of 27 cents per month, 
 for such employe, upon all employers engaged in the 
 business of cocJ and clay mining, in said counties, and 
 for a like tax upon each employe to be deducted from 
 his monthly wages by the employer, both taxes to be 
 paid monthly, and a report made thereon, to the treas- 
 urers of said counties by such employers, the same to 
 be kept by the treasurers in distinct funds to be known 
 as 'miners* and operators' co-operative relief fund,' pro- 
 viding for certain payments therefrom under the orders 
 of the county commissioners, as relief money, to per- 
 sons injured and disabled while in the discharge of their 
 duties in or about such mines, and for the payment of 
 relief money to the extent of $1,500, under orders 
 
[50] 
 
 of the county commissioners, to the personal representa- 
 tives of such employe who may meet death in the dis- 
 charge of his duties, for the relief and sustenance of the 
 indigent dependents of such employe; defining the ad- 
 ministrative powers and duties of such commissioners 
 in relation to such relief fund, and their right to enforce 
 the payment of the tax, providing for advancements by 
 the treasurer of one county to the treasurer of the other 
 to cover temporary depletions of such county fund, 
 and for the remission of the tax when such fund 
 
 reaches $50,000; exempting parties 
 
 complying with this act from suits for injuries, disa- 
 bility and death sustained by their employes, when relief 
 has been accepted or sued for under this act; 
 
 Whereas, it is the duty of the government to pro- 
 vide sustenance in the case of helpless indigence to those 
 who are or may become paupers and charges upon the 
 public and is the settled practice of governments to do 
 so; and 
 
 Whereas, experience has shown that the occu- 
 pation of coal and clay mining in Alleghany and 
 Garrett counties is attended with peril peculiar to the 
 occupation itself, and that a great number of employes 
 in the mines, v^thout estates and having large families 
 and dependents, are annually disabled or killed in con- 
 sequences of injuries sustained in their employment and 
 they and their families become objects of charity and 
 charges upon the public authorities, and their infant 
 children are unable to secure the proper support and 
 education ; and 
 
 Whereas, it appears that such injuries, disabil- 
 1 ities and death occur with such regularity as to be sus- 
 
 ceptible of approximation in advance and are inherent 
 in the occupation and a part of the business itself and 
 the monetary loss therefrom ought to be charged up 
 to the occupation and business; and ! 
 
 Whereas, sound policy requires that some provi- 
 sion be made for the sustenance of the family and 
 dependents of such injured or disabled employe and the 
 widows and infant children and dependents of such 
 employe when death results from such injuries, etc. 
 
 The country treasurer shall make payments when directed 
 by the county commissioners; specific amounts are paid for speci- 
 
[51] 
 
 fie injuries; e. g., loss of hands or blindness $750; there is paid 
 in addition $1 a day during medical treatment of not more than 
 twenty-six weeks; for total disability other than specified, $1 a 
 day for not more than fifty-two weeks; in case of death within 
 a year payment of $1500, less what may have been paid as 
 above. Commissioners shall determine what dependents are 
 entitled, how much they shall receive, and whether in lump sums 
 or allowances, and they may invest $750 in home for wddow and 
 infants. The bringing of suit for damages forfeits rights under 
 the act. 
 
 It is perhaps too early to judge what the result will be upon 
 the laborer of the adoption of the workingmen*s compensation 
 act in New York, but some idea may be gained of its effect upon 
 the employer by the action of insurance campanies who insure 
 against employer's liability. It seems that at the same time that 
 the compensation act went into effect in New York, a new 
 employer's liability act also went into effect, which modified the 
 employer's defenses in an action for injury. In a circular letter 
 of Walter Drew, commissioner of the National Erectors' Asso- 
 ciation of New York, dated November 4th, the situation as to 
 insurance under the two acts is stated as follows: 
 
 Insurance Rates, Employers, especially in the 
 trades affected by the compensation act, should pay 
 careful attention to the question of insurance rates under 
 the new laws before taking contracts. These rates 
 have been so largely increased as to form an appreciable 
 item in determining cost. It will be noted that under 
 the compensation act, the workman has the option of 
 claiming under that act or under the liability law. If 
 he has a strong, clear case, he will probably claim under 
 the liability law, as the chance for large damages 
 would be better. If, however, he has a case in which 
 the employer would not be liable at all under the liabil- 
 ity act, he will claim under the compensation act. The 
 employer, of course, must be insured against his risk 
 under both acts. 
 
 The rates established in the iron trade are $7.50 
 per $100 on the pay roll for the employers' liability 
 act; $5 for the compensation act, and $3 for public 
 insurance, on buildings where steel framework is called 
 
[52] 
 
 for in the plans. The rate for steel frame buildings 
 is in all the trades much higher than in other buildings. 
 Printers, steam fitters, plumbers, plasterers and many 
 other trades will have to pay on steel buildings a rate 
 of $2 for compensation, $1.25 for employers' 
 liability. In the masons* trade on steel buildings, the 
 rate under the compensation act will be $3.25 per 
 $100, and the entire rate, including compensation act, 
 liability act and public insurance will be $7.25. 
 
 In addition to all this, is a new risk imposed by 
 the statute on contractors who employ sub-contractors, 
 as they are made liable for accidents to the sub- 
 contractors* workmen. For this contingent liability, the 
 rate of 60c for each $ 1 00 of the entire cost of a steel 
 building will be charged and 50c per $100 for other 
 buildings. 
 
 The above rates are based on a limit of liability 
 of $5000 to one p)erson, and $10,000 to more than 
 one in any one accident If these limits are doubled, 
 there wall be an increase of probably 30 per cent in the 
 rate. If all the sub-contractors are insured, the com- 
 pany will carry the contingent liability of the general 
 contractor at the rate of 15 per cent per $100 on the 
 cost of the building. If they are not insured and if the 
 general contractor pays the higher rate of 60c for con- 
 tingent liability, his insurance will cover the liability of 
 the sub-contractors also. 
 
 In conclusion in this letter Mr. Drew says: 
 
 A large contractor who had begun a contract 
 without reference to the change in liability rates under 
 the New York law, now finds that he will in all proba- 
 bility be able to complete his contract only at a loss. 
 The high rates under the New York act should fur- 
 nish very serious food for thought in other states where 
 statutes of this kind are contemplated. This does not 
 mean that the compensation principle is not correct. 
 One reason for the very high New York rate is the 
 fact that the compensation principle is not in full and 
 compulsory operation. The workman having a choice 
 makes it necessary for the employer to be insured under 
 two statutes instead of one. This is not only uneco- 
 nomic, but it would seem to mean that an undue pen- 
 alty is imposed upon the employer of New York in 
 trying out the experiment of the compensation principle 
 in this country. 
 
r53] 
 
 In addition to the legislative action above mentioned, efforts 
 have been made in some instances by the employer and the 
 employe, looking to some alleviation of the hardship experienced 
 by the employe under the present system of compensation. 
 
 A synopsis of some of the plans now in force of this char- 
 acter is set forth in Bulletin No. 90, bureau of labor, Septem- 
 ber, 1910, and we present them herewith as found in the bul- 
 letin, excepting the plan of Deere & Company, which informa- 
 tion is obtained from the printed description of the plan before 
 the committee. ^ 
 
 UNITED STATES STEEL CORPORATION 
 
 A striking recent illustration of this form of action is found 
 in the case of the United States Steel Corporation, which put a 
 new accident relief system into operation in May of this year 
 for a trial year. This corporation has a pay roll of nearly a 
 quarter of a million men, and while many of its branches of work 
 involve what are called hazardous employments, all classes of 
 employment are on the same basis as to the benefits of the relief 
 system. The question of negligence is put entirely aside, the only 
 condition for the receipt of relief being that there shall be dis- 
 abling accidental injury in the course of employment. The 
 injury must be such as to prevent the employe from following "his 
 usual or any other occupation." The bringing of a suit at law 
 bars all benefits under the scheme. The employe is -called on for 
 no contribution, all funds being supplied by the Corporation. 
 
 The amount of benefits paid begins with 18 months* earn- 
 ings as death benefits for married men living with their families, 
 the scale increasing with the number of children under 16 years 
 of age and with length of service, the maximum hmit being 
 $3,000. Unmarried employes are entitled to no death benefits 
 other than funeral expenses, and the limitation as to married 
 men, i. e., "living with their families,'* apparently cuts off non- 
 resident families of alien workmen from all compensation imder 
 this scheme. Considerable discretion is allowed in the admin- 
 istration of both death and disability features of the scheme, and 
 provision is made for medical and hospital treatment. Temporary 
 disability is relieved according to a sliding scale, the amount not 
 
[54] 
 
 to exceed $1.50 per day for single men and $2 per day for 
 married men. Permanent disability cases are generally to be 
 dealt with according to their nature, but stated rates are an- 
 nounced for the loss of a hand (12 months' wages), the loss of 
 an arm (18 months* wages), the loss of a foot (9 months* 
 wages), the loss of a leg (12 months' wages), and the loss of 
 an eye (6 months* wages). This system connects itself essentially 
 and naturally with measures of the company to safeguard its 
 workmen from accidental injury. 
 
 INTERNATIONAL HARVESTER COMPANY 
 
 Another corporation taking an important step in the same 
 direction is the International Harvester Company and associated 
 companies, the system becoming effective May 1, 1910. TTiis 
 scheme, affecting approximately 30,000 employes, also ignores 
 the customary defenses of negligence, assumed risks, and fellow- 
 servants, only intoxication and wailful disregard of the use of 
 safety appliances cutting employes off from the benefit of the 
 scheme. No distinction is made between employes having resi- 
 dent and those having non-resident families. Dependents of 
 employes dying as the result of accident and within 16 weeks of 
 its occurrence receive three years' average earnings, but not less 
 than $1,500 nor more than $4,000. For injury causing "ina- 
 bility to work at any gainful occupation whatsoever,** the pay is 
 one-quarter of the average earnings for the first 30 days and half 
 pay thereafter for not more than 1 04 weeks from the date of the 
 accident, compensation not to exceed $20 a week. If total dis- 
 ability continues after 104 weeks, the workman shall receive 
 during such continuance an annual pension equal to 8 per cent 
 of the death benefit which would have been payable in case of 
 his death, but not less than $ 1 per month, payments to be made 
 monthly. The loss of a hand or a foot calls for the payment of 
 one and one-half years* wages, not less than $500 nor more than 
 $2,000; the loss of both hands or both feet, or one hand and one 
 foot, four years' average wages, but not less than $2,000; the 
 loss of one eye, three-fourths of a years* wages; and of both 
 eyes the same as for both hands or feet. By the contribution of 
 
[55] 
 
 small sums — 6 cents per month from employes earning $50 or 
 less per month, 8 cents for those earning more than $50 and not 
 more than $ 1 00, and 1 cents from those earning more than $ 1 00, 
 the one-fourth pay for the first thirty days' disability may be 
 increased to one-half pay for workmen making such contributions. 
 No part of such contributions is to go for operating expenses. 
 Lump sum payments may be arranged for in lieu of weekly pay- 
 ments, and the acceptance of benefits is to operate as a release 
 from all claims against the company. 
 
 NATIONAL ASSOCIATIONS OF EMPLOYERS 
 
 The National Metal Trades Association announced in the 
 spring of this year a mutual insurance scheme in which employes 
 in shops managed by its members may procure insurance cover- 
 ing sickness as well as accidents at a cost of $1 per month. No 
 initial deposit or membership fee is required. No benefits are 
 paid for disability lasting not more than seven days, but if it lasts 
 for thirty days full benefits are paid for the whole period. The 
 rates of benefit vary from $20 to $60 per month, according to 
 the class of employment. The president of the National Cotton 
 Manufacturers* Association advocates the establishment of a 
 contributory accident insurance system for the cotton industry, 
 and the National Manufacturers* Association has had a committee 
 at work since early in the current year investigating the question 
 of compensation with the idea of drafting measures to be sub- 
 mitted to that body. The report of this committee to the fifteenth 
 annual convention of that body in May last shows 67 per cent 
 of the manufacturers in membership with the association to be in 
 favor of a voluntary mutual insurance system among the mem- 
 bership, while 90 per cent are dissatisfied v^th the workings of 
 the present employers' liability laws and liabiHty insurance sys- 
 tems. The association adopted resolutions very much in agree- 
 ment with the findings of the New York commission set forth 
 above as to the inadequacy and unsatisfactory results of the 
 present liability system, the fourth resolution being: 
 
 That we recommend to our members the inaugu- 
 ration with the least possible delay of a system of vol- 
 
[56] 
 
 untary, mutually contributory industrial indemnity insur- 
 ance, this system to be elastic enough to provide for 
 voluntary, contributory sickness, old age, and death 
 insurance, if later deemed advisable. 
 
 The association expressed its desire **to co-operate with 
 state legislators in promoting uniform, sound industrial indemnity 
 legislation,*' while opposing unsound legislation. The president 
 and directors of the association were authorized to arrange for 
 the estabHshment of a suitable plan. 
 
 NATIONAL CIVIC FEDERATION 
 
 The National Civic Federation, representing employers, em- 
 ployes, and the public at large, at its tenth annual meeting in 
 November, 1909, made the matter of compensation for injured 
 wage earners the principal subject of consideration, carrying the 
 discussion forward to its conference on uniform state legislation 
 in January last. At this latter meeting it was resolved to recom- 
 mend "that the workmen's compensation acts, fair to the employer 
 and employe and just to the state, be uniformly substituted for 
 the present system of employers' liability for injuries received in 
 and arising out of the course of employment." 
 
 AMERICAN FEDERATION OF LABOR 
 
 Organized labor, as represented by the American Federa- 
 tion of Labor, is also strongly committed to the idea of com- 
 pensation, the proceedings of the convention showing the growth 
 of this sentiment to be rapid in recent years. The executive 
 council of the federation has prepared four bills embodying com- 
 pensation provisions, and applicable to employment generally, to 
 employes of the federal government, to dangerous employments in 
 jurisdictions subject to federal control, and to persons employed 
 in interstate and foreign commerce. These bills were indorsed 
 by the annual convention of the federation in 1909, and activity 
 of agitation in their behalf was encouraged. The desirability of 
 uniform enactments was dwelt upon in this connection — a feature 
 of the case that was also emphasized in the discussions by the 
 National Civic Federation noted above. 
 
[57] 
 
 DEERE & COMPANY 
 
 This company has estabhshed for the benefit of its em- 
 ployes a system of benefit insurance for disability and death result- 
 ing from sickness or accident, the cost of which insurance is equally 
 divided between the company and the employes. The insurance 
 begins as soon as the employe who is paid through the weekly 
 pay roll signs the employment contract and begins work for the 
 company, and terminates when the employe is discharged or 
 voluntarily quits or without notice leaves the employ of the com- 
 pany. The insurance continues sixty days after the employe is 
 temporarily released from service through lack of work. Insur- 
 ance may be continued by regular employe's absence from work 
 over sixty days by making special arrangements with the employ- 
 ment agency. Sick benefits are paid in accordance with the 
 schedule, and in case of death from sickness, $100 death benefit 
 is paid, and free medical attendance is furnished not to exceed one 
 visit per day by one of the company's doctors during the period 
 covered by the insurance. Sick benefits and medical attendance, 
 however, are furnished only to members who have been in the 
 employ of the company four consecutive weeks during the twelve 
 months previous to disability. Death benefits are payable only 
 in case of death of the employe who has worked for the com- 
 pany continuously during three months just previous to death or 
 has worked for the company a total of six months out of the 
 twelve months just previous to his death. 
 
 Accident benefits are paid to members or surviving widow, 
 if any, and if none, then to the heirs at law and next of kin as 
 prescribed by the laws of the state of Illinois. Said benefits are 
 as follows: 
 
 (E) Twelve Months Benefit. — One dollar per day for 
 twelve months after the first week, for disability due to accident 
 received when not employed othervyrise than by and for the com- 
 pany. Benefits claimed for accidents not occurring at the com- 
 pany's plant will be considered on their individual merits. 
 
 Disability resulting directly or indirectly from sun-stroke, 
 carbuncles, boils, abscesses, ulcers, blood poison or contact with 
 
[58] 
 
 poisonous substances or infectious substances, is not classed as due 
 to accident. 
 
 (F) Surgical Attendance. — Free surgical attendance by 
 the company 5 surgeon. 
 
 ACCIDENT BENEFITS FOR SERIOUS INJURY 
 
 The following special benefits are paid to employes injured 
 at the company's plant: 
 
 (G) Death. — For injuries resulting in the death of a 
 member before the expiration of the benefit period as in E, $ 1 ,000 
 shall be paid. 
 
 (H) Hands and Feet. — For injuries causing the imme- 
 diate severing of, or necessitating, in the opinion of the com- 
 pany's surgeon, the amputation of both hands, or both feet, or 
 one hand and one foot, the member shall receive $ 1 ,000. 
 
 (I) For injuries causing the immediate severing, or neces- 
 sitating, in the opinion of the company's surgeon, the amputation 
 of one hand, or one foot, the member shall receive $500. 
 
 (J) Eyes. — For injuries causing total loss of sight of 
 both eyes the member shall receive $ 1 ,000. 
 
 (K) For injuries resulting in the loss of sight of 
 one eye, the member shall receive $250. 
 
 (L) Finger. — For injuries resulting in the loss of two 
 joints of any finger, the member shall receive $100. 
 
 Benefit Effective on Day of Employment. — Accident bene- 
 fits in paragraph E and special accident benefits become effective 
 as soon as the employe starts work for the company. 
 
 Benefits After One Week's Disability. — Benefits as stated 
 in paragraph E begin after one week's disability, which must 
 be certified to by the company's surgeon. 
 
 Half Benefits. — One-half the benefits as stated in E wdll be 
 paid to members rated at less than 1 5 c per hour. 
 
 OPERATIONS 
 
 Consult Employment Agent. — Any member who desires to 
 have an operation for appendicitis, stricture, hernia, hemorrhoids. 
 
[591 
 
 or any chronic trouble, or who desires special treatment for eye 
 or ear trouble, will consult the employment agent before arrang- 
 ing for treatment. 
 
 Other Insurance. — If the employe carries other sick insur- 
 ance making a total indemnity in excess of the employe's regular 
 wages, the company will pay in the case of such employe only 
 such proportion of the benefits in paragraphs A and B as his 
 regular wage bears to the total indemnity. 
 
 PHYSICIANS 
 
 Accident Cases. — All accident cases at the company's plant 
 must be handled by the company's surgeon. 
 
 Assessments. — In partial payment for this insurance every 
 man on the company's weekly pay rolls will be charged 50c on 
 the last day of each month. 
 
 Half Assessments. — Assessments amounting to one-half the 
 above will be charged employes rated at less than 1 5 c per hour. 
 
 It is provided that in all cases the acceptance by an employe 
 of the full benefits herein provided for shall release all claims 
 against the company for any liability on account of such injuries 
 or sickness, otherwise one-half of the benefits herein provided for 
 will be paid. 
 
 In addition to the system of benefit insurance described 
 above, at the same time the company put in force the comprehen- 
 sive system of pensions by which all employes engaged in any 
 capacity in the operations of the company who have reached the 
 age of 65 years and have been 20 years or more continuously in 
 the service, may be retired from active service and become eligible 
 to a pension; but no person entering the employ of the company 
 later than the age of 45 years is eHgible to a pension. 
 
 It is further provided that at the discretion of the company 
 any employe who has been ten years or more continuously in the 
 service of the company and has become totally incapacitated for 
 further work by reason of injury or sickness, may or may not 
 receive aid from the pension fund; and if it is granted, it shall 
 be for such amount and for such period as the pension board 
 might determine. The entire amount necessary to support the 
 pension fund is furnished by the company. 
 
[60] 
 
 THE LEGAL PRINCIPLES INVOLVED 
 
 Not only have the numerous commissions and other bodies 
 which have investigated the question of workingmen's compensa- 
 tion given thought and study to the question along economic lines 
 and for the purpose of determining what has already been done 
 or what measures would be suitable, but the legal phases of the 
 situation have been carefully analyzed and studied. We have 
 before us the exhaustive brief of the constitutionality of working- 
 men's compensation laws compiled by Mr. H. V. Mercer, who 
 was the attorney of the Minnesota Commission; also a report 
 of Mr. Samuel A. Harper, who was the attorney for the Illinois 
 Commission; the brief of Mr. Carmen F. Randolph of New 
 York, which is elsewhere herein referred to; the opinion of Samuel 
 Williston, LL.D., which is appended as ** Appendix B'* of the 
 Report of the Conference of Commissions held in Chicago, No- 
 vember, 1910, and the article written by Mr. Lindley D. Clark, 
 found in Bulletin No. 90 of the bureau of labor. It is not the 
 purpose of your committee to present an exhaustive brief on the 
 principles involved, but rather in a general way to point out 
 the conclusions which have been reached by those who have made 
 a minute study of the legal phases of the situation, leaving it to 
 those who may be interested in a study of the principles involved 
 to resort to the briefs which we have mentioned or to original 
 research on their part. 
 
 It seems to be conceded that whatever authority the legis- 
 lature may have to adopt the legislation which seems to be needed, 
 it must find its justification in what is known as **the police 
 power." In this connection we quote from the article by Mr. 
 Clark above mentioned — 
 
 What the pohce power is, is not capable of exact 
 definition, since it is subject to growth and change 
 wath changing industrial and social conditions. Under 
 it a government may preserve and promote the public 
 welfare by establishing such rules and regulations for 
 the conduct of persons and the management of business 
 and property as may be conducive to the comfort, wel- 
 fare, and safety of society. Both property and liberty 
 are held on such reasonable conditions as may be 
 
[61] 
 
 imposed by the governing power of the state in the exer- 
 cise of this power, and with such conditions and pro- 
 visions of the fourteenth amendment of the federal con- 
 stitution, declaring that no state shall * 'deprive any per- 
 son of life, liberty or property without due process of 
 law, nor deny to any person within its jurisdiction the 
 equal protection of the laws," were not designed to 
 interfere; but every exercise of the police power is 
 none the less subject to inquiry as to whether it is fair, 
 reasonable and appropriate; or whether, on the other 
 hand, it is an unreasonable, unnecessary and arbitrary 
 interference with the right of individuals to their per- 
 sonal liberty. 
 
 The police power is therefore flexible and adapt- 
 able to the needs of the public welfare as they develop. 
 The idea expressed by the words of the fourteenth 
 amendment, **due process of law," is hardly less broad. 
 Though the words differ, the same idea is expressed in 
 the phrase, '*the law of the land.'* 
 
 It is not restricted to the test of conformity to 
 process or jurisprudence in use at some fixed past time, 
 since to so construe it would unduly restrict and ham- 
 per procedure and deny every quality of the law but 
 its age and render it incapable of progress or improve- 
 ment. Any legal proceeding enforced by public author- 
 ity, whether sanctioned by age and custom or newly 
 devised in the discretion of the legislative power in fur- 
 therance of the general public good, which regards and 
 preserves the principles of liberty and justice, must 
 be held to be due process of law. The state is not tied 
 down by any provision of the federal constitution to 
 the practice and procedure which existed at the com- 
 mon law. Due process of law is secured if the laws 
 operate on all persons alike. 
 
 The provision guaranteeing to all persons the 
 equal protection of the laws is satisfied when all per- 
 sons or classes in like conditions and circumstances 
 enjoy like privileges under the law. It does not 
 limit, nor was it intended to limit, the subjects upon 
 which the police power of a state may be exerted, 
 but simply requires that legislation shall treat alike all 
 persons affected by it. The greater part of all legis- 
 lation is special, either in the subjects sought to be 
 ascertained by it, or in the extent of its application. 
 Such legislation does not infringe upon the clause of 
 
L62] 
 
 tne fourteenth amendment requiring equal protection 
 of the laws, because it is special in its character. When 
 legislation applies to particular bodies or associations, 
 imposing upon them additional liabilities, it is not open 
 to the objection that it denies to them the equal pro- 
 tection of the laws, if all persons brought under its 
 influence are treated alike under the same conditions. 
 The hazardous character of the business of operating 
 a railway would seem to call for special legislation with 
 respect to railroad corporations, having for its object 
 the protection of their employes as well as the safety 
 of the public. The business of other corporations is 
 not subject to similar dangers to their employes, and no 
 objections, therefore, can be made to the legislation 
 on the ground of its taking an unjust discrimination. 
 
 The hazardous nature of an industry is therefore 
 an adequate reason for legislation applying to its con- 
 duct, superseding in greater or less degree the right 
 of contract as between the employer and his workmen; 
 and, as already indicated, it is in part on this fact that 
 the New York statute providing for compulsory com- 
 pensation in specified dangerous employments relies. 
 Laws abrogating the defense of common employment 
 either generally or in designated industries are consti- 
 tutional; so of laws modifying the defense of assump- 
 tion of risks and of contributory negligence; and in 
 general it is no objection to a law that it imposes a 
 measure of liability on an employer that is unknown at 
 common law. The defenses of *'assumed risks** and 
 "contributory negligence" are frequently abrogated out- 
 right in cases where injury results from the failure of 
 an employer to conform to a standard of safety fixed 
 by statute. In other statutes the employe is declared 
 to have, in the defined circmstances, the same rights of 
 action and recovery as if he had not been an employe. 
 
 The extent to which such a declaration carries the 
 matter appears from a consideration of statutes that 
 make the proprietors of an undertaking responsible for 
 injuries resulting from its conduct without personal 
 fault. Thus a Nebraska statute makes railroad com- 
 panies liable for injuries to passengers unless the injury 
 is the result of criminal negligence of the person injured 
 or of his violation of some known rule. The supreme 
 court of the state in upholding this statute, said: "The 
 legislation is justified under the police power of the 
 
[63] 
 
 state. It was enacted to make railroad companies 
 insurers of the safe transportation of their passengers, 
 as they were of baggage and freight." The Supreme 
 Court of the United States sustained this view, quoting 
 the above with approval and adding: "Our juris- 
 prudence affords examples of legal liability without 
 fault and the deprivation of property without fault 
 being attributable to its owner. The law of deodands 
 was such an example. The personification of the ship 
 in admiralty law is another. Other examples are af- 
 forded in the liability of the husband for the torts of 
 the wife, the liability of a master for the acts of his 
 servant.*' It is obviously only necessary to place on 
 the statute books of the same state the two provisions 
 last cited, i. e., the one giving the employe the status 
 of a third person and one making the undertaker respon- 
 sible for damages resulting from the conduct of his 
 business — to attain the full extent of the protection by 
 compensation legislation. 
 
 A text writer discussing this subject, says: "If 
 the rule of absolute liability is held to be unconstitu- 
 tional, it must be on the ground that justice and equity 
 forbid that a person be required to make good the 
 loss of another unless some fault of culpability can be 
 imputed to him. * * * The principle that inev- 
 itable loss should be borne, not by the person 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 intelligent idea of justice which seems 
 to be in accord with modern social settlement. More- 
 over, the rule of absolute liability is established in our 
 law in the case of fires caused by locomotives and has 
 been sanctioned by the United States Supreme Court. 
 ( 1 65 U. S. 1 80. See St. Louis & S. F. R. R. Co. 
 V. Mathews, 165 U. S. 1.) It also underlies the rule 
 of respondeat superior, since the employer cannot relieve 
 himself from liability for the act done by the servant 
 within the scope of his employment by proof of the 
 greatest possible care in the selection of the servant. 
 Logic and consistency, therefore, demand that lia- 
 bility, irrespective of negligence, should not be de- 
 nounced as unconstitutional. The required element of 
 causation may readily be found in the voluntary 
 employment of dangerous instruments or agencies.** 
 
[64] 
 
 In connection with the above quotation, the con- 
 struction of the federal employers* liability law of 
 1906 (and in respect of the points involved the pro- 
 visions of the act of 1908 are the same) may be con- 
 sidered, as it was discussed in the case of Howard v. 
 Illinois C. R. Co. (207 U. S. 463; 28 Sup. Ct. 
 141). Justice White, delivering the opinion of the 
 Court, said: "Besides, the statute, it is urged, dis- 
 criminates against all who engage as common carriers 
 in interstate commerce, since it makes them responsi- 
 ble, without limit as to the amount, to one servant for 
 an injury suffered by the acts of a co-servant, even in a 
 case where the negligence of the injured servant has con- 
 tributed to the result, hence placing all employers who 
 are common carriers in a disfavored and all their 
 employes in a favored class. Indeed, it is insisted that 
 the statute proceeds upon contradictory principles, 
 since it imposes the increased responsibility just stated 
 upon the master presumably in order to make him more 
 careful in the selection of his servants, and yet mini- 
 mizes the necessity for care on the part of the servant 
 by allowing recovery, although he may have been neg- 
 ligent. But without, even for the sake of argument, 
 conceding the correctness of these suggestions, we at 
 once dismiss them from consideration as concerning 
 merely the expediency of the act and not the power of 
 Congress to enact it." 
 
 And Justice Moody in discussing the substantial 
 provisions of the statute in his dissenting opinion pointed 
 out that "the remedy afforded by it is more general to 
 the employe than that given by the common law in 
 several respects'*; first, in allowing recovery of dam- 
 ages for death resulting from neghgence; second, in 
 abrogating the defense of fellow servants; third, in ex- 
 acting a provision as to comparative negligence, by 
 virtue of which the contributory negligence of the 
 injured person does not bar recovery, if the employer's 
 negligence is greater, but only serves to reduce the 
 amount of damages recoverable ; and, fourth, by making 
 void all contracts relieving the employer from liability 
 for injuries received by the employe in the course of 
 employment; concluding, "thus four doctrines of the 
 common law restrictive of the employe's rights are sup- 
 planted by others more favorable to him." 
 
[65] 
 
 Justice Moody then said: '*There can be no doubt 
 of the right of a legislative body, having jurisdiction 
 over the subject, to modify the first three of these 
 rules of the common law in the manner in which this 
 act of Congress does it. They are simply rules of 
 law, unprotected by the constitution from change, and 
 like all other such rules must yield to the superior 
 authority of a statute. They have so generally been 
 modified by statute that it may well be doubted if they 
 exist in their integrity in any jurisdiction. * * * 
 Whenever the legislative power to change any of these 
 rules of the common law has been drawn in question 
 in this court it has been sustained.** 
 
 It may be recalled in this connection that the stat- 
 ute in question has been declared constitutional in the 
 territories and the District of Columbia ; while in respect 
 of the fourth point, relating to contracts of waiver, a 
 decision of the court of appeals of the District of 
 Columbia held this provision to be constitutional. This 
 privision of the law of 1908 was referred to in a very 
 recent case as intended to prevent the evasion of the 
 other provisions of the act. 
 
 That compensation legislation prescribes the con- 
 ditions of contracts between employer and employe 
 and changes largely the legal consequences and inci- 
 dents of such contracts is indisputable. It seeks to 
 improve the status of the employe, and in doing so 
 devolves upon the employer the duty of administering 
 the benefits provided, whether met at his own cost and 
 expense or made a part of the cost of production and 
 distributed among the consumers of his goods or the 
 public served by his undertaking. But even grant- 
 ing that there is as the result of such legislation a shift- 
 ing of relationships, it does not follow that it dis- 
 criminates unfairly between employer and employe. 
 Thus a statute regulating the payment of wages in 
 store orders was said to have a tendency to place the 
 employer and employe upon equal ground, suggesting a 
 previously existing recognizable inequality; in another 
 case the Supreme Court speaks of it as an established 
 and recognized fact that, in the making of contracts, 
 employers and employes do not stand upon an equal- 
 ity. Such inequality is easily a result of the growth 
 of corporations and the centralization of business man- 
 agement employing numerous and widely scattered 
 
[66] 
 
 employes, which fact legislatures may recognize in 
 providing remedial legislation. 
 
 Many of the points of statutory enactment and of 
 judicial construction noted above, together w^ith other 
 legal considerations, were embodied in the brief pre- 
 sented to the Atlantic City conference and in the 
 report of the New York commission, the latter express- 
 ing its conclusion in the following language: *'It is on 
 these judicial statements and the authorities which fol- 
 low them that we base our contention as to the power 
 of the legislature to deal with the question of employ- 
 er's liability on a basis other than fault. That the mat- 
 ter is clear beyond peradventure we do not assert, but 
 that the legislature, on examining its power to enact the 
 legislation we are about to reconmiend, vsnll agree that 
 such action is within its constitutional powers, we 
 confidently expect.** 
 
 It seems from the brief of Mr. Harper, who has given this 
 matter particular attention with reference to the constitutional pro- 
 visions in Illinois, that the greatest question for consideration is 
 whether or not the proposed legislation creating Hability without 
 fault and arranging for automatic compensation, could be sus- 
 tained against the objection that it would deprive either the 
 employer or the employe of the right to trial by jury. In dis- 
 posing of this question we quote from the brief of Mr. Harper: 
 
 In suits at common law where the value in con- 
 troversy shall exceed $20, the right of trial by jury 
 shall be preserved. Article II, of the Illinois consti- 
 tution, provides: **Sec. 5. TTie right of trial by jury 
 as heretofore enjoyed, shall remain inviolate.'* "Sec. 
 1 3. Private property shall not be taken or dam- 
 aged for the public use without just compensation. Such 
 compensation, when not made by the state, shall be 
 ascertained by a jury as prescribed by law." 
 
 It will be readily seen that were it not for the 
 reservation of this right of a jury trial, all other objec- 
 tions relating to due process of law, etc., would van- 
 ish away, because the legislature, in providing a new 
 statutory remedy for an existing condition, might also 
 provide a statutory proceeding, sufficient in itself, for 
 enforcing the liabilities and securing the benefits of 
 such a statute. And while the constitutional provi- 
 
[67] 
 
 sions quoted supra, were not intended to and did not 
 confer any new right or trial by jury, but merely pre- 
 served the right as it existed at the time of the adop- 
 tion of the constiution (Whitehurst vs. Coleen, 53 
 111. 247), yet all actions for damages for wrongs to 
 person or property, were triable by jury at common 
 law, and were and are within the application of the 
 Constitutional provisions above quoted. 
 
 It has been contended that a compensation law, 
 being in the nature of a new statutory remedy, would 
 not properly be subject to the objection that it deprived 
 any person of the right to trial by jury, if such law 
 included within its terms a sufficient and adequate 
 statutory method of enforcing the provisions, either by 
 arbitration or a trial by the court without the inter- 
 vention of a jury. As stated by Judge Brannon: 
 "It (the fourteenth amendment) does not prohibit a 
 state from future new legislation, action or proceedings 
 necessary in its judgment in the administration of its 
 government, so long as it bears alike on all similarly 
 circumstanced and be not unusual, oppressive or arbi- 
 trary action assailing the essential rights of the person." 
 Brannon on Fourteenth Amendment, Page 143, 144. 
 (See also, as bearing indirectly on this proposition: 
 Martin vs. Pittsburg etc. Co., 203 U. S. 284.) 
 
 I am of the opinion, however, that inasmuch as 
 this right of action for personal wrongs was a common 
 law right and triable by jury at the time of adoption 
 of the constitution it is within the application of the 
 constitutional provision, and that a general compensation 
 law would as effectually take away that constitutional 
 right, as would a direct statute expressly abrogating 
 the right of trial by jury in tort cases between master 
 and servant. 
 
 The general terms **due process of law,** which 
 the constitution does not even attempt to define, are 
 susceptible of a good deal of extension and enlargement 
 by construction, and can be interpreted in such a man- 
 ner as to embrace all reasonable police regulations which 
 changing conditions seem to warrant; but the right of 
 "trial by jury** can mean but one thing, and the con- 
 stitutional provision preserving it is singularly inelastic, 
 and it has practically the same scope today that it had 
 when the constitution was adopted. 
 
[68] 
 
 At the outset it may be noted that the right of 
 trial by jury was not guaranteed in express terms by 
 Magna Charta, but the provision that no freeman 
 should be hurt in either his person or property, unless 
 by the lawful judgment of his peers, or by the law of 
 the land, was so construed. Profatt Jury Tr. Sec. 24. 
 
 Of course, after the controversy arises, the par- 
 ties to the suit may waive their right to a jury and sub- 
 mit the question in controversy to the decision of the 
 court, in which case, the court obtains its power to 
 try the issues of fact wholly from the agreement of 
 the parties. Travers v. Wormer, 1 3 111. App. 39. 
 Indeed, our statute provides that '*in all cases in any 
 court of record in this state, if both parties shall agree, 
 both matters of law and fact may be tried by the 
 court." Hurd*s Rev. Stat. 1908, Page 1628, Sec. 
 60. 
 
 It has been held that the provisions of the fed- 
 eral constitution apply only to the federal courts, and 
 that the states may, if they choose, provide for the trial 
 of civil cases in the state courts without the interven- 
 tion of a jury, provided, of course^ that they shall not 
 transcend the express limitations which they have placed 
 upon themselves in their respective state constitutions. 
 Cooley's Con. Lim. 6th Ed. page 29, 30. Keith v. 
 Henkleman, I 73 111. 1 37. Spies v. Illinois, 123 U. S. 
 131. 24Cyc. 103. 
 
 The right of the jury trial in the state court is not a 
 privilege or immunity of national citizenship which the 
 fourteenth amendment prohibits the state from abridg- 
 ing; it only defends such privileges or immunities as 
 arise from, and are incident to, national citizenship as 
 such. Brannon on Fourteenth Amendment, page 82. 
 
 The control of questions relating to public health 
 was ordinarily, before the adoption of the constitution, 
 vested in boards or officers who were authorized to 
 proceed in a summary manner without the intervention 
 of a jury, and such cases, therefore, not coming within 
 the application of the constitutional provision, do not 
 now call for or require a jury trial. 24 Cyc. 1 30. 
 Metropolitan Bd. of Health vs. Heister, 37 N. Y. 
 661. 
 
 We have also seen that the state and its agencies 
 may take or injure the property of a person in times 
 
[69] 
 
 of great necessity or danger in a summary manner 
 without any due process of law or trial of any kind, and 
 without compensation to the person injured, when the 
 general safety or welfare of the people requires it. 
 
 The constitution of the state of California author- 
 izes prosecutions for felonies by information without 
 indictment by a grand jury in the discretion of the 
 legislature. The penal code of the state following this 
 constitutional authority makes provision for the prose- 
 cution of felonies by information and dispenses with the 
 indictment by a grand jury. In sustaining this legisla- 
 tion under the California constitution, the Supreme 
 Court of the United States said: 
 
 **Any legal procedure, enforced by public author- 
 ity, whether sanctioned by age and custom or newly de- 
 vised in the discretion of the legislature in furtherance of 
 the general pubhc good, must be held to be due proc- 
 ess of law." Hurtado v. CaHfornia, 110 U. S. 537. 
 See also in re Debs, 158, U. S. 564. 
 
 We have also seen that pauper acts, imposing a 
 liability for the support of indigent relatives, when 
 there was no common law duty of support, are held to 
 be legal, and not an infringement of any constitutional 
 rights. In addition to the quotation made supra from 
 People V. Hill, I 63 111. 1 86, the court said, with ref- 
 erence to the right of trial by jury: 
 
 **The legal liability imposed is statutory, and the 
 statute fixes the procedure by means of which the liabil- 
 ity is to be enforced. * * * XJ^js procedure may 
 not be in strict conformity with that provided by the 
 English statute or that provided in some other states, 
 but it is not necessarily invalid on that account. It is 
 a statutory liability, and there is no reason why the 
 procedure for its enforcement cannot be provided for 
 in the statute fixing the liability. We are unable to 
 see that the method of procedure adopted violates any 
 constitutional right of appellee. It is suggested that it 
 deprives him of the right of trial by jury. It is only 
 the right of trial by jury *as heretofore enjoyed' that 
 section 5 of article 2 of the constitution provides *shall 
 remain inviolate.* This section was not intended to 
 confer the right of jury trial in any class of cases where 
 it had not previously existed, nor was it intended to 
 introduce it into special summary jurisdictions unknown 
 
[70] 
 
 to the common-law and which do not provide for that 
 mode of trial. Ward v. Farwell. 97 111. 593; 
 Cooley's Const. Lim. (6th Ed.) 504, and authorities 
 cited in note 2." People v. Hill. 163 111. 186. 192. 
 
 193. 
 
 In my judgment, this legislation presents the far- 
 thest extreme to which the state of Illinois has gone in 
 limiting the right of trial by jury, and it finds its only 
 justification in the statement by the court that the legis- 
 lature may, in the exercise of the police power, change 
 what is a moral duty into a legal liability, thus lessen- 
 ing a public burden. 
 
 There are a great many other cases in which the 
 right of trial by jury has either been limited or entirely 
 denied, such as confessing of a judgm.ent, entering 
 into a recognizance, giving a mortgage, which, when 
 recorded, may be enforced by scire facias, the imposi- 
 tion of taxes or assessments, the fixing the amount of 
 liability under a cost bond, cases in chancery, etc. It 
 is also the usual practice, in most of the states, to 
 assess dam.ages for the taking of a right of way, with- 
 out the intervention of a jury, and the supreme court of 
 Pennsylvania has held a law constitutional which pro- 
 vided for assessing damages in the case of property 
 destroyed by mobs, by an inquest of six men on inspec- 
 tion out of court. The decision is based on the ground 
 that the constitutional guaranty of the right of trial by 
 jury applies to the trial of issues in court, and not to 
 an assessment of damages out of court. Ross v. Irv- 
 ing, 14 111. 170, 181. In the matter of the Penn- 
 sylvania Hall. 5 Barr. 204. 
 
 In my judgment, there would be nothing incon- 
 sistent with any theory of natural justice in taking away 
 the right of trial by jury, so far as the servant is con- 
 cerned, in cases where the injury occurs through the 
 negligence of an agent or employe of the master, be- 
 lieved reasonable and in good faith by the master to 
 have been competent at the time of hiring. In other 
 words, the doctrine of respondeat superior in cases of 
 tort by an agent or servant of the master, might be abro- 
 gated and the doctrine of compulsory compensation 
 substituted by legislative enactment in such cases. 
 
 In all cases where the injury results from the 
 direct negligence or intentional act of the master, the 
 
[71] 
 
 servant would seem to have a clear right to his com- 
 mon law remedies against him, including the trial by 
 jury. The extension of the liability of the master, how- 
 ever, to cover the negligent acts of a servant or agent, 
 is a comparatively recent, judge-made privilege given 
 to the employe, and what has thus been given him, 
 might in reason be taken away, in the exercise of the 
 reasonable police power of the state. 
 
 Even this opinion, however, is clouded by the 
 consciousness that the doctrine of respondeat superior, 
 and the employe's rights thereunder existed at the time 
 of the adoption of the constitutional provision, and 
 might therefore be held to be within its apphcation. 
 
 THE COMPENSATION RATE 
 
 The matter of adjustment of the scale of compensation is 
 an extremely difficult one, and in the opinion of your committee 
 is such that no one man will be able to propose a plan which 
 will be entirely equitable and just when considered from the 
 standpoints of the various interests involved. All that it is pos- 
 sible to do in that connection is to present the matter along general 
 lines and then to suggest the scale of compensation which adheres 
 as nearly to general principles as may be. On this subject, Mr. 
 Randolph says: 
 
 An initial compensation law will probably select 
 certain industries whose hazards are widely advertised 
 and whose workmen belong to influential trade unions. 
 As in these industries will be found many establish- 
 ments representing large concentrations of capital, a 
 remarkably liberal compensation may be advocated. 
 But it should be clearly understood that an initial rate 
 must be fixed, not only in regard to all the establish- 
 ments affected but in anticipation of the ultimate exten- 
 sion of the scheme to industries in general, if not even 
 to domestic service, as in Great Britain. For example, 
 accidents to farm hands attract but little attention. 
 Few states, if any, require them to be reported; yet 
 agriculture is wholly, or on its mechanical side, covered 
 in important foreign systems. They should not be per- 
 manently ignored here. Indeed, the Wisconsin labor 
 bureau has already made some inquiry into accidents 
 of agriculture and reports for 1907, 293 accidents to 
 
[72] 
 
 farm hands and 684 to independent farmers. TTiis 
 means that agricultural employment shows 977 casual- 
 ties ranking, in respect to mere numbers, next to rail- 
 way employment with 1 305. 
 
 If today the railroad companies may be obliged to 
 compensate the brakeman, tomorrow the farmer may 
 have to do the like for his laborer. And the company 
 and the farmer will have to pay on the same basis, for 
 one of the fixed points of compensation schemes is that 
 they shall operate equally and uniformly in respect to 
 all workmen included, and not unequally and discrim- 
 inately according to the occupation or financial position 
 of the employer. The history of pension legislation 
 teaches that if there be any alteration in the original 
 rate, we should expect an increase rather than a reduc- 
 tion, so on all accounts we are well advised that an 
 initial rate should, as a matter of policy, be moderate. 
 But a moderate rate is not only commended by policy. 
 It is dictated by the law of the constitution which for- 
 bids spoliation under forms of law. If the master can 
 be made responsible for injuries beyond his fault, his 
 burden must be, at least, reasonable and not exorbi- 
 tant. 
 
 Now we have shown that the compensation rate 
 must be uniform for all workmen in order to insure to 
 everyone the equal protection of the laws. TTiis qual- 
 ity of benefit for workmen involves an inequality of bur- 
 den for employers, who, rich and poor alike, must pay 
 the same proportional rate. And an unequal inci- 
 dence of burden may occur in other ways. A, em- 
 ploying 50 workmen in a dangerous trade, is subject 
 to a far heavier risk at $2,000 death compensation 
 than B, who employs 1 ,000 in a safe one, would incur 
 at $4,000. C, with a dozen plants, might weather a 
 catastrophe whose resulting liabilities would bankrupt 
 B, were his single plant destroyed. 
 
 While I do not assert that the unavoidable in- 
 equality of burden would necessarily amount to a denial 
 of "equal protection** and thus block any compre- 
 hensive scheme, I do insist that a compensation figure 
 based upon the ability of well-to-do employers or of 
 great industries would work an unlawful discrimina- 
 tion against their weaker associates. All employers 
 would not be "treated alike under substantially similar 
 conditions.** 
 
[73] 
 
 The moderate rate may be broadly described 
 as one which each or every industry or employer within 
 the actual or the potential purview of a compensation 
 scheme may be lawfully required to bear; a rate im- 
 posed on the railroad company today must be one 
 which can later be laid upon the small manufacturer. 
 
 Each commission which has made a study of this question 
 has made an effort to solve the question of rate. What seems 
 to be the general conclusion along this line may be gathered from 
 the following: November 1910 a conference of commissioners 
 on compensation for industrial accidents was held at Chicago. 
 This conference met in response to a call of the Massachusetts 
 commissioners who desired the opinion of the commissions of the 
 various states as to certain specific questions under consideration by 
 the Massachusetts commission in preparing a bill for the January 
 1911 meeting of the state legislature. Commissions of eight 
 states, Illinois, Massachusetts, Minnesota, Montana, New Jersey, 
 New York, Ohio and Wisconsin were represented and Coimecti- 
 cut was represented by a special delegate. The United States 
 employers* liability commission and the United States bureau 
 of labor were represented, and there was present a special com- 
 mittee of commissioners on uniform state laws charged with the 
 preparation of uniform workmen's compensation law. The con- 
 ference comprised large employers, small employers, representa- 
 tives of labor, legislators and special students on workmen's com- 
 pensation legislation. Certain questions relative to the features 
 of the compensation law proposed by the Massachusetts commis- 
 sion were proposed to the conference on the question of rate 
 and duration of compensation. The questions and answers were 
 
 as follows: 
 
 4. Shall compensation be paid in a lump sum 
 or in installments: 
 
 (a.) Temporary disability? Installments. 
 
 (b.) Permanent disability or death? Install- 
 ments with right to commute after given time with ap- 
 proval of some public official. 
 
 5. Amount and duration of compensation? 
 
 (a.) Temporary disability? Fifty per cent of 
 the impairment of wages; maximum of $10 per week. 
 
[74] 
 
 minimum of $5 per week; or if wages less than $5, then 
 full wages (or 66 2-3% of wages up to $7.50 of 
 wages per week, then 50 per cent of balance until 
 compensation amounts to the maximum of $10 per 
 week, maximum). Payments not to extend beyond 
 period of 300 weeks. 
 
 (b.) Permanent disability? Same as tem- 
 porary disability. 
 
 (c) Partial permanent disability? Fifty per 
 cent of impairment of wages; maximum of $10 per 
 week; payments not to extend beyond period of 300 
 weeks. 
 
 (d) Death? 
 
 (1) Total dependents? 
 
 If orphans, 50 per cent of wages of deceased. 
 
 If widow alone, 25 per cent of wages. 
 
 If widow and one child, 40 per cent of wages. 
 
 If widow and two children, 45 per cent of wages. 
 
 If widow and three children, 50 per cent of 
 wages. 
 
 If widow and four children, 55 per cent of 
 wages. 
 
 If widow and five children or more, 60 per cent 
 of wages. 
 
 If widow, father or mother, 50 per cent of wages. 
 
 Children under 16 years of age only to be 
 included and only during period they are under 1 6 
 years of age. 
 
 Maximum of $10 per week, minimum of $5 per 
 week, or if full wages less than $5 their full wages 
 (or 66 2-3% of wages up to $7.50 of wages per 
 week, then 50 per cent of balance until compensation 
 amounts to $10 per week, maximum). Payments not 
 to extend beyond period of 300 weeks. 
 
 2. Partial dependents? Fifty per cent of the 
 portion of the wages contributed by the deceased to 
 the partial dependents. 
 
 (2) No dependents? Expenses of last sick- 
 ness and burial, not exceeding $200. 
 
 6. Length of waiting period? Two weeks, 
 during which period employer shall furnish medical 
 
[75] 
 
 treatment or hospital care to an amount not exceed- 
 ing $ 1 00 in value. 
 
 Whether any proposed plan of compensation for all indus- 
 trial accidents would not be an excessive burden upon the indus- 
 tries, is a question that can only be answered after an exhaustive 
 study of the statistics with reference to accidents and the rela- 
 tion which compensation for those accidents under the proposed 
 plan would have to the employer's business. This as far as the 
 employer is concerned is the manner in which the question of 
 rate of compensation must necessarily be finally determined in the 
 opinion of your committee. 
 
 In considering the sufficiency of the rate of compensation 
 from the standpoint of the employe, regard should be had to 
 what is now paid on the average to employes meeting with 
 injuries in industrial accidents. The New York commission made 
 an extended investigation into this branch of the subject, and a 
 brief summary of their findings is set forth in Bulletin 90 of 
 Bureau of Labor, page 693. In connection with the objection 
 that a small proportion of the workmen injured by accidents of 
 employment get substantial compensation, the commission inves- 
 tigated 181 cases in which married men lost their lives in indus- 
 trial accidents in 1907 and 1908 in Erie county, in the Borough 
 of Manhattan. Of this number it was found that the families 
 received nothing in 5 6 cases ; that they received $ 1 00 or less in 
 12 cases; from $101 to $500 in 52 cases, from $501 to $2000 
 in 19 cases, more than $2000 in 12 cases, while suits were 
 pending in 30 cases, so that in 79 per cent of the closed cases 
 the families received $500 or less, and in only 7.9 per cent of 
 such cases did they receive more than $2000, or an amount equal 
 to three times the average yearly earnings of the workmen con- 
 sidered. An investigation of 1040 work accidents by the state 
 labor department, in which total losses and payments were ascer- 
 tained, showed that in 404 of the 902 cases of temporary dis- 
 abihty (lasting from one week to more than one year) nothing 
 was received by the injured person, not even medical expenses; 
 while in 304 cases the amount recovered from the employer was 
 less than one-half the loss of wages and expenses of the injury. 
 
[76] 
 
 In 71 cases there was permanent partial disability, reducing the 
 earning capacity of the employe in varying amounts. Of this 
 number 18 received nothing, 22 received $100 or less, 14 re- 
 ceived from $101 to $500. 5 received from $501 to $2000. 
 while one person received more than $2000; suits were still 
 pending in 1 1 cases. In 902 cases of temporary disabiHty there 
 was a wage loss of $66,800, besides medical expenses amount- 
 ing to $20,000. while all payments by employers amounted to 
 but $25,339, or less than 30 per cent of the losses and costs. 
 Payments in cases of permanent partial disability made a some- 
 what better showing, approximating 34 per cent of the actual 
 losses, though this omits from consideration the depreciated earn- 
 ing power; while in 10 cases of permanent total disability, com- 
 puted on a basis of three years* wage loss, the payments by 
 employers amounted to but 9.7 per cent of the losses and costs. 
 Data obtained from other sources indicate the same general con- 
 dition of inadequate compensation for losses suffered. 
 
 That the system of liability and damage suits entails waste 
 is shown by the fact that the expenditures of 327 firms in the 
 state in 1907. employing 125,995 men, amounted to $192,538 
 on account of accidents, accident insurance, legal expenses, etc., 
 of which the amount paid to the persons injured was but $104,- 
 643, or 54 per cent of the employers* outgo in this connection. 
 Premium receipts and payment of losses by nine insurance com- 
 panies that keep separate accounts of their employers* liability 
 business show that during 1906, 1907 and 1908 they took in as 
 premiums $23,523,585 and paid out in insurance $8,559,795, 
 or but 36 per cent of the premiums received. In connection with 
 attorneys' fees, which are frequently contingent on recoveries, it 
 was shown that in 1 4 of the 5 1 cases investigated the fee was less 
 than 25 per cent of the recovery, in 14 cases it was 50 per cent 
 or more, while in the remaining 23 cases it was more than 25 
 per cent and less than 50 per cent. 
 
 The question of the cost to the employer of a compensation 
 system as compared with the cost of the present system received 
 consideration, the investigation of this phase of the question being 
 conducted by the state bureau of labor statistics. Data were 
 
[77] 
 
 secured from 52 firms, employing about 29,000 persons, from 
 which a comparative study was made, showing the actual cost of 
 accidents during the year 1907, and the cost under a compensa- 
 tion scheme which allowed three years* earnings in case of death 
 and half earnings during disability, making up the loss of wages 
 where partial disability reduced the earning capacity. From the 
 results of this investigation the report concludes that "even with 
 the most liberal allowances for possible understatement on the 
 cost of compensation side, it is impossible to interpret the figures 
 as affording anything but very strong evidence that large manu- 
 facturing concerns could pay compensation on such a scale as 
 that here used, which is fully equal to the present English system, 
 at no greater cost than many of them are now actually incurring 
 for accidents, and probably in some cases for less." It is assumed 
 that this conclusion should not be made to apply to small em- 
 ployers. 
 
 CONTRIBUTION TO FUND BY EMPLOYES 
 
 While there are the strongest reasons in favor of the con- 
 tribution on the part of the employe to the fund out of which the 
 workingmen's compensation is to be paid, a recent research by 
 legislative commissions or other parties has disclosed no way in 
 which this may be brought about by legislative enactment. It is 
 recognized that such a scheme would be advisable for the reasons 
 that it would remove from such schemes all idea of charity and 
 would put the employe on a basis of independence with reference 
 to workingmen's compensation. Such scheme would also be con- 
 ducive to the exercise of care on the part of servants knowing 
 that while the injured person would be compensated under the 
 system, part at any rate of the cost of the accident would fall on 
 the employe generally. It is further believed that it would reduce 
 the element of fraudulent claims and simulation of injurious effects 
 and malingering for the reason that honest and conscientious 
 employes having a personal interest in the fund by reason of their 
 contribution thereto, would be on the look-out for such cases of 
 fraud and malingering. It is true that this principle is enacted 
 into the Montana law above mentioned, but it is the opinion of 
 those who have given consideration to the subject that the pro- 
 
[78J 
 
 visions of the Montana law will not stand the constitutional tests 
 and that when the question is brought before the supreme court of 
 that state the act will be held unconstitutional. 
 
 On the question of contribution by the employe, Mr. Ran- 
 dolph in his brief herein referred to in answering the question, 
 "May an American legislature follow the example of Germany 
 and Austria, and oblige a workman to devote a fraction of his 
 earnings to an accident fund?" says: 
 
 Observe that there is no question here of forced 
 contributions to present needs as where a capable head 
 of a family is ordered to pay for their maintenance. The 
 immediate question is whether the state may prescribe 
 thrift in contemplation of a possible disablement; and 
 this is a branch of the broader question as to its pre- 
 scription in view of the relatively probable incapacities 
 from sickness and old age. But even if the state may 
 prescribe for all men a measure of the latter sort, it does 
 not follow that it may compel a "workman" to contrib- 
 ute to an accident fund, which is created for a "class" 
 as distinguished from the community at large. The 
 solidarity of "labor" is being strenuously advocated; it 
 is being realized in some degree, but it is not yet assimi- 
 lated in our jurisprudence to the solidarity of the fam- 
 ily, on the one hand, or to that of the community on 
 the other. However, if it shall be held that a legislature 
 can so reverse our traditional conceptions of legal re- 
 sponsibility as to compel the master to compensate for 
 all accidents, regardless of their cause, this relatively 
 m.inor matter of workmen's contribution may well take 
 the came course. 
 
 If workmen cannot be affected with direct contribu- 
 tions to compensation it may happen that indirect con- 
 tributions will be obtained by employers by shaving the 
 wage scale, in case the compensation rate is so high as 
 to necessitate searching economies in cost of produc- 
 tion. 
 
 While it may be true that our courts will come in time to 
 relax their views on this branch of the subject, in the present 
 state of the law, it would be fatal, in the opinion of your com- * 
 mittee, to any such law to incorporate that element as a com- 
 pulsory feature, and so in any bill that is framed, if the idea of 
 contribution by the employe is to be incorporated at all it must 
 
[79] 
 
 be done in such a way that it is accomplished by the consent of 
 the employe. In other words, it must be left as a matter of con- 
 tract between the employer and the employe. 
 
 CLASSIFICATION OF INDUSTRIES 
 
 Since it appears that any remedial legislation of the kind 
 under consideration must look for its support to the police power 
 of the state, the question of the classification of industries is one 
 for grave consideration. No doubt very much of the legal dif- 
 ficulty would be removed if the law were made universal in its 
 application; at the same time a mandatory statute made appli- 
 cable to all employers of labor might be held unreasonable by 
 the courts for manifestly a large number of the small industries 
 of the state involve no particular hazard to the employe, and it is 
 a fundamental principle that any exercise of the poHce power of 
 the state must be reasonable in view of the conditions which the 
 legislature affects. 
 
 Under the law adopted by the state of New York the legis- 
 lature relying for its authority in passing the workingmen's com- 
 pensation act on the police power, has endeavored to select cer- 
 tain industries declared by the act to be hazardous and conse- 
 quently a proper subject for such legislation. Mere declara- 
 tions by a legislature that certain industries are hazardous does 
 not make them so as a matter of law, and it still remains for the 
 court to determine whether such classification made on the basis 
 of the hazard of the trade is a reasonable one. 
 
 It may be interesting to note that the supreme court of New 
 York, which is one of the inferior courts in that state, has had 
 occasion to pass upon the constitutionality of a new workingmen's 
 compensation law of that state. This was in the suit of Ives v. 
 The South Buffalo Railway Company, in the supreme court of 
 Erie county. The decision in this case is as follows: 
 
 Pound, J. The answer challenges the consti- 
 tutionality 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 
 
[80] 
 
 mechanical labor in certain employments declared by 
 the act to be dangerous by reason of inherent, neces- 
 sary or substantially unavoidable risks to life or limb, 
 in which it is deemed necessary to establish a new sys- 
 tem of compensation for accidents to workmen (Sec. 
 215). Among such employments is included: "6. 
 The operation on steam railroads or locomotives, en- 
 gines, trains, motors or cars propelled by gravity or 
 steam, electricity or other mechanical power, or the 
 construction or repair of steam railroad tracks and 
 roadbeds over which such locomotives, engines, trains, 
 motors or cars are operated" (Sec. 215). Plain- 
 tiff brings himself squarely under the provisions of this 
 act by alleging facts that establish, as admitted by the 
 answer, that, while employed by defendant as a switch- 
 man, he was injured in the prosecution of his work, 
 without negligence on the part of the defendant, and 
 "without serious or willful misconduct" on his part, 
 but solely by reason 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 recover 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 insufficient 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 attributable to the negligence 
 of the employer. Defendant maintains that, under our 
 system of constitutional government, the incorporation 
 into our law of the English law of workmen's compen- 
 sation is beyond the powers of the legislature: First, 
 because the act in question deprives the defendant of 
 hberty and property without due process of law, and 
 denies it the equal protection of the laws in contraven- 
 Constitution, and article I, section 6, of the consti- 
 constitution, and article 1 , section 6, of the consti- 
 tution of this state; second, because it violates the right 
 of trial by jury guaranteed by article 1 , section 2, of 
 the constitution of this state; third, because it limits the 
 amount recoverable in actions to recover damages for 
 
[81] 
 
 injuries resulting in death in contravention of article 1, 
 section 1 8, of the constitution of this state. 
 
 It has well been said by Mr. Justice Brown of 
 the Supreme Court of the United States, writing the 
 opinion of the court in Holden v. Hardy ( 1 69 U. S., 
 366, at p. 387), that "while the cardinal principles 
 of justice are immutable, the methods by which jus- 
 tice is administered are subject to constant fluctuation, 
 and the Constitution of the United States, which is nec- 
 essarily and to a large extent inflexible and exceedingly 
 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 the railroads the equal pro- 
 tection of the laws. A classification of "dangerous 
 employments*' for the purpose of the act must be up- 
 held. Missouri Ry. v. Mackay, 127 U. S. 205. 
 
 But the act is attacked chiefly because it imposes 
 liability without fault. Our jurisprudence offers ex- 
 amples of legal liability wdthout fault, and the depri- 
 vation of property without fault being attributable to 
 its owner. The law of deodands was such an example. 
 The personification of the ship in marine law is an- 
 other. Other examples are offered in the common law 
 liability of the husband for the torts of the wife, or 
 liability of the master for the acts of his servants. The 
 Osceola, 189 U. S. 158; Chicago, R. I. & P. Ry. 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 wath 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 Nebraska; "The legislation is justi- 
 fiable under the police power of the state, so it has 
 been held. It was enacted to make railroad com- 
 
[82J 
 
 panics 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 pas- 
 senger while being transported over its line while the 
 corporation must respond for any damages to his bag- 
 gage or freight.'* 
 
 The legislature may alter or repeal the common 
 law. It may create new offences, enlarge the scope 
 of civil remedies, and fasten responsibihty 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 workmen in dangerous callings insurers to 
 some extent of the safety of such workmen. The com- 
 mon law imposed upon the employe entire responsi- 
 bility 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 ques- 
 tion of employers' liability on a basis other than fault 
 is not clear beyond peradventure, but every presump- 
 tion is in favor of the constitutionality of the act, nor 
 do I find its constitutionality so doubtful as to warrant 
 this court in holding that such action is not within the 
 constitutional 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 legit- 
 imate exercise of the legislative power to pass all 
 manner of necessary and wholesome acts for the pro- 
 tection and well-being of the public, 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 Lochner v. New York (189 U. 
 S. 45) the prevailing and dissenting opinions contain 
 a full discussion of the principles underlying the deci- 
 sion of such cases. The court held in that case that 
 there is no reasonable ground on the score of health for 
 interfering wnth the liberty of the person or the right 
 of free contract by determining hours of labor in the 
 
[83] 
 
 occupation of a baker. The same court had already 
 held in Holden v. Hardy (supra) that there was rea- 
 sonable ground on the score of health for interfering 
 with the liberty of the person and the right of free con- 
 tract 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, re- 
 quire the restrictive legislation; in the latter case it did. 
 In the latter case Mr. 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 dan- 
 gerous or unhealthful employments, have been found 
 to be in need of additional protection.'* 
 
 As to the objection to the statute that it limits the 
 amount recoverable in death cases, it is enough to say 
 that it is for the plaintiff to make the claim of uncon- 
 stitutionality 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. 
 
 It seems that the idea of specific classification of industries 
 as adopted in the New York act has successfully withstood the 
 first attack upon it, and it remains to be seen what the court 
 of last resort in New York will do with the question. 
 
 The Minnesota idea as expressed in a tentative bill recom- 
 mended by the majority of the commission of that state, is to make 
 the selection of the hazardous occupation automatic; that is, it de- 
 clares whenever an accident occurs in any occupation that then in 
 that case the statute would apply. It hardly appears how this sort 
 of classification can be supported by reason, because under such 
 a classification any occupation, no matter how inherently 
 free from hazard it might by its nature be, in case of an acci- 
 dent happening to an employe in that occupation, it would for- 
 ever afterwards be a hazardous occupation. For instance, apply- 
 ing that law, should a school teacher in passing through the build- 
 ing trip and fall, injuring himself, forever afterwards under that 
 law, school teaching would be a hazardous occupation. Advo- 
 
[84] 
 
 cates of this theory insist, however, that the language would not 
 be susceptible of so broad a construction as we have indicated, 
 for the reason that they insist that a qualification that the accident 
 must happen *'in the course of employment" would eliminate such 
 casual accidents as might occur in an occupation and as do not 
 constitute a hazard of that business, so that the act would not be 
 applicable where the injury was one which might as well occur 
 to a person outside of the occupation as to one engaged in it. 
 
 A workingmen's compensation law applicable to all employ- 
 ers of labor might also be too great a burden upon the vast 
 number of small industries in the state. It has been suggested 
 that a law might be framed which limited its application to 
 employers of labor who employ more than a given number of 
 employes at any one time. Reliance is had for such a classifi- 
 cation upon the decision of the supreme court of Illinois, uphold- 
 ing that sort of classification with reference to the application of 
 the law of Illinois with reference to mine inspections. That law 
 was limited in its application to mines employing five or more 
 men at any one time. The case is that of St. Louis Consolidated 
 Coal Company v. Illinois, 1 86 111. 1 34, which was afterwards 
 appealed to the Supreme Court of the United States on the con- 
 stitutional question involved. The decision is found in 185 
 U. S. 203. 
 
 While in that particular case the supreme court of Illinois, 
 and also the Supreme Court of the United States, has held such 
 classification is reasonable and within the authority of the legis- 
 lature under the police power, the peculiar business of mining is 
 such perhaps as to warrant the legislation in that particular 
 industry. 
 
 It seems to your committee that, unless the danger and lia- 
 bility of injury increases with the number of men employed in an 
 industry, such classification could not be held to be reasonable, 
 and arbitrary and needless. The statistics with reference to man- 
 ufacture show that the ratio of injuries in the industries generally, 
 does not increase proportionately with the increased number of 
 men employed, but that the contrary is in fact the case. The pro- 
 portion of injuries in small industries is really greater than in the 
 
[85] 
 
 large industries employing great numbers of men. If this is true, 
 we are unable to see how a limitation in the workingmen's com- 
 pensation act to apply only to those industries employing more 
 than a specified number of men could be held to be reasonable 
 and needful legislation with regard to the industries covered within 
 the meaning of the police power. 
 
 The attorney for the Illinois commission has recommended 
 that there be no classification of industries but that all be covered 
 excepting that the operation of the law be limited to those indus- 
 tries employing more than a specified number of men. 
 
 It will be seen from this brief discussion of the subject that 
 under the law as it exists, no matter from what position the subject 
 is approached, serious obstacles seem to be in the way. Your 
 committee is of the opinion that the question will have to be 
 determined by the courts finally. 
 
 THE REMEDY 
 
 In view of what is desired to be accomplished and the pecu- 
 liar constitutional restrictions and limitations obtaining in the 
 various states, what legislative action, if any, is advisable? 
 
 It seems to be the conclusion that any safe legislation, 
 although perhaps compulsory in form, must be elective in fact 
 and should embrace all industries, although it might be that a 
 limitation of the application of the act to industries employing 
 more than a specified number of men would meet with judicial 
 approval. 
 
 A bill, "compulsory in form, but elective in fact** would 
 mean a bill providing for the payment of compensation for all 
 industrial accidents upon the basis of the scale to be included in 
 the act, such bill, however, to reserve to both employer and 
 employe their rights at common law, but providing as to the 
 employer that, if he pursues his common law remedies and refuses 
 to make settlement of compensation under the act, his common 
 law defences shall be limited (the limitation to be fixed by the 
 act) and with the further proviso as to the employe that he shall 
 be presumed to have accepted the compensation plan unless he 
 expressly contracts to the contrary; and that any acceptance by 
 
[86] 
 
 him of compensation at common law shall bar him from all ben- 
 efits to the compensation provided in the act. Or it might be 
 made elective in form, with the same penalties to follow an elec- 
 tion not to pay the compensation provided. 
 
 This is the plan proposed to the IlHnois commission by Mr. 
 Harper, its attorney, and in explanation of it he further says: 
 
 It will be observed that this plan would secure to 
 both parties their constitutional rights of due process 
 of law and trial by jury, with a penalty added for the 
 purpose of inducing them to forgo such rights and accept 
 the statutory compensation. 
 
 I am of the opinion that this plan of limitation 
 upon the common law rights of the parties may be prop- 
 erly included in the form of a proviso in the compen- 
 sation act without violating that provision of the consti- 
 tution, which provides that no act shall embody more 
 than one subject, which shall be expressed in its title, 
 because it is manifest that the modification of the com- 
 mon law rights of the parties is in furtherance of the 
 general purpose of the act, viz; to provide certain, 
 definite and automatic compensation for industrial acci- 
 dents. Lamed v. Tierman, I 1 0, 111. I 73. 
 
 It will be equally obvious that when these 
 common law rights are reserved in this way, the other 
 constitutional questions in regard to taking one*s prop- 
 erty without due process of law, trial by jury, unrea- 
 sonable classification, etc., are practically eliminated, 
 because the act, as a whole, is in effect elective and does 
 not rest for its authority upon the police power of the 
 state. In other words, if the reservation of the com- 
 mon law rights were not made, the act could find its 
 justification only in the police power of the state, and 
 this would involve the necessity of demonstrating that 
 any classification made was reasonable, and that al- 
 though the property of the employer might in effect be 
 taken away from him to compensate the injured 
 employe, there existed an overruling necessity for such 
 action, justifying the course of the legislature in impos- 
 ing this burden upon him; whereas, under a bill drawn 
 as above suggested, no objection could be made on the 
 ground that the act was not due process of law, because 
 the courts would say that due process was reserved to 
 him by the act itself, and no vital objection could be 
 
[87] 
 
 made to the classification, because if the act is in effect 
 elective those persons covered by its provisions would 
 have the right, by their own volition, to place them- 
 selves in the same class with those who were not in 
 terms covered by the act. 
 
 VOLUNTARY ASSOCIATIONS 
 
 We wish to present, for your consideration, a suggestion 
 that voluntary associations be organized in the different National 
 Metal Trades Association districts, each member to contribute 
 his fair proportion to a compensation fund of such a size to prop- 
 erly take care of all accidents and sickness among the employes. 
 
 In this way we could do away with the necessity of legisla- 
 tion and soon quiet the demand for it. 
 
 CONCLUSION 
 
 Owing to the limited time which we have had to devote 
 to this subject, and the extensive scope of the inquiry and the 
 many difficult and important questions of economics, policy and 
 law involved, this report is not an exhaustive treatment of the 
 subject. 
 
 >^e have endeavored, however, to show what has been 
 accomplished in foreign states, what has been accomplished in 
 this country, and generally within what limits legislation would be 
 warranted by law. 
 
 It is obvious that nothing in the way of reform can be 
 accomplished without an honest effort both on the part of em- 
 ployers and employes to that end, and in view of the fast form- 
 ing public sentiment in favor of more uniform and equitable laws 
 governing the relation of master and servant, and the liability for 
 and the right to compensation for personal injuries growing out 
 of that relation, we believe that such reasonable legislation as may 
 be the result of such effort will be given that construction by the 
 courts that is in furtherance of the plan, and in the interest of the 
 common good, without too great an adherence to the technical 
 construction of the present law relating to the subject 
 
 While it might seem desirable for this committee to com- 
 pile a bill which would secure the approval of the Association, 
 
[88] 
 
 it would certainly be very difficult to perform this task in a way 
 which would be acceptable to various states of the country in 
 which the membership of the Association is found. The essen- 
 tials have been dwelt upon in this report, and are generally cov- 
 ered in the several bills which are being considered by state com- 
 missions, or in some cases have been presented for legislative action. 
 The committee therefore is content with referring, as appendices 
 to this report proposed bills in Illinois, Minnesota, Ohio, Wiscon- 
 sin, etc. 
 
 In conclusion your committee members will say that they 
 are inclined to favor, if it is possible adequately to secure it, a 
 provision in the acts adopted by the several states for a contribu- 
 tion by the employe to the cost of compensation, not so much for 
 the purpose of relieving the employer of a part of the cost, as for 
 the purpose of enhancing the amount of compensation to be paid 
 beyond what is now recognized as a fair proportion to be borne 
 by the employer in any event, and for the purpose of giving to 
 the employe that independence and that interest in the operation 
 of the proposed law which would come solely from the fact that 
 the compensation was furnished in part by his own contribution. 
 
 Such a provision is highly desirable, but under the law in 
 all probability must be provided for by contract between the em- 
 ployer and his employe; and any act dealing with this relation 
 should be so framed as to recognize and encourage the making 
 of such provisions, and when so made, under the control, however, 
 of some proper state authority, they should supersede the statutory 
 provisions and stand also in lieu of the common law rights and 
 obligations. 
 
 DATA SECURED 
 
 For the purpose of gathering statistical information in regard 
 to what is being done by manufacturers to better protect their 
 employes and themselves against accidents; to what extent they 
 are depending upon liability insurance; what percentage of them 
 belong to mutual insurance associations; what percentage have 
 established employes* aid societies or have adopted other insur- 
 ance systems for the benefit of their employes, etc., seven classi- 
 
[89] 
 
 fied sets or groups of inquiries, arranged alphabetically from 
 *'A*' to *'G," were sent out to each of 200 manufacturers, and 
 from the replies received, has been compiled the information dis- 
 tributed herein, under the several classified headings. 
 
 (A) WHAT METHODS ARE YOU EMPLOYING 
 IN YOUR ESTABLISHMENT TO PROTECT YOUR- 
 SELF AND YOUR EMPLOYES AGAINST ACCI- 
 DENTS? 
 
 Number of inquiries sent out, 200. 
 
 Number of replies received, I 76, or 88 per cent. 
 
 12 per cent did not reply at all. 
 
 3 per cent were too indefinite to be of value. 
 
 3 per cent stated that they were not employing any methods 
 for purposes stated above. 
 
 43 per cent reported as employing the usual precautions, 
 such as protecting exposed gears, saws, belts, and other 
 dangerous parts; causing notices to be posted and advis- 
 ing caution on the part of all employes. 
 
 20 per cent indicate that they depend upon some form of 
 accident or liability insurance for protection. 
 
 7 per cent claim to employ some form of insurance, also 
 to adopt the usual safety appliances. 
 
 To be more explicit, some of their replies are quoted as 
 follows : 
 
 It is our custom to furnish hospital, surgical or 
 financial assistance, but such actions are voluntary, not 
 compulsory. 
 
 We make monthly deposits in banks to an emer- 
 gency fund, which exceeds the amount we formerly paid 
 in insurance premiums. We adopted this plan because 
 the insurance companies wanted to more than treble our 
 annual premiums. 
 
 We pay for insurance and doctor bills, but noth- 
 ing for lost time. 
 
 Periodical inspection of plant and emergency serv- 
 ice. 
 
[90J 
 
 General accident policy, covering employes inside 
 and outside of shop. For death by accident $ 1 0,000. 
 Total liability for any one accident $20,000. 
 
 (B) DO YOU CARRY LIABILITY INSURANCE? 
 
 Replies were received from 98 per cent of the manufac- 
 turers to whom inquiries were sent. 
 
 87 per cent of the replies were in the affirmative. 
 
 1 1 per cent replied '*no.** 
 
 2 per cent stated that they carried their own liability insur- 
 ance. 
 
 One of the latter states in explanation that under the old 
 
 method of liability insurance, while the first aid was always 
 allowed, a question in regard to compensation for loss of time 
 usually arose, causing dissatisfaction among the employes. For 
 the past year they have been carrying their own accident insur- 
 ance and report results as follows: 
 
 We give first aid and further aid if necessary, al- 
 lowing either half or full time, according to the nature 
 of the accident. The cost has been less and results 
 more satisfactory. 
 
 One manufacturer reports that their liability insurance has 
 been discontinued since August, 1910, but does not make any 
 further explanation. Another replies; "No — except boiler insur- 
 
 ance.** 
 
 (C) IS THERE AN EMPLOYES' AID ASSOCI- 
 ATION CONDUCTED IN CONNECTION WITH 
 YOUR ESTABLISHMENT? 
 
 L Is membership in such association compulsory? If not, 
 what proportion of your employes is affiliated with your 
 
 association ? 
 
 2. Does your company contribute to the support of such 
 aid association? If so, to what extent? 
 
 RepHes were received from 197 manufacturers and show 
 that 51 companies, or 26 per cent of the 197, do have employes* 
 aid societies conducted in connection with their establishments. 
 
[9i] 
 
 while 74 per cent do not. 
 
 Only 1 5 per cent of those having such associations state that 
 membership is compulsory. The other 87 per cent who do not 
 compel such membership, claim that 57 per cent of their employes 
 are affiliated with the societies. 
 
 Of the 51 companies referred to above, 29, or 57 per cent, 
 do not contribute to the support of the association. 
 
 Twenty-two companies, or 43 per cent, do contribute, but 
 do so in such diverse ways and varying amounts as to preclude 
 the possibility of computing the amounts, on a percentage basis, 
 or deducing a comprehensive analysis of the value and equity of 
 their contributions, as shown by the replies recorded below: 
 
 Some companies claim to contribute 10 per cent of the total 
 disbursements made by the association. 
 
 Others contribute amounts ranging from 20 per cent to 75 
 per cent of the total disbursements. 
 
 Another contributed $500 to start with. 
 
 Some pay a percentage. 
 
 Others pay all liabilities of the association in excess of dues 
 collected. 
 
 The following are some explanations received: 
 
 We pay an amount equal to one week's wages 
 for each year a man has worked for the company as 
 part of death benefit. 
 
 Contribute for accidents, not sickness. 
 
 We pay all operating expenses of the associa- 
 tion and for medical attendance. 
 
 We pay wages, hospital and doctors* bills. 
 
 We replenish treasury when funds run low. 
 
 Our employes* aid association was discarded when 
 our insurance plan was adopted. 
 
 (D) HAVE YOU ESTABLISHED AN INSUR- 
 ANCE SYSTEM FOR THE BENEFIT OF YOUR 
 EMPLOYES? 
 
 1. What does the insurance cover? 
 
 2. Does it cover a sick benefit? 
 
 3. Does it pay any certain amount for certain risks? 
 
[92] 
 
 4. Does it pay death benefits? 
 
 5. Does the employe contribute? If so, how much? 
 
 6. Does the company contribute? If so, how much? 
 
 One hundred and ninety-two repHes were received, or 96 
 per cent of a possible 200. Twenty-six companies, or about 
 1 4 per cent of all who replied, claim to have adopted some insur- 
 ance system for the benefit of their employes, and from their 
 replies the following answers are compiled: 
 
 1. Each system covers one or more of the following liabil- 
 ities; accidents, sickness, disability, death, pensions. 
 
 2. 62 per cent of their systems cover sick benefits. 
 
 3. 3 1 per cent pay a certain amount, for certain risks. 
 
 4. 80 per cent pay death benefit, but two of them specify 
 for accidental deaths. 
 
 5. 80 per cent require their employes to contribute, but 
 no uniform basis or system for computing such contri- 
 butions seem to have been adopted. 
 
 Three of the systems require employes to pay all. 
 
 Three of the systems require employes to pay 75 per cent. 
 
 Two of the systems require employes to pay from 20 per cent 
 to 90 per cent 
 
 One of the systems requires employes to pay 1 per cent of earn- 
 ings, not to exceed 30c per semi-monthly payment 
 
 One of the systems requires each employe to pay 50c per month. 
 
 6. 62 per cent of the companies also contribute. Some 
 of them the clerical work; others make up deficits, if 
 any. 
 
 Eight of the 26 companies contribute 50 per cent or less of 
 the cost of their respective systems. 
 
 One contributes $1,500 annually. 
 
 One contributed $500 to start with. 
 
 One contributes 50c per month per employe. 
 
 Five pay all. 
 
 Six do not pay anything. 
 
 (E) DO YOU HAVE A PENSION SYSTEM? 
 
 1. If so, on what plan is it run? 
 
 2. What does it cost? 
 
[93] 
 
 3. Does the company stand all or part of the cost? 
 There were 1 90 repHes to the 200 inquiries. 
 
 Only five companies report as having adopted pension sys- 
 tems, and little additional information is obtained from their 
 replies except the fact that more than 97 per cent of them have 
 not adopted pension systems. 
 
 Ihe following is taken from replies received: 
 
 1. Two companies base pensions on earnings and length of 
 service. One company varies pension according to needs. 
 The remaining two companies do not furnish any infor- 
 mation in regard to plan on which their pension systems 
 are run. 
 
 2. Only one company gave information in regard to cost, 
 viz: **At present we have 28 pensioners, whose pen- 
 sions run from $20 to $55 per month, making the total 
 cost per month, about $649.** 
 
 3. Four of the above companies pay all the costs; the other 
 company does not state. 
 
 Some of the replies were: 
 
 We keep the old men on as long as they can come 
 to work. So far, all have died in the harness. 
 
 We endeavor to keep old employes on easier work. 
 
 (F) IS THERE A RECORD KEPT OF THE 
 NUMBER OF ACCIDENTS? 
 
 1 . If so, what was the cost, either in voluntary payments, or 
 as a result of lawsuits? 
 
 Replies received from 81 per cent of the 200 inquiries. 
 
 Sixty-two per cent report that they do keep records of acci- 
 dents. Thirty-eight per cent do not keep such records, except of 
 notices sent to the insurance companies. One report states explic- 
 itly, **$31 yearly average for the past three years.** 
 
 Reports from 34 manufacturers show their combined costs 
 for accidents in one year to be $22,333.24, an average cost per 
 company of $656.86 per year. 
 
[94J 
 
 Another group of 192 accidents, cost seven companies 
 $3,256.18, an average of about $170 per company per year, 
 but the actual cost to each of the several companies varied from 
 $2 to $364.30 per year. 
 
 One company paid in one year for 271 accidents and one 
 accidental death, $3,258.10, but the amount paid for the 
 accidental death was not given and as their death benefits are 
 based in part on the earnings, and such benefits range in amounts 
 from $480 to $4,000, it is impossible to compute the cost of the 
 271 accidents from the information at hand. 
 
 Replies from several manufacturers indicate that they have 
 been unable to obtain from their insurance companies, informa- 
 tion in regard to actual amount of payments made to their em- 
 ployes by the insurance companies. 
 
 (G) DO YOU BELONG TO ANY MUTUAL 
 INSURANCE ASSOCIATION? 
 
 1 . If so, please advise results. 
 
 2. Are you operating under state law? If so, please favor 
 us with an expression of your opinion in regard to it. 
 
 Replies received from 1 76, or 88 per cent of the 200 
 inquiries sent out. 
 
 It should be explained that the above inquiry had reference 
 to local mutual insurance associations, organized by the manu- 
 facturers in their respective localities. 
 
 Six, or less than 3!/2 per cent of all who replied, belong to 
 local mutual insurance associations. 
 
 1. All companies belonging to mutual insurance associa- 
 tions, report results as satisfactory. 
 
 2. All but one of them are operating under state law. 
 
 Their opinions, as expressed in relation to state laws, are 
 in part as follows : 
 
 Members working under New York law report 
 it as being favorable, while other New York members 
 say their compulsory liability law is only partially sat- 
 isfactory. They do not think the employer gets a 
 square deal. 
 
[95J 
 
 The Illinois law, which requires that accidents be 
 reported to the state, is said by some members from 
 that state to be satisfactory when they experience no 
 serious complications to be reported. 
 
 The New Jersey members reporting say they con- 
 sider the state law unjust and very imperfect. 
 
 Much information may be obtained from the replies and 
 suggestions received from these 200 manufacturing companies. 
 First, that they reveal the usual display of diverse opinions to be 
 expected from such a large number of dissimilar institutions, 
 located in so many different sections, established among different 
 environments, each company with its personnel and character- 
 istics peculiar to itself, kind and locality, all of which help to 
 establish their basis of thought and influence their conclusions. 
 
 One important lesson is, that many manufacturers are not 
 giving due consideration to the first of the subjects treated herein. 
 That is, they are not providing newer and better methods for the 
 protection of themselves and their employes. 
 
 Many appear to adopt such methods as are recommended 
 by the insurance companies, or their inspectors. Others, only 
 such as are prescribed by local ordinances, or state laws, for the 
 prevention of accidents, and endeavor to protect themselves 
 against pecuniary losses by liability or other forms of insur- 
 ance, devised for similar purposes. Some, however, are work- 
 ing along newer and broader lines, employing methods which con- 
 servation and experiments have shown to operate for the mutual 
 good of the employe and employer, both sharing in the costs of 
 the systems they adopt. 
 
 Some manufacturers have not kept any records of acci- 
 dents in their factories; others, only records of reports of acci- 
 dents sent to the insurance companies, and few of such companies 
 have accurate, if any records of cost pertaining to accidents. 
 This is especially true of those manufacturers buying insurance 
 protection. 
 
 Barring extraordinary accidents, it should be as easy for a 
 manufacturer to tabulate such records, or keep an accurate 
 account of the amount of their contributions to an employes* bene- 
 fit insurance system, as to figure his factory overhead costs. 
 
[96] 
 
 MEMBERSHIP AND EMPLOYES' BENEFIT INSUR- 
 ANCE ASSOCIATIONS. 
 
 One of our members says: 
 
 It does not seem reasonable to expect an employe 
 to accept with very good grace an arbitrary decision that 
 he must become a member of a certain organization, in 
 subscribing to which he has but two courses of action, 
 in case of accident; that is, either to accept the award 
 of the association of which he is a member, or have 
 recourse to the courts; but if membership is optional 
 with him, he may be justly and successfully taught 
 that by his membership he helps to complete a benevo- 
 lent entity, of which he is an integral part, assuming 
 his share of the moral and financial obligations of an 
 association, a large percentage of the benefits of which 
 accrue to him or those who may be dependent upon 
 him. 
 
 It will be noted from the answers to question **6,** that 
 where membership is voluntary, only 57 per cent of the employes 
 join, and it is very common in case of accident or sickness to an 
 employe who is not a member to have a subscription paper passed 
 around in the shop. This is very unsatisfactory and unfair to the 
 men who are paying dues to the insurance association. Com- 
 pulsory payment, by bringing in all the men, makes the cost 
 per man very much less and enables the association to extend the 
 benefits. 
 
 It is suggested, as the belief of one manufacturer, that the 
 whole employer's liability agitation is a direct movement toward 
 socialism. If this be true, it is high time that all employers of 
 labor were co-operating in a general effort to formulate some uni- 
 form policy or system, which shall be elastic enough to operate 
 equally well for all manufacturers, large and small, and so safe- 
 guard and protect the mutual interests of employer and employe, 
 as to satisfy both. 
 
 It is suggested that the general government should support 
 a needy, disabled or infirm employe, because such burdens should 
 be borne by the public and not by employers. 
 
 No method has been so productive of good, no charity so 
 kind or helpful as that of "helping others to help themselves," 
 
[97] 
 
 and this should be one of the basic principles employed in the 
 working out of this problem. A very few people willingly become 
 subjects of charity and most of them rather give, than receive 
 alms. It seems reasonable to assume that a system for the main- 
 tenance and operation of which both employers and employes 
 should contribute their proportional part of the cost, labor and 
 responsibility could be devised. 
 
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 UNIVERSITY OF CALIFORNIA LIBRARY 
 

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