I might go a little bit farther. We were shown some charts here this

afternoon as to what the workmen receive in an ordinary accident.

Those charts bore out exactly the statement I made this morning. The

charts this afternoon show that the workman receives on an average

something like $400, when he received anything. Now, is that right?

Is the life of a workman only worth $400 on an average? Is that all

the compensation he gets? It costs about $150 to bury a man and that

leaves $250, and besides that you have the other expenses coming in.

I am beginning to doubt whether the life of an able-bodied workman is

worth anything at all.

G. A. RANNEY (Illinois): I do not think the workman gets anything

under the double compensation, but he takes the risk of a suit, and,

I think, if he elects to take that risk, he should bear the loss if

he loses.

MR. INGALLS: I quite agree with Mr. Wright upon the practicability

of the double liability. My observation is that the double liability

is quite unimportant as a practical matter, because when you get

into court it is the delay that is the most troublesome thing. The

real expense in court is not so exorbitant. The charges of a lawyer

to handle the case exceed the actual court charges many times.

Even taking away the double liability will practically affect the

workingman very little. Of course, there may be isolated cases where

he ought to have that right, and where it ought to be preserved to

him, but in drafting a general scheme, it has seemed to us necessary

to preserve the double liability unless the employe agreed to waive

it, if he could waive it.

MR. BUCHANAN: In my opinion there would be very few cases of

expensive litigation in the courts if we had a proper compensation

law in this country. It has worked out that way in Great Britain,

and from information I have I know that the trade unions there are

discouraging action in the courts unless it is a clear case of wilful

negligence on the part of the employer.

I want to call the attention of the Conference to an abuse which

we have here in Illinois, and which our Illinois Commission have

probably looked up and understand. If they have not, they should.

The Appellate Court here has the power to pass on findings of facts.

There have been a great many personal injury cases reversed under

this system of passing on findings of facts. This court was created

in 1878, and given this power. Very few courts in the United States

have it. I believe the United States Court does not claim to have

that power. We desire that that power be taken away from them and

that they have the right to pass on the law alone.

Another thing that should be given thorough consideration is the

financial liability of the employer. I believe that where an employer

insures through a liability insurance company, that that insurance,

whatever it is, should be attached when damages are secured by an

injured employe. We have cases here where employers have no financial

standing, and the result is that they have defaulted in the payment

of damages, although they have been protected themselves by means of

liability insurance. The injured workman cannot secure that insurance

through the courts. That is something that should be remedied.

(An informal discussion was then had as to a more specific program

for the Saturday morning session. Chairman Mercer announced the

following committee, of which the Chair, in accordance with Dr.

Allport's motion, was _ex-officio_ member.)

_Program Committee_--Dr. W. H. Allport, Chicago; Prof. John H. Gray,

Minneapolis, Minn.; A. T. Saunders, Clinton, Mass.

(Upon motion of Professor Gray an adjournment was then taken until

9.30 A. M., Saturday, June 11, 1910.)

THIRD SESSION, SATURDAY, JUNE 11, 1910, 9.30 A. M.

Chairman Mercer called the Conference to order at 9.30 o'clock, and

announced that the Program Committee had submitted eight specific

questions for discussion, the consideration of each question to be

limited to twenty minutes, and the length of time of each speaker to

five minutes.

The further discussion of the Workers' Compensation Code was then

taken up as follows:

CHAIRMAN MERCER: The first question will be whether we want to cover

all employments in this act, or simply the hazardous employments.

MR. DAWSON (New York): In opening this discussion I am going to pass

the legal question, because if it is necessary to limit the bill to

hazardous employments, there are not two sides to the question.

It would appear that it ought not to be necessary for us to repeat

all of the baby experiments that have been made in other countries.

In other words, having delayed nearly thirty years longer than

Europe, why should we not begin where the European countries left

off, instead of where they began. It may, however, be necessary for

us to confine ourselves to certain classes of employment, but I

do not think, personally, that those classes ought to be selected

with strict reference to the question of their being hazardous. For

instance, if it should transpire that the employers of domestic

servants and the farmers are bitterly opposed to any system which

will apply to them, it may be necessary to leave them out, but we

ought, if possible, to cover all manufacturing establishments, all

mercantile establishments and all transportation industries, and

generally to proceed on broad lines.

There is a practical objection to confining this sort of thing

to the really more hazardous employments. It is this: The rates

for employers' liability insurance are already very high in those

industries, and they will probably be doubled or possibly tripled

or even quadrupled. It would be difficult to imagine anything which

would render workmen's compensation more densely unpopular than to

apply the principle exclusively to the more dangerous manufacturing

industries of a particular State. On the other hand, an increase in

the rate payable by a dry goods merchant, for instance, might not

amount to an advance on the payroll of more than one-half of 1 per

cent. or 1 per cent., and, therefore, might not seriously place the

employer at a disadvantage in competition with employers of other

States. That is not true where the hazards of the occupation are very

serious. You then have the situation that every manufacturer affected

may be able to establish that he cannot carry on his business at all

in competition with these other manufacturers if he is thus burdened.

JAMES A. LOWELL (Massachusetts): This matter of how many trades shall

be covered is a pretty serious one for Massachusetts, because I do

not think a scheme in Massachusetts would work unless we covered

practically all the trades. We have an employers' liability law in

Massachusetts now which excepts agricultural employment, which is a

small matter in Massachusetts, and domestic servants, and I should

assume that those two exceptions would be made in any law which was

passed, and incidentally that has been held to be a proper law. So

I do not apprehend any difficulty on the constitutional part of it

through leaving out those two classes of workers.

But in Massachusetts by far the greater part of the industry there

is in manufacturing, the lighter trades, and, I think, in order to

get a law which would be of much service in Massachusetts, we would

have to cover practically all industries, so we are up against the

proposition there that we cannot do much along the line that has been

followed in New York.

The experience in England under the employers' liability law has

been that the premium on insurance in mines is twice what it cost

under their former laws. In hazardous risks, as Mr. Dawson has said,

the rates are from three to four times higher, and in those lighter

trades it is very much greater than that; it is six or eight times

more than it was under the old laws, and the chances are that if we

adopted a law in Massachusetts with anything like the scale there

is in England, it would be six or seven or eight times as much for

insurance as it is at the present time. So that is a very practical

difficulty which we have to face in Massachusetts.

As I said before, in order to have a law there that is to be of any

value, you must practically cover all of the trades, and the only

way you can do that, as far as I can see, is that you would have

to have your scale of compensation under the law very low. I do not

think that that would work out badly in Massachusetts, because most

of the injuries which will be found in the factories will be minor

injuries. There are not a great many very serious injuries in the

cotton factories as compared with the mining and bridge-building

industries, but there are a great many small injuries. If you put

on some kind of a scale which would be relatively quite small, the

result, it seems to me, would be that the workmen, as a whole, would

be very much better off than they are now. As it is now, one man out

of every twenty, we will say, or possibly one out of fifteen, will

get a fairly good-sized amount, and all the other fourteen will not

get anything. Putting it on a moderate scale in the cotton factories

would give everybody something; probably not as much as we would like

to give them, or as we perhaps should give them, but, I believe, the

result would be much better than the present situation. For that

reason on the point we are now discussing, I believe the thing for

Massachusetts to do is to try and get some kind of a law which will

cover practically all industries.

CHARLES A. SUMNER (Missouri): I naturally would like to see the bill

cover all industries, but the legal question arises, and unless

we can get around it, as this tentative bill seems to succeed in

doing, I do not know what we would do down in Missouri. Missouri is

largely an agricultural State, and the Legislature is in the control

very largely of the farmers and the representatives of the smaller

cities in the agricultural districts. We have the initiative and

referendum, however, and it occurred to me, in listening to the

discussion here, that if it were the opinion of this Conference that

it would be better to attempt to get a bill adopted which would

include all trades, that it would be worth trying in Missouri, where

the initiative and referendum are in existence. I believe that if a

proper bill were put to the people direct, it would very likely get

the support of the people in Missouri, particularly if it was a bill

that the best judgment of this Conference had evolved. I believe,

however, that we would prefer to have the bill include all trades.

CHAIRMAN MERCER: Mr. Sumner, the farmers may have a considerable

influence in the Legislature, but so have the other interests, and

legislation is very largely a matter of trade anyway, when you get

into the majorities. Don't you think that would work itself out all

right and take care of the farmers?

MR. SUMNER: As I understand politics in Missouri, the farmers there

are strong partisans, and unless you can get your bill adopted by

one party or the other, as a party measure, which I think would be

very improbable down there, because our parties are very largely

in the control of the corporate interests of the large cities,

they would have something to say about the bills and the farmers'

representatives would simply go with the party. Still, with the

initiative and referendum the people and the labor unions down there

are not relying very much on the Legislature any more.

CHAIRMAN MERCER: If either party, or if both labor and capital wanted

this proposition, then they would vote for it?

MR. SUMNER: Yes.

CHAIRMAN MERCER: So if the employers and employes should agree on

what was a proper bill in your State, you would not have any special

difficulty, after all, would you?

MR. SUMNER: No, probably not. I should add that we have discussed

this matter at the City Club in Kansas City, and the employers are

just as much opposed to the present system as the employes. I was

told by a State Senator last week that he has a bill now drawn up to

be introduced at the next session of the Legislature, but I apprehend

that the bill will not be acceptable to us.

PROF. SEAGER (New York): It seems to me in this matter that we are

between the devil and the deep sea. If we begin this legislation

by taking in all trades, we have got to scale down our schedule of

compensation. We have got to recognize the validity of the argument,

that you cannot put too heavy a burden upon competitive industries

in one State when they have not the same burden in other States.

That means a low scale of compensation. That means it would be very

hard to get wage-earners behind our proposal, and for those reasons

I anticipate that the political obstacle to getting a bill passed

that contains an adequate scale of compensation and applies to all

industries is going to be serious in most of the States.

I know it was our opinion in New York that such a bill could not

be passed through the Legislature. The only certainty of getting

a bill through the Legislature was limiting it to extra-hazardous

trades and to trades that were non-competitive. That policy of

course has this disadvantage: There is some doubt as to whether a

classification along those lines will be upheld as reasonable by

the courts, and I confess that we have some anxiety as to whether

the bill we have induced the Legislature to pass will be held to be

constitutional on that account. On the other hand, along that line

it is possible politically to make a beginning, and I am inclined to

think that it would be easier, if we can, to get the thing started

for extra-hazardous industries and then to extend our definition of

hazardous industries and gradually take them all in as the public is

convinced that it is a good policy and a great improvement over the

Employers' Liability Law. That would be easier, I believe, than to

work along the other line of trying to take in all the trades at the

outset. Starting on that line would involve a very low schedule of

compensation and then trying to advance our schedule of compensation

to what we would feel was adequate.

CHAIRMAN MERCER: But how about the desirability of it in case you

feel it could be done?

PROF. SEAGER: Oh, I assume that we all agree that that is what we

want if we can get it.

CHARLES MCCARTHY (Wisconsin): In looking over the New York Bill, and

after hearing the argument of Professor Seager, I cannot help saying

something about this bugaboo of interstate competition. I have just

returned from Germany and England, where I have been some months

examining the workmen's compensation insurance scheme. You are now

discussing the scope of the bill and I want to tell the delegates

here that the idea here in America that we in Wisconsin cannot start

this scheme because of competition from other States, has a parallel

in the commissions in Europe.

Europe is about as big as the United States and you have all these

countries competing, one with another. You have severe competition

between Germany and England, and you find Germany not only bearing

the burden of accident insurance, of sickness insurance and

invalidity insurance, but the German manufacturer actually adds

out of his own pocket to what he has been required by law to pay,

sometimes to the extent of fifty or sixty per cent. more, in bringing

about many improvements in the conditions of the workingmen, and

I state here that that is one of the basic conditions of German

prosperity. I want to put that on the record here because I want the

manufacturers of America to send representatives to Europe, and they

will find that what I am saying is true; that the reason why Germany

is driving English-made goods out of the market is because this very

burden that they talk about is an asset and not a liability.

Books have been written about this subject and I have had the honor

of reading the advance sheets of the book by Dr. Frankel and Mr.

Dawson, which has not yet been printed, but these books do not really

show why Germany is beating England, notwithstanding this so-called

"burden" upon the shoulders of the German manufacturer. Germany is

passing from an agricultural country into a great manufacturing

country. In doing so it is necessary for Germany to extend her

manufactories out into the small towns. You all know what that means.

Some of you from Massachusetts have seen the shoe factory leave

Brockton to go out and get some cheaper help somewhere, and then it

comes back to Boston, because in Boston they can get the skilled and

intelligent help which must go into the product in order to make the

community prosperous and to make the goods of that community sell.

When a German manufacturer goes to a small town he says to the

workman: "You come out to my town and live there. You will have

your accident insurance, your old age pension and your sickness

insurance, and besides that I am going to get a house for you out

there, and a little plot of land, and I am going down in my pocket

and add something to that invalidity insurance, and I am going to

do something for tuberculosis prevention, and I am going to have a

sanitary factory, and when you come out there you can settle down and

marry and raise your children, and when they grow up I am going to

put them into an industrial school after they have left the public

school at the age of fourteen, and they can go to that industrial

school until they are eighteen."

Now all of these things go to make up an intelligent population

in Germany, where the children grow up under the conditions of

sanitation and education, and with the contentment that comes from

the fact that a man knows he can settle down and marry and have

children. The manufacturers in Germany realize that this is not a

burden, but that it is the biggest asset they have in Germany. I

wanted to point that out to you and have the delegates go back from

here with the idea in their minds that there is more to be said upon

this question of interstate competition than has been brought out as

yet.

England is in a desperate condition because Germany is cutting into

the markets of England throughout the world. England had to adopt

her Workmen's Compensation Act, and she adopted a compensation

plan that Mr. Dawson knows is excellent, and it costs about four

times what it does in Germany. I want to get it on the record that

there are no adequate figures or facts presented as yet as to the

difference between the mutual organizations of Germany and the

private insurance organizations of England. I do not know why that

is, but Mr. Mitchell said yesterday that the private insurance

companies similar to those of England might prevent accidents. I

want to warn you before you go back, that there is the greatest

difference in the world between the mutual organizations in Germany

in the safety and conditions of the workingman's life, as compared

with the third party insurance in England. I have never found in

England a private company having any inspection whatsoever of

dangerous industries. I visited many factories and went into every

insurance company in London and asked them what they did to prevent

accidents, and they were doing practically nothing. I went into the

sawmills in Germany and in England and compared the safety devices

side by side, and I want to tell you that where the manufacturers in

Germany combine under the law as they are compelled to do, they deal

with their men with a hundred times greater humanity than under the

conditions in England.

I am sure of what I am saying and I am going on record. I want every

manufacturer and employer to investigate what I am saying here. I say

that you can get insurance by mutually organizing and having some

provision in your bills for mutual organization of employers a great

deal cheaper and with a great deal more regard for humane conditions

than you can by the private proposition, unless you compel all

insurance companies by some other statute to make inspections before

they place their risk.

I also want this suggestion to appear on the record. Some sort of

provision should be made so that the private insurance companies

will not knock out the old men on poorer risks. When they started in

England they did knock out some of the old men in the employments,

but now that thing has been settled. It ought to be put here in

statutory form, because when you get the third party in here between

the manufacturers and the employes, you are getting people who do not

put their hearts into the thing.

I know this will be a matter of controversy, but I want to

offer it here. I want to tell you not to fear this bugaboo of

interstate competition. Nobody wants to see the State of Wisconsin

more prosperous than I do, and I am sure that if our Wisconsin

manufacturers go forward and make that investment, they will put

intelligence into the product and add a happiness to the people that

will build up the State. If it were not so then the principle of

tariff would be no good; if it were not so then China and Japan with

cheap labor would have been beating us to-day; if it were not so

slavery would have been the best thing for this country instead of

the worst.

MR. DAWSON: An investigation as to the cost of insurance in the

various countries of Europe will be undertaken by the United States

Bureau of Labor, as requested by this Conference at its session at

Washington.

CHAIRMAN MERCER: Gentlemen, is it not true that we have the best

judgment of the great financial interests in this country to the

effect that this interstate competition amounts to very little,

and that that judgment is best evidenced by reason of the fact

that nearly all of the big industries that are doing business both

locally and throughout the United States are adopting a scheme that

voluntarily places a greater burden upon their shoulders than the law

has been providing?

MR. INGALLS (Wisconsin): We have in Racine a perfect illustration of

that. A very large concern there not only adopted the accident but

the pension system as well, so that we do not fear anything of that

kind.

DOCTOR ALLPORT: It would seem to me that the question of whether

we should attempt to adopt or recommend a tentative form of law or

code of law in this matter is really a question of whether we have

profited by the historical aspects of this subject. I think in a

measure we are a little too much wedded to what people are wont to

call the philosophy of individualism. Every State is passing laws of

all kinds, and no State has any particular intention of following

another State.

The historical aspect of this matter with reference to interstate

competition and with reference to the selection of certain trades

has already been threshed out abroad, to the satisfaction of the

European governments, trades people and manufacturers, and it would

not be a bad idea perhaps if for two or three minutes we consider

the historical aspects of this subject, as applied to England and to

Germany.

We all know the inception of this thing began in Germany, but they

never formulated it until about 1883. Before that time, however,

Gladstone in 1880 had been forced to make up some kind of a law

for England which was passed in 1880 as the Employers' Liability

Act. That was based on what is now known to be the crudest and most

unsatisfactory of all principles--principles which are bound to be

local and unsatisfactory and which do not cover the situation, and

which give the workmen practically no remedy except before the court.

That is the stage which this country has reached if it has reached

any stage at all. Few of our States have reached a point where they

have anything like a satisfactory Employers' Liability Act. That is

the initial stage when the child first commences to walk. Germany

went far beyond that. She saw the failure of the Gladstone Act, and

went to the bottom of the matter by deciding to abolish entirely all

matters of liability and put it altogether on another basis. Upon

that basis European-Continental law has been modeled from that time

to this; Germany always in advance but the other countries following

as close as existing laws will permit.

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, in view 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 cannot possibly

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 classify either 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

you _can_ do, 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 the right, 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 the employers 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 going to 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 not believe 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 any objection 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 that does 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 of _either_ instead 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 different over

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

the day 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 employers will 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. Of course, 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 be paid 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 arbitrator or 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 to the 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 and at 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 of

reasons these 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 going to 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 some criterion 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 Commissions and 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 a _vivâ voce_ vote.)

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