In 1890 Germany adopted practically an absolute act, and every State on the European continent has now followed the lead of Germany. The question that has come to us historically and in an evolutionary manner, is whether we should follow the lead of European governments in this matter and do as they have done, adopt the lead of Germany, who ignored entirely the matter of interstate competition and passed a law placing every trade under the Workmen's Compensation Act, or whether we should undertake to work out this matter for ourselves in the crude indefinite way in which England has worked it out.
In England this matter of interstate competition came up. England worked for seventeen years under the Gladstone Employers' Liability Act, but finally Asquith and Chamberlain and a combination of the Liberal and Conservative parties, got together and formulated another act in 1897 which they called the first Workmen's Compensations. That act applied, as we attempt now to apply it in certain of our States, to certain limited trades and occupations.
Prior to that time the various counties and organizations of Great Britain appointed committees which investigated these matters to decide whether they should pass a law to collect statistics and decide whether they should adopt a law including all of these trades or only a portion of them. They decided, inview of the uncertain character of the legislative elements in England, that they would apply it to a limited portion only of the trades, and so they passed the Chamberlain Act of 1896. But they soon saw not only the benefits that came to all of England from the application of the principle, but they saw that in order to satisfy the other workmen who demanded the same thing, that they must apply it to all of the trades, and so finally they passed the Asquith Act of 1906, which is now in operation, and applies practically to all of the trades in Great Britain. They were not so wedded to this unfortunate philosophy of ours which was the cause of our constitution, and I suppose which led America first to separate itself from England and which has dominated American life ever since—this philosophy of independence, this philosophy of individualism. If we cannot see the benefits that come to us from following the European systems, we will have to work one out ourselves. But in my judgment and in the judgment of a great many others more competent to speak authoritatively upon the subject than I am, it would seem as though it was the height of folly for us to ignore the example of Germany and twenty-two Continental Governments which have followed the lead of Germany.
Chairman Mercer: I would like to hear some of the employers discuss this question. Would the employers feel that they were treated fairly if we singled out a few of the more hazardous industries and did not cover all industries in the same way, in proportion to the number of accidents?
John Mitchell(New York): I think we must approach this subject as a practical proposition. I want to make this observation: If these bills include domestic and agricultural labor, we are not going to pass the bill. If we are going to work out a practical proposition with the hope of passing our bills, it seems to me we must exclude agricultural laborers and those employed in domestic service. I do not believe the farmers will favor this legislation if it affects them, and I think that the number of accidents occurring on farms is not sufficient to make their inclusion necessary for the success of the bill.
My judgment is that we should start with men working in dangerous employments, and then perhaps with a few years' experience under a bill of that kind, we may decide to include the agricultural industry. The industries which need it most are the ones in which there are the greatest number of accidents.
Chairman Mercer: What is the harm of reporting the bill complete to the Legislature, and then when it gets in there as a practical proposition, let them pass it, and if they can not, let them cut out such industries as they have to?
Mr. Mitchell: The difficulty is, if the farmers are apparently justified, the men who represent the agricultural districts will vote against it, and the legislator who represents a manufacturing district and who personally might not feel hostile to the legislation, will vote against it, because he does not want to put the burden on the farmers.
Chairman Mercer: Supposing some fellow offers an amendment striking out these industries which you would leave out in the first place, can they not pass the bill just the same?
Mr. Mitchell: Yes, but I am getting at the best way to approach it.
Mr. Harper(Illinois): The experience in Illinois on Commission bills has been that it is vastly better to have no opposition at all, and to eliminate all possibility of amendment if it is possible. In other words, if the Commission submits a bill to the Illinois Legislature, they are inclined to take it as it stands, especially if both sides interested in the matter are on the Commission, because they say, "Well, this matter has been agreed to and we have no special interest in it. If it is all right we will pass it." Hence, if we put something in that requires amendment, it is liable to stir up discord and dissension; and my personal opinion would be that it would be wise to avoid that if possible.
On the subject of classification I think it would be wise to make a classification based upon the hazardous trades; not the non-competitive trades, but the hazardous trades, and make it inclusive and as broad as possible. Include in the hazardous trades the non-competitive trades, as they have done in New York, but do not start with any one especially, because our courts here have gone further on class legislation than anything else, and I think it would be dangerous for us here to include merely non-competitive trades and call them hazardous or extra-hazardous. In my judgment it would be much better to call them extra-hazardous and include in that list the non-competitive industries.
Edwin R. Wright(Illinois): I wanted to suggest that it would of course be desirable to take in every occupation, but if we take in the farm labor and servants of Illinois, we cannotpossibly secure the passage of this bill. If we burden our bill with too many classifications and too many occupations, the moment we get to Springfield, interested parties, the farmers to start with, would ask to have the farm labor stricken out, and when you once start the snowball rolling down the hill, you would strike the meat out of the bill and lose the confidence of the Legislature, and the moment you do that you lose the bill as a whole. It would not make any difference if nine-tenths of the bill were correct, you would have overshot the mark one-tenth and you would lose the entire bill because they would cut it all to pieces.
We have a great many dangerous occupations in this State. A great many men are killed or seriously injured on railroads every day. Five men are either killed or injured in mines of Illinois every day, and the proportion keeps right up through the trades, so that it is pretty hard to say where the danger starts or stops, but must classify the different trades in this State if we hope to get anything at all.
In comparing conditions here with conditions in foreign countries, you will have to take this question into consideration: In foreign countries, as I understand the situation, they raise the workers there, and if we raised the workers in this State we would soon arrive at the conclusion they have arrived at in England and Germany. Here we import the workmen ready-made and grown-up. We do not grow them in this country, and most of the men who are killed are foreign born, or a large percentage of them. If we fail in securing the compensation law, and it has got to take its regular course, we can get the same results through a different channel. Stop bringing in the men who are grown up, and raise them here, and you won't have the workers to kill, but you will have to conserve the workers in this State and in this nation. Out of 220 firms reporting in Illinois, there are over 200 accidents a month.
Mr. Ingalls(Wisconsin): The idea in this plan is to include the railroads and public service transportation company employes as a whole. Now, is it not wise to consider for a moment the distinction between those two classes of occupation? All the gentlemen here will agree perhaps that so far as railways are concerned, and public service corporations of that character, there isn't any question but what the Legislature or Congress can pass a compulsory compensation law. You do not have to classifyeither at all; any transportation company which gets its right to exist and to operate from the Legislature or Congress can be controlled by the Legislature or Congress with reference to compensation for its injured employes. That industry can positively be handled in that way.
Congress has introduced and passed a resolution for the appointment of a Commission, which will consider that very subject. Those measures are to be made uniform; the State could readily agree upon a plan along that line, and it seems to me that with the subject handled with that idea in view you can pass, under our constitution, a compulsory compensation law for all railway employes. And those engaged in interstate commerce could be handled by Congress and thus make a uniform system.
As to what occupations should be considered, none of us has considered in Wisconsin, so far as our committee is concerned, that we necessarily ought to include farm laborers or domestic servants. Of course our plan here is different and the discussion seems to relate to what classification we shall have under an absolute system, which is quite a different question from that in Wisconsin. I can readily see how the farmers and employers of domestic servants would be inclined to oppose a measure as strong and radical as to include all such employes. I agree with the other speakers that in presenting that matter to the Legislature you ought to present it as you think it will be sustained by the Legislature rather than to ask for things that you know yourselves you probably would not be able to get. In fact, I think it might be well to keep in mind, in discussing the occupations, what you can do positively and what there is a great deal of doubt about being able to do, on the theory of an absolute compulsory system.
Mr. Ranney: When the International Harvester Company organized their industrial insurance plan they omitted all employes except those working in their mines, in their plant, and on their railroads. We have some 2500 men in our sales department and experts working out on farms who are not included in that plan, because we felt that going beyond the industries was rather a dangerous proposition. Hence, we included about 35,000 employes and excluded about 2500.
Mr. Blaine(Wisconsin): I think that if there is any justification for this sort of legislation it is found in the fact that the industry or trade should bear the burden and not the workmen.
I have contended also from the beginning that farm laborers and domestic servants should not be included. Farmers as they conduct their occupation in this country to-day do not have any control whatever over the price or distribution of their products, and hence they have no opportunity whatever to transfer the cost of industrial accidents to the consumer. They are not organized. If they were organized into a vast Society of Equity in every State of the Union I doubt not but what they could control and dictate who should pay the cost of this new burden, if it is going to be an additional burden.
The other industries are organized. They cover vast areas of territory, and they know how to transfer the cost of production. The hazard, too, is greater in our industries than in our farming communities. I think, however, that under the Wisconsin plan we have taken care of the farmer, and I apprehend no danger whatever from that source, because he need not come under the plan unless he wants to. He will be independent of it.
Reuben McKitrick(Wisconsin): In an article written by Professor Farnam, statistics are given as to the comparative number of accidents in farming and agricultural pursuits and in the industries, and while I cannot state the figures in absolute terms at this moment, the percentage given is higher for laborers upon the farms than upon the railroads, for instance.
That statement is borne out also in the accident rates for farm laborers as compared with the rates for men in general manufacturing industries throughout the State. The accident rates are higher for the farm laborers, and so if you are going to work on a basis of establishing a classification on account of the hazardous employment, it seems to me the farmer would have to be included.
(In closing the discussion on Question 1, the following resolution was offered by Doctor Allport, but not voted upon, the unanimous consent to its adoption, required under the By-Laws, not being granted:
"Resolved, That it is the sense of this Conference, that State Compensation Laws should be framed to cover all hazardous manufacturing industries, and that any manufacturing industry in which accidents occur shall be declared classified as hazardous. That this classification shall not include farm or domestic labor."
Upon John Mitchell's motion, Commissioner Charles P. Neill, Mr. H. V. Mercer, Dr. John B. Andrews, Mr. M. M. Dawson,Dr. Lee K. Frankel and Dr. William H. Tolman were authorized to represent the Conference at the International Congress of Social Insurance to be held in September, at The Hague, and to extend on behalf of the association an invitation to the International Congress to meet in the United States in 1912.)
Chairman Mercer: The second question is: Do you want the liability in whatever industries you cover to be an absolute liability; or do you want to make a law that will permit a contract to be made by the employer and employe?
If nobody wants to be heard on that we will pass to the next question, because that is largely a constitutional question of what youcando, and you all want to accomplish the same results, as far as you can.
The third question is: Whether, in your judgment, we should have a double or a single liability, if we could get what we want. Do you want to repeal the common law and statutory remedies or do you want to add the compensation act and leave the others as they stand?
John Flora(Illinois): As a member of the Chicago Federation of Labor, and knowing the views of that organization, I want to say that it is the unanimous desire of that portion of the workmen of the State of Illinois that we first have in the State of Illinois a law repealing the common law defenses of the assumption of risks, contributory negligence and the fellow-servant act. We hold, as a body of workmen, that no compensation law, I do not care how good you make it, will be worth the paper it is written on unless those defenses of the employer are taken away from him. Then we do not care whether it is elective or compulsory. If you take away the defenses of the employer along those lines, you can make an elective law, and he is compelled to accept it in order to escape the results of the statutory law.
Chairman Mercer: Are you willing to repeal all the common law, not only the defenses, but the right to recover if the compensation plan covers the whole field?
Mr. Flora: I am not at liberty to state that at the present time. I am careful in making my remarks, because I would first want to consult my constituents on any questions of that kind. I do know this, however, that the working people of Chicago do not want to give up the right of going under the law as it stands to-day and as they have it in England. We want theright, if we do not like the compensation, to go to court. As a matter of fact, I think it is rather a foolish idea that is entertained. If we can get a compensation law in this State as good, for instance, as the one that Wisconsin recommends, personally, I am going to write in my dying request that my wife shall not be fool enough to go to common law, but to take the compensation, because, I think, she will come out better in the end.
I am gathering statistics in Cook County as to the accidents that have resulted in death, and I find in every case where they have gone to court they have received a great deal less than if they had settled with their employers. The largest amounts that have been recovered, after taking out the costs of a court procedure, have been less than what they would have received if they had settled with their employers in 150 cases that I have so far investigated. Therefore, I think, the idea that the working people have—that they want access to the courts under the law—is more of a bugaboo than anything else, and that after a good compensation law is passed we will have a great deal of trouble in our organization in trying to teach the people to take the compensation and stay out of the courts.
Chairman Mercer: Is it not true that the laboring men think now that they ought to have both systems left open to them, because they are afraid they are being handed a "gold brick" by the compensation plan, if their right to recovery under the common law is taken away from them?
Mr. Flora: Yes; if you have had many dealings with working people you will know that they are always afraid of a "gold brick."
Dr. McCarthy(Wisconsin): Do you not believe that after a discussion with the working people they will realize the situation and understand it better? I know in talking with the labor representatives up in Wisconsin for the last two or three years before the Legislature, that they are gradually beginning to understand what a compensation act is. I think the sentiment is changing among our labor people in Wisconsin, and I believe this winter they are going to accept the compensation act without asking for their common law rights.
John Mitchell: I do not believe there should be any hesitancy in answering that question. The fact of the matter is that the working people want the right to sue in order to make theemployers careful. We all know, of course, that under any compensation that is proposed here they are simply averaging up the compensation. That is to say, a man who is probably entitled to anything at all under any law we now have, gets something; and the man who is entitled to a great deal does not get so much.
Dr. McCarthy: Do you think it will make the employer more careful?
Mr. Mitchell: Of course I do. I believe that if it cost an employer $20,000 to kill a man he would be careful. If it is expensive for an employer to kill men, he will protect them, but the great difficulty in this country is that it is not expensive to kill men. It is the judgment, I think, of nearly every one who has investigated this matter, that human life is entirely too cheap; it is not expensive enough for the employers who injure their workmen.
Dr. McCarthy: The employers only pay one rate, any way. It falls on the insurance companies. Why should the employers be more careful?
Mr. Mitchell: Because their insurance rates are fixed by the number of accidents or the number of recoveries. I dare say in England the number of accidents is not as high as it is here. In fact, a representative of an English insurance company told me the other day that the British Government pays 30 cents per capita for mine inspection, and their total expenditure amounts to $6,000,000 annually. I dare say that while our population is double the population of Great Britain, that we do not pay in the whole United States $2,000,000 dollars a year in either factory or mining inspection, where as a little nation of 40,000,000 people is spending $6,000,000 annually. That is one reason, I think, why the accident rate is so much lower in England than it is in the United States.
Mr. Parks(Massachusetts): I have heard a great deal about this double liability plan where the workman, failing to win his suit at common law, would be entitled to compensation under the compensation act. I believe in Mr. Mitchell's idea in regard to that, and I believe that is the idea of the majority of the workmen. The cry in Massachusetts is that they want something different from the present employers' liability act. I am not so enthusiastic a laboring man as to think that we are goingto get the employers' liability act so amended that we will take all of that grievance away from the act. In fact, if we got all of the defenses taken away from the employer there would be no need of a compensation act.
We have had that bill before the Massachusetts Legislature for a number of years, and we have not heard any great talk about workmen demanding this or that right under the employers' liability act. They have been asking for something to take the place of the employers' liability act. They want a workman's compensation act. I do not want to see this thing come up from the workmen themselves, because I think it is going to stop this workmen's compensation movement. If they continually rise and say that the workmen demand this and demand that it will mean that the workmen will get nothing. I have had considerable experience in the Massachusetts Legislature in agitating labor legislation, and, if I do say it, I think Massachusetts in recent years has put more remedial labor legislation on the statute books than probably any other State in the Union, with the possible exception of New York. I give way to New York, because we like to follow New York, but I cannot say that of the other States of the nation. Personally, I would like to see the workmen get all they possibly can get, but we cannot impose too many restrictions on the employers, and if we recommend in the different States the taking away of practically all the defenses of the employer under the employers' liability act, and at the same time recommend the workmen's compensation act, the whole thing will fall through and we will get nothing. I believe we ought to go easy and get something that we can put through.
I am a believer in fixing up everything before you put the bill into the Legislature, and have some kind of an understanding between the contending parties, so that when your hearing comes up both sides are pretty nearly agreed on the same plan. Take away all opposition before you have your hearing, because the minute you start opposition you begin the death of the bill. It is a slow illness, but it means death. If we can bring about something that will not be too radical, that will not be too harsh on the employers, we will get something for the workmen.
I believe, as Mr. Mitchell said, that the workman ought to have his right under the common law, but failing in that he should not be allowed to go to the compensation act. I do notbelieve in that; it is a nice thing, and I would like to see the workmen have it, but it is not fair to the other side.
Mr. Blaine(Wisconsin): On this question of double liability I would suggest that the farmer under the Wisconsin plan will study this law and will learn the benefits of it, and either through mutual insurance companies, as they have mutual fire insurance companies to-day, or something of that sort, he will, no doubt, come under the law and be glad to do so, because it will be a positive benefit to him. The double liability is somewhat debatable. Under our plan we take away certain defenses. If we take away those defenses from the employer, and leave the employe the right to sue at common law, and also the right to compensation under the act in the event of failure to win his suit, I think we are doing something unfair toward the employer and something that the employe does not want. I do not believe that in Wisconsin the Federation of Labor would demand that sort of a measure. In fact, I am led to believe that they are now prepared to meet the committee upon a very reasonable ground as to the double compensation, and I do believe that while our bill provides that the right of election shall take place at the time of employment, that we will be able to meet the committee on the fair proposition that the right of election shall take place at the time of the accident, but that that right shall apply to accidents happening by reason of the negligence of the employer or through his failure to supply the proper safety appliances for his machines.
Mr. Flora(Illinois): Of what value would a compensation law be to the workman in the State of Illinois particularly, where we have no employers' liability law, if the gate were left open for the insurance company or the mutual benefit company, or if the employer could bring in the old common law doctrine of contributory negligence, assumption of risk, and so forth? What would prevent the employer or the insurance company, if we did not repeal those laws, from bringing those in and keeping the workingman out of his compensation under a compensation law? I would like to know what protection the working people would have in that case.
I find also that too many labor representatives are too much imbued with the idea of protecting the other side. I believe in letting the other fellow take care of his own side. He is big enough to do it.
Mr. Parks(Massachusetts): If they had a workman's compensation act in Illinois the workmen would draw whatever the compensation act said they should draw.
Mr. Flora: Cannot they bring in the law of contributory negligence?
Mr. Parks: No; not under the workmen's compensation act; you are entitled to so much, if an injury occurs, without regard to the liability.
As to Mr. Flora's statement that there are too many labor representatives who want to look out for the other side, I find that you get more for the workmen by showing a little consideration for the other side than by being radical.
Mr. Ranney(Illinois): In answer to Mr. Flora's question, I attended the National Manufacturers' Association meeting in New York and talked with about fifty or seventy-five large employers of labor, and there was not one of them that was in favor of a fair employers' liability law. But what they want to know is definitely what this is going to cost them. If they have got to be liable for every accident, they have got to know not only the expense under the compensation act, but the additional expense under an action at common law, which is an unknown quantity. I know that large employers in general are in favor of a fair compensation act, but I do not think they are in favor of double liability, because they will never know where they are. The laboring man quite properly wants to have a fair compensation act and wants a fair amount, but if he elects to go to common law, he should take that chance. Otherwise he will get a fair compensation without any legal action whatever.
Mr. Ingalls: Would a liberal rate be more preferable to the employers than a double liability?
Mr. Ranney: I think it would.
Mr. Ingalls: Of course, if you can fix the rates all right it might go a long way toward covering the proposition.
Mr. Ranney: I am not speaking for any employer, but I think that if a bill is adopted that is fair to both parties, that the employer should have some protection on that side. I am simply voicing what Mr. Mitchell said yesterday, that he was not in favor of the English act, which gives double liability.
Mr. Mitchell: I am not in favor of double liability, but I am in favor of the alternative.
Mr. Ranney: I do not think the employers would have anyobjection to an alternative, but they would not be in favor of a double liability where they might have to fight the case in court and then in the event of their winning the suit the workman could come in under the compensation act and get compensation. That does not seem to me to be fair.
Dr. McCarthy: Do you want the election before or after the accident?
Mr. Mitchell: After.
Dr. McCarthy: If the employers' liability acts that have been passed were any good, or could be amended in any way to stop litigation, we would not be here. England tried for nearly a hundred years to modify the employers' liability act. The only thing we are here for is to knock out the everlasting cost of litigation, and the most perfect act that we can get will be the one that will knock out this expensive litigation. If a man is entitled to elect after he gets hurt there is going to be an awful confused state of affairs and the tendency, I believe, will be to increase litigation, because the temptation will be constantly before that man through the attorneys coming to him to go into litigation.
Mr. Mitchell: In England there are less suits under the English employers' liability law than there were three or four years ago, and every year shows a less number. On the other hand, there are a great number under the compensation act. That demonstrates that in England, even with the double liability, the men are not suing under the employers' liability law.
Dr. Allport(Illinois): I can give you the figures on the employers' liability law and workmen's compensation act for 1908, and that may perhaps enlighten the Conference in regard to the exact status of the act at this time. Out of 2065 deaths in trade accidents in 1908, only 524 out of those cases were made the basis of proceedings, or not much more than one-fourth of them, in the county courts, and only 12 suits were brought for damages under the employers' liability law. In other words, only 12 of those 524 suits took advantage of the old Gladstone act to bring a suit for damages under the double liability.
Prof. F. S. Deibler: I think a great many of the suits that come up in England are suits to determine whether the accidents occurred in due course of employment.
Chairman Mercer: I have a letter from Mr. Gillette thatdoes not exactly come under this heading, but I think you may be glad to hear it at this time. It reads as follows:
Minneapolis, Minn., June 9, 1910.Mr. H. V. Mercer, City.Dear Sir: Our study abroad developed a few things that stand out so clearly that I should like to have you know them before you go to Chicago. They are matters that ought to be carefully safeguarded in legislation of this kind.First, the cost. Even after the act is most carefully drawn and the compensations are restricted to the utmost, the cost is bound, in my opinion, to be two or three times as great as under the present system. This means, of course, that the compensations must not exceed one-half wages in any event, and the death benefits must be limited as well as compensations for total disability. The payments to children must be graded according to the number, with an outside limit and there must be a waiting period without compensation at any rate not less than two weeks, and I think thirty days before benefits begin, and these benefits must not be retroactive in case the disability extends beyond the two weeks or the thirty days. In other words, every economy must be inserted and even then I believe the cost will be increased from two to two and one-half times.Then the doctor question wants to be carefully considered. France is having a serious time over the doctor question. It is the curse of their system, and they are also experiencing great difficulty with the matter in Germany and England. If the English law had been left the way Mr. Chamberlain intended it, so that an independent doctor could have been called in at the request ofeitherinstead of both parties, it would have saved them all kinds of trouble.Then there is another matter that ought to be carefully considered, and that is the matter of discrimination against agent or employe physically imperfect. The situation in England to-day is beginning to force a physical examination of employes. Mr. Holmes of the Hosiery Workers' Federation stated to me that in his opinion there were 150,000 English workmen who could not obtain employment by reason of excessive age or physical imperfections.They are having a lot of difficulty in Germany over various questions arising out of their law. Over 17 per cent. of the claims get into litigation. This looks rather discouraging to us. Of course this arises largely from the fact that this litigation costs the workmen nothing.I should like to write a few hundred pages on this subject, but I haven't time.You might be interested to know that while in England the risks are practically all insured in private companies, the cost to the employer is less in England than it is in Germany, France or Austria. In France about 25 per cent. of the risks are not insured, and of the remainder about 60 per cent. are carried in private insurance, and 40 per cent. in mutual companies. The conditions and character of the workmen are so differentover there from those existing in America that it is pretty hard to estimate the comparative costs if one of the foreign acts was transmitted to this country. Beside that the rates of wages are very much lower, although of course the benefits, being based on the wage rate, are nearly in proportion.The above estimate of cost of two and one-half times our existing cost is based on a contribution of 20 per cent. by the workmen. It looks as if the thing would have to resolve itself into a matter of some form of mutual insurance, both employer and employe contributing to the cost, or with a waiting period or else a longer waiting period, and a fund provided by the employers to take care of the accidents, the employes providing a fund to take care of sickness and temporary disabilities during the waiting period.I am now having my notes written up, and will soon have a table of the comparative costs in England, Germany, Belgium, Austria and France, and possibly Denmark and Sweden.Yours very truly,George M. Gillette.
Minneapolis, Minn., June 9, 1910.
Mr. H. V. Mercer, City.
Dear Sir: Our study abroad developed a few things that stand out so clearly that I should like to have you know them before you go to Chicago. They are matters that ought to be carefully safeguarded in legislation of this kind.
First, the cost. Even after the act is most carefully drawn and the compensations are restricted to the utmost, the cost is bound, in my opinion, to be two or three times as great as under the present system. This means, of course, that the compensations must not exceed one-half wages in any event, and the death benefits must be limited as well as compensations for total disability. The payments to children must be graded according to the number, with an outside limit and there must be a waiting period without compensation at any rate not less than two weeks, and I think thirty days before benefits begin, and these benefits must not be retroactive in case the disability extends beyond the two weeks or the thirty days. In other words, every economy must be inserted and even then I believe the cost will be increased from two to two and one-half times.
Then the doctor question wants to be carefully considered. France is having a serious time over the doctor question. It is the curse of their system, and they are also experiencing great difficulty with the matter in Germany and England. If the English law had been left the way Mr. Chamberlain intended it, so that an independent doctor could have been called in at the request ofeitherinstead of both parties, it would have saved them all kinds of trouble.
Then there is another matter that ought to be carefully considered, and that is the matter of discrimination against agent or employe physically imperfect. The situation in England to-day is beginning to force a physical examination of employes. Mr. Holmes of the Hosiery Workers' Federation stated to me that in his opinion there were 150,000 English workmen who could not obtain employment by reason of excessive age or physical imperfections.
They are having a lot of difficulty in Germany over various questions arising out of their law. Over 17 per cent. of the claims get into litigation. This looks rather discouraging to us. Of course this arises largely from the fact that this litigation costs the workmen nothing.
I should like to write a few hundred pages on this subject, but I haven't time.
You might be interested to know that while in England the risks are practically all insured in private companies, the cost to the employer is less in England than it is in Germany, France or Austria. In France about 25 per cent. of the risks are not insured, and of the remainder about 60 per cent. are carried in private insurance, and 40 per cent. in mutual companies. The conditions and character of the workmen are so differentover there from those existing in America that it is pretty hard to estimate the comparative costs if one of the foreign acts was transmitted to this country. Beside that the rates of wages are very much lower, although of course the benefits, being based on the wage rate, are nearly in proportion.
The above estimate of cost of two and one-half times our existing cost is based on a contribution of 20 per cent. by the workmen. It looks as if the thing would have to resolve itself into a matter of some form of mutual insurance, both employer and employe contributing to the cost, or with a waiting period or else a longer waiting period, and a fund provided by the employers to take care of the accidents, the employes providing a fund to take care of sickness and temporary disabilities during the waiting period.
I am now having my notes written up, and will soon have a table of the comparative costs in England, Germany, Belgium, Austria and France, and possibly Denmark and Sweden.
Yours very truly,
George M. Gillette.
Chairman Mercer: I have not heard yet from Mr. McEwen. He is the labor commissioner, and I was in hopes that we would have a letter from him as well as this letter from Mr. Gillette.
The next question is the proposition of compensation; that is, whether you will have a limited sum or a pension plan, or what you will have.
William H. Moulton(Michigan): In the iron and copper mining region of Michigan for a great many years we have had a plan of payments to which the men and the employers have contributed equally. These payments have been made monthly to the men during disability, and in any event they should not be made at any longer intervals than once a month. These sums have continued for a year, and in case of death, a death benefit has been paid from this fund.
The mining companies are very much interested in this compensation law. This is evidenced by the voluntary action of the harvester company and the United States Steel and some of our other independent companies. The Cleveland-Cliffs Iron Company, which I represent, have been contributing in this way for a great many years at all of our mines. We employ now perhaps 3000 or 4000 men, and another thing which is of advantage to them is this: We found it was a common custom when a man was killed in a mine for the men to stop work until theday of the funeral, no matter whether our boats were lying idle waiting for cargoes or not. I think you will all agree with me that we generally get what we pay for, and if we expect a man to do something for us we expect to pay for it. Our proposition to the men was this: They stopped work out of sympathy for this man who had been killed. We suggested to them that it would be more an act of sympathy to follow out this plan, that they should continue at work until the day of the funeral and we would pay them for all the time they worked, and then if they took a half-day off for the funeral we would pay them for that half-day just as though they worked, but that this amount of money should be a contribution from them to the family of the man who had been killed. The last amount that I remember that was paid in that way was $298 which that family received in addition to the benefit fund. Our company also is paying to the widow and orphans the sum of $12 a month to the widow and $1 a month for each additional child under the age of 16 years, for a period of five years or until the widow remarries. This is done with the idea that by the time the children have reached the age of 21 they can support the family.
We also endeavor to reduce accidents by frequent inspections of our mines and monthly reports, and periodical inspections also, and in case of any serious accident we have a committee who visits the scene of that accident, carefully inquires into the cause of it and makes a recommendation for the benefit of that mine and of all our other mines.
I am sure I am voicing the opinion of all the Lake Superior region of the iron and copper mines when I say that we are heartily in favor of some plan of compensation for the workmen of our country which shall be a liberal one.
Mr. Dawson(New York): Nearly every bill which has so far been framed has proceeded on the basis that it is necessary to limit the length of time for which the benefit is to be paid. That is to say, even though a workman has become totally and permanently disabled, the benefit is to be paid for three or four years, and then is to stop. This overcaution grows out of two things; one of them is that we are almost entirely thinking of this as a compensation scheme which the individual employer is going to pay for. It may be that our laws will be passed in that form; but, even if they are passed in that form, experience in every country in the world has demonstrated that almost all employerswill be insured, and the loss will be paid by companies which can just as well continue payment so long as it is necessary for it to be continued, and charge premiums and set up reserves accordingly.
It is my personal opinion that we ought not to frame our laws on the basis that employers as a class are actually going to pay these compensations directly. We should frame them with a view to their being insured, and that, therefore, this will not be an intolerable burden upon any individual employer unless he makes a fool of himself by neglecting to insure.
The second reason is ignorance as to the cost. The additional cost when benefits are paid to the disabled as long as disability continues is extremely small. Relatively few persons who have been totally and permanently disabled are living after five years, but the need is greater than ever for those who are. In point of fact, it will add very little to the total cost to give the benefit throughout their disability. You may argue, on the other side, that because there are a few of them, we can as well cut them off; but a scheme that starts out to cure this evil—this economic flaw in our business system, and that, notwithstanding, turns loose a permanently disabled man after five years because he happens to be so unfortunate as still to live—is fundamentally shortsighted and should not be tolerated. I, therefore, earnestly urge those Commissions which have not yet prepared their bills, to make the benefit payable during the entire period of disability.
Mr. McCarthy(Wisconsin): On certain minor injuries, would you say that was true?
Mr. Dawson: Not so true. My impression about minor injuries is that a careful study of the Austrian practice will be of great value. These benefits are not paid as an annuity at all unless the person is injured at least to the extent of 20 per cent. of his earning power. Smaller impairments are compensated by lump sums.
Again, in the matter of widows and orphans there is a whole lot of feeling that you must cut them off at the end of three or four or five years. There is no occasion for that, and every reason why it should not be done. The additional cost of paying during widowhood and minority is not heavy; and you should again, in my judgment, take into account that you are expecting this business to be insured and should encourage its being insured, and encourage the employer to run the risk himself. Ofcourse, in a very large plant, it is quite possible for an employer to insure himself, because he can have an average experience to judge from, but I am not referring to the exceptional case.
James A. Lowell(Massachusetts): The practical difficulty which strikes me is this: In Massachusetts, and everywhere else, for that matter, we have a financial situation to face. I would say, and every man here would say, that it would be much better to have a pension for a person who needs to be pensioned; but we are brought up at once in the very beginning, and this thing comes right up and hits us in the face: How much is it going to cost? It is very well to say, as Mr. Dawson has said, that it won't cost much. Perhaps it won't, but the question is how much. It may be just the turning point in Massachusetts as to whether we can do it as a practical financial measure—to have a lump sum or a pension. I, personally, should be very much in favor of a pension. But there must be some way of ascertaining how much this pension is going to be. It appeals to me that as a practical measure in the beginning of this thing, that although we should like to be able to say to the man who is injured for life: "We will give you so much a month for the rest of your life"; that we cannot do it right off, because we do not know whether he will live five years or whether he will live twenty-five years. The difference between the amount which you will pay if he lives twenty-five and the amount you will pay if he lives five years may be just the difference between a possible scheme and an impossible scheme.
The employer's trouble about this thing is the uncertainty. The amount of it is not so great an objection. It is not that the employer would say, "Well, if I have to pay $5000 for such-and-such a case I cannot do it. I can pay $2000, but I cannot pay $5000." The trouble is he does not know whether he is to pay $2000 or $15,000. That is the difficulty. It strikes me in starting your system here you have got to find something that is certain. If there is to be a pension you have got to put a limit of time on it so that it may be definite.
If we were to pass a law for Massachusetts to-morrow, and contained in that law were those various pensions, we should not know anywhere near how we were coming out; and, I understand, and I will stand corrected on this if I am wrong, that they have not figured those accurately in either Germany or Austria or in England. The amount of the pensions which had to bepaid was much greater than was calculated. If they had known at the start they were to pay this greater amount it would not have made so much difference because they could have arranged it, but they did not know it and, therefore, they are getting a higher amount put upon them than they thought they would, which is very unfortunate for a great many reasons.
Mr. Dawson: There are reliable tables by means of which adequate premiums and reserves for annuities to the disabled and to widows and orphans can be computed.
Dr. Allport: I have a copy here of the workmen's compensation act of 1906, the English act, and I think it might not be a bad idea to read you the provision in the English act covering this matter. Of course, the English act started out just as our act must start out if we start out on the basis of compensation. It must be based on a certain proportion of the wage of the individual. When we come to consider the matter of disability, the point that comes up is whether we shall pay a man for a total or permanent disability in a lump sum or whether we shall limit the time in which the payments shall be made. It seems to me as though that is purely an actuarial matter, and that it is something which will adjust itself if any law goes into effect. No employer in England carries his own insurance; it is all carried by some form of insurance, and so the insurance companies will have to work this matter out for themselves, and they are going to be able to do it. The better class of insurance companies have prospered under that class of insurance. The provision in the English law is, briefly, this: It provides for the payment of compensation for disability as long as the disability lasts, and in case of death it provides for payment to the children until they reach a workable age, and for the widow until she marries again. Then there is this provision:
"Where any weekly payment has been continued for not less than six months, the liability therefor may, on application by or on behalf of the employer, be redeemed by the payment of a lump sum of such an amount as, where the incapacity is permanent, would, if invested in the purchase of an immediate life annuity from the National Debt Commissioners through the post-office savings bank, purchase an annuity for the workman equal to 75 per cent. of the annual value of the weekly payment, and as in any other case may be settled by arbitration under this act, and such lump sum may be ordered by the committee or arbitratoror judge of the county court to be invested or otherwise applied for the benefit of the person entitled thereto."
These cases are put into the hands of the court and paid by the court and not by the attorneys, and it is left optional as to whether he will take a lump sum or an annuity.
Dr. McCarthy: Some of the county judges over there with whom I talked told me that they were doing everything possible to keep the lump sums from being paid, because they believe that is a bad practice. There is no agitation over there that I could find in either Germany or England for limiting the time that a man should receive compensation. They understand over there that it has got to fall upon somebody in the end, and you must remember that in Germany and in England, to a large extent, this is done to keep away from the necessity of caring for the poor, and all that sort of thing. You go to any insurance company over there and say, "I have so many people working in my factory under such conditions; what are your rates?" and they will give you the rates and take care of an injured man for the rest of his life.
Chairman Mercer: It has seemed to me sometimes that it might be a good plan to provide for a lump sum settlement, subject to the approval of a court, in case a firm wanted to go out of business, or something of that kind. A corporation might want to dissolve, or the time of its charter might expire, and in that case what is it going to do?
Mr. Dawson: It would go to an insurance company and purchase an annuity to cover it.
Chairman Mercer: Suppose it is a big company that had been carrying its own risks?
Dr. McCarthy: That is an actuarial matter. If it is a mutual company in Germany, there has to be a reserve kept by those companies to provide for the possibility of their going out of business.
Chairman Mercer: It seems to me we might now go to the question of whether we will administer our compensation law through the courts or through boards of arbitration. In New York I notice that they recommend staying under the courts in their present bill.
Prof. Seager: The characteristics of the two bills that have passed in New York were explained yesterday, and I will try to avoid repeating what was said at that time. When it comes tothe details of the plan that the New York Commission recommended, and which the Legislature has adopted, the reasons why we did this rather than that are almost trivial, because they were always practical reasons of expediency. We have a Commission of fourteen members, and eight of them were members of the Legislature; one of them was a farmer; several of them were lawyers, and two of them were employers, so they represented in a very broad way the different interests of the State. It would have been quite impossible to get that Commission to agree on a plan that would include the farmers. It was difficult to get the employers to agree on our plan.
Taking up the details, however, we were very much impressed by the aspect of the case that Mr. Lowell spoke of a few minutes ago; that is, the uncertainty as to what it would cost and the opposition that developed against the measure because of that uncertainty. For that reason we felt that we ought to make the probable cost as definite as we could, and that meant requiring lump sum payments rather than continuous payments, limiting the period during which the continuous payments should be made in case of disability, and in other points making the measure precise and definite, when, from the point of view of the social interests of the community, it ought to be more vague and indefinite, that it might be adapted to the requirements of each special case. It was on those grounds of expediency, remembering all the time that this was the first step, that if the Legislature of New York passed these bills it would be the first State in this country to go in for any kind of workmen's compensation, and that every country which has adopted this policy has found it necessary to amend and modify as the result of experience, that the schedule which we finally agreed upon took the form that it did; that is, limiting the compensation in case of disability to not more than $10 a week, and to continue in case of a permanent disability for not more than eight years. In death cases not more in the aggregate than four years' wages, and not to exceed in any case $3000. That schedule has the advantage of being definite and of being one which enables the insurance actuary without much difficulty to name a rate, and, needless to say, we got such rates from the insurance company's representatives before we finally decided on that schedule.
As to the administrative features of our bills, our difficulty was to devise a plan which would do away with litigation andat the same time be constitutional. We all of us recognized the merits of some scheme of arbitration as preferable to court procedure, and yet the more we looked into it, and the more we studied the complexities of our system in New York, the more we were impressed with the necessity of creating an entirely new system of jurisprudence, if we were going to have in that State a scheme of arbitration comparable to the English scheme of arbitration. For that reason we left that to future amendment of the bill, and left the judicial procedure very much as it is under the employers' liability law, believing that under a law requiring definite compensation, both employer and employe, for their own interests, would keep away from litigation, and would enter into voluntary arrangements for arbitration that would not require a resort to the courts. Resort to the courts may be taken by either side under these bills as before, but it is our confident belief that it will not be taken, and that this plan will very greatly reduce the litigation, and at the same time greatly increase the number ofreasonsthese bills took the form which they have taken.
Mr. Harper(Illinois): Do you provide that in case any question arises under the compensation plan, suit may be brought and the merits tried in an action at law?
Prof. Seager: Yes.
Mr. Harper: And you also provide, I believe, that no jury trial shall be permitted?
Prof. Seager: No; such a provision was in the original bill, but was stricken out of the act. I am sorry that I am not a lawyer, and, therefore, cannot explain the point definitely, but the other provision was simply to make it possible to bring suit and recover a lump sum in case there was any default in the periodic payments required in cases of disability. That is, in case of default in the payments under this provision the employe or the dependent entitled to payment can immediately bring suit and collect a lump sum in damages.
Senator Sanborn(Wisconsin): We have appreciated in Wisconsin all these troubles and oppositions you have been discussing here, and have been trying to find some way that we can put a law into operation in Wisconsin so that we can have some basis for improvement hereafter, realizing at the outset we were going to meet the opposition of the manufacturers if they did not know exactly what it would cost. If we were goingto get their hearty support the rates would have to be so low that they would know it was not going to cost them any more than at the present time. On the other hand, we realized that the laboring man does not want to give up anything he has got, but wants more. That he is entitled to more than he is receiving under the law everybody, I think, will concede. The question was, how were we going to accomplish that and get for the laboring man all that he would get under the law.
We realized that practically 60 per cent. of every dollar that was paid out by the employers for industrial accidents under the present system was wasted and did not go to the laboring man, and if we could bring about a system which would prevent anywhere near that great amount of waste, and turn that money over to the laboring man who was injured, we felt that we would be taking one great step in advance, and we are trying now to get a system by which that can be done. In fact, we want to do away entirely with court proceedings, if possible.
The first step we propose to take in this regard is to change the law generally in our State, so that the manufacturer will feel that he must have relief. In order to reach that result we are going to make them all liable for the negligence of the fellow-servants and strike out the assumption of risk. We have practically agreed on that, and that leaves the only defense remaining for the employer, that of contributory negligence. That will reach a great many cases, and leave it so that the manufacturer will feel that he must have some relief.
Our whole plan is optional. No employer and no employe is obliged to come under it, but if a manufacturer or an employer of labor wants to come under it, all he has to do is to file a declaration with the commissioner of labor, and he is under it. He is not under it definitely, because he can get out at the end of any year by serving notice sixty days in advance of his desire so to do.
Then, as far as the laborer is concerned, the plan is that as a part of his contract of employment he waives his right to anything else except the compensation, and this law will fix his compensation. Then we follow that up by arbitration to settle all the disputes that may arise. The only question that can arise for the court to pass on is whether the arbitrators have exceeded their jurisdiction under the law, but all questions of fact are to be settled by the Board of Arbitration. If we had somecriterion to follow, something that we could point to definitely as to just what would be the result to the employer and the laboring man, we would feel differently. But we feel that we can put this system into operation, and we feel further that the manufacturers and the laboring men in their present spirit will operate under it until we can arrive at something definite. We are endeavoring to make our schedule just as large as it can be made. Our schedule is indefinite and will undoubtedly be increased over what it is in the bill. In other words, we propose to do just as the railroads have always done, to put onto the traffic for the benefit of the laboring man every dollar it will bear, and get that money to the man who is injured with as little expense as is possible. That is what we are aiming to do, and we know of no other way to do it except by putting it under a voluntary system, so as to get away from the constitutional conditions that you meet everywhere. Under a compulsory system you cannot do that, but under an elective system you can.
As to the expediency, we feel that our people will try it, and if it does not work it will not take any act of the Legislature to annul it. We can accomplish some results, and the time will come when we can have some figures perhaps to give conferences like this in their effort to ascertain what is best as the policy to be followed. We started out first with an insurance scheme connected with it, but we abandoned that and made up our minds to make it just as simple as we could, and to let the employer of labor have the widest possible scope to protect himself. If he does it through mutual insurance companies, well and good; if he does it through the other insurance companies, well and good; the idea being to hamper him as little as possible in that respect. All we want is to make it absolutely sure that when a man is injured he will receive his pay. That has been one of the troublesome questions; we have tried to make a provision, which is still tentative, by which the employe's claim shall be an absolute lien upon all the property of the employer.
Prof. Seager: We have not previously provided for the expenses of this Conference or for the expenses of the next Conference we may hold. With that thought in view, I would like to move that the members of the Commissions and committees represented at this Conference be requested to use their best efforts to secure an appropriation from the funds of such Commissionsand committees of $50 from each Commission and committee toward the expenses of our Conference.
Chairman Mercer: Without any formal motion that will be taken as the sense of the meeting.
Mr. Dawson: I move that when we adjourn, we adjourn to meet in St. Louis, and that the time be fixed between Christmas and New Year. The reason I make this suggestion is that there are to be other meetings at that time in St. Louis—the American Economic Association and the American Association for Labor Legislation, and also because by that time all the bills of these various Commissions will be ready, and we can have a final interchange of views before they go to their various Legislatures. I will add to that motion also that the Executive Committee be given power to change the date and place of the meeting if they deem it advisable.
(The motion being seconded was adopted by avivâ vocevote.)
Dr. Allport: It appears in the matter of making provisions of the kind we have been discussing that their constitutionality would depend on two aspects: First, that we take the view as suggested by Mr. Mercer, that it lies within the police power of the State to regulate this matter and so constitute all these employments as dangerous employments, or whether we shall put into the law something which looks like a joker. The particular point I have reference to is this: The specifications in Sections 1, 2, 3 and 4 of the Wisconsin tentative bill relative to waiver of the matters we have been discussing; that is, assumed risk and contributory negligence, fellow-servants, etc. The second bill recommended makes this provision: "The provisions of this act shall apply to any person, firm or corporation transacting business in this State who shall have elected to accept and operate under such provisions."
That implies an election to accept the provisions of the act. In Section 4, however, is this provision: "Every person, firm or corporation engaged in business in this State that has an employe in his or its service shall be presumed to have accepted the provisions of this act. Every employe, as a part of his contract of hiring, shall be deemed to have accepted the provisions of this act unless at the time of such hiring he contracts in writing to the contrary, in which case the employer shall not be liable under the provisions of this act. Every employe whose contractof hiring is in force at the time his employer elects to provide compensation under this act, shall be deemed to have accepted the provisions thereof unless he files a notice in writing to the contrary with his employer within thirty days thereafter."
I am not a lawyer myself, and I do not know what that means, but I would like to know from somebody who is posted in constitutional law as to whether that method of circumventing the usual provisions of the law is strictly in accordance with the rulings under our constitution. That is, whether a law can specify that we shall have the right of election under the law, making the provisions of the law specific, and then in the following section specify that unless they shall elect to the contrary they shall be supposed to be acting under the provisions of this law. That is the way in which Wisconsin has gone behind the constitutional part of the law.
Senator Sanborn: The Legislature can always say what the fact is presumed to be, and the presumption is that every manufacturer will elect to accept this law. Whether they have or not is a presumption of fact, and we do not have to prove that. In other words, as a matter of course, we presume that every man has elected, but we do not have to say that he has elected.
Chairman Mercer: It seems to me, gentlemen, in the course of these proceedings, that the first thing to be done is to prevent accidents. The second proposition is to compensate the injured for those accidents which you do not prevent. You cannot prevent by penal legislation; you cannot prevent by the assumption of damages of an uncertain quantity, because those things have already been tried and have failed. You can prevent accidents better, I think, by placing a certain, simple and rapid liability upon the industry which both sides shall partially bear, and which will compel both sides to understand that there is a financial risk upon them that will increase their cost absolutely if any accidents occur. I do not think any large proportion of that should be placed upon the laboring man, perhaps not over 15 or 20 per cent.
The laboring man, however, is in a better position to determine whether or not a man is faking; he has his own channels of reaching him. He is in a better position to see that the machinery is protected, and to see that the rules are enforced in the factory, and he is the man who is in a position to see that a fair settlement is made if he has a financial interest in it, and not tosay in an off-hand way, "Oh, well, the man has been hurt, give him $50." Besides that, when he has such a proposition as that and feels that it is not a subject of charity, but a business proposition, and a matter in which he has a right to help in the administration of it, he wants to administer it quickly and rapidly. It appears that the European countries which have adopted some such scheme as this have found it to be the most satisfactory. No man will believe that he will be injured in an accident. The moment a man starts in on the proposition of whether he himself is going to be injured, he becomes an unfit subject to ask for employment. He is not in a position to go to the employer and say, "You must guard that wheel," or "protect this machine." But if a situation is devised where one man can go to the other and say: "You are the employer and you must stand five-sixths of the cost of an accident, and we one-sixth, and you must protect these men; here is a man over here that will not live up to the rules, fire him. Here is a man that does not know his business. Do not let him work in this place. We have an interest in this matter. It is costing us money if he injures somebody, and we want these men protected." You can see what a different situation arises.
The employer must take the word of the laboring man for that, because the laboring man is where he can see and know, and the employer is not in a similar position. The result of that is to increase the confidence in the laboring man, to increase the precautions taken to prevent accidents, and to increase the mutual respect and good feeling between the two men, if you place them both where they have a mutual and certain liability.
As to what is a dangerous employment, as to whether or not you should cover some or all, I have no doubt that there is not a man in this country, a farmer, a mechanic, a laboring man, a doctor, a lawyer or any other professional man, but what is perfectly willing to have and desires to have a fair compensation law if he can know just what it is going to cost him, and just what his insurance will cost him, in order to avoid the present uncertainties and evils that flow from existing conditions. The case of domestic servants has been mentioned here. One of our judges in the federal court in our State had a servant break her leg on his back porch last year. He took her to the hospital and took care of her, but would not he rather have been paying three dollars a year for insurance for all the risks that mightcome to her in that industry? Would not you rather do that yourself? And besides that, from the humane standpoint, would not you rather that the poor girl should be placed in a position where she certainly will receive compensation in case of an accident which perhaps she or any one else could not have avoided, than to have her go on and lose her wages or else you pay them to her?
Then you say you must not go to the farmer. I say to you that I believe that the farmers in this country would welcome such a proposition if they understood it. There is not a man, an employer or a laboring man, who, when you place the proposition before him in any such form as we are discussing it here, would sanction it off-hand. But there is not a man in this country that I have ever seen who has studied this question for any length of time, intelligently and carefully, but what believes that the more nearly you can get every industry into one certain, definite and simple liability the better off you are.
Look at it as a business proposition—and it is a business proposition—it is an insurance risk and it ought to be left in such a way that the liability is direct. The first thing the business man undertakes to consider on this proposition is what will it cost me; can I afford it? Every time you put on a double liability, every time you leave a thing uncertain, you increase the risks to him and the cost to him in his business, and he so understands it, and that is something which you should give consideration. I do not believe there is a labor representative here, I do not believe there is a laborer in this country, who entirely understands the matter, who is mature in his judgment upon it and who has studied it and understands the whole situation, but who would be willing that you should repeal all of the statutory provisions now existing, repeal all of the common law, if you give him something which he knows is not a gold brick. If you simply say you must have this liability, it is not a question of contract, because that still leaves an uncertainty; but if you say, "You will be paid in accordance with a certain percentage of your wages if you have an accident in your business," everybody will then know just exactly where they stand on the proposition, because it is only a question of actuarial calculation to determine what the compensation is, and I think everybody would be willing to accept a law drafted in that form. It will cost the business men more, but the laborer is going to get more out of it, and it is good businessfor the business men. You cannot tell me, gentlemen, that all of the large financial institutions and corporations of this country that have voluntarily adopted this scheme in the last three years would have done so, if they had not come deliberately to the conclusion that, taking into consideration the humanitarian features of the case, and the mutual relations that exist between the employer and employe, that this is a step which naturally and logically will be profitably adopted in this country, and one of the most hopeful signs in the present economic situation is that labor and capital are dealing together on matters of that sort, and doing away with the strife and friction that has heretofore prevailed between them.
With respect to the theory that should be followed in this legislation, we must understand that both employer and employe must be willing to stand some restrictions. Neither has more interest in its remote consequences than has the State. We cannot keep up the old system and add a new without leaving all the uncertainties and adding the burdens of certainty. We would leave the burdens of cost, the weight of a large part of the injustice, a considerable amount of the delay and most of the prejudicial feelings that now prevail with respect to the worst accidents and their final determination. There is no doubt but that it would be the worst cases where the remedy through the courts would be used in the present system.
Penalties as such, criminal or civil in nature, ought not to be considered in this legislation where it does not rest upon the basis of fault; penalties never tend to good mutual feelings as between the parties. It is no time to stir up strife when both parties are willing to negotiate fairly upon this question. It is no time to heap unusual obligations when the employer and the State are willing to make a fair compulsory system. Neither is it any time to deprive the laborer of fair compensation; but it is the time to place a liability on a fair basis, comparable to the risk and the situation in other countries, and allow a simple, safe, quick remedy that is absolutely certain.
To be certain, we must remove any idea of recovery as a penalty; we must prohibit the bar of recovery by any fault of the employe. Cases in which the employe would directly and voluntarily be at fault are so few that they would cost the employer and the public much less than the defense of the trials if we should undertake to introduce an element of fault as adefense. The theory of workers' compensation is to get away from fault, and it ought to be barred upon that side as well as the other.
The bill under consideration in this program was meant to be a bill that would accomplish the purposes when more elaborately worked out that we all feel should be had. The title is made broader than an ordinary legislative act, so as to allow a system of law that would repeal all other laws on the question, and substitute this remedy for those which exist and add it where there is none. We, therefore use the term "code" in order to cover a system of law. See Johnsonvs.Harrison, 47 Minn., 575; Central of Georgia Railway Companyvs.State, 104 Ga., 31, Section 1.
We have defined dangerous employment in this act with a view of covering every occupation which has accidents. This will give every person the opportunity to guard against the obligations that arise from injuries occurring in and growing out of the conduct of a business.
It is for the Legislature first to determine whether or not this is a proper classification, and if there be reasonable basis for declaring the employment to be dangerous, the courts will follow the judgment of the Legislature, even though their own judgment might not accord with that of the Legislature. See Lochnervs.N. Y., 198 U. S., 45; Holdenvs.Hardy, 169 U. S., 365.