CORNELL UNIVERSITY LIBRARY NEW YORK STATE SCHOOL OF INDUSTRIAL AND LABOR RELATIONS the gift of The Family of Dr. I M. RuBiNow 1875-1936 The original of tiiis book is in tine Cornell University Library. There are no known copyright restrictions in the United States on the use of the text. http://www.archive.org/details/cu31924002403784 REPORT OF Employers' Liability Commission TO THE Governor of Iowa 1912 Authorized by Act of the Thirty-Fourth General Assembly DES MOINSS EMORY H. ENQLISH. STATE PRINTER // /i REPORT OF (^ 7 J SI Employers' Liability Coinmission PART I REPORT, BILL AND APPENDICES MEMBERS OF COMMISSION John T. Clarkson, Chairman, Albia. W. W. Baldwin, Burlington. P. S. Billings, Valley Junction. J. 0. Staly, Des Moines. J. L. Stevens, Boone. Welkee Given, Secretary. PROPERTY OF LIBRARr ^ ' ' NEW YORK STATE SCf!nSL 7 INDUSTRIAL AfiD LAEOfi fiCLATIOKS ^ CORNELL UNIVERSJTY ^ -■■;: DES MOINES —rt^BI 1 I k . s "■ '''des MOINES EMORY H. ENGLISH, STATE PRINTER 1912 TABLE OF CONTENTS. Page Report of Commission 1 Proposed Bill 26 W. W. Baldwin's Minority Report 49 Bill Proposed by W. W. Baldwin 57 Forms used in the Iowa Investigation 65 Estimated Iowa Insurance Rates 75 German Accident Statistics 82 Iowa Accident Reports 84 Iowa Employers' Liability Insurance 95 Iowa Coal Mine Experience 106 Michigan Liability Insurance 109 Relative Costs 114 Iowa and English Railway Experience 115 Premier Asquith on Compensation 117 Judicial or Political Appointments 120 Liability without fault 123 Present Status of Due Process Doctrine 125 Accident Rate 127 Optional vs. Compulsory Insurance 131 Injured in Line of Duty 132 De Tacquentle's Prediction 133 Pure ^iccident Insurance 134 Brewery Employes' Cpmpensation 135 Cost for Country at Large 139 Notable Opinions 140 Synopsis of Laws 142 Table of Laws and Drafts 152 Mutual Insurance in Germany 159 REPORT OF EMPLOYERS' LIABILITY AND WORKMEN'S COMPENSATION COMMISSION FOR THE STATE OF IOWA. To His Excellency the Governor of loiva and Members of the Gen- eral Assembly of the State of loiva: Your Commission appointed by the Governor under and by virtue of Chap. 205, Acts of the Sith General Assembly authorizing an investigation to be made and if deemed advisabk. to report a plan and recommend a bill to provide compensation for injuries sustained by employes arising out of and in course of employ- ments, respectfully submits its report as follows: CONDITIONS VvTHICI-I CAUSED THE INVESTIGATION. The members of the 34th General Assembly recognizing the fact that the common law and statutory remedies are not adequate, or just either to employers or employes and that our industries of the state are a necessity and the hazards of employment great and annually increasing, and as the industries increase likewise the hazard and burdens are correspondingly increased upon the em- ploye to such an extent that the conscience of our people has been touched to a marked extent, and also to a knowledge that employers of labor are in constant menace from the prosecution of cases, which cost great waste of energy, time and money (much of which does not reach those to whom it properly belongs), and that many of the states arei engaged in the investigation of this all important problem, deemed it advisable and necessary that Iowa should like- wise join the ranks with a view of establishing a rule of law which would more nearly do justice to employers, employes and the consuming public. With that end m view the General As- sembly authorized the Governor to appoint a commission of five members consisting of two employers, two employes and one dis- interested person. DUTY OF COMMISSION. The duty devolved upon the commiasion by virtue of said act required it to investigate the problem of industrial accidents, especially the condition of the law of liability for injuries or 4 REPORT OF EMPLORERS' LIABILITY COMMISSION death suffered in the conrse of industrial employment in this state and other states and inquire into the most equitable and effectual method of providing- compensation for losses suffered, and prepare their reports on or before the 15th day of September, 1912, and re- port its conclusions with a draft of such bill or tills, as may be deemed appropriate, to tlu^ Governor, who shall at once publish said report and draft of bill. .VPPOINTMENT OF COMMISSION. Pursuant to the provisions of saiJ act, the Governor appointed as members of the Commission. John T. Clarkson of Albia, W. W. Baldwin of Burlington, J. L. Stevens of Boone, P. S. Billings of Valley Junction and John 0. Staly of Des ;iIoines, who on the 19th day of June, 1911, met and organized, elected John T. Clark- son as Chairman of the Commission and thereafter selected Welker Given as Secretary and agreed upon general plans to ba followed in making the proper investigation of the conditions in this State as well as other states and the law now in force, especially the constitutional questions involved. INVESTIGATION. The members of the commission have devoted their energies in- vestigating the legal phases relative to the constitutionality of the Aft contemplated and also the laws now in force in foreign coun- tries as well as the laws enacted by the several states of this country. The members met with the Commissions of like kind from other states at a mdeting held in Chicago in October, 1911, and in ad- dition thereto some of the meraberK of the commission have visited other states to otservc the o]icration of the laws there in force as well as the plans of procedure of the respective commissions, notably those of Jlassachusotts, isew Jersey, Ohio, Illinois and Wisconsin. We have availed ourselves of the benefits of the in- vestigation made as reported by commissions of other states and reports made by the foreign governments and such facts as were available in our own state. OI'TI.INE OP LAWS NOW IN FORCE FOR WORKMEN'S COMPENSATION. Three general plans seem to have been followed both by foreign countries and some of the states in this country; namely, the Eng- lish, German and Norwegian. ENGLISH PLAN. In the plan adopted by the English Government by an act of Parliament a fixed schedule of compensation was provided REPORT OF EMPLOYERS' LIABILITY COMMISSION 6 for all injuries sustained by an employe, payable to the injured party, and if death ensued to the dependent, where the injury oc- curred in the course of the employment. No provision was made whatever for insurance, leaving it optional with the employer whether he would purchase indemnity insurance or carry the risks himself. It is claimed by the opponents of this plan that an injustice would be done the employe in that in many cases the employer be- comes insolvent and in that way the very purpose and benefit of the law as intended is not realized in behalf of the employe or dependent as the case may be, and it is further claimed that where the employer is conducting a business with a large amount of borrowed capital and the property is mortgaged to secure the payment thereof, the rights and benefits accruing to injured em- ployes or dependents would be necessarily subject to the mortgage lien and thereby thwart the very intents and purposes of the law, namely: to assure injured employes and dependents certain com- pensation for injuries received arising out of and in the course of employment. This it is claimed is more particularly true in a state or country where the element of development is strong and the industries growing in magnitude and branching out in the various kindred lines of general business. As a further objection to the English plan, it is claimed, that the industries of England are old and well established, hence a law fixing liability without providing for or requiring insurance can be successfully operated as eacu industry und'r ordinary conditions is financially able to fully protect all parties interested and only needs indemnity insurance to protect the business in case of catastrophe and that can and generally is provided for by requiring the insurance com- pany to meet the loss when beyond a fixed amount in any one casualty, hence the premium rate would not be one of great ex- pense. In addition thereto, it is claimed by the opponents of the English plan that it would necessarily leave much if not the major portion of disagreements to be determined by the courts and liti- gation being one of the factors desirable to avoid as far as may be, the English plan falls short of meeting the requirements, which with the cost thereoi: together with the added cost where j.idemnity insurance was carried will ultimately overburden the industries, at least to such an extent as to very seriously hamper the development thereof. The cost of insurance being accentuated by reason of in- demnity companies maintaining a corps of solicitors to get the busi- ness together with the profits. 6 REPORT OF EMPLOYERS' LIABILITY COMMISSION GERMAN PLAN. Many of these who oppose the English plan espouse that which is known as the German plan modified to suit our conditions and constitutional requirements, the general outlines thereof being that the injured employe or dependents shall receive certain and fixed compensation for all injuries sustained arising out of and in course of the employment, a schedule of compensation being fixed by statutory enactments and payment thereof secured by a fund created from contributions made by the employers according to the premium rates fixed, the employers' association having charge of the funds and distribution thereof in payment of claims to those entitled thereto. NORWAY PLAN. Some oppose both the English and the German plan and favor the plan adopted in Norway wherein the statutory enactments pro- vide that compensation shall be paid to all injured employes or their dependents, when death ensues, when the injury was sustained arising out of and in course of the employment, payment thereof to be made from a fund created in the nature of a tax upon each industry according to the hazards of the employment and experience of the individual risk, the fund and distribution thereof being under the control of a commission appointed by the government. Those who favor the English or the German plan contend and insist that the Norway plan is seriously defective and fundamentally wrong as applicable to our government for the reason that it savors of politics and the strong tendency would be that those in charge of the fund in the payment of claims would often times be influenced by the desire to cater to the employes who would be enabled to deliver, when needed, the greater number of votes and that ulti- mately the plan would grow into one great, gigantic political ma- chine and thwart one of the fundamentals of the proposed change, namely : that of the desire to bring about a more equitable distribu- tion of the burdens growing out of modern industry. To the members of the commission tne indictment against the Norway plan appears to be reasonable and one Avhich can be sup- ported when we examine the experience of this and other states where heads of departments are looked upon and generally regarded as a political adjunct "utilized for the purpose of aiding the po- litical party in power. In making this statement members of the commission do not desire to be understood as making an attack upon REPORT OF EMPLOYERS' LIABILITY COMMISSION 7 the appointive power as provided by statute of this state as the fact, is recognized by every one who has given the matter much con- sideration that the person empowered to make appointments would often times be greatly relieved of the unpleasant duty because of the fact that applicants at times forced appointing power to yield when good judgment dictated the contrary but with all that it can be said of Iowa, that we have been reasonably free from the worst effects of the system as compared to that of many of our sister states, yet those who have been in close touch with the system re- gard it as a dangerous one to fasten upon a new order of things between employer and employe. workmen's compensation laws of many op our states. New York was the first of any of th^ states to attempt a change from the old system of employers' liability under the rules fixed by the common law to the new where the industries shall carry the bur- den, following the English plan. The statute applied to such in- dustries as were regarded extra hazardous employments but was declared unconstitutional upon the ground that it deprived the em- ployer of property without due process of law. New Jersey enacted a statute similar to the New York plan, that is followed what is generally termed the English plan but to avoid the constitutional question invoked and applied by the New York court enacted what is termed an optional plan, that is. each em- ployer is presumed to have elected to pay compensation for injuries sustained by the employes while in the course of their employment until written notice shall have been given rejecting the plan and in that event the employer is deprived of the common law defenses known as the defenses of assumed risk, contributory negligence and the fellow servant doctrine. No provision was made for insurance leaving it optional with the employer whether he will or not carry indemnity insurance. A permanent commission was appointed by the Governor having duties to do with the law which are little if any more than advisory in their character and to collect data to enable them to report to the legislature from time to time wherein the law may be strengthened and improved. The legislature of Illinois enacted a statute in its general terms similar to that of New Jersey but failed to provide for a permanent commission. It is confidently believed and hoped by employers and employes of Illinois that the next General Assembly will provide for a permanent commission confering broad powers and duties so REPORT OF EMPLOYERS' LIABILITY COMMISSION s to provide for efficient enforcement of the law and aid. in bringing bout a better solution of the plan proposed and sought to have stablished. The plan adopted by Wisconsin in its general terms is fashioned £ter the New Jersey plan but provided for the appointment of a ermanent commission with broad powers and duties to be per- )rmed, including all of the duties performed theretofore by the ommissioner of Labor in reference to accident prevention and as ) which we will have more to say when we deal with the problem f accident prevention and which we desire to submit to the careful moderation of the members of the 35th General Assembly as we !gard the Wisconsin law in reference to accident prevention, one I the best, if not the best solution to the problem of accident revention. The state of ilichigan adopted a plan in its general terms similar I that of New Jersey, Wisconsin and Illinois but additional pro- Lsion is made requiring the employers coming under the plan to irry either stock company indemnity insurance or insurance of ke kind in a mutual company of five or more employers who may in in contributing to a fund to be administered by the insurance jpartment out of which compensation will be paid the injured nploye. The temporary commission appointed by the Governor of ilassa- Lusetts recommended the enactment of a plan fashioned after the erman system except that the plan was known as the elective plan milar to that of New Jersey and except that the employer does >t come under the new plan unless a notice in writing be given it if the employer fails to give a written notice electing to come ader the plan he is deprived of the common law defenses in an ition brought by an employe to recover damages for injuries re- ived growing out of the employment and in addition thereto the an recommended by the temporary commission provided that ^ery employer who comes under the new plan thereby becomes a ember of the employers' insurance association to which contribu- Dn would be required to be made from time to time according to le rates to be fixed by the employers' insurance association and jproved by the insurance department and out of the fund created, impensation would be paid to the employes who sustained injury ■ising out of and in course of their employment. The General Assembly did not follow the recommendations of le temporary commissior. but left it optional with the employer REPORT OF EMPLOYERS' LIABILITY COMMISSION 9 whether he would take out indemnity insurance in a stock company or become a member of the employers' insurance association. It is claimed by many that the General Assembly erred in taking that position for the reason that the stock companies would seek the cream of the risks, leaving to the employers' insurance association the greater number of the most undesirable ones and in addition thereto reduce the number of patrons of the employers' insurance association to the point which would not enable them to obtain and apply the rule of average, it being a recognized established prin- ciple of insurance that unless you can obtain a sufficient number of employers having a sufficient number of employes, reaching to such number as will enable the making of estimates of rates upon a good general experience, that you cannot obtain a reasonable and satis- factory safe average to determine an equitable rate reasonably safe to meet the requirements without overburdening the industries com- ing within the limited scope. In talking with many interested parties in Massachusetts it was claimed that the change as indicated from that as recommended by the temporary commission would not have been made but for the strong influence brought to bear over the Massachusetts Assembly by the Indemnity insurance companies doing business in the state of Massachusetts. Insurance companies have claimed that the charge cannot be supported from the facts that the interest which they had taken in the matter was to fairly place the proposition before the members of the General Assembly from a practical stand- point and the result thereof was the members of the Massachusetts Assembly were convinced of the correctness of the position taken by the insurance companies and thereby enacted a statute by the terms of which employers may purchase indemnity insurance from' what- ever source they may deem desirable. It is proper, however, to say in connection therewith that all insurance rates of all companies must first be submitted to the insurance department of the State of Massachusetts and' they must be approved before being enforced and in that way it is claimed that it assures to the employer rea- sonable rates and at the same time insures to the employe ade- quate rates to pay compensation, but it does not eliminate the det- rimental phase of the proposition that the insurance companies support a retinue of insurance solicitors, adjusters and the ele- ment of profit thereof, duplicating many times over the same field of endeavor. 10 REPORT OF EMBLOYERS' LIABILITY COMMISSION The rates now in force in Massachusetts made by the employ- ers insurance association and approved by the insurance com- missioner are slightly lower than those offered by the stock com- panies, but the stock company people claim, which seems to be supported by the' facts, that in the event of a catastrophe the em- ployers' insurance association will not be enabled to protect the employer or employe for the reason that no provision whatever is made for reserve fund to take care of such conditions. Hence, in the event of such an occurence, many employers now in the em- ployers' insurance association in order to avoid special assessment to meet the condition will drop out of the mutual and take up the stock company indemnity and in that event, endless litigation will result therefrom, thereby bringing discredit upon the employers' mutual association and in all probability its disruption with dis- astrous results to injured employes who have established claims. The states of Washington and Ohio have enacted plans fashioned more nearly after the Norway system though the plans in Ohio and Washington differ from each other in many material respects. The Washington plan is compulsory, that is, the employers have no election but are required to pay into the state fund stipulated amounts according to the rates fixed by statute. The fund is ad- ministered by the commission, payments are made out of the fund by the commission to all of the employes entitled thereto. The Ohio plan is elective, that is, the employer may elect whether he will or will not come under the new law, but if he fails to come under the new law he is deprived of the common law defenses. When the employer comes under the plan he is required to pay into a gen- eral fund a fixed amount in accordance with the premium rates fixed by the commission, which are supposed to be made according to the hazard of the industry and the experience of the individual risk. This, it is claimed by the opponents of the plan, is one of the most dangerous terms thereof, in that the commission being clothed with arbitrary and plenary powers are thereby enabled to very seriously discriminate between employers engaged in the same line of indus- tries and in addition thereto oftentimes being influenced out of sym- pathy to permit an employe to impose upon the commission to ob- tain from it, compensation at times when not fairly entitled thereto. And it is claimed that this is especially true where the claims are for small amounts, for the reason that it would oftentimes cost more to investigate the claim carefully and fully than it would to pay the same in full, and, therefore, in order to avoid the burden of in- REPORT OF EMPLOYERS' LIABILITY COMMISSION 11 vestigation, the commission would be tempted to yield thereto and pay the claim as made in order to close the docket in that particular ease. The chairman of the commission had the benefit of studying the Ohio commission 's work at close range and is free to say in due course of time when the claims are numerous and the work of the commission is such as it surely will be that there is some merit in what is claimed by those who are opposed to the Ohio plan, not be- cause of the persons who compose the commission but the plan which will in time become cumbersome. It will be a physical impossibility for a commission composed of three members to give much if any consideration to each claim made by the injured employe. This will perhaps not be true until the time arrives when it doubtless will that the employers representing the major per cent of the employers in the state will come under the law and the only relief therefor must come by dividing the state into dis- tricts and creating a commission for each district, or supply the com- mission of three members as now in force with power to appoint heads of departments to whom the claim shall be referred ac- cording to the classification of the head of the department col- lecting the evidence to determine the merits and then submit to the commission for final approval. It would seem, and it is claimed, that a system of that character would become exceed- ingly autocratic, and this, together with the temptation to get in politics and exercise an influence over the medium to leniency in the payment would be a dangerous system to establish and would ultimately grow to such an extent as to cause the employ- ers to revolt and demand repeal of the law. While the Wash- ington plan is to get away from the arbitrary power of the com- mission to fix rates, yet the premium rates having been fixed by statute are thereby arbitrary, hence impracticable for the reason that conditions will change from time to time, but the premium rates cannot be readjusted accordingly. The statement made in reference to the Ohio and Washing- ton plan, which is akin to the Norway plan, does not meet the full approval of all the members of the commission, at least one member feels that opponents to this plan are over apprehensive of the dangers mentioned and feels that ultimately they will work out to the best interests of all concerned. The plans are sometimes referred to as state insurance, but as a matter of fact are not state insurance, as the premiums are paid by the employer, yet the state has the exclusive administration of the fund while 2 REPORT OF EMPLOYERS' LIABILITY COMMISSION nder the plan akin to the German system the employers have the [iministration of the funds supervised by the commission who 3present the state. As before stated, the New York law was declared unconstitu- onal, while, on the other, hand the Washington law being com- ulsory the supreme court of that state in a very lengthy and well msidered opinion held that it does not infringe on the provi- ons of the constitution. The supreme courts of Massachusetts, few Jersey, Wisconsin and Ohio have declared the laws of those ;ates which are ■ elective plans, not to have infringed upon the mstitution of the respective states. In the case of Massachusetts 16 matter was submitted to that court by the General Assembly, he law of that state provides that the legislature may submit any uestion involving the constitutionality of a proposed act to the ipreme court for their opinion as to whether or not the proposed leasure will infringe upon the provisions of the constitution. pon the question being submitted, the supreme court of Massa- lusetts held that the proposed measure would not conflict with le constitution of that state. In other states, namely. New ersey, Ohio and Wisconsin the question of constitutionality was etermined in litigated cases, and that is true of the state of Wash- igton. We have not undertaken to go into details of the several laws Bferred to but only a general outline as to several leading plans lat have received the greater attention of the students of the roposed change Trom the old doctrine of employers' liability ) the new one of workmen's compensation. The one dominat- ig feature characteristic of the several plans is that compensa- on shall be paid for all injuries sustained while in line of duty hich arise out of and in course of the employments, regardless E fault, except that compensation is not allowed when the in- ary is the result of the wilful act upon the part of the injured arty, whereas under the old law all recoveries were forbidden nless the employe could show the employer to have been at fault, 1 other words guilty of negligence. To avoid the results of the decision of the New York courts the ;ates of Massachusetts, New Jersey, Ohio and Wisconsin adopted hat is known as the elective plan. That is the employer elects ) stay or come under the new law and pay the compensation pro- ided or take his chances under the common law without the bene- t of the common law defenses known as contributory negligence. REPORT OP EMPLOYERS' LIABILITY COMMISSION ' 13 fellow servant and assumed risk. The courts of these states hold that a law following that plan is constitutional. The states of Illinois, Kansas, California, Michigan and some others have adopted the elective plan. Hence with one court holding the com- pulsory plan unconstitutional, and but one sustaining the plan, while the courts of four states, namely, ilassachusetts, New Jer- sey, Ohio and Wisconsin, having sustained the elective plan and none to the contrary, it was deemed advisable by the commission to adopt that plan which at this time is fully sustained by author- ity and await future developments as regards the advisability of adopting what is known as the compulsory plan. LAW IN FORCE IN THIS STATE. The rule of law in force in this state generally termed em- ployers' liability at common law, modified in certain cases by statute, and is based upon the requirements of the injured party to show that his employer Mas negligent before recovery can be had, that is to say the burden of proof rests upon the injured party and, if death ensues, upon his legal representative, to show that the employer failed to meet or neglected to do or perform some duty imposed by law or did some act prohibited by law and that injury to the employe was the result thereof, or as it is sometimes said that the employer neglected to exercise reason- able care and caution to furnish the employe a reasonably safe place in which to work. Among some of the duties which are im- posed upon the employer is that of exercising reasonable care and caution to furnish the employe a reasonably safe place to work and to exercise reasonable care and caution to keep such place in a reasonably safe condition, but this rule does not apply where the workman is engaged in a line of employment where the working place from the nature of the work is changing from time to time. In such case the employer is under no duty to the employe to furnish a reasonably safe place to work and the haz- ards of such work are deemed incident to the employment and assumed by the workman. In addition thereto the duty is im- posed upon the employer to exercise reasonabl'! care and caution to furnish the employe with reasonably safe tools and appliances with which to work and to exercise reasonable care and caution in selecting reasonably competent employes to perform the work, and if the employer fails in the performance of any or all of the foregoing duties and the employe sustains an injury as the result L4 REPORT OF EMPLOYERS' LIABILITY COMMISSION ;hereof he is entitled to recover for the damage sustained provid- ng that he has shown by the greater weight of the evidence that le himself, the injured party, was free from negligence. If, how- ever, the injury was the result of negligence upon the part of a io-employe after the employer had exercised reasonable care in selecting the employes, then the injured employe cannot recover. The rules of contributory negligence apply and will bar recov- !ry when the injured party is shown to have been negligent in my degree, and that not withstanding that his employer may lave been negligent, and where he is barred from recovery he- iause of the negligence of a co-employe the doctrine of the fellow lervant rule applies, sometimes called the co-employe doctrine. The 'act that the employe who sustains an injury in the course of his smployment cannot recover damages until he has shown fault ipon the part of the employer by the gi-ea+er weight or prepon- lerance of the testimony necessarily will bar recovery if the in- ury was produced by conditions which the employer could not lave prevented in the exercise of reasonable care and caution in he business, and the injury sustained by the employe produced ly conditions that are sometimes termed unavoidable, and they are leemed unavoidable when the employer has performed all the [uties imposed by law, and in that case the burden falls upon he employe and is regarded as one of the risks or the hazard ncident to his employment and no recovery will be allowed there- or. This rule of law is known to the legal profession as the doc- rine of assumed risk. Some text writers and courts have made I subdivision and say that there are two divisions to the rule of issumed risks, one being such risks as are incident to the employ- aent, the other such risks as grow out of the negligence of the mployer when the employe had knowledge thereof and appre- iated the danger and continued in the performance of the work, lut as to the latter phase of this question the Thirty-third Gen- ral Assembly by statutory enactment modified that rule by pro- 'iding that where the fact is shown that the employer was negli- ;ent in the duties imposed and that the employe continued in the )erformance of the work, even though he may have had knowl- :dge of the negligence of the employer, the employe shall not be leemed to have assumed the risk unless the danger is such and mminent and so apparent that a reasonably prudent person would lot have continued in the performance of the work. REPORT OF EMPLOYERS' LIABILITY COMMISSION 15 The law of this state which applies where injury is sustained by employes while in line of duty, in general terms, may be said to be first that the employe is entitled to recover when he has shown that his employer was negligent and that he himsielf was free from negligence and that the injury was not the result of the negligence of a co-employe, but if the employers' negligence concurred with the negligence of the co-employe and the negli- gence of the employer was the proximate cause of the injury, then the employe will be entitled to recover. Said in another way, the employe cannot recover if he has failed to show by the greater weight or the preponderance of the testimony that his employer was negligent in some duty imposed by law and if he fails to show by the greater weight or the preponderance of the testimony that he himself, the employe, was free from negligence, hence it will be seen that where he is required to show that the employer was negligent, he must necessarily show by competent testimony that the injured party was free from, negligence and that the injury sustained was not the result of the negligence of a co-employe and that it was not the result of a condition com- ing within the doctrine of an assumed risk. The rule of law in this state applicable to personal injury cases has been modified by statute in so far as it applies to a corporation operating a railway. Section 2071 Supplement to the Code, 1907, provides "that every corporation operating a rail- way shall be liable for damages sustained by any person, includ- ing employes of said corporation, in conseciuence of the negligence of the agents or by any mismanagement of the engineers or any other employes thereof when such wrongs are in any manner connected with the tise and operation of anij raihvay." This in effect modifies the fellow-servant rule so far as applicable to rail- ways and makes the corporation liable if the injury occurs in the operation of the train even though the negligence be that of fel- low-servant. The rule of contributory negligence in so far as it applies to railroads is modified by Chapter 124, Acts of the Thirty-third General Assembly, which provides "that contributory negligence of the employe shall not bar recovery, but the damages shall be diminished by the jury in proportion to the amount of negligence attributable to such employe." This in effect substitutes what is termed by the legal profession as comparative negligence for that of contribiitory negligence. The statute further modifies the rule L6 REPORT OF EMPLOYERS' LIABILITY COMMISSION )f contributory negligence to the extent that "where an employe receives an injury and death ensues as a result thereof by rea- son of the railroad company's violation of any statute enacted •equiring safety devices for the safety of the employes, that the njured party shall not be deemed to have been guilty of con- ;ributory negligence, nor that he assumed the risks of his em jloyment." The application of these rules of law which govern employers md employes have become known to the profession and lawmen IS the doctrines of negligence, contributory negligence, fellow serv- int rule, and assumed risks and are the four defenses which domi- late every litigated case where the employe seeks to recover from lis employer for injuries sustained while in line of duty and have jeen the subject of much criticism. The investigators have had in mind the legal principles now in 'orce and the conditions and remedies sought to be attained, and ;he commission when organized set about to study the decisions )f the several courts applicable to the new order of things and ;o study the available statistics gathered by the other states as shown by their reports. Nearly all of the states in a greater or ess degree have taken up the problem with the view of solution, lenee we find the info:*mation is voluminous and the subject las been approached from so many different angles and eompli- iated with the surrounding conditions and legal principles oC long i^ears standing making the investigation laborious and the !»'ib- iect one of difficulty. The Commission was confronted with the deplorable fact that Hir state has been derelict in collecting proper data which would mable one to determine the true situation in reference to the smploye's injury in the several industries and in line of duty and iheir earnings at the time of injury and the length of time the iisability continued or if death ensued of dependents left sur- iriving, all of which is necessary and essential to enable one to ietermine what the probable cost would be under the proposed jhange if a workmen's law be enacted, as compared to the cost resulting from the application of the rules of law now in force. There is a great loss often times termed an economic loss under the present system, and employers within recent years have be- 3ome as much dissatisfied with this antiquated system as the jmploye. In a large degree it may be said that the only differ- jnce between the employer and the employe as respects their ob- REPORT OP EMPLOYERS' LIABILITY COMMISSION 17 jections to the present system is that the employe suffers tlie pain and anguish, while the employer is reasonably free there- from. Prom the standpoint of the employer it can be said that his business and all of his earnings and investments are under con- stant menace and liable to be swept away, only awaiting a catastrophe that is likely to occur that will subject him to a series of law suits. In addition thereto when an injury occurs to an employe, the result is brought about that invariably the employes line up on one side and the employers and officials on the other, and it needs no stretch of the imagination to appreciate that un- der such conditions our courts have not been free from per- jured testimony and has given rise to the ambulance chaser, so- called, the lawyer who makes a specialty of looking up the per- sonal injury eases and makes his presence felt at the bedside of the injured party within a short time after the injury occurs, and in many cases the representative of the employer and the personal injury lawyer are in a mad race to determine who shall first reach the injured party to secure a statement and lay the foundation for a law suit or defense thereof, as the case may be. That the personal injury lawyer is an inevitable result of the con- ditions cannot be denied, and in an overwhelming number of in- stances the injured employe is without means to protect himself or enforce his legal rights, hence but for the contingent fee law- yer who will take the case on a per cent the careless and indif- ferent employer could revel in the satisfaction that the injured party was unable to enforce a just claim growing out of the negligence of his employer. So that the attacks made upon the system in force are amply justified by the records and the ef- fect has been that many of the foremost men of the country and in each state are putting forth their best efforts to fashion a system that will at least wipe away the incongruous part of the antiquated methods that are annually having the effect of widening the breach between the employer and the employe. While the commission have been unable to obtain satisfactory data relative to personal injuries of employes within this state we have prepared all that has been available and attached the same to this report as shedding some general light upon the sev- eral phases of the proposition, and we earnestly urge the General Assembly to carefully study the tables and statistics compiled by our secretary, believing that it will aid the members of the Gen- 2 18 REPORT OF EMPLOYERS' LIABILITY COMMISSION eral Assembly to a better understanding of the different phases of the bill which we herewith present and recommend passage. In connection therewith we would suggest that as far as reason- ably practicable the members of the General Assembly review the reports of other statef5, especially those of New York, Illinois, Wis- consin, Minnesota, New Jersey and Massachusetts as being sub- stantially typical of our own state. The Commissions of those states, especially that of New York, were better prepared than ourselves to go into the details necessary to a full understanding of the subject, better prepared because in the state of New York employers have been required for many years to report in de- tail each and every injury sustained by an employe. ACCIDENT PREVENTION. Before explaining the provisions of the bill, we herewith pre- sent and recommend for passage, we desire to invite the especial attention of the members of the General Assembly to accident prevention. If the General Assembly will provide efficient and adequate means for the enforcement of laws relating to accident prevention, injuries to employes in this state can be reduced, in a vci'y conservative estimate, 50 per cent, and thereby very mate- rially reduce the cost of any new system for compensation. To the workmen, accident prevention is of greater importance than that of the workmen's compensation and the two logically should go hand in hand. The Commission recommends that the office of Labor Commis- sioner be abolished and that the duties now imposed by law iipon the Labor Commissioner be transferred to the Industrial Com- mission, provided for in the proposed bill, and that the law relat- ing to safety devices be very materially strengthened and as a means of procedure we recommend the method employed by the Wisconsin Industrial Commission, wherein the commission of Wisconsin appointed a committee of thirty in number consist- ing of employers, who in turn select experts and superintendents engaged in the several industries, who formulated rviles and reg- ulations for safety devices for the several industries and reported to the committee of thirty, who in turn and in conjunction with the experts prepared thorough and comprehensive rules and reg- ulations for accident prevention. The committee of thirty then reported to the Industrial Commission, and with the employers' Committee and their experts, together with experts selected by the REPORT OF EMPLOYERS' LIABILITY COMMISSION 19 commission, carefully reviewed that which had been prepared by the committee appointed by the Commission and which was ulti- mately adopted and approved by the Commission, the result being that the Industrial Commission and the employers have co-op- erated in one heroic struggle to eliminate as far as may be, in- dustrial accidents, and when an injury is sustained by an em- ploye report is immediately made to the Commission. The state inspector is immediately or as soon as possible thereafter sent to investigate the real cause of the injury, and the findings, together with the Commission's conclusions, are sent to all the employers engaged in that line of business with such suggestions as are deemed advisable by the Commission, suggesting means and methods whereby injuries from that source may be avoided with the ultimate result, as claimed by the Industrial Commission of Wisconsin, that in recent years the injuries of that state have been reduced fully 50 p-er cent. With this example before us the Commission deems it safe to say that Iowa can take up the work in the same manner as Wisconsin and with their experience before us improve thereon and thereby reduce the injuries to employes and save a great part of the expense that otherwise would be in- curred under the compensation act. What we have said regard- ing accident prevention we do not want to be understood as re- flecting upon the department of labor of this state. It has ac- complished much good and doubtless could and would have ac- complished much more if furnished adequate and sufficient in- spectors to cover the ground, but it is extremely absurd to expect much if any beneficial results with two factory inspectors to cover the entire state of Iowa, in other words, with over 125,000 employes employed in the several industries in this state engaged in diversified employments under diversified conditions and with but two men to cover the ground of inspection, having something over five thousand industries to visit, examine and fully inspect with a view to conserving human life and limb, place our state in such position to merit just criticism. Employers are awaking to the fact that we are sadly in need of same remedial legislation which will enable them to co-operate with the state in evolving some systematic plan whereby much of the disastrous results can be eliminated from their business and make one of the valuable assets of the business, the saving of human life and limb. If we have already strengthened the desire to reduce the destruction of human life and reduce the number of maimed and wounded en- 20 REPORT OF EMPLOYERS' LIABILITY COMMISSION gaged in the industrial employments, the Thirty-fifth General As- sembly will see to it that proper and adequate appropriation be made so that a thorough and competent and efficient bureau of ac- cident prevention may be organized and bring to ourselves the credit of modern civilization to which we are fairly entitled. THE PROPOSED BILL. The remedy in the proposed bill herewith presented and which we recommend for passage, we cannot hope that in all its details it will satisfy all parties interested. We have sought as best we could to prepare a workable plan which will do justice to the employers, the employes and the consuming public, for after all is said and done the real funda- mental principle underlying the change from the old to the new is that the industries shall carry the burden and that the cost of the compensation paid to employes shall be so arranged and ad- justed that the employer can add it to the cost of production and thereby distribute the burden rather than to require the employe in the major portion of cases to carry the burd€n. We say the major portion for the reason that from the report of the New York Commission it is found that in suits 50 per cent of indus- trial accidents, neither the employer or the employe was at fault. About 25 per cent thereof was the result of the negligence of the co-employe and the balance was the result of the negligence of the employer and the injured party, so that the employe has been required to carry the burden of approximately 85 per cent of industrial accidents. This is deemed unfair, hence the neces- sity for the change, making a distribution of the burden upon a greater number by adding the cost by way of compensation as a part of the cost of production. The bill is modeled on the elective plan. Sections one to twen- ty-three inclusive being Part I of the bill having to do with the proposition of rights and remedies whereby the employer em- ploying five or more employes is assumed to have elected to pro- vide, secure and pay compensation in accordance with the sched- ule, terms and conditions of the bill, but if the employer elect to reject the terms and conditions of the bill he is then deprived of the common law defenses known as contributory negligence as- sumed risk and fellow servant rule and in addition thereto it shall be presumed that the employer M-as negligent and the burden will rest upon the employer to show himself free from negligence. REPORT OF EMPLOYERS' LIABILITY COMMISSION 21 The same rule applies to the employe. He is assumed to have elected to accept compensation as provided by the schedule, terras and conditions of the bill, but in the event of his rejection of the terms of the new law the employer in an action for damages may plead and rely upon the common law defenses, namely: contribu- tory negligence, assumed risk and fellow servant rule. The Commission deems it advisable to make the proposed law apply only to such employers who employ five or more employes in the usual course of business in the same general employment, for the reason that where but five persons are employed the haz- ards of the employment are not as great, hence not as likely to cause injury to employes. This will be observed will substantially exclude farmers and those employing household servants. A schedule of compensation has been provided which we think and confidently believe is a fair and reasonable one, and which will not overburden the industries of our state and will at the same time afford an injured employe reasonable compensation for personal injury sustained while in line of duty. APPOINTMENT OF A COMMISSION. Part II, being sections twenty-four (24) to forty-two (42), in- clusive, has to do with the creation of an industrial commission, defining their duties and providing for committees of arbitration when disputes arise between employers and employes in regard to questions of fact or law under the proposed new system. This will very greatly reduce the present court costs of personal injury cases which now eonjest the courts of many of the counties in the state with the result of burdening the taxpayers who are called upon to furnish the money to pay for additional judges needed to keep up with the work and pay jury fees and other expenses. The terms oi the proposed biU are such that the opportunity for dis- agreement is reduced to the minimum, the experience of the Wis- consin Commission for the year last past being that but nine cases were submitted to it for final settlement upon disagreement. We have sought to remove the Industrial Commission, as far as practicable, from the domain of politics. The bill requires the supreme court to recommend to the Governor the names of fifteen (15) persons from whom the appointment to the commission will be made by the Governor after having published the names recom- mended so as to allow objections in writing to be filed with the Governor. The same method shall be followed in filling vacancies, 22 REPORT OF EMPLOYERS' LIABILITY COMMISSION if any occur, and in addition thereto we have provided for the term of office to be ten (10) years and earnestly hope that the members of the General Assembly will not shorten the period of time for holding office by members of the Commission, as we feel that the ten year period will have a strong tendency to enable members of the Commission to feel and act independently and per- form their duties in a fair and impartial manner, uninfluenced by the thought of reappointment, as would be the case if but a short period of time were fixed for the term of office held by the Com- mission. RESERVE FUND TO SECURE THE PAYMENT OP COMPENSATION AND PRO- TECT EMPLOYES. Part III, being sections forty to sixty-one, inclusive, has to do with the means and methods by which the compensation will be assured to the employe, and at the same time protect employers in that it will provide a way by which compensation can and will be paid in case of catastrophe without placing upon the employer the extra tax in the way of special assessments to meet sudden de- mands where many employes are injured in the same accident. To use the term applied by insurance companies, the reserve fund supplies what is known as a shock absorber and the collection of the fund is distributed over and for such a period of time and col- lected in such amounts from time to time as will avoid hardship or burden upon the industries of the state. "We are not unmindful that this phase of the bill will meet vdth opposition from those whose business will be interfered with by the enactment of this part of the bill. Our insurance friends will doubtless feel that we have made an unjust infringement upon the field preoccupied by them, but we have started in with the view of doing greater justice to the employe and feel that we would have been derelict of our duty if we had not at the same time exer- cised care and caution to do justice to the employe and in provid- ing for the Employers' Indemnity Association we feel that we have in a large measure safeguarded the employer as well as the consuming public by reducing the cost of compensation to the minimum. In this the bill provides that every employer who comes under the law thereby becomes a member of the Employ- ers ' Indemnity Association, which in effect, at least to a very large degree, eliminates the cost of soliciting the business, and it is claimed by those in authority that the cost of soliciting insurance REPORT OP EMPLOYERS' LIABILITY COMMISSION 23 as now in force is from 20 to 36 per cent. With the employers becoming members of the Indemnity Association when they come under the law eliminates much if not all of soliciting and thereby a good, healthy saving will be made. With respect to tlie matter of soliciting insurance a duplication of soliciting which materially adds to the cost of insurance as now in force with competitive com- panies will not be required. Taking the whole state will enable the Employers' Indemnity Company to obtain a fair average from which rates may be made. With the Indemnity Association han- dling the funds of the employers and the employers being mem- bers of the Association, removes the element of politics and the same tendency will not prevail as charged against the Ohio and Washington plan, the Indemnity Association will not be operated for profit and the employer will only be called upon to contribute to the fund the amount required to pay compensation and ai'tual operating expenses, and to provide for a reserve fund. We feel that this is one of the strong features of the plan. The weakness prevalent with many of the mutual companies, if not all of them, is that no provision has been made whereby employes would be assured the compensation in case of a catastrophe, but with a fleserve fund equal to that maintained by any of the stock com- panies the Employers' Indemnity Association would be as strong as the strongest. In addition thereto the Indemnity Insurance com- panies have to collect the premiums from the employers of Iowa, send- it back east, and when a farmer desires to borrow money he sends back east for the money which the employers have paid to the insurance companies. We propose to reverse that method and arrange the system that the Employers' Indemnity Association will keep the money paid by the employers as premiums at home and loan an amount not needed for immediate purposes to our farmers and others having good security, thereby developing our own enterprises with our own money, borrowed from our own people, fostered and cared for by Iowa people and at the same time assure to our employes in this state an absolute and unquali- fied certainty of obtaining compensation under all circumstances, whether the injury was sustained by reason of a catastrophe or otherwise. It will be claimed that employers will obtain indemnity insur- ance from insurance companies at reasonable rates because of com- petition between stock companies doing business in this state, but as to rates we assert the element of competition does not prevail 24 REPORT OF EMPLOYERS' LIABILITY COMMISSION because of the economic conditions. Bach and every insurance company has actuarial departments and when an injury occurs to an employe of an employer carrying indemnity insurance, re- port is made to the home office and classification made and gen- eral averages taken and the heads of the actuarial departments of each company meet and compare notes and form their conclusions based upon the general experience of all companies. The actuaries arrive at conclusions as to vs^hat vrould be a proper rate based upon the experience of all the companies and a manual of rates com- piled therefrom and placed in the hands of each soliciting agent, hence it can be readily seen that the insurance companies by tak- ing the experience of all the companies and forming their conclu- sions therefrom, necessarily eliminate competition. We have nc criticism to offer for their method of procedure, but assert they are not in a position to offer any better service or as low a rate as can the Indemnity Association provided for by the proposed bill, which will operate not for gain, but at actual cost. And much of this cost can and will be supported by revenue ■ derived from the proceeds of loans made from the reserve fund, which ir turn will very materially stimulate our small industries in develop- ing their business. To enable the Employers' Indemnity Association to pay the compensation and cost of operating expenses the association wil be required to classify the employers coming under the bill intt groups and prepare a premium rate according to the hazard of the group or the individual thereof, based upon the experience of the individual and groups. This work will necessarily require an actuary, all of which will be supervised by the Industrial Com mission, who necessarily will be required to obtain the services of an actuary, and with these safeguards surrounding the em ployer and employe we confidently believe that we have here pre sented a bill that will more nearly do justice to the employe, as suring him compensation, and to the employer the assurance tha' it is going to be at actual cost and to the public that no righti will be jeopardized as the commission will act as a supervising agency and the three elements co-operating, working in unisoi to the same end to obtain compensation for injuries sustained, de velop our industries and to work vigorously and energetically ii the lines of accident prevention. While not directly connected, but closely akin to the matte iinder consideration, the Commission recommends that in all case REPORT OF EMPLOYERS' LIABILITY COMMISSION 25 where the employer rejects the terms of the proposed bill recom- mended by the Commission, and where the employer does not come under the law as proposed in the bill herewith presented, that the statutes be amended requiring that all policies by liability com- panies covering indemnity shall contain provisions whereby the indemnity insurance company shall become liable for the pay- ment of any judgment obtained by an employe against his em- ployer for injuries sustained by the employe arising out of an accident in the course of the employment. Provisions of this sort should be incorporated for the reason that numerous cases have come under our observation where the employer carries indemnity insurance, but by reason of the terms of the policy issued by the insurance company to the assured, the insurance company was not obligated to pay any part of the judgment obtained by the injured party unless the assured had first made payment thereof. In other words, the insurance company only obligates itself to re- imburse the assured for whatever amounts the assured had paid out. It, will be observed that similar provisions of this character are required in policies to be issued by the Employers' Indemnity Association as provided in the terms of the proposed bill. This will put the Employers ' Indemnity Association where they issue policies to their members on the same footing with companies that issue policies to employers who do not come under the law. That is, the same footing to the extent of assuring payment of whatever the injured party may be entitled thereto. With this our labors are closed, conscious that we cannot hope that the proposed measure is perfect in all of its parts, but if enacted into law that it will have very materially reduced the economic loss as compared to the present imperfect and antiquated plans and grant relief to the thousands that are justly entitled thereto and at the same time in no wise infringe upon the funda- mental principles of our government. One of the members of the commission not agreeing with all of the provisions of the proposed bill herewith presented reserves the right to present a form of bill to meet with his views which 26 REPORT OF EMPLOYERS' LIABILITY COMMISSION will be prepared and filed in due time and which when eompleted will be filed by the chairman and regarded as part of the report of the commission. ■September 14, 1911 Attest : WEiiKER Given, Secretary. JoirN T. Clarkson, Chairman, Pnii. S. Billings John 0. Staly ■J. L, Stevens. TTTE COADITSSION BILL. PROPOSED BILL FOR AN ACT TO PROVIDE, SECURE AND PAY COMPENSATION FOR EMPLOYES WHO SUSTAIN PERSONAL IN- JURY WHILE IN LINE OP DUTY. Be it Enacted 'by the General AssemMy of the State of Iowa: Section 1. (a) Where five or more employes, as defined by this act. are employed in the same general employment and in the usual and ordinary transaction of the business, it shall be presumed that the employer as defined by this Act has elected to provide, secure and pay compensation according to the terms, conditions and pro- visions of this Act, to such employes who sustain personal injury, arising out of and in the course of the employment and in such ease the employer shall be relieved from liability for recovery of damages or other compensation for t,ach personal injuries, unless by the terms of this Act otherwise provided. (b) Where the State, County, Municipal Corporation, School Dis- trict, cities under special charter or commission form of government is the employer the limitations of five employes shall not apply, and as to such employes and employers tliereof the rights and remedies as by this Act provided to pay compensation tor personal injury sus- tained by such employes arising out of and in the course of the em- ployment shall be exclusive, compulsory and obligatory. (0) If an employer having the right under the provisions of this act to elect to reject the terms, conditions and provisions thereof and in such case exercises the right in the manner and form by this act provided such employer shall not escape liability for personal injury sustained by an employe of such employer when the injury sustained arises out of and in the usual course of the employment, because: (1) The employe assumed the risks inherent in or incidental to or arising out of his or her em'jloyment; or the risks arising from the failure of the employer to provide and maintain a reasonably safe REPORT OF E3MPLOYERS' LIABILITY COMMISSION 27 place to work, or the risks arising from the failure of the employer to furnish reasonably safe tools or appliances, or because the employer exercised reasonable care in selecting reasonably competent employees in the business: (2) That the injury was caused by the negligence of a co-employe. (3) That the employee was negligent unless and except it shall appear that such negligence was wilful and with intent to cause the injury; or the result of intoxication on the part of the injured party. (4) In actions by an employee against an employer for personal injury sustained arising out of and in the course of the employment where the employer has elected to reject the provisions of this Act, it shall be presumed that the injury to the employe was the direct result and growing out of the negligence of the employer; and that such negligence was the proximate cause of the injury; and in such cases the burden of proof shall rest upon the employer to rebut the presumption of negligence. Every such employer shall be conclusively presumed to have elected to provide, secure and pay compensation to employes for injuries sus- tained arising out of and in the icourse of the employment according to the provisions of this Act, unless and until notice in writing of an election to the contrary shall have been given to the employes by posting the same in some conspicuous place at the place where the business is carried on, and also by filing notice with the Iowa Indus- trial Commission with return thereon by affidavit showing the date that notice was posted as by this Act provided. Provided, however, that such employer shall not be relieved of the payment of com- pensation as by this Act provided until thirty days after the filing of such notice with the Iowa Industrial Commission, which notice shall be substantially in the following form; EMPLOYERS' NOTICE TO REJECT. To the employes of the undersigned, and the Iowa Industrial Commission: You and each of you are hereby notified that the undersigned re- jects the terms, conditions and provisions to provide, secure and pay compensation to employees of the undersigned for injuries received as provided in the Acts of the ( . . . ) General Assembly known as Chapter ( ) and elects to pay damages for personal injuries received by such employee under the common law and statutes of this State modified by Sub-Divisions One, Two, Three and Four of Section One, Chapter ( ) of the Acts of the ( ) General Assembly and Acts amendatory thereto. Signed State of Iowa \ „„ County f ^''■ The undersigned being first duly sworn deposes and says that a true, correct and verbatim copy of the foregoing notice was on the day of 19 , posted at (State fully place where posted.) 28 REPORT OF EMPLOYERS' LIABILITY COMMISSION Subscribed and sworn to before me by this day of . 19. Notary Public. The employer shall keep such notice posted in some conspicuous place which shall apply to the employes subsequently employed by the employer with the same force and effect and to the same extent and in like manner as employes in the employ of the time the notice was given. Where the employer and employe have not given notice of an election to reject the terms of this Act, every cpntract of hire express or implied, shall be construed as an implied agreement between them and a part' of the contract on the part of the employer to provide, secure and pay, and on the part of the employee to accept compensa- tion in the manner as by this Act provided for all personal injuries sustained arising out of and in the course of the employment. Section 2. Compensation, When not allowed. No compensation under this Act shall be allowed for an injury caused: (a) By the employe's wilful intention, to injure himself or to wilfully injure another; nor shall compensation be paid to an injured employe if injury is sustained while intoxicated. Section 3. Employes' Election to reject. (a) The rights and remedies provided in this Act for an eitiploye on account of an injury, shall be exclusive of all other rights and remedies of such employe, his personal or legal representative, de- pendents or next of kin, at common law or otherwise on account of such injury; and all employes affected by this Act shall be conclu- sively presumed to have elected to take compensation in accordance with the terms, conditions and provisions of this Act until notice in writing s'hall have been served upon his employer; and also on the Iowa Industrial Commission, with return thereon by affidavit showing the date upon which notice was served upon the employer. (b) In the event such employe elects to reject the terms, con- ditions and provisions of this Act, the rights and remedies thereof shall not apply where an employe brings an action or takes proceed- ings to recover damages or compensation for injuries received growing out of and in the course of his employment, except as otherwise pro- vided by this Act; and in such actions where the employe has re- jected the terms of this Act the employer shall have the right to plead and rely upon any and all defenses including those at common law, and the rules and defenses of contributory negligence, assumption of risk and fellow-servant shall apply and be available to the employer unless otherwise provided in this Act. Provided, however, that if an employe sustains an injury as the result of the employer's failure to furnish or fails to exercise reasonable care to keep or maintain any safety device required by statute or rule, or violate any of the statutory provisions or rules and regulations now or hereafter in force relating to safety of employees, the doctrine of assumed risk in such case growing out of the negligence of the employer shall not apply EBPORT OP EMPLOYERS' LIABILITY COMMISSION 29 or be available as defensive matter to such offending party. The notice required to be given by an employee shall be substantially in the following form: EMPLOYES' NOTICE TO REJECT TERMS OF THIS ACT. '^° and the Iowa Industrial Commission: (name of employer) You and each of you are hereby notified that the undersigned hereby elects to reject the terms, conditions and provisions of an Act for the payment of compensation as provided by the Acts of the ( ) General Assembly and Acts amendatory thereto, and elects to rely upon the common law as modified by Section Three oi the Acts of the { . ) General Assembly for the right to recover for personal injury which I may receive, if any, growing out of and arising from the employment while in line of duty for my employer above named. Dated this day of 19 .... ' (Signed) ." State of Iowa ) „„ County f''^^ The undersigned being first duly sworn deposes and says that the written notice was on the day of 19 . . . served on the within named employer of the undersigned by delivering to a true, correct and verbatim copy (Name of person served) therof. Subscribed and sworn (or aflirmed) to before me by the said this day of 19 ... . Notary Public. Section 4. Rejection of Act when made, for one year. (a) When the employer or employee has given notice in compliance with this Act electing to reject the terms thereof, such election shall be for one year from date of becoming effective, and unless renewed within thirty days before the termination of one year as herein pro- vided, it shall be conclusively presumed that such party has elected to waive the rejection made and come under the provisions of this Act to provide, secure and pay or accept, as the case may be, the compensation herein provided until the contrary is shown by the service of notice anew electing to reject the provisions of this Act as herein provided; (b) When an employer or employe elects to reject the terms, con- ditions or provisions of this Act, such party may at any time there- after elect to waive the same by giving notice in writing in the same manner required of the party in ejecting to reject the provisions of the Act and which shall become effective when filed with the Iowa Industrial Commission. 30 REPORT OF EMPLOYERS' LIABILITY COMMISSION Section 5. Where the employer and employe elect to reject the terms, conditions and provisions of this Act, the liability of the em- ployer shall be the same as though the employe had not rejected the terms, conditions and provisions thereof. Section 6. An employer having come under this Act who there- after elects to reject the terms, conditions and provisions thereof, shall not be relieved from the payment of compensation to such em- employe who sustain an injury in the course of the employment before the election to reject becomes effective; and in such cases the em- ployer shall be required to secure the payment of any compensation due or that may become due to such workman, subject to the approval of the Iowa Industrial Commission, and until approved, the notice given electing to reject shall have no force or effect. Section 7. JJiability of intermediate parties. Where an employe coming under the provisions of this Act receives an injury for which compensation is payable under this Act and which injury was caused under circumstances creating a legal liability in some person other than the employer, to pay damages in respect thereof: (a) The employe or beneficiary may take proceedings both against that person to recover damages and against the employer for compen- sation, but the amount of the compensation to which he is entitle'! under this Act shall be reduced by the amount of damages recovered. (b) If the employe or beneficiary in such case recover compensa- tion under this Act, the employer by whom the compensation was paid or the party who has been called upon to pay the compensation, shall be entitled to indemnity from the person so liable to pay damages as aforesaid, and shall be subrogated to the rights of the employe to recover therefor. (c) For the purposes of this Act, all employes employed in the execution of the work, whether under the first or any one of sub- contractors shall be regarded as engaged in one joint enterprise or business Section 8. Contracting out forbidden. No contract, rule, regula- tion or device whatsoever shall operate to relieve the employer, in whole or in part, from any liability created by this Act except as herein provided. Section 9. Notice to employer of injury and limitation. Unless the employer or representative shall have actual knowledge of the occurrence of an injury, or unless the employe or some one on his behalf, or some of the dependents or some one on their behalf, shall give notice thereof to the employer within fifteen days of the occur- rence of the injury, then no compensation shall be paid until and from the date such notice is given or knowledge obtained; but if notice is given or the knowledge obtained within thirty days from the occurrence of the injury, no want, failure or inaccuracy of a notice shall be a bar to obtaining compensation, unless the employer shall show that he was prejudiced by such want, defect or inaccuracy, and then only to the extent of such prejudice. Provided, that if the em- ploye or beneficiary shall show that his failure to give prior notice REPORT OF EMPLOYERS' LIABILITY COIVIMISSION 31 was due to mistake, inadvertence, ignorance of fact or law, or in- ability, or to the fraud, misrepresentation or deceit of another or to any other "reasonable cause or excuse, then compensation may be allowed, unless, and then to the extent only that the employer shall show that he was prejudiced by failure to receive such notice. Pro- vided, further, unless knowledge is obtained or notice given within ninety days after the occurrence of the injury, no compensation shall be allowed. No form of notice shall be required but may substantially conform to the following form : FORM OP NOTICE. To You are hereby notified that on or about the . . . day of 19 ... , personal injury was sustained by while in your employ at (Give name of injured employee) (Give name of place employed and point where located when injury occurred and that compensation will be claimed therefor.) (Signed) but no variation from this form of notice shall be material if the notice is sufficient to advise the employer that a certain employe, by name, received an injury in the course of his employment on or about a specified time at or near a certain place. Notice served upon one whom an original notice may be served in civil cases or one em- ployed at the office or place of business, shall be a compliance with this Act. The notice required to be given to the employer may be served by any person over sixteen years of age, who shall make return upon a copy of the notice, properly sworn to, showing the date of service where and upon whom served, but no special form of the return of service of the notice shall be required. It shall be suflicient if the facts therefrom can be reasonably ascertained. The return of service may be amended at any time. Section 10. Compensation, when no election to reject this Act. If an employe has not given notice to reject the terms, conditions and provisions of this Act, or has given such notice and waived the same as by this Act provided, and the employer has not rejected the terms, conditions and provisions of the Act or has waived the same and the employe receives a personal injury arising out of and in the course of the employment, compensation shall be paid as herein pro- vided. (a) The compensation provided for in this Act shall be paid in ac- cordance with the schedule unless otherwise provided: (b) Medical and Hospital Services. At any time after an injury and until the expiration of four weeks of incapacity, the employer, if so requested by the workman, or any one for him, or if so ordered by the court or Iowa Industrial Commission, shall furnish reasonable surgical, medical and hospital services and supplies, not exceeding One Hundred ($100.00) Dollars. 32 REPORT OF EMPLOYERS' LIABILITY COMMISSION (c) Compensation in case of death. Where the injury causes death the compensation under this Act shall be as follows: The employer shall in addition to any other compensation pay the reasonable expense of the employe's last sickness and burial not to exceed One Hundred ($100.00) Dollars. If the employe leaves no dependents this shall be the only compensation. Provided, however, that if the injury from which death ensued was produced by reason of the failure and neglect of the employer to comply with statutory requirements regarding safety devices for workmen or by reason of the failure and neglect to comply with the rules and regulations re- lating to safety for employes, such offending party shall be required to pay full death benefits as provided in Sub-Division "D" of Section Ten of this Act, to the Workmen's Indemnity Association, and said Association shall have a right of recovery therefor. (d) Amounts to dependents in case of death. If death results from the injury, the employer shall pay the dependents of the employe wholly dependent upon his earnings for support at the time of the in- jury, a weekly payment equal to sixty (60%) Per Cent, of his average weekly wages, but not more than Twelve ($12.00) Dollars nor less than Five ($5.00) Dollars per week for a period of three hundred (3 00) weeks. (e) If the employe leaves dependents only partially dependent upon his earnings for support at the time of the injury, the weekly compensation to be paid as aforesaid shall be equal to the same pro- portion of the weekly payments for the benefit of persons wholly de- pendent as the amount contributed by the employe to such partial dependents bear to the annual earnings of the deceased at the time of the injury. When weekly payments have been made to an injured employe before his death, the compensation to dependents shall begin from the date of the last of such payments, but shall not continue more than three hundred (300) weeks from the date of the injury. (f) Where injury causes death to an employe, a minor, wtose earnings were received by the parent, the compensation to be paid the parent shall be two-thirds (2-3) of the amount provided for payment in sub-division "D" Section "10." (g) Compensation to injured employee. No compensation shall be paid for an injury which does not incapacitate the employe for a period of at least two weeks from earning full wages; but if incapacity extends beyond a period of two weeks, compensation shall begin on the fifteenth day after the injury. (h) For injury producing temporary disability, sixty (60%) per cent of the average weekly wages received at the time of injury, subject to a maximum compensation of Twelve ($12.00) Dollars and a minimum of Five ($5.00) Dollars per week; provided, that if at the time of injury the employe receives wages less than Five ($5.00) Dollars per week, and a minimum of Five ($5.00 Dollars per week; per week. This compensation shall be paid during the period of such disability, not, however, beyond three hundred (300) weeks. HEPORT OF EMPLOYERS' LIABILITY COMMISSION 33 (1) For disability total in character and permanent In quality sixty (60%) per cent of the average weekly wages received at the time of the injury, subject to a maximum compensation of Twelve ($12.00) Dollars per week, and a minimum of Five ($5.00) Dollars per week; provided, that if at the time of injury, the employe receives wages less than Five ($5.00) Dollars per week, then he shall receive the full amount of wages per week. This compensation shall be paid during the period of such disability, not, however, beyond four hundred (400) weeks. (j) In case of complete d'sability lasting beyond four hundred (400) weeks, compensation shall be paid thereafter during life at not less than Ten ($10.00) Dollars per month, nor more than Twenty- flve ($25.00) Dollars, payable monthly. (k) For disability partial in character and permanent in quality the compensation shall be based upon the extent of such disability. For all cases inc.uded in the following schedule compensation shall be paid as follows, to-wit: (1) For the loss of a thumb sixty per cent (60%) of daily wages during forty weeks. (2) For the loss of a first finger, commonly called the index finger, sixty per cent (60%) of daily wages during thirty (30) weeks. (3) For the loss of a second finger, sixty per cent. (60%) of daily wages during twenty-five (25) weeks. (4) For the loss of a third finger, sixty per cent. (60%) of daily wages dur.ng twenty (20) weeks. (5) For the loss of a fourth finger, commonly called the little finger, sixty per cent (60%) of daily wages for fifteen (15) weeks. (6) For the loss of the first phalange of the thumb or of any finger shall be considered to be equal to the loss of one-half of such thumb or finger and compensation shall be one-half of the amounts above specified. (7) The loss of more than one phalange shall be considered as the less of the entire finger or thumb; provided, however, that in no case shall the amount received for more than one finger exceed the amount provided in this schedule for the loss of a hand. (8) For the loss of a great toe, sixty per cent. (60%) of daily wages during twenty-five (25) weeks. (9) For the loss of one of the toes other than the great toe, sixty (60%) Per cent of daily wages during fifteen (15) weeks. (10) For the loss of the first phalange of any toe, shall be con- sidered to be equal to the loss of one-half of such toe and the compensa- tion sha.l be one-half of the amount above specified. (11) The loss of more than one phalange shall be considered as the loss of the entire toe. (12) For the loss of a hand sixty per cent (60%) of daily wages during one hundred fifty (150) weeks. (13) For the loss of an arm sixty per cent (60%) of daily wages during two hundred (200) weeks. 8 34 REPORT OF EMPLOYERS' LIABILITY COMMISSION (14) For the loss of a foot sixty per cent (60%) of daily wages during one hundred twenty-five (125) weeks. (13) For the loss of a \eg, sixty per cent (60%) of daily wages during one hundred seventy-five (175) weeks. (16) For the loss of an eye, sixty per cent (60%) of daily wages during one hundred (100) weeks. (17) For the loss of both arms, or both hands, or both feet, or both legs, or both eyes, or of any two thereof, shall constitute total and permanent disability to be compensated according to provisions of Clause "1" Section Ten, Part One hereof. (18) Other cases. In all other cases in this. Clause "K," the compensation shall bear such relation to the amount stated in the above schedule as the disabil ty bears to those produced by the injuries named in the schedule. Should the employee and employer be unable to agree upon the amount of compensation to b« paid in cases not specifically covered by the schedule, the amount oZ compensation shall be settled according to provisions of this Act as in other cases of dis- agreement. (19) Maxunum and Minimum amounts. The amounts specified in this. Clause "K" and sub-diviiions thereof shall be subject to the same limitations as to maximum and minimum weekly payments as are stated in Clause "H" Section Ten hereof. Section 11. 'Where an employe is entitled to compensation under this Act for an injury received and death ensues from any cause not resulting from the injury for which he was entitled to the compensa- tion, payments of the unpaid balance for such injury shall cease and all liability therefor shall terminate. Section 12. Examination cf employes as to physical condition. After an injury the employe, if so requested by his employer, shall submit himself for examinaUcn at some reasonable time and place within the State and as often as may be reasonably requested, to a physician or physicians authorized to practice under the laws of this State without cost to the employe; but if the employe requests he shall, at his own cost, be entit ed to have a physician or physicians of his own selection present to participate in such examination. The refusal of the employe to submit to such examination shall deprive him of the right to compenastion during the continuance of such re- fusal. When a right to compensation is thus suspended, no compensa- tion shall be payable in respect to the per.od of suspension. Section 13. Measure cf responsibility. The compensation herein provided sha.l be the measure oi the responsibility which the employer has assumed for injuries or death that may occur to employes in this employment subject to the provisions of this Act, and it shall not be in any way reduced by contribution from employes. Section 14. "Where a minor dependent or one physically or mentally incapacitated from earning :s entitled to compensation under this Act, payment shall be made to a trustee appointed by the Judge of the district court for each county in the respective judicial districts, and the money coming into the hands of the said trustee shall be expended REPORT OF EMPLOYERS' LIABILITY COMMISSION 35 for the use and benefit of the person entitled thereto under the d'ree- tion and orders of the Judge during term time or in vacation. The trustee shall make annual reports to the court of all money or prop- erty received and expended for each person, and for services rendered as trustee shall be paid such compensation by the county as the court may direct by written order directed to the Auditor of the County who shall issue a warrant therefor upon the Treasurer of the County in wh ch the appointment is made. U the Judge making the appoint- ment deem it advisab e, a trustee may be appointed to serve for more than one county in the district and the expenses shall be paid rateably by each county according to the amount of work performed in each county. The trustee shall quali'y and give bond in such amount as the Judge may direct, which may be increased or diminished from time to time as the court may deem best. Section 15. In all cases where a party is entitled to compensation under this Act, compensation may be made at any time in a lump sum for good cause shown to be for the best interest of the beneficiary by petifcn to the Iowa Industrial Commission or a Judge o. the District Court in the county where the injury to the employe occurred. Section 16. Computing compensation. The basis for computing compensation provided for in this Act sha'l be as follows: (a) The compensation shall be computed on the basis of the annual earnings which the injured person received as salary, wages or earn- ings in the enrployment of the same employer during the year next preceding the injury. (b) Employment by the same employer shall be taken to mean employment by the same employer in the grade in which the employe was employed at the time of the accident, uninterrupted by absence from work due to illness or any other unavoidable cause. (c) The annual earnings, if not otherwise determinable, shall, ba regarded as three hundred (300) times the average daily earnings in such computation. (d) If the injured person has not been engaged in the employment fcr a ful year immediately preceding the accident, the compensation shall be computed according to the annual earnings which persons of the same class in the same* or in neighboring employments of the same kind have earned during such period. And if this basis of computation is impossible, or should appear to be unreasonable, three hundred (300) times the amount which the Injured person earned on an average of those days when he was working during the year next preceding the accident, shall be used as a basis for the compu- tation. (e) In case of injured employes who earn either no wages or less than three hundred (300) times the usual daily wage cr earnings of the adult day laborer in the same line of industry of that locality the yearly wage shall be reckoned as three hundred (300) times the average daily local wages of the average wage earner in that par- ticular kind or c"lass of work; or If information of that class is not obtainable, then of the class or kindred or similarity in the same gen- eral employment in the same neighborhood. S8 REPORT OF EMPLOYERS' LIABILITY COMMISSION (f) As to employes in employraents in wliich it is the cu^^tom to operate for a part of the whole number of working days in each year such number shall be used instead of three hundred (^00) as a basis for computing the annual earnings, provided, the minimum number of riays which sha'l be used for the basis of the year's work shall not be less than two hundred (200). (g) Earnings, for the purpose of this section, s^ali be based on the earnings for the number of hours commonly regarded ps a day's work for that employment, and shall exclude overtime earnings. The earn'ngs shall not inclu'^e any sum which the employer has been accus- tomed to pay the employe to cover any special expense entailed on him by the nature of his employment. (h) In computing the compensation to be paid to any employe who, be'ore the accident for which he claims compensation, wa? d's- abled and drawing compensation un-'er the terms of this Act, the compensation for each subsequent 'njury shall be apnortionei accord- ing to the proportion of incapacity and disability caused by the re- spective injuries which he ma3' have suffered. Section 17. Definitions. In this Act unless the context otherwise requires: (a) "Employer" includes and applies to any person, firm, associa- tion. Or corporation, and includes State, Counties, Munirina' Corpora- tions, Cit'es under special Charter and under Commission form of Gf'vernmert and shall include School Distr'cts and the lesal represen';a- tives of a deceased employer. It includes the owner or lessee of prem- ises, who is virtual'y the proprietor or operator of the business there carried on, but who, by reason of there being an independent con- , tractor or for any other reason is not the d"rect employer of the work- men there employed. Whenever necessary to give effect to Section Seven of thia Act, it includes a princ'pal or intermediate contra'-tnr. (b) "Workman" is used synonymous with "employe" and meins any person who has entered into the employment of, or works under contract of service, express or implied, or apprent'ceship for an em- ployer, except a person who've employment is purely casual and not for the purpose of the employer's trade or business or those engaged in clerical work only, or one holding an official position or standing in a representative capacity of the employer, or an cfBcial elected or appointed by the State, County, School District, Municipa' Corporat'on, Cities under special Charter, and Commission form of Government. Provided, that one who sustains the relation of contractor with any person, firm, association, corporation or the State, County, School District, Municipal Corporat'on, City under special Charter or Com- mission form of Government, shall not be considered an employe thereof. | The term "Workman" shall include the singular and plural of both sexes. Any references to a workman who has been injured shall, where the workman is dead, include a reference to his dependents as herein defined, legal representatives, or where the workman is a minor or Incompetent, to his guardian or next friend. REPORT OF EMPLOYERS' LIABILITY COMMISSION 87 (c) The following shall be conclusively presumed to be wbolly de- pendent upon a deceased employe: (1) The surviving spouse, unless it be shf^wn that the survivor wil- fully de'-ertei deceased without fault upon the part of deceased and if 't be s'^own that the survivor deserted deceased w'thout fault upon the part of deceased, the survivor shall not be regarded as a dependent in any degree. (2) A child or chil'iren under sixteen years of age (and over sail age if physically or mentally incapacitated from earning) whether actually dependent for support upon the parent at the time of his or her death. (2) A parent of a minor entitled to the earnings of the employe at the time when the injury occurred, subject to provisions of Sub- divis'rn "F" Section Ten hererf. (4) If the deceased employe leaves denendent surviving spouse the full compensation shall be paid to such spouse: b"t If the d°TiPnd- ent surviving sp'^nse d'es before payment is made in full, t^e balance remaining shall he paid to the person or persons wholly denendent. if anv, share and share a'ike. If there be no person or persons wholly dependent, then payment shall be made to partial depen'lents. (5) In all other cases que^'tions of dependency in whole or in part shall be determined in accordpnce with the fact as the fact may ne at the time of the injurv, an'i in surh ot^er cases 'f the^e is more than one person wholly dependent, the death benefit shall be eqm'ly divided among them, and persons partially dependent if anv, shall receive no part thereof. If there is no one wholly dependent and more than one person partially dependent, the death benefit s^'a'l be divided among them according to the relative extent of their depend-^ ency. Provi'^ed, however, that when a lump sum is naid as contem- plated by this Act, t^e court or Commission in mal<:ing distribution thereof, shall take into cons'deration the contingent rights of partial beneficiar'es or the rish'^s of those who may become such after a wholly dependent child or chiHren become sixteen years of age. (6) Step-parents sha'l be regarded in this Act as parents. (7) Adopted child or children or step-child or children shall be regarded in this Act the same as if issue of the body. (d) "Injury" or "personal injury" includes death resulting from injury. (e) The words "personal injury arising out of and in the course of such employment" shal' include injuries to employees whrse services are being performed on, in or about the premises which are occupied, used or controlled by the employer, and also injuries to those who are engaged elsewhere in places where their employer's business re- quires their presence and subjects them to dangers incident to the business. (f) The words "injury and personal injury" shall not inc'u-'e in- jury caused by the wilful act of a third person directed against an employee for reasons personal to such employee or because of his em- ployment. 38 REPORT OF EMPLOYERS' LIABILITY COMMISSION (g) They shall not include a disease except as it sha'.l result from the injury. (h) "Industrial employment" includes only employment in occu- pations, callings, businesses or pursuits which are carried on by the employer (or the sake of pecuniary gain. (1) The word "court" whenever used in this Act unless the con- text shows otherwise, sha'l be taken to mean the District court. Section 18. limitation of power to waive rights under this Act. (a) Any contract of employment, relief benefit cr insurance or other device whereby the employe is required to pay any prem'um or premiun-s for insurance against the compensation provided for in this Act shall be null and void; and any employer withholding from the wages of any employe any amount for the purpo-e of paying any such premium shall be gui'ty of a m'sdemeanor and punishable by a fine not less than Ten ($10.00) Dollars nor more than Fifty ($50.00) Dollars for each offense in the d'scret'on of the court. No employe or beneficiary shall have power to waive any of the provisions of this Act in regard to the amount of compensation which may be payable to such employe or beneficiary hereunder to whom the Act app'ies. Secton 19. Crntrarts void which change terms of this "ct. Any contract or agreement made by any employer or his agent or attorney with any employe or any other beneficiary of any cla'm under the provisions of this Act within twelve (12) days after the injury shall be presumed to be fraudulent. Section 2 0. Right of lien l;y employe. In all cases where an em- ploye is entit'ed to compensation for 'njuries received w'thin t^e mean- ing of this Act and to which this Act applies, the empl-^ye s^all have a fir=-t and prior lien to any and all other lieis upon any ani all property of whatever kind or character of his emplover to secure the payrrert of the amount due cr to which he is entitled unt'l pai'l; pro- vided, however, that the prirri<-y of liens for compensation due or to become due shall net anply to the obligations of existing contracts in force when this Act takes effect and +he payments due under such compensation provis ons rhall not be subject to attachment, levy, execu- tion, garnishment or satisfaction of debts. No claim of any Pttorney- at-law for services in securing a recovery under this Act shall be an enforcib'e lien thereon unless the amount of the same be approved in writing by a Judge of a court of record or the Iowa Industr'al Com- mis-ion, which approval may be made in term time or vacation. Section 21. In any case where an employer, coming under this Act, fails, omits and neglects to comply with the statutes regnrding safety devices or appl ances Cor the safety of workmen, or fails or neglects to comply with an order, rule or regulation in force -maie by the Iowa In'-iustria^ Commission relating thereto and an injury occurs to an employe as the result thereof, the offending employer shall pay into the funds of the Workmen's Indemnity Association, an amount equal to that paid by the Associafon or which it becomes obligated therefor under the terms of this Act. REPORT OF EMPLOYERS' LIABILITY COMMISSION 39 Section 22. This Act shall not apply nor in anywise affect any action now pending or hereafter instituted to recover for injuries sus- tainea or occurring prior to the time when this Act becomes effective in all its parts.- Section 2 3. The provisions of this Act sha'l apply to employers and employes as defined in this Act engaged in Intra-state commerce and also' those engaged in Inter-state or foreign commerce for whom a rule or method of compensation has heen or may be established by the Congress of the Un ted States, only to the extent that their mutual connection with Intra-state work or foreign commerce shall be clearly separable and distinguishable- from Inter-state or foreign commerce; provided that any'such empoyer and workman of such employer work- ing only in this State may subject to the approval of tlie Iowa Indus- trial Commission, and so far as not forbidden by any Act of Congress or permittel, may voluntar'ly by written agreement, accept and be- come bound by the provisions of this Act in like manner and with the same force and effect In every respect as by this Act provided for ether employers and employes. PART II. Section 24. Commisgioii, Appointment of. There is hereby created a- Beard which shall be known as the Iowa Industral Commission, con- sisting of three members, not more than two of whom shall be of the same political party, to be appointed by the Governor, by and with the consent of the Senate. The term of office of members of the com- mlEslcn shall be ten years, except that when first constituted, one member shall be appointed for four years, one for seven years, and one for ten years. Thereafter one member sliall be appointed, at the expiration o- any term of office, for the full term of ten years. Ap- pointments may be made to fill vacancies or otherwise, when the Senate is not in session, but shall be acted upon at the next session thereof. The member appointed for the four year term shall act as chairman of the Commission and thereafter the member whose term will first expire, from time to time, shall serve In that capacity. Pro- vl_ded, that if an appointment be made to fill a vacancy from any causes of a member while tt.ling the position of chairman, the member whose term will next expire shall succeed the office of chairman. The members of the commission shall be selected from the names of per- sons who are recommended and furnished by the members of the Supreme Court, of Iowa, and within thirty days after this Act takes effect the members of the Supreme Court of Iowa shall furnish to the Governor the names of fifteen competent persons but before mak'ng appointments the Governor shall pub ish the names of the persons recommended, in at least six (6) papers In six (6) different cities in the state, and thirty days after publication appointment of the mem- bers of the commission shall be made. -In mak;ng the appointments the Governor shall consider any written protest, if any, filed against the person or persons whose names have been recommended as herein 40 REPORT OF EMPLOYERS' LIABILITY COMMISSION contemplated. In case a vacancy occur from any cause the Governor Bhall notify the members of the Supreme Court thereof who sha'l fur- nish the names of not less than five persons and the Governor shall thereafter publish the names of the persons recommended as by this Act in other cases provided and shall make an appointment to fill the vacancy thirty days thereafter from the persons recommended, pro- vided that if more than one vacancy occurs at the same time the mem- bers of the Supreme Court shall furnish five names for each appoint- ment to be made as herein contempated. Section 25. Salary and expenses of Coniniission. The salary and actual necessary expenses of the commission shall be paid by the State and shall be provided with adequate and necessary office rooms, furni- ture, equipment, supplies and other necessaries in the transaction of the business. The salary of the chairman of the Commission shall be $ per annum, and the salary of other members sha'l be $ per annum. The commission may appoint a Secretary and other assistants and clerical help as may be required and needed and fix their compensation; provided, that the salary of the Secretary shall not exceed $ dollars per annum. The salary and actual personal expense account of the members of the commssion shall be itemized and sworn to by the members claiming payment thereof, which shall first be approved by the chairman of the commission and filed as other current bills as provided by statute, and warrant there- for shall be issued by the Auditor upon the Treasurer of State for the payment thereof at the end of each calendar month; provided, however, that the expense account may be audited, allowed and paid at the end of each week. The commiss on sha 1 provide itself with a seal which shall be used to authenticate its orders, decisions and any other proceedings deemed necessary, upon which shall be inscribed the words, "Iowa Industrial Commission, Seal," and the date of or- ganization. All other accounts made by, through or under the com- miss on for salaries, expenditures, unless otherwise by this Act pro- vided, shall be itemized and sworn to by the party entitled thereto, audited by the commission, approved by the chairman, attested by the Secretary, filed as other bills are required by statute and a war- rant shall issue therefor by the Auditor of State upon the Treasurer who shall pay the same out of the funds appropriated for the use of the commission as by th s Act provided. The salaries of all persons under the Commission shall be audited, allowed and paid at the end of each month, and expense accounts may be audited, allowed and paid at the end of each week. The commission shall have the power to remove the Secretary or any other person appointed to an office by it at any time the commission may see fit. Before entering upon the r duties, each member of the commission shall qualify by taking the oath of his office, that he will support the Constitution of the United States and of the State of Iowa, and will faithfu ly and impartially without fraud, fear or favor, discharge the duties of his office incumbent upon him as provided by the law of the State of Iowa to the best of his ability and understanding. REPORT OP EMPLOYERS' LIABILITY COMMISSION 41 There is hereby appropriated out of any money not ctherwise ap- propriated for the use of the Commission as contemp'ated within the terms of this Act or Acts amendatory thereof, or other statutes re- lating to the commission, its duties and responsibilities empowered by law, the sum of $ annually and in addition thereto the Executive Council shall provide and furnish the commission with such printing as may be necessary in the transaction of its business within the contemplation of '.aw. For the purpose of meeting the first expenses of the Employers' In-'emnity Association provided for by this Act, the Iowa Industrial Commission is hereby authorized to advance a sum not to exceed $....; out of the money appropriated for it which sT^all be returned by the Indemnity Association within two years from the receipt thereof. Section 26. Rules and regulations. The Commission may make rules and regulations not incons'stent with this Act for carrying out the provisions of the Act. Process and procedure under this Act shall be as summary as reasonably may be. The commission or any mem- ber thereof sha'l have the power to subpoena witnesses, administer oaths and to examine such books and records of the parties to a proceeding or investigation as relate to quesfons in dispute or under investigation. The fees for attending as a witness before the In- dustrial Commission shall be $1.50 per diem; for attending before an Arbitration Comm'ttee $1.00 per diem; in both cases five cents per mile for traveling to and from the place of hearing. The District court is hereby empowered to enforce by proper proceedings the provisions of this Section relating to the attendance and testimony of witnesses and the exam'nation of books and records. The com- mission shall make biennial reports to the Governor who shal'. trans- mit the same to the General Assembly, in which among other things, the Commission shall recommend such changes in the law covered by this Act as it may deem necessary. Section 27. Compensation asreement. If the employer and in- jured employe reach an agreement in regard to compensation under this Act, a memorandum shall be filed with the Industrial Commission and if approved by it, thereupon the memorandum shall for all pur- poses be enforcible under the provisions of this Act. Such agree- ment shall be approved by said commission only when the terms con- form to the provisions of this Act. Section 28. Committee on Arbitration. If the employer and the Injured employe or representatives or dependents fail to reach an agreement in regard to compensation under this Act, either party may notify the Industra! Commission, who shall thereupon call for the formation of & Committee of Arbitration. The Arbitration com- mittee shall consist of three persons, one of whom shall be a member of the Industrial Commission and shall act as Chairman. The other two shall be named, respectively, by the two parties. If a vacancy occurs it shall be fl.led by the party whose representative is unable to act ,42 REPORT OP EMPLOYERS' LIABILITY COMMISSION Section 29. Oath of Artitvatcrs. The Arbitrators appointed by the parties shall be swcrn by the chairman to take the following oath: I do solemnly swepr (or affirm) that I will faith- fully perform my drties as arb'tratcr and wi'l net be influenced in my decision by any feeling of friendship or partiality toward' either party. (Signed) Section 30. Appointment of Arbitrators. It shall be the duty of the Industrial Commission, upon notilication that the parties have failed to reach an agreement, to request both parties to appoint their respective representafves on the Committee of Arbitration. The com- mission shall designate one of its members to act as chairman, and, if either party does not appoint i'"s member on this committee w'thin seven days after notification as above prov'ded, or after a vacancy has occurred, the commission or any member thereof shall fill the vacancy and notify the parties to that effect. Section 31. Committee to investigate. The committee on A''bi- tration shall make such inquiries and 'nvestig^.tions as it shall deem necessary. The hearings of the Committee shall be in the city, town or place where the injury occurred and the decision of the Com- mittee, together with the statement of evidence submitted before it, its findings of fact, rulings of law and any other matters pertinent to questions arising before it shall be filed with the Industrial Com- mission. Unless a claim for a review is filed^ by either party within five days the decision shall be enforclble under the provisions of this Act. Section 32. Appointment cf Physicians. The Industrial Commission or any member thereof may appoint a duly qualified impart-al physi- cian to examine ihe injured employe and make report. The fee for this service sha'l be Five ($5.00) Dollars, to bs paid by the Industrial' Commission, together with traveling expenses, but the commission may allow additional reasonable amounts in extraord'nary cases. Section 33. Arbitrators' fees. The Arbitrators named by or for the parties to the dispute shall each receive Five ($5.00) Dollars as a fee for his services, but the Industrial Commission or any member thereof may allow addifonal reasonable amounts in extraordinary cases. The fees shall be paid by the employer who may deduct an amount equal to one-half of the sum from any compensation found due the employee. And all other costs incurred in the hearing be!ore the Board of Arbitration shall be taxed to the ^osing party, or an equitable apportionment made thereof by the Committee according to the facts; and in the event of the employer being the losing party, he shall pay as a part of the costs in the case a reas'^nable attorney's fee for the employe's attorney in a sum to be approved by the Ar- bitration Committee, but in no event to exceed Fifty ($50.00) Dollars. Section 34. Review cf decision. If a claim for review is fled, the Industrial Commission shall hear the part es and may hear evidence in regard to any or all matters pertinent thereto and may revise the decision of the Committee in whole or in part, or may re.er the mat- ter back to the Committee for further findings of fact, and shall file its REPORT OP EMPLOYERS' LIABILITY COMMISSION 43 decision with the records of the proceedings and notify the part'es thereof. No party shall as a matter ol right be entitled to a second hearing upon any question of fact. Section 35. Ceitifieil copy of District Coiu't. Any party in interest may present certified cop es of an order or decision of the Commission or a decision of an Arbitration Committee from which no c.aim for review has been tiled within the time allowed therefor, or a memoran- dum of agreement approved by the Commission, and all papers in con- nection tnerew.th, to the District Court of the county in which the injury occurred, whereupon said court, shall render a decree in ac- coraance therewith and notify the paities. Such decree s-all have tliO same eftect and in all proceedings in relation thereto sha.l there- after be the same as though rendered in a suit duly heard and de- termined by said court, except that there shall be no appeal there- fzom upon questions Oi fact or where the decree is based upon a decision of an Arbitration Committee or a memorandum of agreement, and tnat tuere shall be no appeal trom a deciee basei upon an order or aecisicn of the Commission which has not been presented to the court wl;iiin ten days alter the notice of the filing theieof by the commlss on. Tjpcn the presen.,ation to the court ol a certified copy of a decision of the industrial Commission, ending, diminishing or in- crea.-ing a weeli-y payment uuaer the provisions of this Act, the couri snail revoKe or mod.ty tne decree to confoim to such decision. Section 36. (a) Any payment to be made under this Act may be reviewed by ti^e Industiidl Commission ac the request of the em- ployer or of the employe, and on such review it may be ended, dim- inished or inci eased subject to the maximum or minimum amounts piovided for m tnis Act li the commission hnds the conuitions of tne employee warrants such action. (b) Any notice to be given by the commission or court provided for m this Aori shall be in writing but service thereof s^iall be suf- ficient if deposited in the mail, addiessed to the last known address of the parties. Section 3 7. Fees for attorneys and physicians. Pees of attorneys and physicians for services unaer this Act sha-1 be subject to the ap- proval of the Industrial Commission unless otherwise piovided in this Act. Section 38. Records of injuries and reports. Every employer shall hereafter keep a record of all injuries, fatal or otherwise, sustained by his employees in the course of their employment. Within forty- eight hours, not counting Sundays and legal holidays, after the oc- . currence oi an accident resulting in personal injury, a report shall be made in writing to the Industrial Commiss on on blanks to be pro- cured from the commission for that purpose. Upon the termination of the disability of the injured employe, or if such disabil ty extends beyond a period of six:y days, at the ex- piration of such period, the employer shall make a supplemental re- port on blanks to be procured from the commission for that purpose. The said reports shall contain the name and nature oi the business 44 REPORT OF EMPLOYERS' LIABILITY COMMISSION of the employer, the location of the estalDlishment. the name, age, Bex and occupation of the injured employe, and shall state the date and hour of the accident, the nature and cause of the injury, and such other information as may be required by the Commission. Any employer who refuses or neglects to make the report required by this section shall be punished by a fine of not more than fifty ($50.00) dollars for each offense. Section 39. It shall be unlawful for any member of the Commission, during his term of office, to serve upon any other committee of any politi- cal party or espouse the election or appointment of any person for any political office or contribute to any campaign fund of any political party, or to the campaign fund of any person who is a candidate for election or appointed to any political office. A violation of this section shall be deemed a misdemeanor and upon conviction shall be fined one hunderd ($100.00) dollars. Section 40. It shall be unlawful for any person who is a candidate for the appointment as a member of the commission to make any promise to another, expresed or implied, in consideration of any assistance or in- fluence given or recommendation made that the candidate will, if appointed as a member of the Commission, vote to appoint such person or one for whom he may recommend to an office within the power of the Commission to appoint. A violation thereof shall be deemed a misdemeanor and upon conviction thereof shall be fined one hundred ($100.00) dollars. Section 41. All recommendations to the governor of any person asking the appointment of another as a member of the Commission shall be re- duced to writing signed by the person presenting the same, which shall be filed by the governor in his office and open at all reasonable times for public Inspection, and all recommendations made by any person to the Commission for the appointment of another within the power of the commiss'on to appoint, shal! be reduced to writing, signed by the person presenting the same and filed by the commission and open for public inspection at all reasonable times and hours. Any person rec- ommending the appointment of another within the ccntemplaticn of this Act and re.using to reduce the same to wrifng, it shall be the duty of the person to whom the recommendation is made, to make a brief memoranda thereof stating the name of the person recommended and the name of the person who made the same, which shall be filed as by this Act' in other cases provided. It shal be unlawful for any member of the Commission to become financially interested in any busness enterprise coming under or affected by this Act during his term of office and any member offending this statute, it shall be suf- ficient grounds for his removal from office and in such case the Gover- ncr shall at once declare the office vacant and appoint another to till the vacancy. Section 42. Upon a conviction of any member of the commission for a violation of the duties imposed by th s Act, the Governor shall Immediately declare the office vacant and appoint another to fill the vacancy in the same manner as provided for original appointments. REPORT OF EMPLOYERS' LIABILITY COMMISSION 45 PART III. Section 43. For the purpose of assuring and securing the pay- ment of compensation by th s Act required of employers who have net elected to reject the terms, conditions and provisions thereof, such employers by virtue thereof, thereby become members of an un- incorporated association, which shall be known as The Emp'oyers' Indemnity Association, hereby empowered to issue policies of In- demn ty to its members, and such other powers as may be necessary to carry out the provisions of this Act. It shall have power to sue and be sued in the name designated, but the private property of the members shall not be liable for debts of the Association, except as by this Act otherwise provided. Section 44. The Governor shall appoint a Board of Directors of the Associat.on consisting of ten members who shall serve tor a term of one year or until their successors have been elected by ballot by the members at such time and for such term as the by-laws shall provide. Section 45. Until the first meeting of the members, the Board of Directois shall have and exercise al; the powers of the members and may adopt by-laws not inconsistent with the provisions of this Act, whiCh shall be in effect until amended or repealed by the members. The Board of Directors shall annually choose by ba.lot a Presideut who shall be a member of the Board, a Secietary, a Treasurer and such other officers as the by-laws shall provide. Section 46. Seven or more of the Directors shall constitute a quorum for the tiansactlon of business. Section 47. Vacancies in any office may be filled in such manner as the by-laws shall provide. Section 48. Any employer coming under the terms of this Act for the payment of compensation for injuries sus:ained by any of their employees coming under this Act, shall be conclusively pre- sumed to have elected to secure the payment thereof as by the terms, ccnaitiODS and provisions of the Ai.t, and any employer, coming under this Act, employing five or more employes coming under this Act, thereby elects to and becomes a member of the Employers' In- demnity Association, except the S.ate, Count.es, Municipal Corporations and School districts, including Cities under special Caaiter and under Commission form of government. Tlie Board of Directors shall within ninety days after th:s part of this Act takes effect, call the first meeting of the members of the association by a notice in writing, mailed to each member at his place of business, not less than ten days before the date fixed for tne meeting. Sect on 49. In any meeting of the members, each member shall be entitled to one vote and if a member has five hundred employes to whom the association may become bound to pay compensation as provided for by this Act, he shall be entitled to two votes, and he shall be entitled to one additional vote for each additional five hundred employes to whom the association may become bound to pay compen- 46 REPORT OP EMPLOYERS' LIABILITY COMMISSION satlon; but no member shall cast by his own right or by right of proxy, more than twenty votes. Section 50. The Board of Directois shnJl distribute the members into groups in accordance with the nature of the business ani the degree of the risk of injury, and shall fix and formulate such rulen and regulations establishing premium rates for groups and differentials fcr groups and individuals as shal be fair, just, equitable and reason- ably necessary and adequate for the purpose of raiting such funds as may be required to meet the expenses of sa-.i Association -and pay the compensation to injured employes, subject to the approval of the Iowa Inaustrial Commission. Oi the piemiums collected from the members of said Association, ten per cent of the amount collected from the members shall be placed in a reserve fund unti; the sum of One Million ($1,OUO.OOO) Dollars shall have been accumulated which at all times shall be used or loaned under such rules and regu-at.ons as may be determined in the by-laws of the Aisoc.ation. Until the sum of One Hundred Thou- sand ($100;000.00) Dollars shall have been accumulated in the re- seive fund, the Directors of the Association shall cause the risks of its members to be reinsured in some one or more Companies to be ap- proved by the Industrial Commission in the amounts as foJows: When organized. Five Thousand ($5,000.00) Dollars. When membership represents fifteen thousand employes, Thirty Thou-and ($bU,000.00) Doliais. When the membership represents twenty-five thousand employes. Fifty Thousand (.>oO,Ooo.OO) Dollars. When the membership represents fifty thousand employes, Seventy- five Tnousand ($<5,0UU.00J Dollars. When the membeiship represents sixty thousand employes. One Hundied Tnousand ($iOU,0Go.U0) Dcllais, which shall be for the use and benefit of tne Association to meet its liabiliues and liab.l.ties of its membeis when needed to pay the compensation contemplated by this Act. And if at any time the reserve fund becomes leduced below One Million ($1,000,000.00) Do lars, the D. rectors of the Asso- ciation shall retain ten per cent of the premiums collected fcr the purpose of replenishing tue reserve as keieiu conLempi^ted. Thd luads o; me Employeis' Indemnity Association shall be exempt from taxation except the' income fiom money .oaned. Section 51. The Board of Directors may from time to time by vote fix and determine tne amount to be paid as a dividend upon pol- icies expiring during each year or other stated period aiier providing sufficient to pay all the compensation wh.ch may be payable on ac- count of injuiies sustained, expenses and amounts required for re- serve. All premiums and assessments shall be fixed by and for groups with differentials in accordance with the experience afl:ecting the risk of each group or ind.vidual, but all the funds of the association and the contingent liability of all the members shall be liable for the payment of any claim against the association or members. REPORT OF EMPLOYERS' LIABILITY COMMISSION 47 Section 52. All proposed premiums, asses"ments, divlden-^s or dis- tribufon of members shall be filed with the Iowa Industrial Com- mission and shall not take effect until by them deemed fair, just, equitable, reasonable and adequate and by them approved after such investigation as it may deem nece'sary. Section 53. The Iowa Industria! Commission may withdraw its ap- proval of any premium rate, distribution of members or app'-oval ot an order for dividend given by it under the provisions of this Act, and thereupon the Board oi Direcfrs s^all at once prepare another rate or distribution of members as the case may be. Sertion 54. The Poprd ot Directors may make and enforce reason- able rule's and regulat'ons for the preventicn of injuries to employes on t'le premises cf members and fcr that purpose the inspectors,, ad- justers or agents of the Association shall have free access to all such preF'ises during reasorab"e hnurs. Any member or employe aggrieved by any such rule- or regulation may petition the Icwa Industrial Commission for a review, and it may affirm, amend or annul the rule or regulation. Sertion 5 5. The Board of Directors of the Employers' Indemnity Association shall prepare a form of prlicy of In-^emnity Insurance to be issued to its merrbers, and the conditions thereof, not m conflict with this Act or acts amendatory thereof, which shall contain the following provisions: (1) The Employers' Indemnity Association hereinafter called t^e company in cous'deration of the premium.s which are set forth in the schedule, together with the covenants herein contained, does hereby agree to indemnify the person, firm, association or corporation herein- after named or the legal representative of such deceased person, or the receiver or other person appointed by any court to take cl^arge or control of the property or business of the person, firm, association or corporafon hereinafter named, herein called the assured, against the loss from liability imposed by an Act of the General Assembly of the State of Iowa, designated as Chapter .... and Acts amenda- tory thereof, known as the Workmen's Compensation Act; and said company agrees to pay any and all compensatif^n due or that may be- come due or to wUch workmen coming under this Act may be entit''ed for injuries sustained aris'ng out of and in the course of the employ- ment of fuch assured, and the company agrees to pay such compen- sation in accordance with the terms, conditions and provisions of said Act or Acts. And the company further agrees that in the following matters to-wit: (1) Proceedings by the employer or employe in reference to com- pensation for such injuries. (2) Decisions fin-'ings or orders made by any court of this State, the Icwa Industrial Commission or a Board of Arbitration in reference to such compensation. (3) Or an agreement entered into by and between the assured and such workmen in reference to such compensation, shall be binding upon the company with the same force and effect as against the as- 48 REPORT OF EMPLOYERS' LIABILITY COMMISSION sured and for that purpose the company in such cases shall be regarded as a principal and one of the parties to the proceeding, decsion, find- ings, orders or agreements, the assured being a party thereto, being sufficient to bind the company therein; and in such cases the assured and the company shall be regarded as the employer. Section 56. All forms of policies of Insurance of said Association shall be submitted to the Iowa Industrial Commission for approval, and by it approved if conforming to the provisions of this Act and any decisions rendered and entered for compensation as contemplated with- in the terms of th's Act, shall be binding and enforc'ble against the Employers' Indemnity Association, and when recorded shall be a lien frr t^e amount of compensation al'owpd upon the funds of said asso- ciation, and its assets until paid, together with Interest at six per cent upon all payments not made when due. Section .57. In anv case where an employer coming under the pro- vision': of this Act fails to pay the premiums, assessments or other oblie-ations due the Employers' Indemnitv AFSOC'ation as contemplated bv thi= Act, the Board of Directors sbPll have the r^ower to e^f'rce core^tion by appropriate proceedings in a competent court having jurisdiction of the employer. Provided that the Employers' Indemnity Associat'cn mav provide in t^e bv-laws and pf^licy where the premium shall be pavabie. and in ■'nch cases thp District cou^'t of the county where the premium is made piyab^e shall have jurisdiction of the sub- ject mat*er and parties for the purpose of enforcing ccTection of the claims; and the amount for which judgment is rendered shall be a first lien noon any and all property of f^e judgment debtor 'n such cases subject onlv to that of tayes and claim's of employees for com- pensation remaining unpaid to parties entitled thereto as by this Act provided, and except preferred claims for wages of employes. Pro- vided, however that the lien provided for herein shall not apply to the obligation of contracts existing when this Act takes effect. Section 58. There is hereby appropriated out of the monevs of the State not otherwise appropriated the sum of $ Dollars for the purpose of paving compensation to injured employes in the employ of the State. Claims therefor sbaV be filed with the Industrial Com- rr'ission and when allowed the Auditor shall "ssue warrants upon the Trea^^urer o' the State for the amount due the Injured workman in accordance with this Act. Section 59. This Act shall be construed as supplementary to any and all r^ther acts, riehts, remedies and I'abi'ities in force affect'ne the relitionshin of emplover and employe unless clearly inconsistent there- with and to that extent all Acts and parts of Acts inconsistent here- with are hereby repealed. Section fiO. If the prov'sions of this Act or any part thereof sha'l be renealp'i or pdju-^eed invalid or unr-onst'tii'-'onai hv tho suP'-e'Pe corrt of this state or the supreme court of the United States, the period of time intervening betwpen the occurrence of an injury or death and repeal or the final adjndiction of invali-^'ty shall not be computed as a pat-t of the time lim'ted bv law for the commencement of any action relating to such injurv or deat^i; and the partv en- titled to bring su^h action shaM pot be preju-^iced bv reascyj of any proceeding' had or tal^en under this Act: but t^^e amount of any ccm- pensafon which may have been naid for such injurv s^all be deducted from any judgment for damages on account of such injury. Section 61. Part One of this Act, being Sec'ions One to Twenty- three inclusive, shall take effect on the first day 9' January 1914 and the remainder being Parts Two and Three Sections Twenty-four to Sixty-one Inclusive, shall take effect July 4tli, 1913. EEPORT OF EMPLOYERS' LIABILITY COMMISSION 49 MR. BALDWIN'S MINORITY REPORT. Hon. B. F. Carroll, Governor: With all due respect to the views and judgment of my colleagues, I feel impelled to file a minority report. Some form of compensation for industrial accidents, regard- less of fault, has existed for years in various European coun- tries, and under a sort of common impulse for passing laws of this nature fifteen States in this country, and the United States Senate, have acted within the past four or five years. No two of these plans are alike and in no single State has the experi- ment continued long enough for any definite conclusions to be stated either regarding the plan or the wisdom of its results. My strong inclination has-been to recommend postponement of action in this State, and further study of the methods and ex- perience under these numerous experiments, with a view of se- curing for Iowa the full benefit of such experience elsewhere under American conditions. But if legislation upon the subject must be enacted, I respect- fully submit herewith some provisions for an Act. It does not seem necessary at this time to make the draft of a complete law; that is the task of the Legislature. I have only sought to present a sketch or outline of some of the main provisions which I would recommend in such a law which, at most, can only be regarded at this time as experimental. Upon general principles no man should be held liable to pay for an injury to another unless he was in some manner or to some degree at fault; much less should he, when without fault, be liable to one who has by his own fault, injured himself. But this general principle is greatly affected and modified by the condition that in modern industry, especially where dangerous machinery is employed among large numbers of men, the ques- tion of "fault" is almost always uncertain and complicated. Who shall decide it? We say the courts, but what does that mean? It means an unequal contest from which, if the injured 4 50 REPORT OF EMPLOYERS' LIABILITY COMMISSION man or his family are successful, they emerge after long delays and uncertainties with only a fraction of what the employer pays, while the employer himself may be ruined by the size of the judgment and the costs of the trial. We know moreover, that as necessary incidents, a considerable portion of the time of the courts is taken up with the trial of suits in damages for personal injuries, which adds to the public expense. It is also true that burdens are increased by the necessity for poor relief to those who have been injured and to their families because of meager compensation long delayed, to say nothing of the un- usual bitterness connected with this class of litigation. To change or modify this condition I would offer as the main justification for this legislation, that is to protect the employer from damage suits and give to the employe for a limited period a definite part of his wages, because this brings, on the whole, in the public interest, better results than litigation now secures, especially when so many uncertain elements are involved and such expense and waste seem to be necessary in order to reach any result in the courts. From this point of view it is a piece of compromise legislation, which it is hoped will result in advantage to both parties. It is said that accidents are trade risks and that sums paid for accidents can be treated as an expense and that the employer has only to add their cost to his prices and pass the item along to the consumer and thus distribute the burden more widely; but this condition is of too limited and doubtful an application to furnish the sole basis for such broad legislation. I have recommended that the law be compulsory. I am not unmindful of the decision which overturned the Wainright law in New York, and that several States have adopted a so-called "optional" plan in order to create the semblance of a voluntary acceptance by employer and employe and thus avoid the ap- pearance of "taking property without due process of law." But it seems a misnomer to call a compensation act optional which says to the employer, "You must accept this law or we will strip you of many of your rightful defenses and make you virtually an insurer of your employes against accident regardless of fault by either party," and says to the employe, "You must accept this law or we will so restrict your right of recovery as to make it of little value." That is enforcing freedom or an "option" with a club. Properly considered it amounts to compulsion. If HEPORT OF EMPLOYERS' LIABILITY COMMISSION 51 the ptiblic welfare demands this legislation, I would frankly avow the principle and trust the Supreme Court of Iowa to unhold it. The principle invoked by this legislation practically imputes to the employer an agreement to pay, at least in part, for in- juries caused by the business he has created, the agencies he has set going. In the main it is a question of two innocent parties, that is, no actual "wrong" on the part of either. If so, why shall not he who created the agency share in the loss? This is not punishing him for what is not his fault; it is requiring him to do what seems right ; that is, to share in the losses that are one of the risks of his trade. I cannot believe that the Supreme Court of this State will uphold an evasive and uncertain "optional" statute of this character as "due process of law," and overturn, as being not due process of law, a plain, direct and reasonable law declaring the same public policy and providing the same remedies. This is the view also of the Congressional Commission and of the Uniform Law Commissioners. The suggestions for procedure in the sketch for a bill which I submit herewith differ materially from the recommendations of my colleagues, and other members of the Commission. If the principle is sound and worthy of legislation then make the right to compensation, and its amount in every case that is likely to arise, clear, unequivocal and certain, and provide some prompt, direct and sure method of collecting it by summary legal process, without expense to the injured employe or his dependents, in case of death, for either lawyers or doctors, as far as possible, with a sufficient penalty (ten per cent interest) to make it strongly to the interest of the employer to pay, with the right of attachment where necessary. Doctors' fees and hospital bills are So uncertain an element and so liable to abuse and to entail heavy expense upon employers that they can well be made part of the share of the burden which the public will carry and be paid by the county. Compulsory insurance and creating a general lien upon the property of employers are of doubtful wisdom. The compensation rates suggested in my draft of a bill are based upon fifty per cent of the employe's wages while the majority report recommends sixty per cent. Among the fifteen States which have passed laws of this character, I think that only 52 REPORT OP EMPLOYERS' LIABILITY COMMfSSION four States have named over fifty per cent of wages as a basis of compensation, and in one of these the employe is required to contribute. The Federal Act fixes fifty per cent. This fifty per cent basis of rates produces double the compensation pre- scribed by the English law or by any law in Europe, and a higher rate, for a beginning at least will in my opinion, encounter serious opposition from Iowa employers. This rate, moreover, is founded upon the principle of a joint responsibility and equal sharing by employer and employe in the loss from industrial accidents. The plan I suggest will provide for the injured employe a well understood, simple, direct, and summary remedy, with the minimum of delay and expense; the compulsory arbitration set forth in the majority report will, I fear, prove unworkable and very expensive. Under that plan no disputed question can be settled in any way except by an "Official Arbitration." Hundreds of accidents occur annually and in different parts of the State, many of them on the same day and hundreds of them will in- volve disputes of some kind. The "Industrial Commission" that it is proposed to create is to consist of three members, and it is required that one of these three shall be a member of and chairman of every arbitration board. With such inadequate machinery weeks of delay are sure to attend investigations, be- cause every hearing must be had "in the place where the injury occurred," which may be miles from a railroad. Either party may appeal from the decision of the arbitrators to the Commis- sion itself which may "hear evidence." Such hearings on appeal must be in Des Moines, entailing more delay and large expense. To permit a member of the State Board to sit in arbitrations and, later, to sit and act in the hearing of appeals from his own decisions would be inadvisable, to say the least. Meantime the three commissioners may and doubtless will be engaged over the State in primary arbitrations with no opportunity for sessions at the capital to hear appeals. After all this cumbersome and expensive and long drawn out procedure has culminated in a decision it is to be sent back to the county and filed in the district court, "whereupon the court shall render a, decree," presumably in term time. It would seem far better if there are no legal obstacles, to give parties direct and inexpensive access to the District Judge sitting in banc with provisions for summary hearing and summary REPORT OF EMPLOYERS' LIABILITY COMMISSION 53 judgment. Let us not encumber this law with expensive and unnecessary State boards and State administrative machinery of doubtful utility. A serious omission from the bill reported by the majority, it seems to me, is the failure to incorporate any provision per- mitting employers and their employes to form voluntary benefit associations, maintained by their mutual contributions similar to those now maintained with marked success in many large industries. The experience of many years in England has shown that, under similar provisions plans have been adopted which are of far more advantage and benefit to working men than the legal compensation provided by law. We are constantly invited to look to Europe for precedents in this legislation. Why not at least permit a trial of that which experience in the most ad- vanced country in Europe has shown to be the best feature in their system? INSURANCE. The majority report embodies a recommendation for a Com- pulsory State Accident Insurance Company. I cannot bring my- self to approve of this scheme. There are at least three systems of Indemnity Insurance for Accident now being considered in various States, in connection with compensation laws. If employes make no contribution towards the cost of insurance, the most desirable, it seems to me, is commercial insurance furnished by private companies organized for that purpose, if it is not too expensive. Such companies have actuaries of training and experience and they employ men of the highest skill and ability to investigate accidents and pre- vent frauds, so that from the standpoint of the employer, aside from any question of cost, that is unquestionably the system they will prefer. The employe in such case is not interested in the rates of in- surance paid by the employer and does not want fraud to succeed and therefore welcomes investigation, especially if his case can be investigated promptly and without requiring him to give half the amount of his recovery to a lawyer. The system next most desirable, in my opinion, is that of Mutual Insurance, under which, in various forms, employers may organize, engage skilled actuaries to establish rates and provide hi REPORT OF EMPLOYERS' LIABILITY COMi.flSSION methods for assessing each other and for investigating and pay- ing claims. A similar system has existed for years in Germany, made compulsory by law upon each separate trade or craft, con- nected with measures, for indemnity against sickness, with re- quirement that employes shall contribute a minor part of the expense which is thought to be in the interest of justice and tend to the discouragement of fraudulent claims and the reduc- tion of risk through the prevention of accidents. The absence of trade organizations or crafts in Iowa and of any plan for indemnity against sickness, and notably the lack of autocratic power to enforce regulations and other practical con- ditions, seem to render adoption in this State of the German system impracticable. The nearest approaches m this country to its best features have been the voluntary mutual insurance societies, organized by employers and employes, such as the United States Brewers' Association recently sought to establish. This provided not only definite and very liberal payments to em- ployes when injured by accident in the company's service, but indemnity for sickness and pensions for old age. The third system and the one that is least of all desirable for Iowa or under our present social and business conditions, is State Insurance, upon the plans adopted by the States of "Wash- ington and Ohio. They combine state socialism and political bureaucratic management; they are expensive and will surely tend to the encouragement of fraudulent claims ; they result in gross injustice to certain classes of employers and in uncertainty and long delay in the payment of the just claims of injured employes, and are, it seems to me, practically certain to break down of their own weight and be discarded, by the States which have adopted them, after a few years of trial. My associates upon the Commission recommend for Iowa the formation of an unincorporated State association to be known as the Employers' Indemnity Association. This is not to be a voluntary organization. Every employer in the State subject to the Act must join it and must pay the premiums required, which must be high enough to enable the accumulation of a reserve fund of one million dollars. A similar act in Massachusetts only con- templates "such premiums as may be required to pay compensa- tion for the injuries which may occur in that year." May not the requirement of additional premiums sufficient to accumulate a reserve fund of one million dollars "to be used or loaned," -REPORT OF EMPLOYERS' LIABILITY COMMISSION 55 place an unnecessarily heavy burden upon those who are em- ployers in the first year or years of the law for the benefit of other employers who may come after them? If an employer fails to pay his premium he may be sued "and the amount for which judgment is rendered shall be a first lien upon any and all property of the judgment debtor." Elsewhere in their draft of the law is this clause: "The em- ploye shall have a first and prior lien to any and all other liens upon any and all property of whatever kind or character of his employer to secure the payment of the amount recovered or to which he is entitled, until paid." These two clauses place an indefinite blanket mortgage upon the property not only of every manufacturer but of every farmer or other employer who -has five persons in his employ in domestic service or otherwise. This seems to me an unnecessary provision and one that may seriously impair the credit of many. The avowed necessity for this Indemnity Association is stated to be, "For the purpose of assuring and securing the payment of compensation by this Act required of employers." A claim in a personal injury case, whether in favor "of an employe or a stranger, is not now, before judgment, a lien iipon the defendant's property, nor can the defendant be compelled to take out insurance for the benefit of employes who may be injured. The compensation law is supposed to provide employes with a more liberal right of recovery and gives them the same remedies they have always had. A right to attach, and a stiff penalty of interest, or the like, for failure to pay is as far as it seems best to go in this direction, without encroaching too far upon the freedom of employers in their business. While this insurance company is thus obligated and required "to pay," there is no provision, that I find, under which it can investigate the justice or validity of a claim. That is all to be done by machinery to be provided through the "Industrial Com- mission," another State tribunal that is to be created. All cases of dispute are to be decided by a "Committee of Arbitration," the chairman of which and the deciding member must be a mem- ber of this Industrial Commission. Therefore, while the insurance directors are chosen by the employers themselves, the fixing of the amount of liability in .cases of dispute is through a State Board appointed by the Governor for long terms. This seems far from assuring that close and careful investigation of damage g6 REPORT OF EMPLOYERS' LIABILITY COMMISSION claims which insurance companies now carry on before payments are made by them. ]\Iy position upon the subject of insurance briefly stated is this: Some form of indemnity insurance for employers, espe- cially small employers, is essential, but I do not favor making any State plan exclusive. Preserve competition in insurance. Permit an employer to insure his liability with any company, State or private, which will give him the best terms. Make the rates of private companies subject to the approval of the Auditor of State, if necessary, thus guaranteeing employers against un- reasonable rates. Without experience in this State we do not know how low insurance companies can be induced to make their Iowa rates under a moderate compensation law, free from uncertainties, direct in its working, prompt in its remedies, with every op- portunity and incentive for the discouragement of fraudulent claims. What confident assurance can be given that the rates which employers will be required to pay by the proposed Indemnity Association will be lower than they can secure from private companies? As these compulsory insurance laws are, in a gen- eral way, based upon the German plan of mutual indemnity accident insurance under State supervision, careful consideration is due to the following significant comments upon that plan by a well recognized authority: "While it starts off with pleasingly low rates, it must eventually result in unduly high rates. The universal satisfac- tion at first felt with the German law was consequently ephemeral. That condition has passed. There are now loud complaints from employers, and their dissatisfaction will increase, as rates con- tinue to rise, as they must for many years to come. The rates in Germany today average about double what they were in the beginning. It is calculated that they will not reach their stable maximum until some twenty years more. How much higher they will then be no one knows, but the majority guess is that they will again double." It is not yet the American way to encourage the State to engage in business in any field which private enterprise can cover as well. The Federal Compensation Law which has passed the Senate contains no insurance feature, but permits every em- ployer subject to its provisions to carry his own insurance. REPORT OF EMPLOYERS' LIABILITY COMMISSION 57 Being applicable only to railroad companies, all the reasons for permitting freedom in that respect do not apply to the ordinary employer, but there is much to be said in favor of giving him the same freedom of action. Let us pass a compensation law which in the first place invites and urges working men and their employers in large industries to form mutual insurance agreements, covering not only losses from accident but from sickness as well, for their common pro- tection and advantage. Where that is not done let the law be such as to invite insurance companies to make the lowest pos- sible rates, and if reasonable rates are not then realized in this state will be time enough for the State itself to go into the insurance business. Respectfully submitted, (Signed) W. W. Baldwin. Burlington, Iowa. October 15, 1912. MR BALDWIN'S DRAFT OF PROPOSED LAW. Section 1. Every employer of labor in this state, employing five or more persons, shall pay compensation in the amounts he'-e'naffer speciflei, and according to the terms and conditions of this Art, to any employe who, while employed, sustains personal injury by a-cidsTit arising out of and in the course of such employment ani resul in? In his disability, or to the dependents, as hereinafter defined, of such employe in case such Injury results in his death; and, except as he ein provided no such employer shall be liable in civil damages for any personal injury to or for the death of any such employe resulting from any such accident. Sec. 2. The first fourteen (14) calendar days of disability resulting from any injury shall be excluded from the period for whicli compen- sation is herein specifiei, and no employer shall be liable under fiis Act for any injury which does not disable the workman for a period of at least fourteen (14) days from earning full wages at the work on which he was employed when injured. During said fourteen (14) days of disability resulting from such accident the necessary medical ani surgical aii and assistance to the Injured employe, including ^ospital services, shall be furnished at the expense of the county in which the accident occurred. It shall be the duty of the County Physician immediately on being advised of an accident to any person entitled to compensation under this Act to take charge of the case, and all bills incurred tfierein s*iall be audited and paid by the County in the same manner as all other bills incurred by his office; but nothing herein contained shall pro- 58 REPORT OF EMPLOYERS' LIABILITY COMMISSION elude either tlie employer or the employe from proviaing medical and surgical aid and hospital care at his own expense. Sec. 3. It tihall be the duty o.' the Injured employe, immediately upon the happening of the accident, or as soon thereafter as practica- ble, and not later than thirty (30) days from t'ae date of the acci eit, and likewise in case of his death by such accident it shall ba the duty of one or more of the dependents of such employe, within thirty (30) daya thereafter, to give or cause to be given to the employer written notice of the a'-cident causing such injury or death, stating in ordin- ary language the time, place, and particulars thereof, the name of the injured or dead employe, his class of service, and the address of the injured employe or the person giving the notice: Provided, that w ere it is made to appear that the party herein required to give such w. it- ten notice has been prevented from giving it through or by reiEon of mental or physical incapacity, ignorance of law or of fact, or the fraud or deceit of some ether person, the same may be given a'ter the ex- piration of said thirty (30) days, but not later than ninety (90) days from the date of the accident or death; and in the absence of such written notice the employer shall not be liable to pay compensatiDn under this Act: Provided, that in case of death resulting immediate- ly or within twenty-:our (24) hours, from the time of the ac.i^eit notice thereof shall not be required. No defect or inaccuracy in the written notice herein require! shall be deemed material unless the employer shall show that he was pre- judiced theaeby, and then only to the extent of such prejudice. The notice may be served' personally upon the employer, or upon any agent of the employer upon whom a summons may be served in a civil action under the laws of this state. Sec. 4. After fifteen (1-5) calendar days from the date of the in- injury, the employer and the injured employe may at any time by agreement settle and adjust the compensation due under this Act. This agreement shall be in writing and shall be signed and acknowl- edged by the pprties, ani shall specify the compensation, which shall not be less than the compensation provided for in this Act or its equivalent. In case of death as herein specified, such agreement or settlement may be made between the employer and any of the dependents of tie deceased employe covering the compensation to which such depen- dent is entitled hereunder. Such settlement agreement shall be executed in triplicate, one copy of which may be retained by the employer, and one by the em- ploye or his dependents, and the other shall be filed with the Clerk of the District Court of the County in which the accident occurrel. Any modification or alteration of said settlement agreement shall be in writing and shall be executed and filed in the same manner as above provided for the original agreement. If any employer shall .'or thiity (30) days after written demand therefor, fail to tnak-* the payment or to otherwise comply with tte terms of such settlement agreement, the employe or dependent en- REPORT OF- EMPLOYERS' LIABILITY COMMISSION 59 titled to such compliance may maintain an action In any court to en- force such agreement as originally made or as subsequently modi'-'el, or s^all have the option of treating the settlement agreement as res- cinded, and may then enjcrce his claim for compensation unier the provisions of this Act. No agreement for settling the compensation due under this Act shall be valid except as in this section provided. But, notwithstanding any agreement, or award, or finding, or lia- bility respecting compensation under this act, no compensation shall accrue or be payable while such employe is employed at any work for which he receives pay equal to ninety (90) per cent of the pay th't he was receivii? at the t'me of his injury, but if s"ch pay falls below such ninety (90) per cent, then his compensation hereunder shall be equal to the difCecence between such- ninety (90) per cent and the pay he is receiving, not to excee', however, fifty (50) per cent of his weekly wages at the time of the accident; and the tiTie during which he is so emnloved shall effect a reduction to that ex- tent in the aggregate period for which compensation would otherwise be payable. See. 5. Any injured employe claiming a right to compensation under this Act, shall at any time, and from time to time, upon request of the employer, subrrlt himsel? at all reasonable times and' places to ex- amination by a duly qualified physician or physicians designated and paid for by the employer and the employe shall be entit'ed to also have a pliysician provided and paid for by himself present at aiy snch examination; and any physician who shall make such examinaf'oT or s'^all he orepent at such examination may be required to testify as to the results thereof. If such injured employe re'uses to submit himself to such examina- ticn or in any wry ob-tructs the same, his right to payment or com- pensation, and his right to take or prosecute any proceedin? un-^er this Act shall be suspended until he shall have submitted himself to such examination; and no compensation shall at any time be payable in res- pect to the' period of such suspension. "Upon request, a ccpy of the report of the employers ptiysician or phvsicians upon, such examination s^iall be furnished to t'"e employe, and a copy of the report of the employe's physician or physicians, if any, shall be furnished to the employer, within six (6) days after any such examination. The employer shall have the right in any case of death, to require an autopsy at his expense. Sec. 6. If no agreement of settlement is made as prov:de1 under Section 4, and in any esse o: dispute or failure to agree upon aiy claim for compensation or any other question arisin'j under this Act, either party may submit s^'ch question or such dispute to the judge of the Dis^jict Crrrt sitting in banc in any county wtiere such judge would have jurisdiction In a civil case in his court between said parties in- volving the same or similar controversy. The procedure before said judge in such cases shall be substantially as follows, to-wit: Either party may present a petition to such judge 60 REPORT OF EMPLOYERS' LIABILITY COMMISSION setting forth the names and residences of the parties and the facts relating to employment at the time of Injury, the accident and char- acter of the Injury, the amount of wages received at the time of the Injury, notice of the occurrence of the injury, and any other facts that may be necessary and pr-per for the in-ormafon of the said ju'ge, and stating the matter or matters in dispute and the contention of the petitioner with reference thereto, which petition shall be verified by the oath or affirmation of the petitioner , Upon the presentation of such petition the same shall be filed with the clerk of court and the judge shall thereupon fix a time and place for the hearing thereof, not less than three weeks after the date of the filing of said petition. A copy of said petition shall be served as an original notice In a civil action and may be served within f'ur days thereafter upon the adverse party. Within seven days after t' e SQVT^lce o" such notice the adverse party shall file an answer to such petition which shall admit or deny the substantial averment of such petition, and shall state the contention of the defendant with reference to the matters in dispute. The answer shall be verified in like man- ner as required for the petition. At the time fixed for hearing or any adjournment thereof the judge shall hear such witnesses as may be presented by either party a.vA shall decide the merits of the controversy In a summary manner. This determination shall he filed in writing with the c^erk of tie court, and ju-'gment shall he entered thereon in the same manner as In a civil cause tried in the district court. Said wrrten decision shall con- tain a statement of facts as determined by said judge, and such finding of facts and all decisions of said judge in the said dispute upon ques- tions of fact, shall he final and shall be conclusive and binding upon all parties In Interest. Subsequent proceedings thereon shall only be for the recovery of moneys thereby determined to be due; provided, that nothing herein contained shall be construed as limiting the jur- isdiction of the Supreme Court to review questions of law by certior- ari. Costs may be awarded by said judge In his discretion, and w'len so awarded the same costs shall be allowel, taxed and colle-tel as are allowed, taxed and collected for like services in the d'strlct court. In all said proceedings the County Attorney of the county In which a petitioner may file a petition as hereinbefore provided, shall, as part of his official duty, appear and act as attorney for the employe or the dependent, as the case may be, who may be a party thereto, but such ap- pearance of the County Attorney shall not in any way limit or preclude the right of such employe or such dependent to be represented by an attorney selected and paid for by himself. It shall be unlawful for any county attorney to accept any com- pensation for his services in such proceedings, or for any attorney employed by such employe or such dependent to accept any con- tingent fee therein, and the amount of his fees shall be flxel by the judge and entered of record as part of his findings, and in case of^an REPORT OF EMPLOYERS' LIABILITY COMMISSION 61 appeal upon a question of law, such fee shall be determined by the appellate court and be enteral of record in said court. Sec. 7. The compensation under this Art shall be as follows: In case the injury causes death and such employe at the time of bis death leaves persons who were wholly dependent upon his earn- ings for their support at the time of the injury which caused his death, such dependents as herein specified shall receive compensation for a period of not more than three hundred (300) weeks, as fol- lows, namely: 1. If a widow, and there is no child then living under the age of sixteen years (16) years, there shall be paid to such dependent widrw a weekly payment equal to thlrty-flve (35) per cent of the wages of the deceased; provided, that no widow shall be regarded as a de- pendent who has wilfully deserted her deceased husband without his fault. 2. If there is a child or children of the deceased under the age o6 sixteen (16) years living with such widow, there shall be paid to the widow for the benefit of herself and such children a weekly payment equal to flfty per cent (50 per cent) of the wages of the deceased. 3. If the deceased employe leaves any child or children under the age of sixteen (16) years and no widow there shall be paid, if there is one such child a weekly payment equal to twenty per cent (20 per cent) of the wages of the deceased, and if there is more than one child an additional weekly payment for each of such children equal to tsn per cent (10 per cent) of the wages of the deceased, but not to ex- ceed in all a total of fifty per cent (50 per cent) of such weekly wages. All payments made for such children shall be divided among them, share and share alike, and if the number of such children is subse- quently reduced to less than four, the amount of such payments shall be correspondingly diminished. 4. If the deceased employe leaves no wi!?ow nor a child entitled to any payments hereunder, but does leave a parent or parents who at the time of the injury were wholly dependent upon his earnings for support, there shall be paid to each of such parents a weekly pay- ment equal to fifteen p&r cent (15 per cent) of the wages of the de- ceased. 5. If the deceased employe leaves no widow nor child nor parent entitled to any payment hereunder, but does leave a brother or sister who at the time of his injury was wholly dependent upon his earn- ings for support, there shall be paid to such dependent relative a weekly payment equal to twenty per cent (20 per cent) of the wages of the deceased, or if there are more than one, then thirty per cent (30 per cent) of such wages, to be divided between them share and share alike. 6. If any of the relatives of the deceased employe hereinbefore specified were only partially dependent upon his earnings for their 62 REPORT OF EMPLOYERS' LIABILITY COMMISSION support at the time of his Injury, such partially dependent relative shall be paid a weekly payment equal to such a proportion of the sums hereinbefore specified as payable to persons of the same class of consanguinity who are wholly dependent as the sums which were being contributed weekly by the deceased towards theirs partial sup- port at the time of the injury, bore '".o his entire weekly earnings. 7. If there are no dependents entitled to payments hereunder, the employer shall be liable for the necessary burial expenses, not exceed- ing one hundred dollars ($100). The obligation to make payments to dependents shall only apply to persons who at the time of the death of the deceaseJ employe are actual residents of the United States or Canada, except that if there are no children residing in the United States who are entitled to com- peirsation hereunder, then any non-resi'ent widow of the deceased who at the time of the injury was wholly dependent upon his wages for her support shall be entitled to receive from the employer a limp sum equal to as many days wages as the said employe had worked fo.r such employer, at the time of the injury, not exceeding three hundrel and twelve (312) days. The payment of compen'sation to any dependent shall cease upcB the death or marriage of such dependent, and if the dependent is a chilli such payment shall ceas"^ when the child reaches the age of six.ean years; and it shall also cease whenever the dependent to whom t':ie payment is being made shall cease to be dependent thereon for sup- port. No payments to dependents on account of the death of an emnloye shall be required in excess of ten dollars ($10) per week nor less than five dollars ($5) per week nor for exceeding three hundred (300) weeks nor for more than three thousand dollars ($3,000) in the ag- gregate; and whatever payments have been made to the injured em- ploye on account of the injury before his death shall be a credit upon the payments due to dependents. B If disability results from such injury there shall be paid to the in- jured employe a weekly compensation equal to fifty per cent (50 rer cent) of his average weekly wages at the time of the injury for a period of not to exceed four hundred (400) weeks. C For all cases included in the following classes of injuries there shall be paid, for the perioib named below, fity per cent (50%) of the average weekly wages, as follows, to-wit: In case of The Ices of one arm, two hundred (200) weeks. The loss of one hand, one hundred fifty (150) weeks. The loss of one leg, one hundred seventy-five (175) weeks. The less of an eye, one hundred (100) weeks. The loss of a thumb, fifty-two (52) weeks; first finger, thirty-five (35) weeks; second finger, thirty (30) weeks; third finger, twenty (20) weeks; fourth finger, fifteen (15) weeks. ' REPORT OF EMPLOYERS' LIABILITY COMMISSION 63 The loss of one phalange of a thumb or two phalanges of a finger shall be considered equal to the loss of half of a thumb or finger, and compensation for one-half of the above periods s'aall be payable. The loss of a great toe, twenty-five (25) weeks; any other toe, fifteen (15) weeks. If an employ^' refuses to work after work is furnished or secured for him by the employer, he shall not be entitled to compensation for disability during the continuance of such refusal. Sec. 8. No employer shall be liable under this Act for the Injury ri death of an employe where such injury or death of the ercploye wis caused by or resulted from the wilful negligence of such employe, or from his intention to cause such an injury, or to bring about his own irjiry or de2 ih, or that of any other person, or from his re'usal to use a guard or protection against accident required by law or provided for him, or where the accident was caused by or resulted from his intoxication. Sec. 9. No weekly payment on account of disability shall exceed ten dollars ($10), nor be less than five dollars ($5), nor shall any su3h weekly payment ext&nd over a period exceeding four hundred weeks (400); and "disability" under this Act means that such employe is physically unable to continue his regular work because of such accident. Sec. 10. Where an employe has become entitled to compensation for injury under this Act and death ensues from any cause not resulting from the injury for which he was entitled to compensation, payments of the unpaid balance for such injury shall cease and all liability therefor shall terminate. Sec. 11. The right to compensation for injury under this Act shall net accrue in favor of an employe unless the injury occurrel whl'e he was engaged in, on, or about the premises where his services are being performed which are occupied by or under the control of the empl-yer, or while he was engaged elsewhere in or about his employer's business where his service requires his presence as a part of such service af the time of the injury and subjects him to the dangers incident to that ■employment, and shall not include disease. Sec. 12. Any employer subject to the provisions of this Act may enter into an agreement with his employes to provide a scheme of compensation, benefit, or insurance, in lieu of the compensatirn pro- vided for in this Act, subject to the approval of the Auditor of State. Such approval shall be granted only on condition that the scheme pro- posed includes the benefits provided by this Act or their reasonable equivalent; and if the scheme provides for contribution by employes it shall confer benefits in addition to those provided by this Act, or their equivalent, commensurate with such contributions. If such a scheme mests with the approval of the said Auditor of State, he shall issue a certificate enabling the employer to contract with any or all of his employes to substitute such scheme for the provi- sions of this Act for a period fixed. 64 REPORT OF EMPLOYERS' LIABILIT'T COMMISSION Any such scheme may be terminated by said Auditor of State on reasonable notice to all interested, if the srheme is not fairly ad- ministered, or if there is any other substantial reason for such ter- mination. Sec. 13. All sums due and payable as compensation under this Acf shall draw interest after thirty (39) days from the date thej are due and payable and until paid, at the rate of ten per cent (10%) per annum. Sec. 14. Any employer subject *" the provisions of this Act may insure his liability, to pay compensation, with any mutual association or stock company authorized to do business in this State. REPORT OF EMPLOYERS' LIABILITY COMMISSION 65 APPENDIX I PRINCIPAL FORMS USED IN THE INQUIRY IN IOWA IMPORTANT. (Employers' Form No. 1.) To the Employers of Labor in Iowa: Tlie Workmen's Compensation Commission of tlie State of Iowa trusts that each of the following questions will be answered by you, and earnestly urges prompt attention thereto. We ask that you procure the data, wr'te the answers, and mail to the Secretary while the subject is fresh in mind; otherwise you may overlook this important matter and the Commission will lose your valuable assist- ance. WELKER GIVEN, Secretary. '"'^ JOHN T. CLARKSON, Chairman. Des Moines, Iowa. Albia, Iowa. 1. Q. Name of person, firm, association or corporation? A 2. Q. Address 3. Business conducted 4. Q. Give number of employes employed during the years 1909, 1910 and 1911. If not in business during all that time, give average number employed during the time engaged in business for one or more of the years mentioned, stating the length of time covered. Note: If the business in which you are engaged is such that you have more than one class or department, then give the average number em- ployed in each class or department, naming each class or department. A. For IS 09 DEPAKTMENT. NUMBEK. DEPAKTMENT NUMBEK. (a) (a) (e) (e) (b) (b) (f) (f) (c) (c) (g) (fi) (d) (d) (h) ( h) For 1910 (a) (a) (e) (e) (b) (b) (f) U) 66 REPORT OF EMPLOYERS' LIABILITY COMMISSION (c) (c) (g) (S) (d) (d) (h) (b) For 1911 (a) (a) (e) (e) (b) (b) (f) (f) (0) (c) (g) (g) (d) (d) (h) (h) 5. Q. What was tbe average wage paid by you during the year 1909, 1910 and 1911? If not in business during all of the time mentioned, give the average for the t'me engaged in business during one or more of the years mentioned, and for the same length of time covered by your answers to question No. 4. Note: If your business is such that you have more than one class or department, then give the average for each class or department, naming each class or department and the average amount for each. A. For 1909 .• DEPARTMENT. AMOUNT. DEPAETMENT. AMOUNT. (a) (a) (g) (g) (b) (b) (h) (h) (c) (c) (j) (j) (d) (d) (k) (k) (e) fe) (1) (1) (f) If) (m) (m) A. For 1910 (a) (a) (g) (g) (b) (b) (h) (h) (c) (c) (j) (j) (d) (d) (k) (k) (e) (e) (1) (1) (f) (f) (m) (m) A. For 1911 (a) (a) (g) (g) (b) (b) (h) (h) (c) (c) (j) (j) (d) (d) (k) (k) (e) (e) (1) (1) (f ) (f ) (m) (m) 6. Q. Give the number of employes injured while at work in your em- ploy during the years 1909, 1910 and 1911. If not in business during all of the time, give the number during the time engaged in business for any one or more of the years mentioned; and for the same length of time covered by your answers given to questions 4 and 5. Note: If your business is such that you have more than one class or department, give the number njured in each class or department, naming each class or department and number injured in each. •The Injury contemplated by this question is one where the employe was disabled, preventing from working. REPORT OF EMPLOYERS' LIABILITY COMMISSION 67 A. For 1909 CLASS OB NUMBEB CLASS OB NUMBEB. DEPARTMENT. DEPAETMENT. (a) (a) (e) (e) (b) (b) (f ) rf) (c) (c) (g) (g) W (d) (h) (h) A. For 1910 (a) (a) (e) (e) . (b) (b) (f) (f) . (c) (c) (g) (K) . (d) (d) (h) (h) . A. For 1911 (a) (a) (e) (e) (b) (b) (f) (f) (c) (c) (g) (g) (d) (d) (h) (h) 7. Give the nature of the injury and length of time each employe was so disabled as to prevent hm from following his usual employment, for and during the years 1909, 1910 and 1911, or for such part of the time that you have been in the business during said years; but covering the same period of time mentioned in your answers to questions 4, 5 and 6. Note: If the business in which you are engaged is such that you have more than one class or department, then give the class or department in which the injury occurred following the same rule in stating time employe was disabled. A. For 1909 NATDBE OF INJUEY. DEPABTMENT. NATIIBE OF INJUBY. DEPABTMENT, (a) ■. (a) (e) (e) (b) (b) (f) (f) (c) (c) (g) (g) (d) (d) (h) (h) A. For 1910 (a) (a) (e) (e) (b) (b) (f) (f) (c) (c) (g) (g) (d) (d) (h) (h) A. For 1911 (a) (a) (e) (e) (b) (b) (f) ff) (c) (c) (g) (g) (d) (d) (h) Ch) 68 REPORT OF EMPLOYERS' LIABILITY COMMISSION IN ORDER THAT THE COMMISSION MAY BE ENABLED TO CO' PUTE THE PRESENT COST TO THE EMPLOYER OF LABOR IN TH! STATE GROV/ING OUT OF ACCIDENTS IN HIS BUSINESS, AND TH PROBABLE COST UNDER ANY NEW SYSTEM DEVISED, IT IS V :P0RTANT THAT THE FOLLOWING QUESTIONS BE ANSWERED A FULLY AS MAY BE WITHIN YOUR KNOWLEDGE: 8. Q. What amount, if any, during the period given in your answers questions 4 to 7 inclusive, have you paid to injured employes or the families or representatives? Note: If your business is such that you have more than one class ( department, flU in the amount by class or department. A. For 1909. (a) In case of death, amount [If class or department answer from (a) to (h) inclusive.] AMOUNT. DEPABTMENT. AMOUNT. DEPARTMEN' (a) (a) (e) (e) (b) (b) (f) ff) (C) (C) (g^ (g) (d) (d) (h) (hj For 1910. (a) In case of death, amount [If class or department answer from (a) to (h) inclusive.] AMOUNT. DEPABTMENT. AMOUNT. DEPABTMINI (a) (a) (e) (e) (b) (b) (f) (f) (<=) (c) (g) (K) (d) (d) (h) (h) For IPll. (a) In case of death, amount [If class or department answer from (a) to (h) Inclusive.] AMOUNT. DEPARTMENT. AMOUNT. DEPARTMENl (a) .(a) (e) (e) (l*) (b) (f) (f) «=) (C) (g) (g) (d) (d) (h) (h) A. For 1909. (b) Total disabilities,' amount [If class or department answer from (a) to (h) inclusive.] AMOUNT. DEPARTMENT. AMOUNT. DEPARTMENT (a) (a) (e) (e) , (") (b) (f) ,f, (C) (C) (g) (g) ( (d) (h) ..(h) For 1910. (b) Total disabilities.^ amount [If class or department answer from (a) "to "(h)' Ineiusive.'] IlEPORT OF EMPLOYERS' LIABILITY COMMISSION 69 AMOUNT, DEPAaTMENT. AMOUNT. DEPARTMENT. (a) (a) (e) (e) (b) (b) (f) (f) (c) (c) (g) (s) (d) (d) (h) (h) For 1911. (b) Total disabilities,' amount [If class or department answer from (a) to (h) inclusive.] AMOUNT. DEPARTMENT. AMOUNT. DEPARTMENT. (a) (a) (e) (e) (b) (b) (0 (f) (c) (c) (g) (e) (d) (d) (b) (h) A. For 1909. (c) Partial disabilities,' amount [If class or department answer from (a) to (h) inclusive.] AMOUNT. DEPARTMENT. AMOUNT. DEPARTMENT. (a) (a) (e) (e) (b) (b) (f) (f) (c) (c) (g) (g) ,. (d) (d) (h) (h) For IPIO. (c) Partial disabilities," amount [If cl&ss or department answer from (a) to (h) inclusive.] AMOUNT. DEPARTMENT. AMOUNT. DEPARTMENT. (a) (a) (e) (e) (b) (b) (f) (f) (c) (c) (g) (K) (d) (d) (h) (h) For 1911. (c) Partial disabilities,' amount [If class or department answer from (a) to (h) inclusive.] AMOUNT. DEPARTMENT. AMOUNT. DEPARTMENT. (a) (a) (e) ...(e) (b) (b) (f) (f) (0) (c) (g) (K) (d) (d) (h) (h) A. For 1E09. (d) Medical attendance, amount [If class or department answer from (a) to (h) inclusive.] 'By total disability is meant, where the injured party is totally dis- abled from following his usual or any other vocation. 'By part'al disability is meant, where the injured party is disabled for a limited time from following his usual or other vocation or his ability and earning capacity impaired. 70 REPORT OF EMPLOYERS' LIABILITY COMMISSION AMOUNT DEPARTMENT. AMOUNT. DEPAETMEKT, (a) (a) (e) f e) (b) (b) (f) ff) (c) (c) (g) (g) (d) (d) (h) (h) For 1910. (d) Medical attendance, amount [If class or department answer from (a) to (h) inclusive.] AMOUNT. DEPARTMENT. AMOUNT. DEPABTMENT. (a) (a) (e) (e) (b) (b) (f) (f) (c) (c) (g) (g) (d) (d) (h) (h) For 1?11. (d) Medical attendance, amount [If class or department answer from (a) to (h) inclusive.] AMOUNT DEPAKTKENT. AMOUNT. DEPABTMENT. (a) (a) (e)...., (e) (b) (b) (f) .(f) (c) (c) (g) (g) (d) (d) (h) (h) A. For 1909. (e) Attorneys' fees,* amount [If class or department answer from (a) to (h) inclusive.] AMOUNT. DEPABTMENT. AMOUNT. DEPABTMENT. (a) (a) (e) Ce) (b) (b) (f ) (f) (c) (c) (g) (g) (d) (d) (h) (h) For 1910. (e) Attorneys' fees,* amount [If class or department answer from (a) to (h) inclusive.] AMOUNT. DEPARTMENT. AMOUNT. DEPABTMENT. (a) (a) (e) (e) (b) . ; (b) (f ) (f ) (c) (c) (g) (g) (d) (d) (li) (h; For 1911. (e) Attorneys' fees,* amount [If class or department answer from (a) to (h) inclusive.] AMOUNT DEPARTMENT. AMOUNT. DEPAETSIENT. (a) (a) (e) (e) (b) (b) (f) (f) "By partial disability 's meant, wbere the injured party is disabled for a limited time from following his usual or other vocation or Us ability and earning capacity impaired. 'Attorneys' fees paid for the firm or claimants. REPORT OF EMPLOYERS' LIABILITY COMMISSION 71 (c) (c) (g) (g) (d) (d) (h) (h) A. For 1£0'9. (f) Court costs, amount [If class or department answer from (a) to (h) inclusive.] AMOUNT DEPARTMENT. AMOUNT. DEPABrMENT. (a) (a) (e) (e) (b) (b) (f) _ff) (c) (c) (g) (g) (d) (d) (h) (h) . . . , For 191w. (f) Court costs, amount [If class or depaitment answer from (a) to (h) inclusive.] AMOUNT. DEPAliTMENT. AMOUNT. DEPARTMENT. (a) ' (a) (e) , fe) (b) (b) (f) (f) (c) (c) (g) (g) (d) (d) (h) (h) For 1911. ( f ) Court costs, amount [If class or department answer from (a) to (h) inclusive.] .■i-MOUNT. DEPASTMENT. AMOUNT. DEPARTMENT. (a) (a) (e) (e) (b) '. . . . (b) (f ) (f ) (c) (c) (g) (g) (d) (d) (h) (h) A. For 1909. (g) Any other expenses, amount [If class or department answer from (a) to (h) inclusive.] AMOUNT. DEPARTMENT. AMOUNT. DEPARTMENT. (a) (a) (e) (e) (b) (b) (f) (f) (c) (c) (g) (g) (d) (d) (h) (h) For 1910. (g) Any other expenses, amount '. [If class or department answer from (a) to (h) inclusive.] AMOUNT. DEPAi?TMENT. AMOUNT. DEPARTMENT. (a) (a) (e) (e) (b) (b) (f) ff) (c) ( c) (g) (g) (d) (d) (h) (h) •Attorneys' fees paid for the firm or cla'mants. ''The Commission desires information of injuries received by work- men, while in the performance of their work, whether suit was instituted to recover damages or not. 72 REPORT OP EMPLOYERS' LIABILITY COMMISSION For 1911. (g) Any other expenses, amount [If class or department answer from (a) to (h) inclusive.] AMOUNT. DEPARTMENT. AMODNT. DEPABTMEN! (a) (a) (e) (e) (b) (b) (f) (f) (c) (c) (g) (e) (d) (d) (h) (h) 9. Q. Do you carry Employers' Liability Insurance? ^. If s( what have you pad for the period or any part thereof, mentioned li your answers to questions four to seven inclusive? Give length o time and amount. A. For 1909. Length of time Amount For 1910. Length of time Amount For 1911. Length of time Amount .'. 10. Q. Do you contribute to any mutual aid or relief association fo: your employes? If so, give amount contributed for the period or an; part theieof mentioned in your answers to quest'ons four to sevei inclusive. Give length of time and amount. A. For 1909. Length of time Amount For 1910. Length of time Amount For 1911. Length of time Amount 11. Q. If yoii have been to any expense growing out of injuries to em ployes in your business not covered by the foregoing answers, giv amount paid and period covered. A. For 1909. Length of time Amount For 1910. Length of time Amount For 191L Length of time Amount ( Signed) (Employers' Circular No. 1.) To the Employers of Labor in Iowa: The Workmen's Compensation Commission of Iowa, appointed by ti Governor, conforming to the law of the Thirty-fourth General Assembl; hands you heiewith questions in blank which we earnestly urge you t fill out In detail and as fully as within your knowledge. REPORT OF EMPLOYERS' LIABILITY COMMISSION 73 It is the earnest desire of tlie Commission to obtain reliable data to present to the Thirty-fifth General Assembly upon which the members thereof may act intelligently in considering the advisability of changing the law relating to the payment of compensation to employes in the several industries of this Staie, when injured in the performance of their ■work. Heretofore, the employers have been compelled to bear the burden of any payments made for injuries received by the employe, often after expensive litigation, and a great waste of time, energy and money. It is now proposed to change the law in this state, as already done in Illinois, Wisconsin, Ohio, Massachusetts, Maryland, Washington and Montana, so as to enable; the employer to charge the amount paid, if any to the cost of production. This cannot be accomplished Intelligently unless we receive the co-operation of the employer, who we trust will furnish the Commission with data at first hand, reasonably reliable, to enable the Commssion to advise the members of the next General Assembly as to whether such a system can be carried out with fairness to all con- cerned: the employers, employes, the public and the consumer. Any information given ■will be considered strictly confidential. The facts only will be given the General Assembly, without the name of the emoloyer. WELKER GIVEN, Secretary. JOHN T. CLARKSON, Chairman. Des Moines, Iowa. Albia, Iowa. IMPORTANT! Employes' Form No. 1. TO THE WAOE EARNERS OF IOWA: The Workmen's Compensation Commission trust that each of the fol- lowing quest'ons will be answered by some members of the organization directly addressed with help of others and earnestly urge prompt at- tention thereto. You are vitally interested in the work of the Commission and results hoped to be accomplished; but without your cooperation, we may fail to atta'n the desired result of improving the present unsatisfactory system of rendering compensation to injured workmen. We therefor3 ask of you that you assist us in procuring reliable data, by obtaining the necessary information. Write answers to the following questions and mail to the Secretary while the subject is fresh in your m'nd; otherwise you may overlook this important matter and the Commission lose your valuable assistance. WELKER GIVEN, Secretary. JOHN T. CLARKSON, Chairman, Des Moines, Iowa. Albia, Iowa. 1. Q. Name of person or organization? A 2. Q. Secretary? A, 74 REPORT OF EMPLOYERS' LIABILITY COMMISSION 3. Q. Address? A • r 4. Q. Give name of any employees injured of -whom you know or cai obtain reliable ■■nformation, who received injury while in the per formance of his work for the years 1909, 1910 and 1911? A. (a) Name (h) Address (c) When was party injured ;, (d) Work engaged at when injured (e) By whom employed when injured , (f ) Character of injury (g) How long disabled (h) How did injury occur? State all of the facts in detail as far as obtainable ■ ( j ) What were employee's earnings at time or injury (k) Was suit brought to recover damages (1) If su't was brought, give county (m) If suit was brought, was party successful? If so amount recovered (n) If party was successful, give amount received by injured party from the amount recovered , (o) Amount received, if any, without suit (p) If injured party received any amount, by whom paid (q) Was injured party married, or supporting dependents? Giv number . . . ^r) If the injury produced death, how has the family, if any, bee: maintained (s)'* If permanent injury resulted from injury received, how has tli family been maintained (t)t If the injury was not permanent, to what extent, if any, ii it lessened his ab'lity as a wage earner (Signed) *By permanent injury is meant, where the injured party is total disabled from following his ubual or other vocation. tBy partial disability is meant, where the 'njured party is disaM( from following his usual or other vocation for a limited time, or h his ability and earning cp.pai'ity impa"red. JThe Commission desire information of injuries received by worknw while in performance of work, whether suit was instituted or not. REPORT OF EMPLOYERS' LIABILITY COMMISSION 75 APPENDIX. II ESTIMATE OF PROBABLE INSURANCE COST IN IOWA BY S. H. WOLFE, CONSULTING ACTUAEY, OF NEW TOEK. Compensating workmen for injuries received during tbe course o£ their employment, irrespective of the question of contributory negli- gence, seems now to be an accepted theory. To use a trite phrase the wear and tear on workmen is as much a part of the cost of pro- duction as the wear and tear on machinery, which for a long time has been one of the recognized elements entering into the cost to the con- sumer. I take it that the desirability of your State adopting some form of a Workmen's Compensation Act requires no argument upon my part, and it remains merely to ascertain the most desirable form to be adopted. The first pomt to be considered is whether the application of such an Act shall be made compulsory or voluntary. In New York the highest court, the Court of Appeals, in Earl Ives v. South Buffalo Railway Company, held that the compulsory feature of the New York Act was unconstitutional; in the State of Washington in State ex rel Davis Smith Co. v. C. W. Clausen as State Auditor, the highest court he'd that the compulsory feature was constitutional. In New York at the present time the State constitution is being amended to permit of the compulsory features. It would seem that the other States have attempted to overcome this difiiculty by penalizing those employers who do not come within the Act, so heavily as to practically make the Act compulsory. If a compulsory plan can be sustained under your con- stitution I would recommend its adoption, but if any doubt should exist in your mind it would seem that the entire fate of the Act should not be hazarded as long as the same result can be accomplished in an indirect, though effective way. The manner in which this result has been accomplished is as follows: Employers and employes have the right to elect to come within or to stay without the provisions of the Act. If an employer does not come within the Act he cannot' plead the three important defenses of contributory negligence, fellow servant and assumption of risk, in any action brought against him by an injured employee. If, on the other hand, an employer has elected to come within the Act and an em- ploye has elected to remain without, the employer is permitted to 76 REPORT OF EMPLOYERS' LIABILITY COMMISSION plead these three defenses in any act'on brought against him by the Injured employe who has elected to retain his common law rights instead of availing himself of the guaranteed benents of the com- pensation Act. METHOD OF COMING WITHIN THE ACT. There are two courses open to you. In New Jersey, for instance, every employer of labor i^ assumed to come with n the Act unless he files statutory notice of his intention to remain without. In Massa- chusetts an emp oyer is assumed to remain without the Act unless he takes definite steps to come within either by posting a notce up at the place of employment or by serving a notice upon each employe In- dividually. If we were sure that no injustice would be done to the small employer, it would seem that the New Jersey method has certain advantages over the other. APPLICATION OF THE ACT. In some States the Act does not apply to personal injuries sustained by domestic servants and farm laborers, in other States all employments are covered. There may be some political reason for excluding tlie domestic servants and farm laborers, but I do not know of any logical reason. It would seem that casual employes are generally excepted and in some States the Act does not apply to employers of less than a certain number of workmen — five for instance. There is logic in this exception, but the burden is so sight on the employer of a small num- ber of men as to rob the objection of much of its force. It would seem to me that your Act should carefuFy specify its application to "acci- dental injuries sustained by an employee in the course of and during his employment." I make this suggestion in view of the fact that in Massachusetts the act is made to apply to "personal" injuries. This may in the future give rise to some litigation, for a personal injury is net always an accidental injury. I thnk that serious and wil ful misconduct of the employes, the deliberate Intention to cause injury and intoxication should be made reasons for depriving the employe of the benefits of the Act. I take it that there is no need for me to discuss the benefits to be pad or the methods of paying them. The statutes of other States furnish a reliable guide in this matter, for we must be careful not to impose a greater burden on the manufacturers of Iowa than is imposed upon the manufacturers of other States. On the other hand, the minimum payment in practically a',1 of the States represents as low a figure as should be paid to any injured employee. COST OF FTJKNISHING THE BENEFITS. In every State of the Union, except Ohio, the entire cost is assessed against the employer. In that State the employees contribute 10 per cent. I am of the opinion that the employer should meet the entire cost. COLLECTION OF FUNDS. Without attempting too refined a discussion of the subject, there are three ways of providing for the accumulation of the funds neces- REPORT OF EMPLOYERS' LIABILITY COMMISSION 77 sary to pay benefits to injured employees. These may be stated as follows: 1st: By State insurance. 2nd: By merely requiring the employer to pay. 3rd: By requiring the employer to effect a policy of insurance either in a mutual organization fostered by the State, or in a company authorized to do business therein. STATE INSURANCE. The States of Ohio and Washington are the only ones in this country which have attempted to solve this problem by using the State Govern- ment as a medium for the collection of premiums and the payment of losses. In both States injured employes under the law must look to a State insurance fund tor their benefits. I th;nk that by no stretch of the imagination could the State itself be held for payments if for any reason it would be found impossible to collect the necessary funds from the employers. In my opinion, neither the Federal Government nor any of the individual States in this country is prepared to install a system of State insurance. There are many reasons for this. As practical legislators the- inadvisability of etsablishing a bureaucracy will doubtless appeal to you. While State insurance is in force in some of the European countries, I think we are not ready tor it here and unless the Commission desires me to elaborate upon this phase of the question, I shall dismiss it. BEQUIKING THE EMPLOYEE TO PAY. The inherent weakness of this system lies in the fact that it makes the financial solvency of the employer the sole guarantee that the in- jured workman will receive his benefits when due. It is not difiicult to conceive of a situation where the amounts for which the employer would become liable as the result of any one accident, would be suf- ficient to force him into bankruptcy; th s of course would result in more or less hardship to the dependents of the injured employes, even though they should be made pre:erred creditors. While, tneiefore, this method has the merit of divorcing the State from the guaranteeing of the payments, it contains the inherent defect just poined out. THE THIBD METHOD. With the idea that it would substitute corporate solvency for in- dividual solvency, the Commonwealth of Massachusetts has modified the terms of the Compensation Act as found in other States, by pro- viding that neither the State nor the individual employer shall pay the compensation, but that the benefits to the injured employe shall be paid by a corporation. This corporation may be either one of the regular insurance companies licensed to transact liability business in the Commonwealth or the Massachusetts Employees' Insurance Asso- ciation, a corporation created by the Workmen's Compensat'on Act itself and intended to enable the employers of Massachusetts to obtain their protection at cost. In other words, an employer must, in order to bring himself within the Act, not only give the statutory notice to 78 REPORT OF EMPLOYERS' LIABILITY COMMISSION his employes, but must also protect them by becoming a policyholder in one of the corporations just mentioned. Realizing that this State- formed mutual would be a formidable competitor of the stock com- panies the Legislature of the Commonwealth took certain steps to pre- vent the early strangling of this corporation; you can well appreciate that stock companies which have been in business for some time and have accumulated a considerable surplus, could, if so inclined, cut rates to such a point as to make the operations of a new corporation impossible. The Legislature therefore provided that all rates used in Massachusetts must receive the approval of the Insurance Commis- sioner, who is made the judge of the sufficiency of the premiums to be charged. The Act provides that the Association may by its by-laws fix the !imit of the extra assessments to which the subscribers of the Association shall be liable, providing, however, that the limit may not be lower than the amount of the cash premium paid by the subscriber. In other words, if an employer, a subscriber of the Association, pays $100 as a cash premium for his policy, he may not, in the event of excessive losses, be assessed for more than $100 in addition to what he has paid. All of the funds of the Association, however, are liable for the payment of its debts. At the end of each policy year the Association will cast up its accounts and ascertain whether employers who have been arranged into groups in accordance with the nature of their business and the degree of the risk of the injury, have paid too large a premium; if so, the excess is returned to them in the manner' prescribed by the by-laws. These, in brief, are the salient features of the State mutual (as it is populary referred to) in Massachusetts. It has considerably over 200 subscribers, who employ over 50,000 employes, and the premium in- come is now sufficient to enable the unqualified statement to De made that the project is an assured success. Acting upon my advice, the directors have established an emergency fund, which will take care of what may be termed the "catastrophe" hazard. If for any reason a catastrophe should occur in a plant, the law of averages m'ght be temporarily disturbed to such an extent as to embarrass the corpo- ration. By establishing this emergency fund, however, and maintain- ing it at a reasonable figure, this danger disappears. I am of the opinion, however, that the State having assured itself of the suf- ficiency of the premiums which its creation will charge, could, with perfect propriety, guarantee that the benefits provided for in its pol- icies would be paid. This at the most would amount to merely prom- ising to advance temporarily from the treasury the amount of the benefits until the funds have recuperated and have been restored to their normal condition. This of course is bound to happen if the premiums are sufficient. The advantages to the employers of your State by the establishment of a corporation s'milar to the Massa- chusetts Employees' Insurance Association, are numerous and too ob- vious to require an elaborate demonstration on my part. REPORT OP EMPLOYERS' LIABILITY CJOMMISSION 79 PROBABLE COST TO YOUB MANUFACTUEEBS. It Is manifestly Impossible to make an accurate statement as to the cost of a compensation plan in your State. So much depends upon the equipinent of the individual plants, the adequacy of the factory inspection laws, and the degree of risli of injury peculiar to each em- p'oyment, that at the best the estimate will be rather crude, but it will, I th'nlj, enable you to form an approximate idea of the tax which the Act will impose upon your employers. It has been the practice of liability companies in the past to quote their premiums on the basis of the pay rolls. In other words, an em- ployer would be to'd that he would have to pay $.60 for each $100 of pay roll for his liability policy. As the liability companies have been the vehicle for transacting workmen's compensation insurance, they have followed the same method in quoting rates for workmen's com- pensation policies. This, however, has served to inject an error into the calculations, and without desiring to make this report too technical, I will point out one or two factors which I think will make my point self-evident. One of the principal benefits of a compensation Act is the medical service which Is given dur'ng the first fortnight. Now as it ccsts exactly as much to give medical service to a c'erk earning $4 a week as to one earning $25 a week, it is quite evident that the cost of the medical service is not proportional to the pay roll, but should be expressed in terms of the number of employees. In the same way the establishment of maximum and minimum limits by the compensation Acts has served to render incorrect the use of the pay roll as a basis. Let us assume that the law prescribe that In case of injury the workmen shall receive half wages, but not less than $5 per week, and that we have two plants, side by side, engaged in the same busi- ness, and having the same degree of hazard; if plant A has 1,000 em- ployees each receiving $9 a week, and plant B has 1,000 employees each receiving $10 per week, it is quite evident that in case of injury the employes in both plants will receive exactly the same benefit. If, there- fore, we attempt to quote the premiums on the pay roll basis, plant A would pay only 90% of the premium which is charged to plant B. For these reasons, therefore, it is incorrect to base the rate on the pay roll, but as you will want to have some standard whereby you can compare the rates in the future with the present premiums charged for liability policies, I have reduced the rates to a pay roll basis for the typical industries se'ected by your chairman for the purpose. I have gone upon the assumption that you will want to allow injured workmen 50% of their wages, with a minimum limit of $5 and a maximum of $10. The following are the rates: so REPORT OF EMPLOYERS' LIABILITY COMMISSION Premitini per Occupation. $100 of pay roll. Asolialt pavement laying ? 1-95 Automobile manufacturing 1-23 Baking ^-27 Boi'er and iron workers ^■*' Printing and book binding l-"4 Brick manufacturing 2.06 Cnneries — not making cans l-^" Cipir manufacturing °2 Clf-tTiins: 80 DpnartiT'eTit stores "^ Iron f"iindrips 2. '2 Fiirni+nrR manufacturers 1-^9 Op!? ro'Tinnnies 2 44 pipftrip ^v^t companies •''•''5 Strppt rnilro'ids 5.15 L''i'nd'-iPB — band 1 'S I.piin-'rips — mach'ne 3 Og Paw miHs 4 4B LnmTipr yards (no saw mill) 1 "9 J.o^-P'ing 3 47 Pnripr b"yps 2 06 pipplngr rnill 3 23 PliiTvb'ng nnd tiPBtins: 1.V0 Pppf and pork napkins' fnn slaughtering) 2^0 Pfiiptnre stpe' mpnufacturing 5.21 Tplpn>ione companies 4.S9 W'>^or\ renair 1 23 Slansrbtpring 4 63 Airriciilturiil imnlement manufacturer 2-57 Oiiss and pa'nt dealers 90 Mp^'sI wi^eel manufacturing 4,22 Sash and door manufacturing 2.98 Street car axle 2.48 BT-ick and tile 2.05 Pottery 2.06 Coal m'ning (see below) Haying machinery manufacturing 2.57 Soap manufacturing 1.54 Brewery 2.12 H^irdware 1.24 Pumps 1.99 Pear' button manufacturing 206 Cereal manufacturing 2.06 Starch and by-products 4.09 Erecting iron and steel 9.75 Machine shop (without foundry) 1.99 REPORT OP EMPLOYERS' LIABILITY COMMISSION 81 I have examined the reports of the State Mine Inspectors of the first, second and third districts and have analyzed the accidents for the purpose of determining the prohable outlay caused by mine ac- ciients. I have made certain assumptions, and as a result find the following: Estimated Year cost of deaths. 1910 $ 42.000 1911 120,000 1912 39,000 $201,000 No deaths reported in second district during 1910. In examining the weeks of disability caused by accidents, T have no records for the year 1910 from the second and third districts. Omit- ting them I find the following: Cost of Year. disabilities. 1910 .• $ 1,020 1911 \ 7.480 1912 3,720 $12,220 In sending you this report I have attempted to give you mere'y the briefest outline of a subject which with its raniiflcations is a most com- plex one. I trnst, however, that it will serve your purposes. All of which is respectfully submitted. S. H. WOLFE. New York, Sept. 4, 1912. EBPORT OF EMPLOYERS' LIABILITY COMMISSION German Accident Statistics for 1887, 1897 and 1907 (U. S. Bureau of Labor Bulletin, 1908, p. 120) 1S87 Per cent 1897 Per cent 1907 P^r cent Fault of— Employer Employe , ,--.. Both parties Due to negligence of parties . Inentable risks, etc 20.47 26 56 8.01 55 04 44.96 17.30 29.74 10114 57.18 42.82 16.81 28.39 994 55 64 44 30 Causes in 1887 Per cent 16.81 28.89 64.30 1. Cause attributed to employer 2. Cause attributed to employe 3. Due to inherent risk of business. APPENDIX III SUMMARY OF REPRESENTATIVE IOWA ACCIDENT REPORTS 84 REPORT OP EMPLOYERS' LIABILITY COMMISSION SUMMARY OF REPRESENTATIVE S 1 Kind of Business Period report- ed g ■G 03 tt-i O d 13 Death Loss Dependents Death Loss no Dependents g h — ai Q * cBtS 2 d d 4J a d ■*3 s < ^ a. Paper Mtg. ? 2 3 2 2 2 2 1 2 2 r 1 a 2 1 2 2 2 2 2 2 2 2 2 2 li i: 9 < 9 e ) 1 1 1. i ) 2C 1 5 1 Wagon Mfg. ) Marble Works ! Sash and Door Mfg...i S Canning Co. < 1 Candy Mfg. 1 Imrlement Mfg. *1 Gas and FlPctric Liirht . 5 18 Gas and Electric Light 1 19 Wholesale Bread - . 2( 21 2S 21 24 2£ ?' 2f 2S 30 31 32 33 34 Mfg. Millwork 7f » 1 1 SI 6 Candy Mfg Pire and Tile . Brewing Co. Biscuit Co 1 s 1 $ 200. « Mattress Mfg. Pipe and Tile Broom Mfg. 1 1 Implement Mfg. ~~ Box Mfg. "~~"~~ 1 Bank Fijrtiires . " Planing Mill 1 2? 3 1 ~ Maehine Mfg. Canning Co. 37 P'Cklp Co 38 Silo Mfg. ' 39 Cigar Mfg. 2 2 2 2 2 2 2 2 2 2 2 2 2 4C Proom Mfg, 9 9 9 9 9 9 9 9 9 9 9 9 1 1 5 35 1 4 1 2 2 'J 1 41 Creamery Supplies 4 Sash and Door Mfg Bakery 3 4i 1 44 Silo Mfg. — ~~~~*" .-_-._ 4.^ Biscuit Co 4( Poultrv Food "■ _„— IW Mfg. Horse Collars Prnting Co. Candv Mfg. * " ""*■* ib;^ «;•' 9" Peed Mill ' 9' ProT>rietary Medicine Prf'wing Co. Biscuit Mfg 4> 4 2 9 2 9 2 9 2 9 2 9 2 9 2 9 2 9 2 9 2 9 2 1 2 9 2 9 2 9 2 t' 2 «. 2 9 2 9 2 9 1 9 2 9 2 9 2 9 2 9 2 9 2 9 8.... 2 9 3 6 b" Printing Co. . 2 b4 Shoe Mfg ._ 1 4 6 I P 11 ■T 2^ i 7 9 SB Blank Books 90 Foundry bt. Sngar Mfg. -__-_- «J Biscuit Co. . -..-_- ti" Dray Mfg. ---———_ _„„_ B4 Tile and Clay Products tron and Steel Works Skirt Mfg. _.. -— --.. 1 bl .„—.-_ .... . tiV Oyrsnm Prodpcts _ Milling and Grain Pook Binding ? 1 B 2.000 00 3.oro.oo -—.-___.. """""" 7P r Flour Mill K Shoe Mfg •1- •"andy Mfg. in Sflddlerv ) 1 2! r Sheet Metrl — - — — 78 Gas and Electric Light Foundry Putton Mfg. 80 L *■ til 8? Peed Cookers Pearl Button MJg Brick Mfg 1 . 4 . — Washing Machine 4. 1 . ._._ . — REPORT OF EMPLOYERS' LIABILITY COMMISSION 85 IOWA ACCIDENT REPORTS & S3 u O - 03 S6 ■3 ■■3 03 03 03 •O P a i o .-1 is, ■SeS i. a i .2 a O '3 ■3 a 3 •a a O f4 o a I 1 .. 13 B SO 174 10 48 20 99i 20 10 125 SO 12 108 f 2.00 1.00 2.M 2.60 2. '.5 .90 . 2.00 2.32 2.00 1.70 1.77 1..-.0 2.10 2.18 $ 26.00 9.50 76.00 452.40 22.50 43. aO 40.00 23C.84 40.00 17.00 221.25 45.00 25.20 267.84 $ 330.00 $ 35.00 $ B.OO $ 370.00 1 16 1 2 1 100.00 690.00 62.50 180.00 232. ao 2,819.93 450.00 105.00 1,8118.10 (8.45 34 61 1,145.00 53 00 209.88 264. C6 100.00 6 .00 13.50 63.00 20.00 149.00 160.00 81,00 25.00 50.00 3.1(1 00 7.'i3.0O 101.00 285.00 552.90 13 1 783,81 3,754.74 420.00 1 70 1 190.00 1,040.79 32,., 00 1,419.05 624 00 4,3.17.94 68.45 1 36 12.50 60 00 14.00 12.50 229?65 56.50 59.81 1,145.00 332.63 2 36 1.66 66.16 2711.38 264.66 1 -------- 6 8 12 3.00 2.00 1.95 18 00 16.00 23.40 3 40 00 79.80 16.00 66.00 9 134.40 160.00 214.20 i:o.oo 1 -. 2 184 42 10 2.75 2.06 1.75 2.00 6. .50 379.04 73.. iO 20.00 18 3 2.56.00 205.00 170.00 310.00 30.00 733. CO 235 00 1 9.0O 10. OO 10 00 7.50 9.00 36.00 46.00 10 00 1 - 1 S 1.30 6.50 11.50 19.00 1 10>.00 600.00 105.00 9 r 49 ]fi4 72 116 TO. 84 44 7 IS 1.70 1.90 2.00 1.50 2.16 1.77 1.S5 1.10 . 2.0O 83.30 311 .60 144 00 174 OO 1.56. 59 148.68 59.40 7.70 36.00 280 00 41 3.. 50 30,00 36.00 67 00 68 00 6.00 8.00 780.00 27 310.00 725.. 50 30 00 4 9'5.0O 60 00 103.00 140. CO 132.00 1 2 617.00 634.00 161 .00 143.00 2 9.25 17.26 75 00 232., 50 73 00 3 5 -. 1 10 31 2" is 30 65 468 63^ 6 76 238 6 246 2.45 M 2.00 1.86 1.15 1.70 2.86 1.92 2.60 2.17 2.30 2.50 3.00 24 .W 30.69 44.00 33.30 34.. 50 93.. 50 1,333.80 121 .9? 15.00 164.9? 547.40 15 00 762 60 30.00 18.00 20 00 25.00 282.50 43 09 2 91 00 75.00 50.00 264.94 91.00 1 73,00 4 B 60.00 45.00 145.00 264.114 1 1,350 00 125 00 15.00 22.50 1,3,50,00 7 6 139.77 157.65 422.42 15.00 8 33 108 57 975.00 10.00 141,07 975.00 3.00 102.25 6.00 15.00 3' 8 7.1 185 00 24 00 25 CO 60.00 IB 00 23 1,796.46 20.00 2,217.45 £03.00 1 18 15 34 1.35 2.60 1.50 24.30 37.. W 61.00 29.00 2 §4.00 60.00 75 00 90 00 (6.00 120 00 310.: 3 IWl 00 2 50.00 12.00 1,30 00 87.00 1 1 28 i" 1 36 94 305', 14 22 18 tl 2] 2.25 3 5(1 2.16 2.26 2.00 2 S8 1.82 1.75 1.49 3.35 81.00 84.00 657. f 3 81 64 44,00 42.84 81 90 21.00 81. -9 35.18 90 00 300.00 360.00 396.00 93.50 B73„50 310,23 7.00 15.00 86.00 7,00 1 4 1 4 1 211.00 285.00 75.00 871.66 61.60 49.50 275.. -0 841.00 73.00 26"o6 ssloo 871 68 112.60 REPORT OF EMPLOYERS' LIABILITY COMMISSION SUMMAPY OF REPRESENTATIVE Kind of Business " Period a report- 'O ed ai O m O O |H a IZi Death Loss Dependents Death Loss no Dependents BS ■gx) as 156 Lime and Plaster 169 Food Products 1£0 Canvas Goods Mfg 161 Extract Mfg. S4 Electric Light 96 Electric Light 98 Mfg. _ 97 Punishing Co. Publishing Co. Telephone Co. 101 Gas Plant 10' Gas Plant 103 Retail Grocery IM Publishing Co. 1051 Water Worts - 106 Gas and Electric Co.. 107 Water Works 108 Implements 109 St. R. R. & Power Co.. 111 Bottling Works 112 Electric Light 113 Laundry 115 Brewing Co. 116 Gas and Electric Light 117 Laundry 11? PuVhshing Co. llf Auto Repair ir Publishing Co. 12? Laundry 153 Laundry 124 Flectric Light '. 125 Laundry 12f Nursery 127 Electric Light . 12? Electric Light 1?9 Laundry _ ISO Book Binding . _ 131 Electric Light 13^ Electric Light 134 Publishing Co. 13' Flectric Light 13!" Laundry .13 Wholesale Seed Co. IS? Publishing Co. 13! Wholesale Grocery 140 Laundry 14" Wholesale Grocery 14'" Publishing Co 143 Laundry 144 Laundry 14.'^ Electric Light 146 Puhlishing Co. . 147 Hotel :~: 149 Mdse. Company 150 Hotel _ "■ 1F8 Electric Light 162 Advertising ..'.'.' If3 Cement Machinery I" 165 Gas Engine Mfg 151 Bridge & Iron Mfg. 1(6 Telegraph Co. ' 167 Organ Co. If? Brick and Tile 170 Ice Cream, wholesale 17" Sash and Door Mfg. 174 Creamery Co. 176 Buggy Mfg. Co.. 1„. 1. 1 . 1. 1 1 1 1 2,600.00 REPORT OF EMPLOYERS' LIABILITY COMMISSION 87 IOWA ACCIDENT EEPORTS-Continued s o is |5 is ■3 •3 03 OS fit 09 >i OS ■o .5 a oa 3 > a a: °o>. P •1 o a 1 b O II u 1 42 39 2.00 1.13 84.00 44.07 83.00 67.00 60.00 133.00 13 342 177. 1,003. 409.25 177.74 3 T 6 60 180 60 2 6 36 76 18 128 90 95 eo 28 7 90 13 6 78 63 30 2 12 2 6 6 24 18 S6 18 30 280 12 12 120 78 22 1.25 2. GO 2.00 1.50 2. to 2.40 3.05 2.25 2.25 1.47 1.66 2.00 2.16 1.75 2.90 • 2.25 2.40 2.50 1.16 2.6f 1.S5 1.25 2.66 2.i'6 1.66 i.oe 2.00 2.60 2.27 1.47 2.00 2.25 1.50 1.77 2.0O 1.52 2.33 7.50 120.00 SCO. 00 90 00 5.20 14.40 109.80 171.00 40 50 188.16 149.40 190.00 129.60 21.00 20.30 202.50 E8.80 15 00 90.48 167.58 55.00 2.50 •31.92 5.50 9.93 9.9f 48.00 46.80 81.72 23. 4B eo.oo 630.00 18 00 21. S4 240.00 118.56 51.26 6.60 1,009.95 120.00 1 120.00 420.00 1 155.00 676.00 1 1 7.00 2.60 9.00 247.26 221 .68 40.00 257.08 9.60 2 9.0O i 65.85 95.50 25.00 206.00 808.10 i 1 75.00 392.13 66.00 2 1 493.50 60 00 8,987.71 1,341.40 956.58 60.00 1 18.00 160.00 48.00 20 30 210 00 18.00 4,005.71 1,735.00 77.00 1 1 233.60 29.00 1 20.30 1. 125.00 336 00 1 75.00 93.00 1 1 206.94 32.5. 15 684 40 25.00 50.00 £75.00 1,180.94 825.15 8 1 1 16.00 60. CO 659.40 25 00 1 20.00 6.00 70 00 6.00 1 1 129.00 37.50 80.00 166 50 1 48.00 65.00 128 00 1 66.00 1 130.00 26.60 166.60 2 1 3 360.00 SCO. 00 1 22. CO 15.00 40.00 21.60 45.00 14.00 6.00 22 00 1 250.00 290.00 3 IfOOO 141.56 181.50 3 I 61.33 237.89 14.00 3 -. 4 ■ 166 14 14") 45 1.50 2.50 2.fO 1.85 1.25 6 00 390 OO 40.60 270 10 56.25 75.00 80 00 1 390.00 40.60 272.00 390.00 5 60.00 100.60 11 2 623 or 76.38 70.00 175.75 25.00 795. CO 75.38 1 2.0O 18 00 100 .TO 10.00 75.00 72.00 2 1 1 _ 2 19 S6 1.85 1.25 35.15 45.00 25.15 150.00 213.90 276.00 10,00 1 i" 180 36 1 6 2.00 1.60 1.00 1.50 360 00 54.00 l.OO 9.00 120.00 195.00 1.00 5.00 46.00 1.00 9.00 14 00 1 45.00 1 150 2.00 3£0.00 365. 7f 92. If 62.. 'iC 214.7- 507.7 300.00 665.78 92.18 1 10.00 4.20 15.00 216.00 328.55 66.70 229.75 10 9 1 379 lis 12 f,9 2.05 1.65 2.80 1.40 776.95 194.70 33 eo 64 so 73 00 21.35 796.79 349.90 450 ( 225.01 3 47.00 60.00 65.00 15.00 4.00 41.50 50.00 65.00 639.12 325.00 5 1 1- 50 2.50 125.00 130.00 800.01 364-.S. 815.00 368.80 "■""" "' " ^ 8S REPORT OF EMPLOYERS' LIABILITY COMMISSION SUMMARY OF REPRESENTATIVE Kind of Business Period report- ed CO a at '3 % 6 ' Death Loss Dependents Death Loss nc Dependents - li §6 o S 2i a d S5 1 14(1 2 2 2 2 2 2 2 2 2 2 2 2 2 3 3 3 3 3 S 1 3 3 9 e q 2 2 148 1CT Flpctric Light and W. W R5 Cement Co. 1 *" ?0" Plan'ng Mill 1 ?07 1 — _ ?0S Sash and Door Mfg Glove Mfg. 1 i 21,-) -III 2 16 1 3 1 1 211 Wholesale Grocery Metal Contractors Canning Co. 1 X 212 21 S 214 Steel Tanks — — - 21 B St. R. E. & Light Co ' 1S-^ Fridge Bldg 2 2 2 2 2 2 2 2 1 2 ? 2 ? 9 9 9 9 9 9 9 1 ""9 9 9 9 9 9 9 11 11 9 9 9 1 m Canning Co. 2 24 2 4 2 21 4 1 f< Box Factory " 51 Canning Co. 15'0 Transfer Co. — — 171 Culvert Co. * 17S Machinerv Mfg. 1 74 Button Mfg. IS Medicine Mfg 2 1 1 9 27 1 6S Brick and Tile 1 --___. ..... 18? Flectric R. R. & Light Co. Button Mfg. """- .— _. 1S6 Boiler Mfg. „ iSS Fl'-ctrie Light 1 r IfP Prick and Tile 9 :::- 1f7 Gas Co. } 2 2 2 2 2 IRf Sash and Door Mfg Glove Mfg. Brick and Tile Hardware Mfg. 76 8 ' 15 1 2 2 1 1 450.00 — 69 1 1 8,700.00 — — 47 SoaT> Mfg. ---. — ». ISO Flectric R. R 16 Mattress Mfg, 2 9 3.... 3.... 3.... 2 10 3. 3. 2 216 Electric Light & W. W... Hotel Shoe Mfg. a. Sugar Refining Co Paper Box Mfg ail 1 7 lf8 1!18 " •JW " g K'O 21 1 47 _-.-_- 1 2"1 AsTihalt Paving Co Sash and Door Mfg Laundry i!2!? 223 3 8 3 3 3 3 8 3 8 3 3 ■~3 3 8. 2''4 Brass Goods Mfg. * 225 Button Mfg. 4 4 4 - — " 2''f Soar> Mfg. .. ——_____ 227 Wholesale Liquors 1 """""*""•"" — 228 Pump Mfg — - — — — 2''9 Bottling Works --- 1 1 1 " — 2S0 Brick Mfg. 1 — ...... 2R1 Stock Poods — "- 232 Wagon Mfg. Specialty Co. Laundry Laundry — — ._ 2S3 234 235 — :i"~: aau Wholesale Bakery — 8. — .......... , ..^ 2 REPORT OF EMPLOYERS' LIABILITY COMMISSION 89 IOWA ACCIDENT EEPOETS-Continued g o S3 SI §« ■3'a n a [0 O l-l Hi V > a a i-i •a other contribu- tions u n On .-, CO o a 2 2 45 1.30 68.50 76.38 42.00 200.00 117.38 2OU.0O 609.64 629. UO SOO.UO 3,735.23 495.30 4,579.31 2,839.07 659.41 009.04 14 240 1.63 391.20 127.00 35.00 322.68 1,078.62 3.)6.00 3,733.23 1 90.00 40.00 1.644.01 93.00 Ub'.il 856.25 28.62 3,576.90 1,677 50 3,070 00 1.571.26 683.30 31 88 15 2 2 2 594 1,S68 162 2t0 312 2.16 1.89 i.to 1.15 2.17 i,£83.oi 2,585.52 307.80 299.00 677.04 4,806.22 6,339.33 684.03 3,575. !jO 14 1 638.18 8.')0.flO 4,800.00 77.50 72.00 779.21 229.07 li.OO 500.00 2,233.68 4,4.;o.oo 92 460 2.12 975.20 6,371.26 2 77.50 1 1 42 2.40 lOO.SO 25.00 64.00 151.00 779.21 2 15 1 -- 18 16 1 1.88 2.50 33.84 2.50 35.50 50.00 lO.OO 32.50 4.0O 213.30 ----- 1.13 478.07 50.00 25.00 2 3 .60 1 1 2.50 2.50 5.13 4,432.28 87.50 183.00 672.76 4,432.28 1 -------- 14 15 48 86 90 6 115 64 6 2.60 1.05 1.48 1.65 2.75 2.50 2.18 1.00 1.65 36.40 24.76 71.04 141.90 247.50 12. oC 250.70 64.00 !..i.O 65.00 25.00 152. iO 2 24 280.00 30.00 488.00 708.76 2 ' 4 too. 00 100. OO 300.00 100.1)0 90.00 9.90 19.00 450.00 25.00 700.00 2 11.75 b'.m 311.75 20 4 2,123.57 2,223.57 95.00 2 98.91 94.84 672.00 192.00 1,001.34 183.75 391 .57 2,736.90 75.00 791.20 108.81 113.84 1 9 25 2 143 9 210 30 2.20 1.61 2.85 1.70 314.00 14.49 698.60 51.00 25.no 7.00 1,147.1)0 224.00 1,001.34 1 1 14.00 4.00 51.00 65.00 187.75 391.67 73 3 2 16 2 26f. 23 €6 1,C62 160 1.08 1.10 2.03 2.30 2.10 478.80 25.30 19b. W) 2,442.60 324.00 487.60 8.00 180.00 465.19 126.50 482.73 25.00 275.65 181.15 325.00 3,707.15 108.00 1,1.6.85 640.34 431.50 2 462.68 462. (i8 78 2.05 159.90 2,230.00 400.1)0 100.00 2,250.00 400.(10 ::e: SO 21 171 1. 6 1.05 2.35 112. ;o 22.0.1 401.85 154.06 254.06 5 15S, 20 5,085.61 277.94 6i:0.02 30.00 665.56 7,011.69 307.94 3i) 8 330 2.36 778.80 300.00 lL-8 00 375.00 330.00 12].. W 184.40 240.00 120.00 569.90 141 ;6o 90.00 150 00 164.00 75.00 300. no 1 21 1.86 39.06 40.00 45.00 213.00 373.00 4 4 3 128 41 1.67 1.86 213.76 76.26 330.00 213.76 lOO.OO 335. 8 284.40 240.00 1 6 2.25 13.50 6.00 eToo 13 30 450.00 9. CO 13 .m 1,019.90 ] 6 l.fiO 9.60 13,00 141.00 90.00 " 1.^.0.00 164 00 1 76.00 90 REPORT OF EMPLOYERS' LIABILITY COMMISSION SUMMARY OF EEPEESENTATIVE t-l s Kina of Business Period report- ed a \a o a o d Death Loss Dependents Death Loss no Dependents g i If 3-1 o'p Eh ' i'l d d S > OS la S3 d d 2 o 1 ?P8 Brewing Co. - - - 8 3 1 999 Locomotive Mfg, . 35 6 1 38 51 6 2 1 1,600.00 ii 4.000.00 E SCO Sash and Door Mfg Milling Co 801 8 ' S02 Mlg. Co. 3 3 8 3 3 2 2 3 3 :::: 303 Mfg. Maciiines 304 Mfg. Tools SOS Brick and Tile 806 Oil Co. 307 Creamery Supplies — _ sot Five Packing Houses sireet E. B. Co 9 487 3 9 2 3,750.00 3(1!. 1 30S) Pickle Works """""" 8,304 15 $22,760.00 12 $ 4.000.00 63 •Unsettled. REPORT OF EMPLOYERS' LIABILITY COMMISSION »3 IOWA ACCIDENT REPOETS-Continued la , u 03 ^.§ s g-5 3 3 ■a O fl OS ■a P-O. •so 03 OS 0) > P. Wage loss temporal ability 11 '3' o '■s o si Op o o. B ll< t-1 .< . 1^ a o &H , 1 , . 425 00 2,470 O:) 20.00 750.00 445.00 28 j_ 408 2.40 979.20 7,282.56 10,502. .56 8 3 39 1.90 74.10 126.54 23.50 79.50 231.. 54 a 70 2.55 178.60 114.37 50.00 49.50 213.87 38 38 1.95 7^.10 293.. i3 20. UO S13..i3 51 473 00 173.66 107.00 48. 1« 00.00 640.00 3 ,16 , - . 1.05 16.80 221.66 4 30.00 5.00 180 00 445.50 210.00 2 162 2.;5 445.50 4,i0..i0 140.65 10,161.46 HO. 110 85 7,495 2.01 15,064.95 1,286.60 4.199.6S 15.647..i8 2 5 2,13 11.15 68.0(1 85.00 4,443.5.'. 4,511.55 85.00 _...._.- % 61,868.34 2,150 64 24,198 1 % 50,738.24 $ 100,107.89 % 15,949.31 { 178,725.54 94 REPORT OP EMPLOYERS' LIABILITY COMMISSION Number of accidents reported 2,3C Number of deaths where dependents 1 Amount paid where dependent $22,760.0 Number of deaths where no dependents Number total permanent disability Amount paid for total permanent disability $4,000.0 Number partial permanent disability 6 Number total temporary disability 2,15 Number partial temporary disability 6 Loss of time in days 241.9 Average wage per day $2 Wage loss for temporary disability $ 50,738.2 Liability Insurance reported $100,907.8 Amount paid for medical aid $ 15,949.3 Other contributions $ 61,868.3 Total cost under present law $178,725.6 10 employers carry mutual benefit amounting to $ 7,929.6 7 employers carry liab'lity insurance and also contribute to mutual benefl 70 employers v/ith a pay roll of 2,827 men carry no insurance. 15,589 men are under employers who carry liability insurance or contr bute to mutual benefit or do both. 18 per cent of employes work for employers not protected by insurance. REPORT OF EMPLOYERS' LIABILITY COMMISSION 95 APPENDIX IV COMPARATIVE STUDY or EMPLOYERS' LIABILITY INSURANCE INCLUSIVE OF ALL COMPANIES DOING BUSINESS IN IOWA. FOR TEN YEARS 1902-1911. f COUNTRY AT LARGE. SHOWING RESULTS FOR SUCH COMPANIES \ I IN STATE OF IOWA. TEN YEARS' RECORD OF COMPANIES DOING EMPLOYERS' LIA- BILITY INSURANCE BUSINESS IN IOWA. 1 Employers Liability Assurance Corporation. 2. London Guarantee & Accident Co. 3. Maryland Casualty Company. 4. Ocean Accident & Guarantee Co. 5. Standard Life & Accident Company. 6. United States Casualty Company. 7. New Amsterdam Casualty Company. 8. Fidelity & Casualty Co. 9. Casualty Company of America. 10. Empire State Surety Co. 11. General Accident, Fire & Life Assurance Corp. 12. Etna Life Insurance Company. (Accident Dept.) 13. Travelers Insurance Co. (Accident Dept.) 14. Frankfort Marine Accident & Plate Glass Co. 15. American Fidelity Co. 16. Travelers Indemnity Co. Travelers Indemnity Co. (Fly Wheel.) 17. Etna Accident & Liability Company. (F!y Wheel.) 18. Hartford Steam Boiler Inspection & Ins. Co. 19. Pacific Coast Casualty Co. 20. United States Fidelity & Guarantee Co. 96 REPORT OP EMPLOYERS' LIABILITY COMMISSION Number ■Sss n OQ ._ S M >> * CJ p O □ Oj p5E S'^ o c oj u 6- ■a o O 1902 1 2 1,132,878 798,935 1,093,237 683,883 456,848 860,440 2t3 ,549 84.7 85.6 67.7 46.2 38.6 63. 65.4 1,663,513 b59,lll 1,417,37!. 1,000, t9; 647,783 417, 8W 318,429 666,273 41,8,294 4; 6, 931 525,298 209,271 183,102 141, ot» 143,835 3,027 227,004 64,014 4,522 420,131 2db,2 5 389,133 243.647 1 6,112 111,588 96,982 249,752 113,703 120,601 120.636 90,676 102,022 6.,, 406 88.1 91.1 3 8i.( 4 . 93.; 5 70.. 82.' 7 to.i Total 6,593,770 63.3 6,324,77". 2,700,768 442,462 1,651,020 857,018 89., 1 . 1,631,212 ;S6.171 941,461 564,053 531,313 3J3,i55 237. 44S 1.555.232 30.7 Sb.2 60.7 46.4 39.9 38.7 66. 30.7 1,915, r26 1,194,892 1,329,9.6 949.903 645,265 444,929 331.08. 1,903.007 727,606 372,811 444,: 67 338,054 2 9,319 212,206 loO.b.'.O 849,761 173,219 133,478 223,485 124,184 47,8 22,072 16,771 157,270 484,652 278.081 331,856 228.001 153.184 108,389 82,180 421,257 288,423 130, i81 205,219 166,868 103.532 98,333 62,027 337,744 87.. 2 . . 77. a 97.' 4 . 80.; 6 6 81.1 99.1 7 8 94.: 9-.I Total 6,531,269 8,714,403 3,324,602 8.,8,S39 2,087,663 1,438,447 89.1 1901 1 2 1,510.242 786,674 883,343 695,118 B12,e81 35.,, 705 252,382 1,461 ,2o3 493.303 82.3 87.3 48.3 46.8 39.6 36.4 48.9 26.9 62.7 1,812.213 1,003,624 1,26'>.0 9 957. 4-i; 627,4.52 42.'), 792 318,338 1,770,904 603,981 681.266 430,457 464.231 334.931 2C8.084 lt3.71 131,118 888,014 50,930 178,293 138,4.51 230.915 130.(145 44.638 30.935 18,237 171,074 12,411 46^,722 207,834 294.733 226.413 171,626 112.204 74.205 384.227 124,179 306,811 101,378 233,994 170,<:60 88,130 94,591 61,7 4 338,954 111,131 90. 97. 3 104. 6 IIIIIIIIIII 80. 84. 6 . _- 91. 8 III.. Ill ~I 89. 100. 9 58. Total 6,856,911 63.4 8,093,761' 3,392,746 964,999 2,125,143 1,668,793 92. 1905 Total 684 657, £35, 1,421, 7,300, 333 84.7 8-i3 85.8 033 44.7 718 46.3 922 40.9 486 36.1 3.'i7 45.4 I,E1 24,5 603 69.6 202 28.6 172 49.6 1 ,961 .339 1.J12.004 1,159,323 9 4,135 671,145 408,272 324,234 1,643.612 769.694 126,26 9,100,28 717,207 329,334 435,832 326,395 207,435 131,688 123.73) 863.793 125,338 6,337 3,296,494 183,792 233,136 11,3„2 65,866 19,012 2 ,030 158,7fi2 29,782 2,072 726,644 524,110 286,241 271 .61 5 218.860 158,324 107,336 71,122 351,240 199,!.21 40.621 2,22j,640 223,6661 278,4851 204.886 206,603 123,422 75.624 70.849 93,103 148,284 71,728 1.498,655 For names of company, see list on preceding page. REPORT OF EMPLOYERS' LIABILITY COMMISSION 97 o 262,902 .56,958 97,191 l,lel,.J95 1,176,229 176,749 130,988 £09,017 127.378 71.i,64 28,8.6 22,480 169,617 44,308 8,383 '104.149 626,859 614.280 336,461 321 .8.6 245,577 173,483 103.207 84 .089 407,478 216,828 75,184 e0.(i22 611,050 987,984 0,231,076 1,739,768 4,238,074 3,357,297 213.648 78 242,306 £8 232, 84 99 253,043 98 181,487 89 151,186 105 70,864 82 485, olO 99 164,188 .83 97,41,8 104 114,835 125 321,229 84 831,127 SO 1907 1 2 4 IIZIIII! 5 6 .- 7 8 9 -. 10 11 12 13 14 15 Total 2,226,979 1,0.53, (,06 1,22.., 729 998,819 763,784 419,303 3 6,675 1,665,857 799,836 189,879 889.408 1,854,104 2,224,724 COS. 80 170,8.2 14,920,821 84.5 85.6 41.1 49.8 40.7 33. 46.2 20.7 51.9 27.1 44.2 65.6 64.3 93.8 53 62.6 2,570,441 1,443,20- 1,604,211 1,353,902 8.,8,95'. 447,242 424,720 1,940,619 921,182 300,521 395,994 3,010,470 5,045,7 829,13. 187,1c f. 498,633 678,381 625,502 329,190 178,331 170,753 143,050 371,; 67,219 143,725 1,438,156 1.487.3,2 313.647 35,494 213,880 185,667 224,81.1 143.183 106,984 43,416 23,756 181,566 51,755 21,038 31,323 132,978 892,71,6 3,775 12,057 21,434.68, 8,110,254 2,269,035 3,201,566 4,072 693,249 384,588 391, 57v 318.731 L08.858 114.627 102,37 435,528 231,519 92,546 117, 708.435 1,137,020 Ll4,260 60,894 469,104 238,603 iHS-i.'S-ii 201 .623 143,476 62,734 7o,3y6 322,632 204.770 86.183 344,713 375,893 905,217 157,266 28,873 1908 1 3 .1 2,555,436 1,131.3,53 1,207,603 980,013 777,330 4 2,629 298.603 1,690. .574 744,159 182,275 624,23') 2.083,323 3,507,410 6>.8,143 242,604 456 83.2 83.7 36.7 49.5 48.8 33.5 43.1 24.2 52.4 21.8 41.4 65.8 53.2 85.7 65.5 .2 2,636,69. 2,19 ,16. 1,671,863 1,340,447 932.680 471.618 401, .116 1,900.697 907.738 S 08,588 493,118 2,939,912 6,482,215 795,184 248,185 474 1,206,401 561 ,041 619,825 538,380 334,605 174,740 192,012 616,999 422,283 61,293 188,469 1,349,753 1,783,792 395,385 58.934 10 257,762 224,573 231,070 158,132 129,123 49,535 23,039 310,701 74.572 83.663 2,032 145.614 923.589 80.608 S3. 3.50 683,290 4m„393 404,838 312.653 220,889 1.3,078 97,851 420,603 257,833 58.099 92,. 530 702.543 1,082.097 202.. 542 79,088 13 613,580 28 ,929 290,022 215.998 213.401 107.536 87.791 428.372 242.692 79.. 599 195.570 444.767 964.847 167.110 36.617 153 96.4 70.3 92.4 4 91.3 5 98.5 6 . 96.4 7 . 99.8 8 92.6 9 102.7 10 101,. 9 11 96.6 12 94.7 13 14 - 73.3 106. 15 79.7 16 39.2 Total — 17,046,648 48.0 23, 767", 999 8,084,152 2.067.366 6,130,644 4.377,983 87.8 REPORT OF EMPLOYERS' LIABILITY COMMISSION ■•■ • ^±--—11 - - -u Number 03 S.S >i CO ill o ^ il CM 1 1 la i a M 01 u a) O f vam 2 ii"~n"i 3 2,657,123 l,iS4,7(.3 1,439,225 1,242,641 818,530 629,860 804, ,31 7 1,862,990 837,072 21j8,376 924,501 2,381,732 3,847,261 682,438 360,326 259 80.2 77.8 39.1 60.9 48.2 42.9 41.6 24.9 64.0 21.8 47.6 68.2 64.2 89.7 68.9 .07 3,S93,03( 2,068,400 2,199,209- 1,67^,310 1,049, 3l8 796,074 413,969 ',270,778 1,136,600 274,852 1,116,562 3,619, 5!l6 5,233, 37i 982,81.0 466,297 2ei 1,012,312 6t3,943 657,411 613,117 3tO,784 261,134 176,634 759,505 365,749 49,684 318, 76J 1,718,884 1,.5'),376 465,8!iO 83,423 261. C05 239,029 260,676 174,244 127,777 74,996 2i,4u6 330,831 199, L05 39,567 764,638 452,530 432,224 337,364 223,653 206,927 85,432 432,209 232,884 66,1.07 233,805 737,311 l,024,v98 il4,378 120,507 728,239 802,188 315,817 210,618 202,078 174,693 46,781 428, W2 183,540 74,469 309,995 427,884 1,176,276 182,873 43,557 74 4 5 6 7 8 9 19 12 184,693 931,570 80,725 82.763 13 . 14 15 16 Total 19,481,304 49.4 26,687,52- 9,460,011 2,942,807 5,658,047 4,781,277 1910 3,123,364 1,431,75', l,L3g,031 1,224, t09 981,88 717,132 406,469 2,303,339 1,261,542 209,967 I,0fcO,644 2,663,839 4,721,348 652. t08 669.288 31 ,403 358,897 135,6 ( 77.6 82.1 40.t 47. 48. t 44.4 46.4 28. 2 61.7 20. 49. i tO.3 67.4 84.5 70. 6.2 70.9 3.5 8,609,907 2,141,118 2,S01,27S 1,9:0,284 1,135,124 844,772 470,034 2,6 6,193 1,258.300 160,591 1,077,107 4,078,118 5,891,209 919,506 726,(54 9,(02 373,941 13.i,758 1,343,119 867,518 i65.644 699,891 600,207 403,268 207,038 t85,l,24 602,711 94,567 470,478 1,924,942 2,591,293 520,. 502 178,389 4,162 88,684 4,315 263,315 125,211 138,945 126,886 68,t81 64,374 18,500 363,655 72,916 19,347 20,672 502, 36 663, (66 87,673 34,631 1,640 28,987 4,4C6 914,115 627,180 490,952 369,476 334,600 230,1:04 112,039 650,384 352,544 21,319 477,560 885,219 1,357, 3n 226,996 217,707 5, 55 107,336 24,r.02 623.701 411,361 289,539 300, 74( 183,861 116,47,. 76.943 661,202 98,20-J 49,087 463,218 618,476 1,463,175 70,923 265,357 6,789 77,183 78,963 3 4 6 6 7 s . 10 IIIII 11 12 13 14 15 . 16 — 19 20 Total 23,633,36 49.9 29,666,49012,374,342 2,C06,840 7,306,369 6,738,209 REPORT OF EMPLOYERS' LIABILITY COMMISSION 99 BtBttitttSJd o) sassoi 4aS3 idi jamo Baoissini nj03 10} piBj; O o H CQ I— I H o1 H CO jnsnusnCpB JO }BO0 (N m CO OS ■* .-( N lWU9-*O>lft*NCC00 00 ^ iE ^ SB « i=- "^ ft eo w 3s 3S J3 « © -i<_ -N s ass '£ ■!!!"=! a Essss-; ^ -r "* op 1-4 IT I- 36 1- O ^ OJ I- I- CO I -q< (-1 00 — OlPSi-iW-ri-^O-^oyoo ICO-«ri 4riV« 3 OQ in -r 33 S ^ 3S OJ 1-1 I 33 rH * iccoMO'Mmcgosin'w iKi-t 5 03MI-H-1 O&lfilT sidpfoq sniriioiajti 4n90 jej stamtaajd BinnimaicI H^l-03iC>l«"i" O eooQ to r-1 «2 3tra554iMini-i-itoMt-i-HO 33 (-1 >0 lO OS 1-1 lO •* rH t- m « or-T a. - .'J ^ to lO 31 O I- L- -r r-l _ (30 OT i-i O ■* m r- O dO 00 0> 00 i" — 33 ■^ — "' „ S3 p-i riM 03 in o u3 03CM w oq r g CO tog c^ o in c» «o"i-i'i-i' oscoioeomooM'-iH oot^iooa w cot* C-CQCO^t)LaTKT}1COtOkOlC3aOi»rHO(Or-t 3 m 00 cc I - " J uu kJu;C0'fc0>Q0 h£D;iJMOt~-*03": ;i-t-io3Mic:Ococoo0330ii. C' --. - 5 O O 00 O ^"^ ty 3 ^ /I tg go *t< j^ ly O o-i »i I- CD CO 33 i~- ;o 00 < r ^ r>i (^ <^i la ■i oB O (M I- ICS ilf^W33O»—>OCQlQ0Qjwt'-i-t*kO00-<«« (((M-VN « - c q i O ea O) to I SI 2 •■S.S la" O IS P?iu DO w^ O 3 Go' SO"; sgsg ^^1= Kr-I SO< 1 >3 100 REPORT OF EMPLOYERS' LIABILITY COMMISSION a H M o O o 1X1 V) O I— I H O! H rH i W ^ '. ■ CI 00 1-1 31 eC* M* O I- 0> iH -W gU 1' I- 1 ■■6 K in c oo'cccocoi-if'o (O'rt -* •^ in" d r-Tin" in r-T d t» p9At8Dai l.-i-1sOCQ« (Mr-ilOC- lO '_-'"_iD_3i^=_« 35 Oc^QOOO 1- I- in 00 ■^ JOC:^tc cs,c 00 CO 31 ^ w'-^'fMlM'r-f doJOO r^CO '«)<" \n ^' OS eg ^' eg S e^ ee- 9t ■* i 1 i 1 1 i 1 1 1 N 1 1 1 1 1 i i i i i 1 1 1 1 1 1 1 1 1 1 1 1 N i i i N N ii i N 1 1111111 1 1 |S i 1 1 .' 1 1 1 1 1 1 1 1 lu 1 1 1 -=^ i i i i-" i i i i j 1 i^ j j 1 o o I .: -^ ! S O^ O ! ! . aS 1 1 !:!=!'! Liability Assurance uaranee & Accident Casualty Co. 'idem & Guarantee C Accident Co. sualiy Co i-rilam Casualty Co... ■' Casualty Co Co. ot Anier.ca Ins. Co. (Accident De Marine Accident & P Fidelity lo Deposit of Maryland enmity Co BiJty & Guarantee Co. 1 .5 6 p. a o o o B isualty Co asualty of N. Y. t & Liability.... am Holler Inspect nity ( y & Guarantee C . of America S^-lr.gSS Employers Lonlon G Maryland Ocean .\cc Standard 0. S. Ca New Amst Fidelity & Casualty Q'ravelers FranliJurt American Fidelity & Eoyal Ind Maryland Fidelity & Etna Accii Hartfor.1 ! Eoyal Ind Casualty REPORT OF EMPLOYERS' LIABILITY COMMISSION 101 SUMMARY OF LIABILITY INSURANCE STATISTICS. Tear la 111 *Per cent of same to en- tire business of company .if n V o| to =t s o =1 ■^1 o •ssa ercent amt. paid policy- holders to premiums ■' 1^ CU A< o Oi o i CM 1902 B. 693, 770 63.3 1 6,3"4,717 9,700.758 1 442,462 l,6.-il,020 8.57.018 89.4 42.7 leos _ 6.531,56. 48.7 8.711,403 3.324.f02 808, .339 2.0S7.013 1,488,447 89.1 38.2 1E04 . 6.826.911 63.4 8,693, 7t0 3,392.746 954,099 2,12.1,143 1,S68,793 92.4 39.0 KOi . 7,3no.i7-2 49.6 t, 100.282 3,296.494 726,644 2, 29,' 40 1,498,6,53 85.2 36.2 1E06 . 13,233. I£6 48.: 17,6nO,C75 6.231 .07.T 1,739,7.')8 4,238.074 3,. 357, 297 E8 6 35.6 aS'lT 14.9?0 8'1 62 C 21,434,089 8.110,264 2,- 69,035 5,201,668 4.072.083 91.! 37.8 1918 . 17,046,648 48. ( 23.767.99: 8,684 l,Vi 2.667,3(:6 5.1.50.644 4,377,983 87 f 36.5 1S04 19,451. SO' 49.' 21.c87.525 !i. 410. nil 2,942.8117 5. .5.58,047 4,781.277 86.. 3 35.4 1910 23,633,S(,.- 49.' 29,6(6,490 r, 374. 342 2.605,840 7.. 305. 3.59 5,738,201 94.." 41.7 1911 . 24.187.52- 44 ■■ 29,348,0i:e 12.767,584 70,332,01 3,397.084 18,840,334 «, 87 1,495 5,781,071 98.) 43. S 138,784,')7L 50. t 181,268,096 42,418,64, 33,520,833 91.9 38.8 *The sum ol the amounts paid by the several eompsnies for all pontingpnplfs to persons holding porcies, (hat for the adjustment of losses, and that for commissions for ob- taiu'ng business is deducted from the aggregate disbursemonrs for the year. Of the rema'nder ihus fonnd a percentpge is taken which is that which the buslni'ss of pm- rlovers' liability, fly wheel pnd workmen's collrptive bears to the entire business of the several companies, which proportion is that wh'ch appears in this column, while the amount thereof is found under the bead ol "Other Expenses." COMPANIES DOING BUSINESS IN IOWA Name of Company Premiums Received Lospes Paid Per Cent 1902 Fmployers LiaMlity Assurance Corp London Guarantee & Accid -nt Co Maryland Casualty Co Oceen .'Veeident & Guprantee Co Standard Life & Accident Co V. S. Casualty Co New Amsterdam Casualty Co 8.661.45$ 22,f63 1.5 5.182.94 14. .542. 15 2,665.31 1,223.. 56 1,442.48... 66,471.04 2.932.32 15.774 2,8P1.4fi 1,9.32.08 345.23 764. 34.2 69. 34.2 13.3 13. 62.5 $ •:4, 610.621 43.58 Employers Liability Assurpnce Corp. London Guarantee & Accident Co.. Maryland Casualty Co Ocean Accident & Guaraniee Co Standard Life & Accident Co U, S. Casualty Co .1 10,032.50, 25,333 29 6,153.74 18,856.40 6,223.23 1,1.2.16 2.819.58 10.804.28 3.2.51.19 3,6811.93 701.23 656.06 $ 67,791 .32 $ 21 ,813.29! 28.2 44 ? 63.6 19.5 11.3 46.6 32.1 1904 Emplovers Liability Assurance Corp London Guaian ee & Accident Co... Maryland Casualty Co..-. Ocern Accident & Guaraniee Co Standard Life & Accident Co EU. S. Casualty Co — • Casualty Co, ol America I 11,319.90$ S2,78!i J 6,363.32 15,678 80 6,0,32.31 81)8 87 6.52.50... 2,198.41 6.518.21 2,107.73 4, .598. 47 1,835.97 200.48 19,4 19.9 33.1 20.3 30.3 22^ 73,735.48$ 17,459.271 23.6 102 REPORT OF EMPLOYERS' LIABILITY COMMISSION COMPANIES DOING BUSINESS IN lOWA-Continued. Name of Company Premiums Received Losses Paid 1905 Employers' Liability Assurance Corp. London Guarantee & Accident Cc- Maryland Casualty Co Ocean Accident & Guarantee Co Standard Accident Co D. S. Casualty Co. Casualty Co. of America €,143.27 82, 18.8! e,4f8 1:' i8,9-:2 ee 7,040 SI l,SC."i.S( 73,311.50 1,907.30 11,473.06 1,931. re 8,013.77 1,122.36 594.3' 118.3, 25,163.461 1906 Employers' Liability Assurpnce Corp. London Guarantee & Accident Co.--. Maryland Casualty Co Ocean Accident & Guarantee Co , Standard Life & Accident Co U. S. Casualty Co Fidelity & Casualty Co - Casualty Co. of America Etna Life Tns. Co. (Accident Eept.) Travelers Ins. Co S 6,915 67 $ 2,099.74 39,3-0.25 21, 7(8. 4' 7.0f].46 11 .645 1 22.065 46 7,707.3- 9,076.68 s,n9.i- 1,546.18 1,394.6 ■ 6,279.28 3,r89.1f 3,434.83 7,57.].- 25,2t] 05 14,845.«l 30,983.84 24,969.9' $ 150,994.18 $ 91,293.6; 1907. Employers' Liability Assurance Corp.— $ 11,428 4' 47, .-3 3 8,f07.3 25, 233. n: 8, 199. If 3,371.7 6,279 -y 8,5.-0 IF 34,142 r 36. 504. 4-' 317. OC 3:4.24 ^ 2. 390. If 19,562.90 6 111.44 12,314 7f 6,198.18 ] ,803 74 3 OfQ.U 2.469 (S i3,rs-i 83 23,(74.46 21 London Guarrntce & Accident Co IV'aryland Casually Co. 61 Ocean ^cc'dent & Grpranlee Co i. Standard Life & Accident Co.-- 6' U. S. Cafualty Co Fidelity & Cesualty Co 31 5J Casualty Co. of America _ E(na Lite Tns. Co. (Accident Dept.) Travelers Insurance Co PranVfort Marine Accident & Plate Glass Co - American Fidelity Co _ "" $ 189, 630. to * 89,200.29 4' Employers' Liability Assrrance Corp $ 7,741.79 61,]-IS.24 16.5-il>.i? 12,5-0.21 9.st; jo 3, 'HI !'8 10,]7( .20 11, COS 1)4 4\F46 40 63.f6n 78 4,878 31 $ 4,024 97 40,805.00 7,812 3S 15 854 3f> 6.604.r 4.831 4- l.SOl E' 2.017 K 24, 711. 1.' 10,081 5- ,508 fi 5 Louden Guaran'ce & Accident Co --_ -- 6 Marylrnrl Casualty Co. Ocean Accident & Currantee Co Standard Life & Accident Co D. S. Casualtv Co 13 1 .7 Fidelity & Casualty Co. CasiifUy Co. of Amcrea I!tna Life Ins. Co. (Accident Dept.) Travelers tQHTrance Co. 1 1 American Fidelity Co. $ 234,811.43 S 118.852.9, 5 REPORT OF EMPLOYERS' LIABILITY COMMISSION 103 COMPANIES DOING BUSINESS IN lOWA-Continued. Name of Company Premiums Eeceived Lo.sses Paid 1909 Employers' Liability Assurance Corp. London Guarantee & Accident Co. - $ 10,207.58 52,964.82 20.t£4.12 3,li00.82 7,760.66 5,071.99 15,010.97 20,027.40 10 OO 1.749.87 56,608.09 40,033.40 145. t; 10,207.51 $ 2,865.27 30,115.20 8,188.47 6,li0.47 2,144.47 6,202.29 7,390.72 11,141.11 27.9 66.8 Maryland Casualty Co. _ 3S.9 Ocean Accident & Guarantee Co. _- 132. Standard Life & Accident Co. 27.6 U. S. Casualty Co 10 .5 Fidelity & Casualty Co. 49. 66.6 Empire State Surety Co Etna Life Ins. Co. (Accident Dept.) 29,]l6 68 10,436.39 51.4 Travelers Insurance Co. 26. Eri.nkfort Marine Accident & Plate Glass Co American PideLly Co. ' 926. to .9 $ 244,682.t8 $ 112,687.8. 46. Employers' Liability Assurance Corp. _ $ 7,445.16 67,5.j7.81 26.442.48 6,025.20 9,511.03 6,134.95 381.72 26,501.00 24,503.07 6, £61. 37 40,5.0.81 I4o.41 11,625.57 tie. 44 $ 4,991.47 49,649.58 18,110.37 3,7.8.81 9,097.30 4, £96. 02 25.82 12,440.00 14,183.36 6G6.00 29,234.13 67. London Guarantee & Acciaent Co. 73.3 63.4 73.9 95.6 D. S. Casualty Co. __ 96.6 Kew Amsterdam Casualty Co. 6.5 Fidcliiy & Casualty Co _ 48.7 67.8 10.3 Traveltis Insurance Co. _ _ - 72.1 Erankfort Marine Accident & Plate Glass Co Amer.CLn Fidel. ty Co. __ _ 6.E01.14 49. $ 230,563.01 $ 162,654.03 66.2 1911 Employers' Liability Assurance Corp. LonJon Guaraniee & Acciaent Co. . MarylEnd Casually Co. Ocean Accident & Guarantee Co. — Standard Life & Accident Co. U. S. Casualty Co, __. I\ew Amsterdam Casualty Co. Fidelity & Casualty of Aew York- Casualty Company of America Travelers Ins. Co. (Acciaent Lc»'t.) Amer.can Fidelity Co. Fidelity & Deposit of Maryland Eoyal Indemnity Co. O. S. Fideliiy & Guarantee Co. $ 11, 14V. 24$ 6,940.01 63.3 82,074.C8 45,301.88 55.2 33,219.14 32,610.18 97.7 13,533.54 11.301.11 85. 7,531.72 3,613.42 60.6 6,624.53 2,800.05 49.8 1,443.49 272.40 18.9 41,871.73 14,8:6.69 35.5 23,522.37 10,405.02 44.2 30,1,00.00 23,494.00 76. 18,037.80 7, .81. 40 42.. 6,078.20 1,303.46 21.4 4,9.6.74 711.88 14.2 514.11 $ 280,577.59 $ 160,297.88 67.1 SUMMARY OP BUSINESS IN IOWA. 1902 _ $ 66,471.04 67,791.32 73,735.48 73, oil. £6 160,964.68 li;9,6j0.90 234, £11. 43 244,082.18 230, 5> 3.01 270,577.59 $ 24,610.6. 21,613.;; 17,459.-1 26, 103.4, 91,296.05 £9,100.21 118,832.94 112,(87.87 152,6:4.08 100,297.80 43.5 lb03 - .- 32.1 1904 23.6 1S05 34.2 lice — 60.4 1907 . - 47. 1608 50.6 11,09 46. 1910 - C6.2 69.3 Total * 1,592,769.99 $ 814,036.84 61.1 104 REPORT OF EMPLOYERS' LIABILITY COMMISSION EMPLOYEES' LIABILITY INDEMNITY BUSINESS 1902-ril OF COUNTRY AT LAB COMPARED WITH THAT IN IOWA. Total premiums collected . Total premiums in Iowa Total losses (paid rolcy holders).. Total losses in Iowa Premiums collected Losses (paid policy holders). Premiums collected in Iowa - Losses (paid poLcy holders) - 185,346, -'Til l,5a2,7;0| «.& 70,354.118 814,0371 l.i: 185,346,2711 70,354,118 J8. 1,692.770 814,037'51.1 The Commission is not authoratively advised whether "Losses" in lo include only amounts paid to those holding policies and covers no ei mate of other expense. Amount of premiums collected l£02-19n _ . _ _ $ 185,364,271 Amount paid policy liclders . $ 70,354.118 16,842,3^6 70.3.M,118 42,418,W6 Amount paid for adjustment Amount paid policy holders 8a,i..0,5UJ 112,772,71.4 48. Per cent to premiums cohecied in Amount paid policy holders and for business 112,772.764 18,842.386 liums'foo ]65,]S9,870 Amount pa.d for adjusimtni Per cent to premiums Total losses 71, Toii.1 10 premiums 89. The amounts paid policy holders under employers' liability laws in 1911 _____ _. was 42.6% of total disLursements amounting to If the amount paid pol.ey holders in Iowa tears the same proportion for Iowa ijL.s.ncss lo total disburseuiems, the aggregate would Le. Bus.uess in low a Losses in excess Assuming that the amount paid for losses in Iowa Includes en allow ance lor adjustment of same, and that that amount would bear the same relation to total e-Npenses in Iowa that it does to bus.ness at large, which is 48.17c, the aggregate of losses iu Iowa liability bus ntss was Total premiums collected ^"..ll-l'.V."!"."!"." Net loss Again assuming that losses in Iowa Include amounts raid for getting the lusmess .n addition to that paid policy holders and that that amount bears tlie same relation lo all of Iowa business that it does to the aggregate of disbursements, which is eo.8,b, the total e.\ pcnse m Iowa would be Premiums received Premiums in excess . Again assuming that "losses" In Iowa Includes amounts paid policy holders, for adjustments end for busiuess, and that the same bears corres, ondmg relation to Iowa disbursements that It does to all, which is 71%, the Eggregate expense in Iowa is Premiums collected Premiums in excess j or I 70,354,111 16o,Uti,8.0 1.919.008 l,'i9^. 3l6,i>38 1,C9^385 1.592.770 99,615 1,338.870 1,. 592. 770 253,900 1,146,536. 1.092.770. 20.i REPORT OP EMPLOYERS' LIABILITY COMMISSION 105 WORKMEN'S COLLECTIVE INSURANCE BEFORE 1911. Name of Company Premiums Collected Losses Per Cent 1808 Pirtdity Casualty Co. Ocean 21.9 163.1 1909 Fidelity & Casualty Co. ? 195.40 7(3..i8 100 00 30.50 336.30 « 572.19 131.48 292.7 Etna Life 17.2 Maryland _ Standard 91 00 25.6 $ 1,444.78 * 794.67 55. 1910 Casualty Co. of America Fidelity & Casualty Co $ 212. Sf 23.2.^. .01 $ 2.13 23 3". 1. 100. Maryland - - - — — t 236.24 « 25.38 107.5 Total - $ 1.785.29 * 848.75 47.5 GRAND TOTAL OP PREMIUMS AND LOSSES, 1902-1911. Year .Is it ■a £ Oi 1 I ..-1 CO ga O in a .■2° a IS o ill r; « s ■1 si P.I 1902 $ 6,324,777 8.714,403 8,e«3.Teo 9.lr0.?82 17.530,675 21.434,089 23.7(7.099 28.fif7.525 2S.6(6,4('0 29.348.096 1 1 - 1 $ 2.700.7.')8S 44-''.462' S l.flSl.OmS 857.018 89.4 89.1 92.47 85.2 88.64 91.94 81.35 a5.54 84.5 t8.9 42.7 1103 IJ'04 ISO". ]9!'6 3.324,602 3,392,746 3,2E6,4!I4 6.253.075 8.no.3.';4 8.684.1.52 9.460,011 12,374,342 12.7.57.584 898,339 $ 9.51,: 99 726, (546 1,739. ".'.8 2,2(9,035 2.667.366 2, 942, £67 2.(0-<.S40 3,597,054 2,0f7.fi63 2,125.143 2,229,040 4,238,074 6,r01,5(6 5, no, 642 5,5,^8,047 7,305,3.-.8 e,i71,493 1,4C8,38d 1., ■:6s. 798 1,4:8,(55 3.3.-.9.297 4,125,075 4.379,983 4,781,-277 6.748.181 5.781.071 S8.1 39 36.2 35.4 1907 1 08 1!:09 19'0 1911 38.8 36.5 35.4 41.7 43.5 Total $181,268,396 $ 70,354,018 $ 18,841,336 $ 6,671,493 $ 5,781,071 98.9 43.5 106 REPORT OF EMPLOYERS' LIABILITY COMMISSION APPENDIX V ANALYSIS OF IOWA COAL MINE EXPERIENCE, 1901-1910. By J. A. Eddy S5 ■a Sp Os oS SS ■ag S° sS o u . tu . Oi o a o p. ^ ^ 1st .--, Snd ... 3rd .., 1st 2nd 3rd 1st 2nd 3rd 1st 2nd 3rd 1st 2nd 3rd 1st -., 2nd .. 3rd ... 1st 2nd 3rd 1st 2nd 3rr 1st Snd 3rd I'.t 2nd 3rrt 1901 1801 1901 1902 1902 1902 1903 1903 1903 1904 1904 1904 1905 1905 1905 1''06 1903 1907 1907 1907 IOCS 1 08 1908 1909 19<'9 1909 1910 1910 1910 1,964 1.870 1JS07 ,0M 123 ,C90 5,441,803 2,318 1,542 l,t63 2,883, 1,4l6, 1,835, 6,185,734 2,395 1,972, 1,816, 6,214,i 2.347,' 2,4(8.1 2,010,1 6,646,011 2, 648. .519 2,3r8,6-:4 2,040,342 7,017,48.5 2,843,023 2,4E9,305 2.23E, 7,568,405 2,ei3, 2,2.51,840 2,- 49.990 7,165,435 2,725,069 2,074.939 2,546,245 7,346,253 2,4''8.-67 2,1.18.111 2.63.'i.602 7,2''2..180 .%.310.058 66.512,2111 5,302 3,969 3,904 51, 13,175 109,114 143.8-6 2i9,(J70 295 305 558 25 35 5,937 3,187 3,878, 143,2071 210,776! 4,, 758 127,I6B| 347 539 103 298 13,002 6,3,59' 3,142 3. (.91 100, 25o; 262,152; 293,310 3l7,0 1, 678 628 738 13,192 6,796 4,530 4,9S9 294,100 184,267 246,. 565 184,638 16,315 7.250 4.994 6,3S0! 333,323 414.758, 182,7361 6281 523 566 499 1,036 110 17,t24 285.250 169 S72| 73,; 44[ 7,075 311 4,184 41; 5,566 39 lUl 3l{ 3i| 42, 16. S2. 7,089 4.5f6 6,430 1121 17,045 371 7,069 4.579 6.t64 87 17,312 S9, 7,213 87 4,?7 45; 6, .514 i:i[ 18,002 34; 7,411 44 4,327 ]7| 6,523 178,000 165.5.32 179,125 £55,042 243,716 316,891 207,442 159,721 722 734 442 322 695 216,240 176.906 2.50,205 ICO. 71 3 188,301 340.634 230,548 231,476 262,397 242.877 166. Ol\) 164,725 18. "ei 1771 '641, 87,445 913 160,753 185.100 205.000 192,200 787 377 388 687 471 509 404 456 901 475 692 741 833 4('7 480 171 107 205 148 165 48 ,121 16: 13; 205 166 110 151 64, 23, 61. 101, 167 78, 142 186 135 11 108 96 114 177 89 128 1.54 93 11 fi 12: 17(1 76 17 isr 122 128 68, 48, 55, CO, 66, 41.1 65,: 44,; 62,1 41 .( 71,1 48.1 61, i 51 ,( 72,1 43.- 53, ( 58.1 46.: i7.. 36.- 80.1 63,1 .50. ( 5::, I REPORT OP EMPLOYERS' LIABILITY COMMISSION 107 EXPERIENCE BY DISTRICTS. District 1st 1st 1st 1st 1st 1st 1st 1st 1st 1st 2nd 2nd 2nd 2na 2nd 2nd 2nd Jnd 2nd 3rd 1901 3id 1902 3rd - lt03 3rd 11.04 3rd . lijoa 3rd . 1E06 3rd ito? 3rd 1808 3rd 1909 3rd 1910 1901 1902 1903 lbU4 1906 1906 19j7 1908 1909 1910 1901 l.Oi 1903 1904 1905 1906 1.07 1906 1909 1910 •o e^ >i ea O p a !zi ^ a 03 TU ■oS V >> &2 &« IS B'" 6»s O P. O p. ^ f^ 1,964, OM 18 15 5,302 109,114 291 171 59,330 2,318,335 11 26 5.937 210,776 539 166 64,460 2,883,675 11 27 6,359 262,152 678 107 75,886 2,6 0,470 13 28 6,766 184, 2J7 6i3 166 66,426 2,347,360 7 32 7,250 335,3 3 1,036 160 00,188 11,909,000 60 127 31,644 198,000 627 169 63.600 2,648,319 16 44 7,075 165,532 442 108 14.1J2 2,483,0:23 9 31 7,0.9 315,891 787 177 71,075 2,6„3,o9j 15 37 7,0u» 170,901, 471 136 61,032 2,727,069 8 39 7, 13 340,364 901 164 .58,000 2.4.6,767 10 34 7,411 242,8,7 741 1".0 57,472 13, SCO, 000 58 185 35,8)7 230,600 619 148 54,700 25,209,IKJO 118 312 67,601 213,000 565 157 59,000 1,870,123 13 24 3,969 143,856 303 107 60,544 1,642,319 31 35 3,187 49,758 103 4t 23,370 1,460,603 6 IS 3,142 293, 3lO 6l8 13 i 63,7S5 1,972,623 i 33 4,530 246,565 566 HO 48,110 2,488,61,0 6 31 4,994 414,7:.8 832 13i> 66,117 9,340,318 6b 141 19.820 150,000 315 97 45,800 2,3 S,(,24 13 31 4,184 179,125 322 95 62,923 2, 48 J, 305 12 3S 4,. 526 207,442 377 69 48.609 2,:i5],i.4B 6 22 4,379 250,205 609 146 72,040 2,074.939 9 37 4,275 230,548 475 93 45,107 2,158,111 13 44 4,327 166,660 333 76 36,117 11,302,825 f6 173 21,891 202,000 391 96 50,000 20,643,143 11. 314 41,711 173,000 352 96 48,000 1,607,690 7 12 3,904 229,670 5£S 20.- 84.615 1,C53,]52 13 19 3,878 127,166 29S 121 51,6,0 1,835.456 5 IS 3,61,1 367,0 J 738 20., 101,969 1,840,386 10 23 4,98^ 184,038 499 151 55,931 2,0.0,101 11 37 6,3t0 182,736 489 lli 41,877 8,952,783 46 104 21,842 195,000 475 140 59,200 2,040,342 8 41 5,566 265,042 695 114 41,639 2, 36,097 14 42 6,430 159,721 388 97 39,990 2,249,990 14 38 5,664 160,713 404 109 43,400 2,643,245 11 45 6,514 231,476 692 116 45,360 2,635,602 16 17 6,523 164,725 407 176 80,000 11,708,276 63 183 29,697 186,000 471 123 47,600 20,661,059 109 287 51,539 190,000 473 130 52,000 108 REPORT OF EMPLOYERS' LIABILITY COMMISSION COMPARISONS AND DEDUCTIONS. District o a a a "3 1 ■a si £1 a ee 3 01 V oj ^H o a at u o a 1' 1st 1901-5 19(11-5 1901-5 1006-10 lS0«> a Written Sg >■§ 0) CD ss Sa ■sa >-a J3a £a Pi in ^ % SS 5- sE ■3 .a » 30 gp. h to H ^ &( &H 1902 $ 1.10 7.74 7.32 6.99 7.28 7.79 7.20 9.70 28.35 $ 19.93 19.39 18.12 2 .IJ 20.. "0 20.37 21 .ro 28.74 $ 18.04 12.03 13.15 14 96 13.91 11.32 11. i6 $ 6.68 8. (-.5 8.07 9.82 9.37 7.91 $ 4.55 6.52 6.02 6.U1 4.21 $ 60. 00 1903 64.14 1904 _ 65.97 1905 62.52 ltC6 — . - 68.97 It07 62.20 1£08 44.54 43.32 1910 - 3./. 70 Unallocated salaries and expenses carried to totals only. FIDELITY AND CASUALTY COMPANY. 1897 % 10.94 1-..12 11.75 10.30 9.92 9.79 32.85 12.88 11.03 11 75 13.47 10.47 12.22 r9.41 $ 20.75 22.56 20 45 22.10 20.82 19.21 20.02 50. )8 23.01 21. JO 17.98 22.98 24.38 $ 10.71 10 30 11.94 10.80 9.36 10.35 9.66 7. JO 9.47 7 84 8.14 22.18 $ 9.05 8 .56 7.98 6.27 7.20 8.96 4.81 6 83 6.76 6.78 6.66 % 6.38 3.70 6.68 4.83 4.0 6.44 6.81 4.38 S.8S 3.98 $ 66.81 1S9S 67.23 1899 67.81 ISOO 64.31 ISOl -— 1902 62.10 61.47 lt03 61.91 1904 . 61.96 1 05 . . 63.13 1906 69.74 1S.07 . .. 66.10 1908 66,32 45.32 1910 . " 47.32 Small amount of unallocated salaries and expenses carried in totals only. 110 REPORT OF EMPLOYERS' LIABILITY COMMISSION EMPLOYEES' LIABILITT ASSURANCE COEPOEATION. S n a Year Business Written ai tn am is ^5 BJ ED n Ss 11 f^a flS Sa a ■«& S& go 25 ■s .tjn go 30 a &i CO B lb ^ &( 1897 $ 11.27 $ 26.12 $ 12.28 $ 6.74 $ 2.50 $ 57. 1898 10.64 10 76 11.09 10., S9 27.00 26.77 24.61 26 IG 10.52 9.44 9.00 9.55 4.38 7.23 5.12 6.76 1.04 3.57 2.94 3.68 63 1699 67 ISOO . 52 1901 57. IW) 10. 7 J 23.27 8.38 6.14 1.99 60. 1903 10.96 9.46 8. SI . 9.80 10 37 8.36 20.93 20.99 21.72 23.54 22.15 21.42 9.25 6.B5 7.73 12.42 8.34 8.15 3. 88 4.79 4.82 4.83 4.04 2.31 2.08 3.37 2.04 48 li)04 _ 45 1605 ... 1906 63 ] 07 . 4,T 1908 39. 9.;1 23 40 22.86 1910 :::~::::::::~:::: : 25. Unallocated salaries and expenses subsequent to January 1, 1901, carried to totals onl; FRANKFOET MARINE, ACCIDENT AND PLATE GLASS INSURANCE COMPANY. 1897 1898 1S99 1£00 1901 lt02 1903 1£04 1905 1.06 1907 1908 1909 19.0 17.84 17.19 22.01 16.16 19.90 15 55 16.13 13.02 15 67 13.19 18.02 15.75 24.41 16.28 12.92 14.62 13.22 15.15 13.5) 12.66 9.82 11.47 9.23 10.93 11.16 11.85 4.29 8.30 9.16 10.51 8.47 7.61 6.93 7.91 8.50 9.79 6.71 1.74 12.81 6.26 6.85 6 48 3.99 5.53 5.03 3.18 64. 66. 71. 66. 64. 62. 49. 46. 51. 49. 57. 42. Unallocated salaries and expenses subseouent to January 1, 1902, carried to totals onl; GENERAL ACCIDENT, EIRE AND LIFE ASSURANCE CORPORATION. 18 9 $ 0.00 0.10 8.97 9.95 8.10 6.14 11.09 8.39 11.62 6.70 10.68 29.54 $ 360.46 $ 360. 19(10 " 1901 lii02 1903 26. C6 18.52 19.27 13.19 20.. i8 26.32 20.00 E0.31 26.83 $ 15.79 6.71 8.41 4.74 10.07 9.48 15.52 9.07 $ 14.13 3.71 4.13 8.43 4.15 5.84 B.flO $ 4.41 8.39 4.57 B.67 1.24 3.26 69. 47. 44. 38. 47. 63. 62. 36. 1 04 1S05 itoe 1907 It08 1909 87 140 1 29, CASUALTY COMPANY OE AMERICA. 1903 $ 1.01 4.85 3. 7 6.6^ 6 85 B.74 S.iiO 17.57 i 19.01 l.".e3 34.46 17.68 17.94 16.54 27.41 $ 7.71 11.32 10.35 14.00 12.78 8.43 * $ 6.06 e.to B.f6 8.49 8.64 $ 2.77 B.77 1.03 4.85 f 44. Bl 41 68 m »B 48 !3 1904 -. 1905 ]9(i« 1907 1908 liiOJ " ■■■■■■■■■ 1910 Unallocated salaries and expenses carried to totals only REPORT OF EMPLOYERS' LIABILITY COMMISSION 111 NEW AMSTERDAM CASUALTY COMPANY. .2 Year Business ."S to ■Zs CO 'us QQ Cll a 1 Written • - al >>§ at 0) d) sg g§ a >,B "S^ !>ig aa Sa- a go ■ 3 1* IS so 3 o 1^ CD ^ fH A B 1899 i $ 12.82 13.49 6.96 9.81 10.70 12.82 11.85 S.18 11.90 $ 33.65 26.50 20.40 18.32 16.11 • 11.52 10.33 16.20 18.18 $ 16.00 16 88 10.78 7.53 8.69 10 47 6.28 6 77 11.50 $ 15.33 10.53 4.(8 6.92 2.95 11 88 14.30 5.57 7.29 $ 8.65 6.66 6.65 5.29 2.21 4.06 8.04 4.54 $ 86.45 1900 73.08 lEOl . 62.69 1S02 47. £6 1.03 40.66 1!>04 . 60.74 1905 . — .... 45.80 1906 . 40.26 48.27 1608 1909 38 05 17.00 ■^2.49 20.28 ' ' 37.28 1910 - 22.49 AMEEICAN FIDELITY COMPANY. IfOS . .... $ 0.00 10.23 7.05 6.21 7.86 8.17 7.37 18.14 $ 9.22 15.97 19.56 12.37 14 42 15.74 21.56 $ 9.22 1904 $ 7.23 • 11.99 10.11 9.10 12.76 $ .11 2.10 4.42 33.33 1905 . 1906 1C07 . . - $ 14.20 9.37 10.il 47.91 42.48 41.58 13C8 - 36.66 1 09 30 80 1910 21.41 Unallocated salaries and expenses of 1909 and 1910 carried in totals only, MARYLAND CASUALTY COMPANY. 1898 $ 2.45 9.03 7.7.J 7.28 6.12 5.36 6 19 5.35 7.68 7.64 7.76 7.79 18.89 S 14.71 25.45 24.63 17.01 16.22 16.13 19.63 19.42 21.6-0 21.22 20.73" 19.16 $ 12.71 16.56 14.20 9.01 8.04 9.92 9.21 10 85 8.66 9.97 11.75 $ 4.99 9.98 6.77 7.01 6.35 7.88 8.08 4.93 6.21 7.07 $ 3.16 6.31 6.31 4.90 4.72 4.51 3.00 2.34 1.19 $ 38.01 1£99 1900 66.32 68.69 1901 . • 49.17 1602 45.43 1903 50 44 1S04 1 OS . ■ 63.16 48.98 ib07 iiiiiiini""..!" 60.26 61.70 1908 47.42 1909 . . . 33. CO IDIO - 18.80 Unallocated salaries and expenses from Jan. 1, l.Ol, to Jan. 1, 1910, carried In totals LONDON GUARANTEE AND ACCIDENT. 1897 $ 6.34 6.49 6.08 6.22 7.83 8.92 7..'i4 7.69 7.iO 6.71 8.68 9.72 9.81 27.(6 $ 18.16 16.88 16 08 19.93 22. C3 20.84 16.91 17.41 16 96 18.26 21.22 24.02 27.72 $ 11.27 10.73 14.19 13.91 8.80 9.01 7.56 7.68 9.16 10.08 9.66 9.37 $ 7.74 10.60 6.44 7.36 6.45 4..T0 6.81 8.11 6.22 7.90 6.14 S 2.18 5.19 5.73 6.15 4.65 3.83 3.19 2.63 3.82 6.30 $ 45.70 48.90 48.60 18£8 18S9 1900 . — _ 6" 57 1901 - 50 02 1. 02 . 47 68 1803 . 43 65 1904 . . 44.44 1905 . ItOS 46.ia 61.61 190? . 1. 08 48.18 45.41 1910 20.83 UnaUocaten (atariei and exxjensee subsequent to January l, lool, anied to totals only. 112 REPORT OF EMPLOYERS' LIABILITY COMMISSION OCEAN ACCIDENT AND G0AEANTEE CORPORATION. m CQ 1 Year Business "■S Is -Zs SS •S" a "Written ^§ a a oj a; £S 2ia ^ ■ga i-a S3S Pi It s& 3 33 SS •3 .tin so. ga o fe m Eh 1^ h 1899 $ 0.00 6.55 8.44 7.59 6.94 6.76 7.44 7.82 9.88 7.14 10.18 21.86 % 12A5 19. HI 29.39 19.31 17.33 17.71 £1.92 24.06 21.94 21.56 24.89 $ 29.72 12.33 12.75 9.07 8. 2 9.35 11.47 11.71 8.£6 11.00 $ 43.15 8.76 8.68 3.48 3.49 4 93 6.62 6.78 S.2J $ 16.49 4.22 S.64 2.97 2.32 2.42 3.43 2.88 $ 101.80 ItOO . 61.49 1901 62.07 1S02 43.69 1903 - 4.'j 03 ]!04 - 47.56 1605 . 64.19 Ii06 -. 67.89 3907 . 48.82 1908 44.70 1909 3.1.31 1910 33.57 Unallocated salaries and expenses subsequent to January 1, 1901, carried to tota PACIFIC COAST CASUALTY COMPANY. 1902 $ O'.CO 3.83 2.42 6.19 4.41 6. 87 7.13 8.49 16.97 $ 54.22 12.86 11.87 18.27 22.34 16.44 10,23 13.-5 $ 2.38 6.72 4.54 9 39 12.97 8.78 11.38 $ 1.77 2.51 3.54 4.52 6.59 5.39 1.69 1.4J 1.06 2.88 $ 5S.37 27.51 25.03 11,03 — It04 - lb03 It06 ... 49 55 1107 3y 24 1908 f SU 52 1,09 23. £8 1910 27.02 Unallocated salaries and expenses carried in totals oly. TRAVELERS INSURANCE COMPANT. 3897 18jS $ 4.85 3.37 4.28 4.85 6.:K) 6.77 6.74 6.50 6.37 4.98 6.81 6.04 7 !« 19.33 $ 12.06 11.45 in.SO 14 85 14.74 14.66 13,12 12,41 15.16 15.08 16.27 16.09 23.78 $ 7.63 11 (.4 8.89 If. 76 i:;.87 i.ol f.79 ( 20 10.99 " 12.41 12.11 11.98 $ 4.50 6.83 8.61 7.87 10.23 6.72 8.13 7.44 9.L8 8.82 7.80 $ 1.73 6.42 4.39 6,22 6.28 4.23 6.09 4.79 6.44 6.70 $ 40.16 47.06 45.12 •62.77 52.91 45.77 49.44 45.46 64.66 63.33 60.10 1899 ItOO 1901 1902 ... 1.03 1904 1905 1606 1907 1908 1.09 38.93 23.(10 1910 •Loss expense prior to 1901 not divided as to policy years, and included In second year's payments on business in 1900. Unallocated salaries and expenses subsequent to January 1, 1901, carried in totals only. UNITED STATES CASUALTY COMPANY. 1897 3898 1E99 1 00 1901 1902 1103 1904 1905 39(;6 1907 1908 1909 1910 10.28 31 2(1 8.90 9.18 11.06 7.57 6.76 8.26 9.01 8.19 10.72 10. '^.1 36.64 37.17 2^.42 20.86 £2,74 18,84 25,93 38.43 16.26 17. .53 16.91 21.59 22.18 20.89 36.64 6.36 9.46 11.19 7.34 38.67 6.86 6.84 7.53 » 15 6.90 8.14 6.63 3.74 4.57 2.53 6.71 6.95 3.79 6.17 4.17 4.61 7.24 6.13 3.24 1..57 2.89 2.26 2.36 3 04 S.27 8.64 2.14 1.81 46.04 47.71 43.24 44 32 61,65 37.69 37.11 40 13 40.81 43.. « 46.17 87.92 63.0S 87.17 REPORT OF EMPLOYERS' LIABILITY COMMISSION PENNSYLVANIA CASUALTY COMPANY. 113 tn CQ s Year Business ."S Ss, -"» Ss -"2 g Written ss t>iS ca a &lg So 03 sa ■ga ■♦■a aa- Sis a 2 0, s o f» CO &H ft f^ Eh 18'19 — , 1 CO ... IVul ... ItOi — ICOS ... 1!H:4 — 19(13 .- 19"« .. 1007 -. 1E08 .. Ii09 .. 1910 .. O.CO 21.83 .04 2.3i 5.37 3 49 12. C6 3. SB 4.49 5.71 6.32 13.i:6 $ 126.95 $ 31.14 $ 92.17 $ 7.95 10.22 7.54 .22 3.44 5.01 29 64 2.05 63.38 12.34 8.11 10.27 3.18 24 47 13 to 0.05 2.28 11 91 11. SI 6.2!i 2.80 24.65 18 M 14.83 9.33 25.47 21. S3 9.47 2.36 19. f6 12 94 16.(1' 21.60 8.55 25.06 258.31 43.21 90.67 Sli. i 46.76 si; 29 79 61 68 0! 52.69 44.15 34.51 21.22 Unallocated salaries and expenses subsequent to January 1, 1906, carried to totals only. STANDARD ACCIDENT INSURANCE COMPANY. 18' 7 $ 14 37 S..49 12.-5 9.49 12.15 11 98 11.47 10 86 9..J4 12.60 13.95 15 90 16 16 32.45 16.12 17 19 14.05 17 41 15.69 15 80 14.74 19.1? 22.30 18 30 17.33 27.15 B 9.61 6 36 6.19 6.07 8,70 9 76 6.45 6.61 7.87 9.23 9.53 8.87 $ 7.98 4.04 3.77 7..W 4.78 5.3) 4.07 5.(7 5.10 4.00 4.68 $ 3.49 1.8(1 4.38 2..i4 3 16 2.26 4.97 3.31 4 29 2.78 5 49 71 1898 1819 - 35.81 43 78 1900 38 71 1901 40.20 KG' 45 07 1903 42.76 1904 41.24 1905 - 46 03 1906 60.91 19(17 40.45 lj:08 4-' 10 1909 . . 43.31 1910 . 82.45 The comment is ma(3e on the foregoing that unallocate(3 salaries and expenses refer to tlie expenditures involved in the settlement of pay- ments or "losses" and are required by several of the State insurance de- partments to bf included 'n the report as a part of the loss. The technical- ly uninforme(i will find the less ratio as stated on business written in 1910 somewhat confusing and should note that the question of unearned premiums enters to an extent that renders the figures excessive. 114 REPORT OF EMPLOYERS' LIABILITY COMMISSION APPENDIX VII ACCIDENT COMPENSATION Relative Costs Due to Losses in Different States Imposed by the Old Employers' Liability Laws* (USED BY THE COMPANIES IN DETERMINING RATES) Bahama Arizona __-_--- Arkansas Cal.iornia Colorado Connecticut Delaware District Columbia riorida Georgia Idaho Illinois Indiana Indian Territory -. Iowa — Kansas *__^ Kentucky Louisiana . Maine ... ... Maryland Massachusetts .... Michigan Minnesota Mississippi Missouri Montana Nebraska- New Hampshire New Jersey New Mexico Nevada New York North Carolina North Dakota Ohio Oklahoma Oregon Pennsylvania Rhode Island South Carolina South Dakota Tennessee Texas Utah Vermont Virginia . Washington West \ irginja Wisconsin Wyoming 20 00 ,00 .00 ,00 1.00 .70 !.00 .70 I.SS !.00 •From Industrial Insurance in the United States, p. 187. Inasmuch as tliese payments constitute costs of production, it is readily seen that, from the standpoint of industrial competition, a decided premium is placed upon deliquency In liahility legislation. It will he noticed that with exceptions enough to prove the rule, the old slave states are the low ones In the list and that Iowa is not far from midway on the scale. An arbitrary scale of 2.00 is set tor the states where legislation and other conditions most favor the workman and others ara rated below in proportion. REPORT OF EMPLOYERS' LIABILITY COMMISSION 115 APPENDIX VIII COMPARATIVE STATISTICS SHOWING EETUKNS OF Railroad Employes' Accident Insurance RATSS IN GREAT BRITAIN CONTRASTED WITH Employes' Judgment and Settlement on Five Iowa Trunk Lines BRITISH HOME OFFICE REPORT, Cd. 3622, p. 11 1907 In the case of one of the iadustr'es coming under the Workmen's Com- pensation Act — Railways — Information is available as to the charge placed upon it by the Act. The following table, which is compiled from the returns furnished by the Railway Companies to the Board of Trade, shows the amount paid by the Railway Companies as compensation under the Act, including payments to Insurance Companies and to funds under schemes certified by the Chief Registrar of Friendly Societies to cover liabilities under the Act. 1899 1900 1S.01 1903 England and Scotland Wales ■- 97,480 17,972 3,397 126,808 10,502 2,717 133,249 17,U()8 3,671 125,498 13,595 Ireland . _ - - 5,062 Total 118,849 146,027 163,928 144,155 1903 1904 1£05 1906 Fngland and Wales Scotland . - 131 ,320 18.296 6,879 142,387 13.673 6.093 151,427 16.2.y2 5,469 164.000 18. .HK) 6.000 ^""^ 155,496 162,155 173,148 188,000 116 REPORT OF EMPLOYERS' LIABILITY COMMISSION Taking the Board of Trade returns as to the numbers employed, and the average weekly earnings, the amount paid as compensation in 1906 •works out at about 10s, 7d, per 100 of wages paid.* If the figures in this table are compared with the figures in Table 1, it will be seen that of the amount paid in compensation only about 8 per cent was the subject of proceedings in the Courts. Class ng railway employes according to wages from $50.00 to $125 per month the Federal Employers' Liability and Workmen's Compensation Commission (Rep. p. 145) gives the following percentage of annual cost to pay-roll on the roads of the United States. PEE CENTAGE OF ANNUAL ACCIDENT COST TO PAT ROLL. i, All Accidents .a §■3 = g a.Q el R Ph &, frH Per Cent Per Cent Per Cent Per Cent Per Cent (A) 1.0C9 1.345 0.574 .5i;6 0.0"7 .122 0.158 .279 310 (B) .388 (C) — 1.444 .736 .641 .282 .115 .042 .3.57 .144 .430 (D) .m (Ji) .702 .23 .041 . .139 .264 Total .979 .396 .065 .202 .316 Five lines in Iowa report to the Iowa Commission (the specific in- formation not to be published except In a combined general total) as follows: Total paid for losses 3,142,354 90 Aggregate pay-roll '." 234,514,762.42 Average to wages, per cent 1.3399 *Which is equivalent to 53 cents per $100 of wages. REPORT OP EMPLOYERS' LIABILITY COMMISSION 117 APPENDIX IX Speech of Right Hon. H. H. Asquith in Parliament, on the Workmen's Compensation Bill, May 18, 1897 One other thing. I do not see — and I never have seen — the Incom- patibility, frcm the point of principle, which appears to suggest itself to the minds ol some Hon. Gentlemen between proposals such as those which some of us were engaged in promoting three or four years ago, for the amendment of the law of employers' liability, and the proposals now before the House. They aim at different, hut at perfectly reconcilable and perfectly consistent, obiects. The primary purpose — although people may differ as to the method — of legislation as to employers' liabiity is, by fixing a direct personal responsibility on the employer for taking all precautions which skill and foresight can suggest against accident, to raise the average level of safety. The primary purpose of compensation, on the other hand, is to secure that every one who is engaged in what is called "the army of industry," shall, if he is wounded or f , his life is cut short, have se'cured to him and those dependent on him, an adequate provision to meet the necessities of the case. These are different objects, but they are quite compatible, one with the other, and I do not see why they should not be pursued at the same time. ("Hear, hear!") A great deal of reference has been made to the German system. In com- mon with most of those who are interested n Industrial questions, I have watched that system pretty closely during the past few years. If I had to state my own opinion of it, I think I should find myself almost midway between the conflicting viev/s of its champions and its critics. But I desire to point out the German system has noth ng to do with the proposals in this Bill, which is framed on entirely different lines. In the concep- tion and in the drafting of the Government's Measures, it is perfectly clear that they have deliberately, and for reasons which seemed good to themselves, abjured the German example. The German system is a perfectly logical attempt to comb ne the two objec's which I have described. On the one hand it does secure to the workman not only a title to, but an absolute assurance that he will receive compensation; because it does not make his enjoyment of compensation dependent on the solvency of his employer, but enables him to have recourse to the whole industrial group to which that employer belongs. On the other hand, the German system aims also at those objects wh'ch we have endeavored to pursue In our law relating to employers' liability. It has a "danger tariff" as it 118 REPORT OF EMPLOYERS' LIABILITY COMMISSION is called— and a system under which a higher levy of contribution is exacted for the common fund from the employer who, from the prevalence of accidents in his works, there is ground for bel eving does not take proper precautions. The German system may be very well suited to the economic and social conditions of that country, but its adoption here- resting as it does on the double foundation of compulsory grouping and centralized control — would require us to fly in the face of the tradi- tions and the living tendencies of British industry, (Cheers.) I thought that the government were perfectly right in discarding that part of the German system, although it must be adm tted that in so doing they have been obliged to deprive the workmen of a security which, under the Ger- man system, he does undoubtedly enjoy. Let us see how it works out. It is said that under this bill the employers will insure. I believe that in a laige number of cases they will, though there is no obligation to do so. In the text le trades, where the premium paid at present for insuring employers' liability is so trifling as to be an insignificant item in the cost of production, the burden thrown on the employer, even if that premium were multiplied five or ten fo!d by the Bill, would still be very small; and I do not doubt that in that large industry insurance will be very generally resorted to. But there are other trades in which you cannot predict with the same certainty that that will be the case. I mean, for instance, the building trade and coal mining. Take a case which I am sure is possible and even probable. Take the case of a coal mine in South Wales — one of these dangerous areas where, as we know, however great the precautions taken by the manufacturer, there is a natural and unforeseeable liability to disaster. Many of them are owned by limited companies of v/hich the whole of the capital is paid up. I do not believe that any of the insurance companies would insure an employer in that position againsi the rick of explosion; but, whether or not, I am certain that the premium which would have to be pa d for such an insurance would be larg... and would be such a heavy burden on an industry in which the margin of profit had reached almost the vanishing point, that the owner would rather depend on "the chapter of accidents" than avail himself of that insurance. Then what happens? Sooner or later the ex- plosion takes place and perhaps 200 lives are lost. The minimum payment under the Bill s L30,000j and it may rise to L60,000. What becomes of the workmen? The concern goes into liquidation and the workman has a right of proof for what it is worth, and I may say that there is no form of litigation su unsatisfactory as carrying in a proof in bankruptcy. The workmen may get a farthing or at the outside sxpence In the pound. Here I beg to assure the House I am putting no imaginary case, but one which is very likely to occur — ("hear, hear!") — and one cannot ignore the- prob- ability that the existence of a statutory obl'gation of this kind will tend to encourage the conversion of any bus nesscs at present carried on by private partnerships into limited companies, thereby, of course, reducing the margin which would oe available for compensation to workmen in the event of one of these inevitable disasters. I am sure that Her Majesty's Government and those who support them will agree with this as a very REPORT OP EMPLOYERS' LIABILITY COMMISSION 119 serious state of things, and as long as that is possible it cannot be said that we have solved the question of compensation for accidents. It may be said, what suggestions have ynu to make? I repeat that I think the Gov- ernment were right in the first instance in tryng the experiment of making the individual employer liable. But I am certain that when you have made that experiment you will find that you will be led to lengths which some people hardly anticipate. (Cheers) Let us fully realize where we are going. It you once establish the principle that if the eoldier in the army of industry is wounded or dies he is entitled in the one case to a pension, and in the other case that his dependents are to be provided for, you cannot leave the application of that pr'nciple to the hazard of chance, as to whether the captain of his company is solvent or insolvent. The liability you recognize rests not upon the ground that the employer is morally responsible; it rests on the ground that this is one of the burdens incidental to the trade, and that it 's a matter of general interest that men should not be left unprovided for who have devoted the best of their energies to the carrying on oM m to 15 1 D ■SfS 3 53 O 1 o Bisahility indemnity for non-fatal accidents Death benefits, at $3,000 .. 1,768 20 $ te.sso cn.Oflo 29.376 1,200 20 $ 67,392 60,000 25,478 AppnrTimate annual cost, with death benefits of $3,000 $176,256 $ 152,870 """"'"■ Cost if $2,000 benefits are paid $352,256 $ 128,870 There is a bare possibil ty that the assumed number of deaths per an- num is in excess of the actual number of fatal accidents, and various other reductions in the above esfmated cost doubtless could be effected by a careful study of the remediable causes of some brewery accidents, the application of actual experience to the formulation of practicable admnistration plans at the lowest expense consistent with the prompt and satisfactory handling of claims, and the material decrease in the cost of fatal accidents to employes having no dependents, in the case of which only undertakers' and doctors' bills are general'y pa'd instead of death benefits perhaps running as high as $3,000. These large death benefits, now generally recognized as eminently proper features of any fair work- men's compensation plan, are solely intended to serve as a partial in- demnity for the loss to the fatally-injured man's dependents due to his death. If the man killed had no such dependents, there is no occasion for, nor justification of, the payment of that death benefit. In short, I think 't ma> safely be assumed that the preceding estimate in at least two of the three factors named is somewhat in excess of the cost which actual experience will develop. In other words. If the brewery workmen's returns for the accidents Incurred by them in their works covered the two 138 REPORT OF EMPLOYERS' LIABILITY COMMISSION years named In the 'nqulry blank, the figures at which the probable approximate cost of the proposed plan of the workmen's compensation is placed in this report, are, very possibly, outside figures. Even assum- ing for the moment that the actual cost should be fully up to the estimated cost, the total annual cost of the proposed liberal plan would be but $4.41 per man for the supposed 40,000 brewery workers considered in the tenta- fve estimate, even on the most liberal basis of paying indemnity on all accidents in the work disabling for more than one week, and paying $3,000 death benefits. By no meant! the least of the many strong arguments in favor of the proposed plan is the fact that a study of every phase of the s'tuatlon leads to the inevitable conclusion that the total cost of the plan most assuredly would not exceed, and probably would be materially lower than that of employers' liability insurance for an equal number of brewery workmen. This conclusion is fully warranted by the rates recently fixed on breweries by the employers' liability companies for states which have adopted or are considering, new workmen's compensation laws. Here are some of those rates on brewer'es, with any discounts from annual rates deducted in every case: New York, 50 cents per $100 of pay roll; Illinois, Indiana, Iowa, Kansas, M.ssouri, and Nebraska, 40 cents; Minne- sota, North Dakota, South Dakota, Montana, Texas, Oklahoma, Kentucky, and Tennessee, 65 cents; Alabama, Mississippi, North Carorna and South Carolina, about 49 cents; Arkansas and Georgia, about 43 cents; Louisi- ana and Florida, about 33 cents. The average of these rates for breweries (with or wltliout bottling) in the various states is approximately 50 cents per $100 of pay roll; and, assuming that there are 40,000 brewery employes in his country averaging $18 per week, or $936 a year, the brewing industry mus* have annual pay roll of $37,440,000 and at the average rate of 50 cents per $100 of pay roll, or $5 per $1,000, employers' liability insurance even at the present rates would cost the industry substantially $187,200 a year as contrasted with the $176,256 which the proposed work- men's compensation plan would presumably cost on the basis of the outside estimates (1 week waiting basis) on a previous page of ths report, even though the death-benefits were fixed at the top-notch figure of $3,000. Of course the estimtated costs of both systems of workmen's insurance are calculated on the assumption of 40,000 employes at an av- erage wage-rate of $18 per week the year round. Any deduction in the number of brewery workmen, the'r wage-rate, or the average number habitually employed, obviously would proportionately decrease the cost of either system of workmen's insurance; but the relative costs of the two systems would remain the same. In a word, at even the highest tenatively-esfmated cost of the proposed plan of workmen's compensation, that system would cost the brewing Industry less by more than $10,000 a year than would employers' liability insurance at the present rates, (on two weeks basis, $35,000 less). And the chances are, most decidedly, that employers' liability rates w 11 steadily go up, rather than down, in the near future as a result of the general extension of workmen's compensation legislation. REPORT OF EMPLOYERS' LIABILITY COMMISSION 139 APPENDIX XIX Estimated Cost For the Country at Large The net cost, when the plan is under full swing, will not be less than $400,000,000. Under private insurance, as in Great Britain, fully 100 per cent is added for expenses. Each of the three systems named, (Ger- man, Norwegian, Austr'an) of mutual insurance under state compulsion, is operated at an expense of about twelve per cent of the net cost. "With the net cost at $400,000,000 this means a saving of the difference between 100 per cent 1. e. $400,000,000 and twelve per cent, i. e. $48,000,000, or more than $350,000,000 per annum. There is also the saving that a vast number of our citizens are not diverted from useful occupations to these which are worse than useless; snce it is also clearly demonstrated that, in every other respect, a system of mutual insurance with state compul- sion is more effectual, both in assuring the payment of the benefits and in the more important matter of prevention of accidents.' 'Miles M. Dawson, Actuary, Survey, April 29, Mil. 140 REPORT OF EMPLOYERS' LIABILITY COMMISSION APPENDIX XX NOTABLE OPINIONS WOODROW WILSON: "There must be a state system of Insurance. It Is all very well to enact a general law with regard to the compensation to be pa'd Injured employes, but what of the small employers and corporations? If they can't afford to pay this compensation then the security afforded by the law is of no avail to workmen." WILLIAM H. TAFT : "The doctrine of the common law originated when the relations between master and servant were comparatively simple; when machinery was not complex; when one man gave employment to comparatively few workmen and could personally supervise them to sjiard against accidents; and when all the employes of one man know each other, their habits and faults. It was not unreasonable, therefore, that the employe should be denied damages where he had been negligent himself, or had accepted service with a full knowledge of all the risks in- volved, including that of a fellow servant who might be responsible for causing accident or death. But today machineryis complicated and dangerous; steam and electri- city and not horse and hand power move the industrial world. In the railroad field especially the occupations of the men are extra hazardous, and there is deplorable loss of life and limb. No longer does the employer know the habits and characteristics of the employe; small business has become one oi" huge proportions. One great railroad system of the coun try employs one hundred and twenty-five thousand men; master and servant are nc longer in daily contact; supervision must be 'ntrusted to officers and foremen; the real employer is far removed from the work- men. Man today is injured through the inherent dangers of industry and the basis of compensation ought to be changed and made a risk of indus- try itself, so that the 1 ability will follow from the fact of injury. A few of the states have already enacted laws looking to the elimina- tion of the common-law doctrines. I should like to see the governors and legislatures of the various states try to reach a common basis for legislation. In many matters of no more v'tal consequence the states have sent representatives to conventions for the purpose of bringing about laws working In unity. REPORT OF EMPLOYERS' LIABILITY COMMISSION 141 The United States is far behind other civilized nat'ons of the world In worlimen's compensation. There are few countries where provision has not been made for workmen's compensation Independent of negligence." THEODORE ROOSEVELT: "It Is a matter of humiliation to the nation that there should not be on our statute books provision to meet and par- tially atone for cruel misfortune when it comes upon a man through no fault of his own while faithfully serving the public. In on other prominent Industrial country 'n the world could such gross injustice occur; for al- most all civilized nations have enacted legislation embodying the com- plete recognition of the principle wh ch places the entire trade risk for Industrial accidents (excluding, of course, accidents due to willful mis- conduct by the employee) on the industry as represented by the employer. Where the States alone have the power they should enact the laws. It is to be observed that an Employers' Liabil ty Law does not really mean mulcting employers in damages. It merely throws upon the employer the burden of accident insurance against injuries which are sure to occur. It requires him either to bear or to distr bute through insurance the loss which can readily be borne when distributed, but which, if undis- tributed, bears with frightful hardship upon the unfortunate victim of accident. In theory, if wages were always freely and fairly adjusted, they would always include an allowance as against the r sk of Injury, just as certainly as the rate cf interest for money includes an allowance for insurance against the risk of loss. In theory, If employes were all experienced business men, they would emp'oy that part of their wages which is received because of the risk of injury to secure accident insur- ance. But as a matter of fact, it is not practical to expect that th s will be done by the great body of employees. An Employers' Liability Law makes it certain that it will be done, in effect, by the employer, and it will ultimately impose no real additional burden upon him." JUSTICE HUGHES: "Our present methods are wasteful and result In injustice. Numbers of negligence cases are prosecuted upon a basis which gives r;he attorneys a h gh percentage of recoveries. Only a small per- centage of the premiums paid for insurance against liability is devoted to payment ot losses. As a result the workmen do not receive proper compensation and employers pay large amounts that do not reach them. There are ccnstitutional restrictions whch stand in the way of some of the remedies which have been devised in other countries; but the subject should be thoroughly examined to the end that the present waste and injustice should be mitigated to the 'fullest extent that may be found to be at once practicable and cons 'stent with the provisions of our fundamental law." 142 REPORT OF EMPLOYERS' LIABILITY COMMISSION APPENDIX XXI Synopsis of Recent Compensation Law Enactments Usually in this country legislative acts take effect immediately or at most a few months after adoption but the workmen's com- pensation laws are exceptional. A longer period of preparation and adjustment being here thought advisable the time for taking effect has been generally set from six months to two years ahead. Hence while such acts have been adopted in ten states within two years they are in actual operation as yet only in a few and in these eases have been operative only a short time. The people have had little opportunity to be come familiar with them. The movement toward the workmen's compensation policy has been closely connected with a movement away from the defenses of the employer at common law. In fully half the states of the union the defenses of assumption of risk, fellow service and contributory negligence have been either modified or abolished, and they appear generally to be the subject of increasing attack. The trend seems more and more to be to the question whether there shall be a naked repeal or modification on the one hand or a substitution of the compensation principle on the other. It is thought that much of the complexity appearing when these acts are first viewed together may be relieved by taking them not in alphabetical order or any like sequence but as grouped by lead- ing features: 1. Those providing an arbitrary flat relief rate with state tax and insurance. 2. Compulsory compensation; essentially automatic, protected by private insurance if any and with relief adjusted to a per- centage of the employe's earning power. 3. Compulsory percentage rates for certain hazardous trades and supplemental to the old liability rule as preserved for other occupations with private insurance optional for both. REPORT OF EMPLOYERS' LIABILITY COMMISSION 143 4. Compound elective; compensation (a) guaranteed by a state insurance fund or (b) with optional protection under ordinary employers' liability insurance or (c) with mutual and state super- tvised insurance added. Employes contribute under modifications of type 1 in Maryland and Montana and of type 4 in Ohio. , SUMMARY BY STATES. IN WASHINGTON the act applies specifically to extra hazardous works but the enumeration covers in addition all ordinary occupations where machinery is used and is elective as to all others.* The right of voluntary acceptance of the measure extends even to employers and worKmen en- gaged in interstate or foreign commerce, so far as not forbidden by act of congress. Extra hazardous employments enumerated in the law in- cludes factories, mills, workshops and plants where machinery is used, foundries, mines, logg'ng, lumbering and ship-building operations, ral- roading and allied employments. Other occupations not enumerated by the law may be declared extra hazardous by the Industrial Insurance Department and brought under the act. In all classes of extra-hazardous employments the remedies of workmen against employers for injures received are withdrawn from private controversy and a relief povided regardless of questions of fault and to the exclusion of ever.v other rem- edy. This relief is in the form of an accident fund to which each em- ployer is required to contribute a sum equal to a percentage of his total pay-roll according to a schedule of rates set forth in the law which varies according to the relative hazard of each industry. If any employer de- faults in any payment to the accident fund, the amount due shall be col- lected by action at law in the name of the state as plaintiff. In case of such default, the injured employe may choose between receiving compen- sation under the act or proceeding against the employer by suit. If suit is brought the defenses of fellow-servant and the assumption of risk shall be inadmissable, and the doctrine of comparative negligence shall obtain. No contribution to the accident fund is made by the workmen. Each class of employment is liable for the accidents occurring in such class, but is not liable for accidents happening in any other class. The amounts contributed to the accident fund are intended to be no more nor less than enough to meet current liabilities. The custody of the fund is placed in the hands of the state treasurer. Flat rate compensation is provided and is not based on the employes' earning power. In case of death a payment of $20 a month is made to the widow (or widower if invalid) during life or until remarriage and additional $5 per month for each child under sixteen, the total payment not to exceed $35 per month. In case of permanent total disability re- sultfng from Injury, the employe receives, during the period of such dis- ability, $2(> per month if unmarried and if married a maximum of $35 per month, depending upon the number of children under sixteen years * 27 Corp. Tr. Jour. 4. 144 REPORT OP EMPLOYERS' LIABILITY COMMISSION Of age. In no case shall the total sum paid for injury or death except ?4,000. Other amoun's are prescribed for tempora'^y or partial disability or In case of death, when the deceased leaves orphans or partly dependent persons only. • The administration of the art Is imposed upon an Industrial Insurance Department, consisting of thr^e commissioners appointed by the governor. It ascertains and establishes the amounts to be paid out of the accident fund. Any employer, workman, beneficiary or person aggrieved at any de- cision of the department may appeal to the superior court of the county of his re-sidence, in so far as such decision rests upon quetions of fact, but matters resting in the discret'on of the department shall not be sub- ject to review. Salary of board $3,600. The law took effect October 1, 1911. IN WISCONSIN the common law defenses of assumption of risk and the fsUow-servant rule are abolished in all actions against employers on account of negligence, but employers accepting tne compensation feature of the law are not deprived of these defenses if the employe chooses to recover by action of law. Employers having less than four employes, however, do not come within the scope of the law, neither do railroad em- ployes who are included in the comparative neg'igence act of 1907. The compensation feature of the law Is compulsory as to the state and its subdivisions and elective as (o all other employers. Such election on the part of the employer is made by filing a statement with the industrial accident board and may be terminated by filing notice to that effect at least 60 days prior to the expiration of the first or any succeeding year. When an employer has accepted the compensation plan, h's employes are presumed to have accepted it unlfss contrary notice is given. No reduc- tion of liability by contract is allowed. The compensation provided by the act includes all medical expenses reasonably required for ninety days and in addition to a payment based upon the earnings of the employe. In case of death, when the deceased leaves one or more persons whol'y dependent on him for support, the maximum if four times the average annual earnings, but not more than $3,000. In case of total disability, the compensation shall be sixty-five per cent of the average week'y earnings during the period of such total disability. If the injured employe becomes so helpless as to require the assistance of a nurse, the amount is increased to one hundred per cent of the average weekly earnings. No compensation is paid for the first seven days after the injured employe leaves work. An industrial accident board (salary of members $5,000) is created by the law to which disputes and controversies concerning compensation shall be submitted. Awards of the board may be filed with the circuit court for any county, whereupon the court shall render a judgment in accordance therewith. Parties aggrieved by any reward may commence in the circuit court for Dane County an action against the board for review of such reward, but the award may be set aside only on the REPORT OP EMPLOYERS' LIABILITY COMMISSION 145 grounds that the board exceeded Its powers or that the award was pro- curfd by fraur or that the findings of fact do not support the award. The entire act took effect September 1, 1911. IN ILLINOIS the law anpKes to certain dange'-ous employments, enum- erated in the act, and incluips construction or elrctrical work, transpor- tation by land or water and allied employments, mining and employments In which explosive materials, molten metal or inflammable fluids are handled in dangerous quantities or regarding which statutory regulations are imposed for the placing and using of machinery. Any emp'oyer cov- ered by the ael may elect to he bound by the comppnsat'on plan. If he does not so elect the defense of assumed risk and the fellow-servant rule are dpn'ed him, and contributory negligence shall be conslderd by the jury only to the extent of reducing damages. Eve'-y employer Is presumed to have accptiTfd the comnensation plan unless notice to the contrary Is filed with the State Bureau ot Labor Stitistirs, but he may renounce the act at the expiration of any year bv filing proper notice. Every emp'oye of employers accepting the act 's deemed to be bound by it unless notice to the contrary is filed. An employe bound by the act has no common law or statutory right to recover damages other than the compensation provided in the law, except in certain cases. The amount of compensation paid under the act Is based on the earning powpr of the emo'oye. In case of death, if the deceased leaves lineal heirs to whose supnort he had contributed within five years previous to the time of h's death, the compensation shall equal four times the average annual earnings of the employe, but not l^ss than $1,S00 nor more than $3,500. Other amounts are prescribed if the deceased leaves collateral heirs or no hfirs. In case of complete disability, the compensation shill equal one-half of the earnings, but not Irss than $5 nor more than $12 per week, for a maximum period of eight yea's, or until the compensa- tion so paid equa's the amount payable as a death benefit. Thereafter the compensation shall be for life at a rate equal to 8 per cent of the amount which would have been payable If the accident had resulted in death, buf nof less than $10 per month. No compensation is to be paid for fhe first v.fek of d'sability excpnt for necessary first aid, medical and hcsu'tal services, not to exc-ed $?00. Necessary services of a physician or surgeon shall be pail for during the entire pe'lrd of dhahility Com- pensation for partial disability or disfigurement is to be paid at lesser specified ratet. Disputes regarding compensation shall be determined either by agree- ment, or arbitration, each party selecting an arbitrator and the judge of the proper court, the third. Appeal may be taken fom the decision of the arbitrators to the circuit court or the court that appointed the third arbitrator. The law took effect May 1, 1912. IN NEW HAMPSHIKE the act applies only to workmen engaged in manual or mechanical labor In or on railroads, mills, factories and other employments enumerated as dangerous because in them the risk of em- ployment and the danger of injury caused. by fellow-servants are great 148 REPORT OP EMPLOYERS* LIABILITY COMMISSION and difficult to avoid. Any employer or workmen 'n the occupation enum- erated In the act may elect to be subject to the payment of compensa- tion to injured employes accordirg to a stated scale. If he does not elect to accept the compensation feature of the law, the fellow-servant rule and the doctrine of assumed risk are denied him as defenses and the plea of contributory negligence shall avail only when the fact of such contrbutory negligence is made to appear by a preponderous of evidence. An employer signifies his intention to accept the compensation plan by filing a declaration with the commissioner of labor, and must thereupon satisfy the commissioner of his financ'al ability to comply with the law or file a bond conditioned upon his discharge of all liability incurred under the act. An employer may at any time revoke h's acceptance of the compensation plan by filing a declarat'on to that effect. Even though an employer has accepted the compensation plan, his employes may choose between accepting the stated compensation or commencing an action for damages. In the latter event, the common law defenses are not denied the employer. The rate of compensation is based upon the earnings of the employe, being in case of death, when the deceased leaves relatives wholly depend- ent, a sum equal to one hundred and nfty times the average weekly earn- ings. In case of total incapacty the maximum rate is fifty per cent of the average weekly earnings, but not exceeding ten dollars a week, for three hundred weeks. No compensation shall be received for incapacity not lasting more than two weeks. Any question as to compensation arising under the act shall be deter- mined by agreement or in equ'ty. The injured workman or his represen- tative may recover compensation in any court having jurisdiction and any employer, who has declared his intention to act undep- the compensa- tion feature of the law, may apply to the superior court for a determina- tion of the amount to be paid an injured workman. The law took effect January 1, 1912. IN NEVADA the act applies to workmen engaged in manual or me- chanical labor in or on the erection of buildings or bridges requiring steel construction, the operation of elevators, constructon and operation of electrical apparatus, the operation of railroad locomotives, trains or cars, the construction and repair of railroad tracks, the construction and operation of mills, smelters, mines or tunnels and all work necessitating dangerous proximity to explosives. In all employments enumerated In the law the employer is bound to pay compensafon for injuries or death according to the scale set forth in the act, although the workmen may pursue any other remedy at law and disregard the provisions of the act. The common law defense of assumption of risk and the fellow-servant rule are abolished and contributory negligence shall not bar recovery under the act where the employe's negligence was slight compared with that of the employer. The rate of compensafon Is based upon the employe's earnings. In case of death, if the deceased leaves persons wholly dependent, the amount payable is a sum equal to three years' earnings but not less than two REPORT OF EMPLOYERS' LIABILITY COMMISSION 147 thousand dollars, nor more than three thousand dollars. " In case of total disability, the payment Is 60 per cent of the average weekly earnings each ■week during the period of disability, but not exceeding in all $3,000, Other compensation prescribed by the act varies according to the nature of the injury, and, In case of death, if the deceased left partly dependent persons or none. No compensation is paid for disability lasting less than ten days. In case of disputes over compensation the question shall be submitted to a board of arbitration, the employer and the workman each choosing one arbitrator, and the two arbitrators chocsing a third. Their decis on, if unanimous, is binding on both parties. On failure of the arbitrators to agree, ether party may apply to a court of competent jurisdiction. In effect July 1, 1911. IN NEW JERSEY the act mcludes all kinds of employments and all employers. The law is divided into two sections. Section one makes the question of the employe's wilful negligence one of fact for the jury, abolishes the plea of fellow-service and assumption of r sk and puts bur- den of proof of employe's negligence on the defendant. Section two con- tains the stated scale of compensation to be received by employes for In- juries sustained by them, provided both employer and employe have elected to accept this scale in 1 eu of any other method, form or amount of compensation. Every contract of hiring is presumed to have been made under section two, unless the contract expressly provides that section two shall not apply or unless either party gives written notice to the other prior to any accident, that the said sect'on shall not apply. Any contract for the operation of section two may be terminated on 60 days notice by either party. In all cases where either party renounces the stated scale of compensation under section two, action for damages mav hf> tried be- fore a jury. Where personal injury -s caused by the actual or lawfully imputed negligence of the employer, the doctrine of assumed risk, and the fellow-servant rule may not be pleaded as grounds of defense. Neither is contributory negligence to be a defense, except wilful negligence, which shall be a question of fact to be submitted to the jury, and the burden of proof to establ sh wilful negligence, shall be upon the employer. The rate of compensation to be paid under the act is based upon the wages the employe received at the time of the accident. In case of death, if the deceased leaves actual dependants the maximum rate is 60 per ceni which is paid to a w dow with five or more children. Children over six- teen are not considered as dependants and aliens residing outside of United States cannot receive compensation. For total disability 50 per cent of the wages may be rece.ved for a period not exceeding 400 weeks, but in no case shall the compensation be less than $5 nor more than $10 per week. For partial disability or loss of limbs other rates of compen- sation are provided. In case of disputes over compensation, either party may sumblt the claim to the judge of the court of common pleas of such county as would have jur'sdiction in a civil case, who hears and disposes of such suit Id a summary manner. The law took effect July 4, 1911. 148 EEPORT OF EMPLOYERS' LIABILITY COMMISSION IN CALIFORNIA the common law defenses of assumption of risk and fellow-servant rule are abolished In all actions to recover damages for personal injurj where recovery is sought on the ground of want of ordin- ary or reasonable care on the part of the employer. Contributory negli- gence of the employe is not a bar to recovery when it was slight com- pared to the negligence of the employer, but damages may be d minished in proportion to the amount of negligence attributable to the employe. In place of recovery through the courts, the act provides a schedule of com- pensation payable to injured employes regardless of the question of neg- ligence. The law applies to all employers, including the state itself and each county, c ty, town, village and school district. Employes of the state and Its political divisions are subject to the compensation plan with- out choice. All other employers and employes have the right to elect to become subject or not subject. Such election is made by employers by filing a statement with the ndustrial accident board, which binds him to the compensation plan for one year, and thereafter renews automatical'y unless the employer files a notice at least sixty days before the ex- piration of any year to the eftent that he withdraws his election to be subject to the act. Employes are deemed to be hound by the act unless they give notice to the contrary in wr ting. The compensation paid to injured employes includes necessary medical expenses for ninety days after the injury, but not to exceed flOO, and in addition ar. indemn ty based upon the earning power of the employe. In case the injury results in death, if the deceased leaves persons wholly dependent upon him, the maximum amount of indemnity to be paid to such dependants shall equal three timed the average annual earnings of the employe, but not less than $1,000 nor more than $5,000. In case the deceased employe leaves only partly dependent persons or no dependants, the ndemnitj is reduced accordingly. In case of total disability, 65 per cent of the average weekly earnings of the employe are paid during the period of such disability, which amount is increased to 100 per cent of his earnings during such period, if any, in which his Injury renders him so helpless as to require the assistance of a nurse. The total sum of payments, however, is not to exceed three times the average annual earnings of the employe. Other rates of compensation or indemnity are prescribed for partial dsability. No indemnity is paid for disability not lasting more than one week. Any dispute or controversy concerning compensation is referred to the industrial accident board, consisting of three members appo nted by the governor and confirmed by the senate. Salary of board $3,600.- Either party may present a cer-tifled copy of any award of the board to the superior court, which shall thereupon without notice render judg- ment accordingly. Awards may be reviewed by the super'or court and appeals taken from the superior court to the supreme court. The law took effect September 1, 1911. IN KANSAS the law applies only to railways, factories, mines and employments in which risk- to life and limb of the workman are inherent, necessary or substantially unavoidable. In such employments, all em- REPORT OF EMPLOYERS' LIABILITY COMMISSION 149 ployers by •whom fltteen. or, more ■workmen are employed may elect to pay the stated scale of - compensation prescribed by the law by filing a notice with the Secretary of State. Such election is presumed to re- new automatically each year, unless terminated by sixty days' notice prior to the expirat on of any year. Evei y employe is deemed to have accepted the act unless he gives notice to the contrary. If an employer elects not to accept the act he Is deprived of the common law defenses of assumed risk, fellow-servant rule and, contributory negligence, except that the latter shall be considered by the juiy in assessing the amount of recovery. Any employer accepting the act is not deprived of these defenses should he be sued by an employe who has not accepted the act, unless the injury was caused by the wilful or gross negligence of the employer. The rate oC compensation is based upon the employe's earnings. In case of death., if the deceased leaves persons wholly dependent, residing in the United States or Canada, the indemn ty is three timts his earnings for the preceding year, but not less than $1,200 nor more than $3,600. in case of total incapacity, the compensation is 50 per cent of his earnings payable periodically for a maximum per od of ten years during such incapacity, but not less than $6 nor more than $15 per week. Other rates of compensation are prescribed if there aie no dependants in case of death or if the incapacity for work is only part al in case of injury. No compensation is allowed for injuries which do not disable the work- man for more than two weeks. An injured employe's right to compensa- tion may be teim nated if he removes beyond the boundaries of the United States or Canada. Disputes regarding compensation may be settled by arbitration If mutually agreeable to employer and workman, and^the arbitrator's award with the consent to arbitration attached, shall be filed in the off ce of the clerk of the proper distr ct court. In default of agreement or arbi- tration, a workman may -enforce his rights to compensation in any court of competent jurisdiction. The law took effect January 1, 1912. IN MASSACHUSETTS the law creates the Massachusetts Employes Jnsurance Association governed by a board of fifteen directors appointed by the governor in the first instance, and therealter elected by the sub- scribers. Any employer in the Commonwealth may become a subscriber. Subscr bers shall be divided into groups according to the nature of the business and the degree of risk of injury. Subscrit)ers in each group pay annually such premiums as may be required to meet compensation for injuries which may occur in that year. The associat on thereupon pays all claims to which any subscriber may become liable, either under the stated schedule of compensation provided for in the act or as a result of any act on at law for injuries sustained by an employe. It any employer fails to become a subscriber to the association, he is deprived of the defense of contributory negligence, the fellow-servant rule and the doctrine of assumed risk, but these defenses are available to a subscriber If the injured employe chooses to claim his common law right of action 150 REPORT OF EMPLOYERS' LIABILITY COMMISSION rather than receive the stated compensation of the act. The law does not apply to farm laborers or domestic servants. The schedule of compensation is based on a percentage of the average weekly wages of the employe, being 50 per cent for a period of three hundred weeks, but not less than four nor more than ten dollars a week in case of death when the deceased leaves persons wholly dependent on him. In case of total incapacity the rate is the same, the maxmum period of payment is five hundred weeks, the maximum total payment, three thousand dollars. No compensation is paid for an injury which does not incapactate the employe for at least two weeks. An industrial accident board is created to administer the law. Salary of chairman $6,500, members $6,000. When an agreement is reached between the association and an injured employe in regard to compensa- tion under th ne- flts If injury resuiv ed from deliberate intention of em- ployer. Permitted in lieu of comrensation where employer wilfully fails to comply with a statute. Permitted in lieu of compensation If in- jury was caused by willful act of em- ployer, or failure to comply with safety law. Permitted for short term injuries also In I;eu of comprnsa tlon If employer was personally neg- ligent. Permitted In lieu of compensation if em- ployer was person- ally negligent. Not permitted Permitted with three defenses If employe does not elect com- pensation; without them If employer does not elect but compensation when elected by botb is exclusive. Approved schemes may be substituted. No waiver of com- pensation. No reduction of lia- bility allowed. Employer Employer Employer I. , Employer Employer Employer and em- I ploye jointly. Forbidden Employer and em- ploye jointly. Forbidden Employer ... Approved schemes may be substituted Approved schemes may be substituted Approved schemes may be substituted Permitted but em- ploye must elect on which to sue. Employer Employer 90 per cent, employe 10 per cent Employer Employer . Employer Employer To Be Compensated Disability Must Continue More than one week. More than two weeks More than two weeks More than two weeks More than two weeks More than one week (payment for first week If disability lasts more than four weeks). More thau one week More than 12 weeks; then compensated Jroin first uay if pronounced perma- nent. Any time. (Law fixes no minimum per.od) More than one week Then compensaLion from eighth day. More than one week More than two weeks More than two weeks More than two weeks Two weeks. 156 REPORT OF EMPLOYERS' LIABILITY COMMISSION n J f rSIS OF LAWS and DKAFTS of BILLS-ConUnued COMPENSATION FOB Deatb. Throe years' earn- ings: ^l.iNHi iiiin- liiium, fri, maximum, no dependents $100. Total Disability. $1.600 3.000 „ $75 fnneral expenses: spouse receives *:?0 niontlily until death or re-marriage: each cliilil up 10 three, $3 per month to age of 16. Widow lump sum on remarriage. lineal heirs tour times average an- nual earnings: min- imum $].3u.6a: limits, same as For death. 50 per cent of weekly earnings: $(} min imurn. $13 max Imum, for not more than 10 years. 60 per cent of average weekly earnings: maximum, $10 for not more than 300 weeks. 60 per cent of wages for 4(HI weeks: $'1 miniiimm, $10 max- iumui. 50 per cent weekly wages, not inorr than $10 or less than $4: maximum 500 iveeks or $3,000. 65 per cent of wages If nurse is renuired. lOO per cent after HO days: no total to exceed four years earnings. With maiming .$".'0 without maiming, .$1 per working day for 52 weeks after first. $1 per working dav during disalillity. o per month if sin gK $25 If married for each child up to two, .$5 per niontli until 16. 50 per cent of weekly earnings for eight years, not less than $5 or more than $1-. per week; after wards eight per ceni of deatb benefit loi life. Partial Disability 65 per cent of wage decrease: wages con- sidered and total payments same as for total disability. 25 to 60 per cent of weekly earnings: $3 minimum. $12 max- imum, for not more than 10 years. 50 per cent of wage loss: maximum $10 per week, not more than 300 weeks. Proportionate, fixed scale (sec. 11, c.) Medical and Surgical Aid. During first 80 days not to exceed $1U0. Only If employe dies leaving no depend- ents. 50 per cent Impair ment of wages, not aliove $10 or more than 300 weeks. 65 per cent of wage decrease: no total to exceed four year^ earnings. With maiming, $375.. Loss of limb or eye. $1,000. Proportionate; not over $1,500. If min or parents get luini' sum of 10 per cent. :o per cent of wage decrease, not less than $5 or more than $12 per week during disability or until amount equals death benefit. Only If employe dies leaving no depend- ents. During first two weeks, not over $100 First two weeks. For not more than 90 days. 'n maiming cases $1 per working day for 26 weeks after first. At rti.«cretIon of State Auditor. 30 per eent of bene- fits adiied for first six months of total temporary disal II- Ity: not more than (0 per cent of wages In all. Necessary during first eight weeks, not ex- ceeding; $.00. REPORT OF EMPLOYERS' LIABILITY COMMISSION 157 SYNOPSIS OF LAWS AND DEAFTS OF BILLS-Continued COMPENSATION FOE Death Ki per rent wages for six years, ininlimnn JI.SOO, ma.vliiiuin $3.4(10. rollnt(Tnl heirs prororltnnei) to support reerived. $150 funeral expenses; e«% per eent of wnires for six years: $1 .sno minimum, $3,400 maximum. Three years' earnings. $1.00(1 minimum, $0,0(10 maximum, no dependents $'0(). Three years' earn'ngs $3,000 maximum no dependents $100. 60 per eent of earn- ings for .^OO weeks: not over ifio week- ly; no dependents, $200, Total dependents four years" salary: not over $3.(H)fl: partial in proi'ortion. (563 per cent of wages until death If per- ninnently disabled: liuilt $3 to $12, ™ , X,, .-•,•» T, ,.• 1 T,- »,-i-t Medical and Surgical Total Disability Partial Disability j^jj 30 per cent of earn nines: not over $1.5 weekly nor for more than 10 years nnli'ss permanently totally dlsahled, 50 per eent of weekly earnings: $10 niax- Ininni tor not more than 10 years, 50 per eent of earn- ings for SOO weeks, not over $10 weekly 4 to $10 per week not exceeding six years. 66J per cent of wage Not to exceed $200, decrease for six years: $5 per week minimum, $12 max- imum: not over $3,- 400 In all. Proportionate; not First aid only, more than for total disability. 50 per cent of wage decrease: same lim- its as for total dis- ability, 50 per cent of wage decrease: same lim- , Its as for total dis- I ability. One half of the Im pairment of wngcs not exceeding $10 a week add six years in time. Only If employe dies leaving no depend- ents. During first two weeks; not over$l(X) Eeasoaahle during first two weeks. 158 REPORT OF EMPLOYERS' LIABILITY COMMISSION SYNOPSIS OF LAWS AND DRAFTS OF BILLS-Oontlnued Time for Notice and Cl^lni Notice In 30 days; claim In one year. Notice in 10 days; claim in six monttis. Notice as soon as practlc- aMe, and before leaving service; claims In six monttis. Notice in 30 days; in 90 days if employe can justify de- lay and employer was not prejudiced tliereby. Accident soon as practicable claim six monttis. Notice in 30 days; claim in two years. Appeal, 12 months after In- jury, six months after death. Claim in one year Notice as soon as prac- ticable; claim in six months. To be fixed by board Notice in 30 days; claim In six months. Notice in seven days; claim in 6 months. Notice soon as possible; claim in six months. Disputes Settled By— Industrial accident board; limited appeals to courts; salary of board $3,tOO. Local committees or arbi- trators; court review al- lowed. Proceedings in equity. Judge of comt of common pleas. Committee of arbitration, one representing the state: salary of t oard $3,000; chairman $6,500. State industrial accident board; appeal to courts; salary of toard $5,0C0. County commissioners; ap- peals lie to courts. State Auditor. Industrial insurance depart- meit; limited appeal to courts; salary of board $3, too. Arbitrators for each case; third appointed by county court. State liaMIity board of awards; limited ap;>eal courts; salary of board $5,000. Local arbitrators; appeal to courts. Local commission or courts- Board of Arbitrators.. Arbitation of courts -. Non-Eesident Alien Benefic- iaries of Deceased Worlimen $750 maximum except resi- dents of Canada same as U. S. Beneficiaries must be resi- dents of state. Excluded. Included. Only widow and children considered. Only father and mother eon- sideied. No mention; wor'-men leav- ing United Siatca forfeit coinpensati'in. $1,000 maximum, except to residents of Canada. Excluded. This table as prepared under direction of the Iowa Em- ployers' Liability Commission is founded on the summary of the Bureau of Labor, January, 1911, omitting the Minnesota Com- mission bill which failed and the New York act (found uncon- stitutional by the Court of Appeals) and with the act of Massa- chusetts and the draft of the Uniform Law Commissioners added. Massachusetts and some other States give additional compensa- tion of half wages from twelve to one hundred weeks where there is maiming. December, 1911. REPORT OF EMPLOYERS' LIABILITY COMMISSION 159 APPENDIX XXIII Mutual Compensation Insurance in Germany It was a painful experience for the German manufacturers — tlielr awak- ening to the sifnificance of the law — for it cost them, in the first two years of its existence, the sum of 150 million marks of compensations. But instead of allowing themselves to be crushed by these losses, or of rising up in rebellion against the law, they rallied their forces and indi- cated a determination to get the better of the situation. The first thing they did was to combine, realizing that the only safe- guard against the enormous debts into which the new law was plunging them lay in cooperation. The second was to form insurance companies — the safest way of unifying and making precise provision for large acci- dent liabilities. Employers engaged in similar trades formed insurance companies of their own, called Berufsgenossenschaften, (there is no Eng- lish term for this, except perhaps "mutual associations of Employers," but the connotation here is inexact.) The idea was that these companies should pay workmen's compensations out of the annual premiums con- tributed by the individual firms. The employers managed these com- panies themselves, delegating to them all the unpleasant tasks that the employers did not wish to take care of separately and all the responsi- bilities that they could not well shoulder alone. Of the functions that were delegated to them, the Berufsgenossenchaften have made such good use that today they are the most powerful factors in the industrial sys- tem. They act as intermediaries between employer and employe. They shoulder the entire responsibility of making payments under the law of the employers and they look out for the welfare of the employes; they are trade policeman, judge and jury, as well as executive head and legisla- tive body. E. E. Vom Baur in Pol. Sci. Quart., vol. 27, p. 471. REPORT OF THE EMPLOYERS' LIABILITY COMMISSION PART II. Public Hearings Pursuant to Chapter 205 Acts 34th General Assembly REPORT OF EMPLOYERS' LIABILITY COMMISSION MEMBERS OF COMMISSION. John T. Claekson, Chaibman Albia, Iowa. John 0. Staly Des Moines, Iowa. J. L. Stevens Boone, Iowa. W. W. Baldwin Bublington, Iowa. P. S. Billings Valley Junction, Iowa. Welkee Given, Seceetaey Des Moines, Iowa. Adolph Sandee, Repoetee Ottumwa, Iowa. TABLE OF CONTENTS i mes, E. G 32 Archbald, James 9 Baker, Howard S 66, 67, 68 Baldwin, W. W., memtier of Commission, questions by. 79, 80, 81, 82, 83, 84, 85, 86, 88, 89, 91, 93, 95, 121, 128, 129, 133, 135, 139, 140, 147, 148, 150, 151, 154, 155, 156, 158, 159, 162 Bartlett, C. L 124, 125, 126 Bettendorf, J. W 138, 139, 140 Bloom, H. L 96 Breene, E. J 73, 76 Burlington, Session at 147 Burt, B. D 108, 109, 110 Burt, Ross 87, 88, 89, 90 Burtonsmlth, R. H 59 Campbell, A. K 11 Case, Charles R 34 Cedar Rapids, Session at Ill Ciierry, W. W 112, 122, 123 Clarkson, John T., member of Commission, questions by. 8, 11, 13, 14, 15, 17, 18, 21, 26, r", 31, 37, 38, 39, 40, 41, 42, 43, 44, 45, 46, 47, 50, 51, 52, 53, 54, 55, 56, 57, 58, 61, 61, 65, 66, 68, 77, 78, 79, 80, 81, 82, 83, 85, 89, 90, 91, 92, 94, 95, 98, 100, 101, 105, 106, 109, 110, 111, 113, 117, 118, 119, 122, 123, 124, 125, 126, 127, 130, 131, 132, 133, 134, 136, 138, 140, 141, 146, 147, 148, 149, 151, 153, 156, 158, 159, 163, 164, 176, 179, 181, 182, 183, 184, 185, 186, 188 Collls, Geo. J 99, 100, 101, 10'6 Colvin, H. A 36 Council Bluffs, Session at 35 Davenport, Session at 127 Deets, J. F 97 Dentz, E. C 160 Eenz, E. C 163 Des Moines, Session at.. 7, 14, 16 Doods, W. E 10, 11 Doolittle, W. T '. 8 Dubuque, Session at 98 Dunn, P. T 122, 123 Dunshea, W. H 112 Dutton, H. a 140, 141 Emery, R. D 16, 17, 18 Ely, N. V 127, 128, 129, 130, 131, 132, 134, 135 Erickson, H. L. ..93, 94, 95, 96 Fendt, Harry 135, 136, 137, 139 Florang, E. A 160 Fort Dodge, Session at 69 French, Nathl 141 Gardner, Edward 141 Conner, Nicholas 101, 102, 106, 107 Green, R. 70, 71, 72, 73 Grupe, W., H 163 Hedges, Geo. F 126 Heindel, Geo. F. .165, 176, 179, 181, 182, 183, 184, 185, 186, 191 Hibbard, J. M 38, 39, 40, 41, 42, 43 Hills, Robt 11 Johnson, J. L 75, 76 Johnson, N. R 56 Kent, C. B; 117, 118, 119, 120, 121 Kimball, W. H 36, 37, 40 TABLE OF CONTENTS Knight, B. F 51, 52, 53, 54 lieopold, Carl 160, 162 Lockwood, S. H 55, 56, 66 Loomis, J. C 112, 113 Lukins, J. A 164 Mahon, Samuel 189 Marsh, W. W 80, 81, 82, 83, 84, 85, 86 Marvin, F. H 33 McDonald, J. M 103, 104, 105, 106, 107 McFadden, J. M 98, 110 Mead, J. C 138, 141 Meers, J. A 8 Mauser, W. S 110 Michael, F. M 93 Millard, Geo 151,152, 153, 154, 155, 156 Miller, Geo. W. ..77, 78, 79, " 80 Miller, J. C 96 Minnick, W. C 186 188 189 Moore, 0. J 60, 61,62 63, 64, 65, 66, 67 Moore, S. D 90, 91, 92 Morey, D. F 165 Mulroney, W. V 73, 74, 75 Noelke, E. C 147, 148, 149, 150 Ottumwa, Session at, 164 Packer, L. E 57, 58, 59 Patten, Chas. E 32 Pinney, E. E 112 Poe, A 123 Porter, J. F 133, 134 Pratt, Charles A 18, 21, 26, 27, 29, 30, 31 Pratt, H. M 75 Bathberger, Max 108 Reddington, Ray 97 Roberts, C. A 75 Saunders, C. G 47, 50, 51 Shelly, W. H 156, 157, 158, 159, 160 Simmons, F. W 190 Sinclair, R. S Ill, 112, 113, 117 Sioux City, Session at 55 Smith, Malcolm 112,113,117 Staly, John O. member of Com mission, questions by 18, 40, 41, 42, 43, 46, 54, 57, 60, 61, 71, 72, 75, 108, 109 St. Boniface League, Father Heer 107 Stevens, J. L., member, of Com- mission, questions by 14, 15, 18, 29, 30, 31, 35, 36, 37, 38, 39, 42, 43, 44, 46, 47, 51, 52, 53, 56, 58, 59, 60, 61, 62. 63, 64. 65, 66, 67, 68. 69, 70, 71, 73, 74, 75, 88, 89, 91, 94, 95, 96, 101, 104, 105, 106, 107, 110, 111, 112, 113, 117, 119, 120, 121, 136, 137, 138, 140, 147, 148, 149, 150, 151, 152, 153, 154, 155, 156, 157, 158, 159, 160, 164 Stewart, S. "W. 31 Tackaberry, W. E. 59, 62, 66, 68 Taft, John H 123, 124 Towne, Orville B 35, 36 Turner, C. E 150, 151 XJrick, A. L 191 Warfield, L. W 14, 15 Waterloo, Session at, 77 Waterman, H. L 185, 190 White, John 11 Y/hitlock, K. A 46, 47 Willigies, August 65, 66 Wood, M. H 44, 45, 46 Wrath, J. W 92, 93 Wrightman, G. A 7 FIRST SESSION— DBS MOINES Des Moines, Iowa, March 18, 1912. Commission met in Room 22, Capitol. 2:00 p. m.. Chairman Clarkson called the meeting to order. Mr. G. A. Wrightman, representing the State Manufacturers Associa- tion, makes the following address: Mr. Chairman, gentlemen: I did not come to this meeting of the com- mission with the idea of talking at all, and the reason why I came that way is, because the manufacturers of the State have not spoken as to the position that they take collectively in regard to this matter in hand. The manufacturers of the State will meet in May in their annual convention and at that time it is to be thoroughly discussed. It is the leading question of our tenth annual convention and we hope at that time to possibly address something to the commission in a definite forpi. But now, I understand the commission is about to enter upon a distinct and wide investigation and series of hearings for the purpose of having manufacturers, and others, of course, but manufacturers have the op- portunity of coming individually, in each locality and giving their in- diviaual views and opinions to the board, and that, I think, is by far the most valuable thing that the manufacturers of the State can do. I think it is more valuable than the collective because that is apt most always, to be more or less of a compromise of various views while the individual views of manufacturers will undoubtedly be given at these various meetings showing the position of the different manufacturers of the State. Speaking for myself, I have studied this question pretty deeply for the last five years. As to my views, I will not, and of course, cannot give them at this time. It would not be right. I am not really entitled to give views upon the subject; as I wish to speak with and hear from the members of the state association. I will say this, that I know that the manufacturers of the State of Iowa strongly desire that some measure may be arrived at by the next. General Assembly of Iowa that will place the manufacturers and em- ployes of the State in a just and feasible relation to each other, in re- gard to the question of accidents which may occur. We are not unmindful of the fact that the whole world, especially the European world, the industrial world, has deeply studied this ques- tion and has made progress, at least, has moved on. Now, some of the movements that have been made by European countries and by our own states are of questionable progress. It is a question of whether it is progress or whether it is error. That is the reason why we stand at such great doubt in the matter. We cannot copy the doings of some 8 REPORT OF EMPLOYERS' LIABILITY COMMISSION other country or some other state. We have to apply them to our own conditions. But this I know, from my connection with the manufac- turers, collectively and individually, that they do strongly desire that we may move forward in this matter in the line of right and justice. "We have, no desire to stand still on the matter. "We appreciate that in- dustry in modern times is not industry of fifty and one hundred years ago and the laws and conditions that existed under the old regime are not applicable to the regime of today, that some change has to be done, and we hope that the State of Iowa, in moving forward, will move forward, not so much on the idea of moving forward at this time, as to lay a foundation from which we can build, as we see it will be wise. On account of the great doubt in connection with the question that exists, even in the most advanced country, Germany, for Germany's doings, certainly no state in the union has yet been able to outdo ; anything that has elevated it out of the realm of doubt, I say that on account of the great doubt that still surrounds the whole question, we believe it is best for Iowa not to do the whole thing now, but lay a foundation from which we can do it. Mr. Clarkson: We will be, pleased to hear from any other gentlemen present. Mr. J. A. Meers, representing the Des Moines Trades and Labor As- sembly. I will state that I hav.e written the argument that we intend to present and will leave the copy of the argument with the commission rather than attempt to deliver it. (Mr. Meers reads the paper. See Ap- pendix.) Mr. Clarkson: Q. Have you given any thought to the proposition as to the distribution, of the payment of the funds you had in mind; that is, whether it should be made in the nature of a State Insurance fund, so to speak, or whether the liability should fasten upon the employer and he be required to car© for it as an individual? Mr. Meers: I think, Mr. Clarkson, I have given it some thought. I believe it should be administered thru some department of the State. I believe there should be— possibly the department of labor, should have a provision made that would handle the matter there, by it being there as a tax or license upon the industry, based upon the experience tables of accidents happening as reported by the Casualty Company or by a person. That could be worked out; the exact amount that would fall upon any particular industry and trade. W. T. Doolittle: I want to say, that I coincide with the statement that Mr. Meers made, that it should be handled thru the State; that all the money should go to those who are entitled to it and take it out ot the hands of the Casualty Insurance Companies. Mr. Clarkson: Are you one of the representatives of the Trades and Labor Assembly of Des Moines? Mr. Doolittle: I am a member of the painters. I came here as a representative of the painters. REPORT OF EMPLOYERS' LIABILITY COMMISSION 9 Mr. James Archbald, n, representative from the miners convention: I have sat here and listened with a good deal of interest to the sev- eral gentlemen that have preceded me on the floor and I realize with you, that we are considering here today a question of vital importance to the laboring classes as well as the manufacturers of this state. I know that in times gone by, in years that have passed into history, it has been thought that the laboring classes and the capitalists were at sore points with each other and to a certain extent that tnay be true today, but I am glad to say that in a great many instances and especially with the mining industry of this country, that we have succeeded in getting together in the joint movement and compromising or intelligently talking over our differences and coming to a peaceable adjustment. And the question that is before us here today is one that we have, as miners per- haps, seen more of than most any other class of laborers in the country. A man who has followed the vocation of mining in this state or any other state, for a number of years, has often been called upon to see his fellow workman, in a maimed and crippled condition, removed from the mine; oft times killed outright. Just as often, if not more so, crippled, so that his ability to profit for his family was practically removed. We have always maintained that if we could only get the money that was expended in litigation, to prevent us from getting relief, that we would already have relief. The manufacturers have paid more money in courts to prevent us from getting relief in lots of instances, than it would have taken to furnish ample relief. In other cases, where it has went to the court, the decision has been rendered in favor of the party in the lower court and thru the inability of the party bringing the suit, they have been unable to follow it when it has been appealed and' the case has been lost to the party who was thus interested. No com- pensation has been received for the injury. As miners, we fully agree with the statements introduced by Mr. Meers, in writing. "We realize that we live- in an age of survival of the fittest, and while we may not be able at all times, as miners, to get what we desire, we realize that in an organization there is strife and we are in thorough accord with this commission. We are willing to do anything we can to help you in your labors. But it appears to us that the present trend of commerce is to protect the dollar even to the extent of human sacrifice. We realize too that we make a grave charge against the employers of this country, but if you will go into the different factories, different shops and different mines and see the opportunities that are given to crippled and to maimed, the workingmen who have to go there and earn the bread to support their families, while a small expenditure of money for safeguards kept thrown around them, you will see it was not any too great a charge to place at their door. And all this is done to the effort that huge fortunes may be piled up. We are not prepared to say just which of the branches of com- merce, whether the producer, the distributor or what other branch may be in the business, should carry the most of the burden of paying the compensation to the employes. But we do think that relief should be afforded and we are willing to leave the matter in the hands of this 10 REPORT OP EMPLOYERS' LIABILITY COMMISSION commission believing that you are able and that you will evolve some means that will furnish relief. We are living in a Christian nation, in a nation that believes in God and one of the foremost laws in Christianity is to love God; the second is like unto it, love your neighbor as yourself, and if we love our neighbor, as ourselves, our neighbor may be the manufacturer; if he loves us as he loves himself, he will be willing to do something along this line. We believe they will, and with our efforts we expect to re- ceive relief. I can only assure you that the coal miners of the State of Iowa will be willing to do anything in their power to furnish you data in any way that you call upon us, the mining industry of the country. W. E. Dodds of Centerville; representative of the miners from the State convention: I didn't expect to say anything because I think that the ground has been fully covered. Y'et, I believe, that if any class of laborer in this State, in any way, needs a law of this kind enacted, it is the miners. Unfortunately we, as a general thing, have more men that work in the mines than, I think, any other vocation of labor. I don't know why it is; we have foreigners and every class of labor in the mine. Probably they are unskilled workmen and can't do other labor, yet their lives are just as precious to them or their wives as any skilled workman's is. Now, after I went home at noon, I received a paper, our daily paper from Centerville and it gives the verdict of the jury, of the coroner's jury there, in a case where a man w?_3 instantly killed in a mine, just as lie was quitting work in the evening, the day before I came ap here, in the mine that I was v/orking at. That man has left his wife and three small children, who are left, you might say, at the mercy ofthe world, nothing to live on, and I just want to read the coi'oner's verdict. The , coroner's jury yesterday returned a verdict that Bush Pulliam came to his death by a fall of rock in the entry of the Diamond mine, in the mine of the Centerville Block Coal Company. That is all the satisfaction that the coroner's jury give. They don't say accidentally or thru his' own -negligence or anything. Now, the only remedy that the poor woman has, if she is able to employ an attorney and take that into the courts, and as has been stated here, the costs of the courts, even if you are able to carry it thru, costs more than the compensation that should be allowed to them, and the cost to the people; and it virtually comes off the people, at least the tax payer. "We have there every term of court, from three to four cases that continue along, probably one term to another, of dam- age for injury or death in the mines. And I certainly believe that the people of this State have come to the conclusion that it is time some- thing should be done to relieve the situation as it has been in ithe past. I certainly have all confidence in the ability and in the fairness of this appointed delegation or commission that by a thorough investigation which they will make, that they will be able to formulate something that will be of lasting benefit to the future people of this State. I have all faith that they will do that and I, for one, am certainly willing to trust the result in the hands of the commission. REPORT OP EMPLOYERS' LIABILITY COMMISSION 11 Mr. Clarkson: Q. Could you give us any estimate as to the probable number of personal injury cases which are tried or brought in the county of Appanoose, in which Centerville is located, each year, for the last two or three years? Mr. Dodds; Well, not just in my memory I couldn't, but I could get you that information, and I would be glad to do it if you will just tell me. Mr. Clarkson: We would be pleased to have you do that for us and mail it to Mr. Welker Given, the secretary, at Des Moines. If you cannot keep the name in mind, just address it to the secretary of the Employers' Liability Commission. In that investigation I wish you would not only investigate the number but just make a brief synopsis as to the cause of the injury, the amount of recovery, if any, made, and the amount of costs in the case, and if possible, find out the amount which the injured party, ultimately received. Mr. Dodds: All right, how far back? Mr. Clarkson: Three years. 1909, '10 and '11. Mr. Robert Hills, a ref)resentative of the Miners Convention: Mr. Chairman, being a representative of the miners, I can frankly state that the two preceding me have fully given the conditions and cir- cumstances of the miners and we are willing to leave the rest in the commission's hands. ■John White: I don't know that I have anything to add to what has just been said, but as one of the representatives of the United Mine Workers, I just desire to say, that our calling as miners is a peculiar one. We have a stipulated price given us and it is presumed in that calling that we understand all the conditions before us but it is so complex and we are supposed or presumed to work strenuously; and in that vocation in the mine, some of the commission knows just how we are constituted, and in filling our vocation and working strenuously in the mine, it happens sometimes that there are faults, cracks and slips in the roof, of coal, that we cannot forsee, and pursuing our work as common laborers, as we are classed, we cannot foresee that and sometimes then just a little piece to be mined out, causes the coal or slate or rock to fall, without giving any warning to the ones employed, and as our compensa- tion is such that the time that we lose during the year, it brings the wages down to a low rate. Therefore, the one that is injured is not in a position then to sustain or support his family. It is in these cases that we come before the commission, believing that a just law should be enacted, whereby the family of the one injured should, in some measure, receive some compensation from the State or company that he works for, and we trust and hope that this commission will be enabled to work out a just law that will be just to everybody, and we, as miners, fully believe that this commission will do so. Mr. A. K. Campbell of the Campbell Heating Co., Des Moines: I understood there would be some representatives of both sides prepared to throw some light on this subject, so I came up to listen. But I have 12 REPORT OF EMPLOYERS' LIABILITY COMMISSION some thoughts about this as a manufacturer. We are always on the alert about it and we are always watching to see that we don't suffer by any- body's injury. Of course, we are interested in this proposition and I have watched this thing for a good while and I have thoroughly come to the conclusion that the efforts are being made along the wrong line. Now, if these gentlemen representing labor here, got everything they would ask, it would simply be put in a position to pile up what they want. They would have to do it under the greatest possible difficulties; they would have everything against them. , The wealth of the country is, in one sense, against the labor of the country, in the very nature of things, not from man's choice or anything of the kind, but from the very nature of things. Now, if a man was to be in my employ and he should be injured, my sympathies would be with him but at once there would be antagonism. He would say, you ought to pay me so much, and we would say to him, we are not responsible for your injury, you did it yourself. It is true, you used our machinery. Notwithstanding the sympathy that would be between us, we would naturally become enemies in that case and we would come to a contest; he would do the best he could to get the money, and if that man got anything it would be at the end of a long law suit and at great cost at the end, the result is not what the laboring men want. If we would give them the very best conditions possible in the law they would be possibly able to get what they ought to have. Now, when a man is killed, a man with family, has a wife and several children, everything is gone to that family practically where there are a number of children to care for, the whole of this world is wrapped up in his person and his family depends on him and when h". is killed or crippled for life it is a very bad condition of things and there ought to be a remedy somewhere. Society ought to take care of that family and will do it in certain ways, but there ought to be some good method devised by which that family could be rescued and saved. I realize the law that has been brought about in making it a contest between the employer and the laboring man. There don't seem to be very much of a remedy in sight. I don't see where the laboring men are going to get what they ought to have if they have to fight before they get anything. I think we are on the wrong track and I would like to see this commission devise something new and better than we have had before. Iowa is a great country to devise new things and it is in the power of this commission to get the lead in this matter and present something new. Now, a great injury can be done on both sides. For instance, I think about 75 per cent of the manufacturers of this state would be bank- rupted if they had a very serious injury and the penalty for that injury, if put upon them for several thousand dollars, would break them up. We don't want to injure the manufacturing establishment; that would be against the interests of the manufacturing men and against the in- terests of the laboring men and they wouldn't get their wages. We pay out lots of money to hedge against this thing. We pay out insurance money and a lot of it, an immense amount of it over the State. Still, REPORT OF EMPLOYERS' LIABILITY COMMISSION 13 that don't hinder litigation; it don't help the laboring man a bit; it is something to help take care of the manufacturer. I believe a plan could be devised by which a sum could be raised which would be always available for a man that is hurt. That should be in the hands of men that would carefully administer it and distri- bute it. What we want to do is distribute these burdens as much as possible in every line of society, as much as possible, equally over all.' Now, if we could devise some plan which would provide a fund, I be- lieve that is the thing to do. Have a fund already prepared and ready in reserve for those that suffer, and if you are going to put a burden on the manufacturer himself because he gets the benefit of the man's labor in building up big fortunes, let there be some sort of contribution or tax levied on that industry to provide against these things. They should as soon pay that as pay a company for taking care of them, for protecting them. The Treasurer of the company gets a good deal of money out of the manufacturers. If that money was put where it would benefit the people it would be a good thing. There is generally a good feeling between the manufacturer and the men. They always had kind of a mutual concern in our shop. Any man that gets hurt, we help him. If a man dies, sometimes we have to bury him. Just a short time ago we had to bury a man. We bought him a coffin and gave in- structions to have him well buried. When we got thru .we found that man had a little life insurance and had it in favor of one of my boys, just for this particular case, just about enough to pay what we paid out. Thru the manufacturing establishments over the country, I think, gen- erally, there is a good feeling between the men and the manufacturers, A manufacturer don't like to have a thing held over him that may happen at any hour in the day that may destroy him. And this is the condition of things today, under our law, and may be made worse, and I think the remedy is not to make that worse and put the men, women and children to the point of having to fight to get what is really due them. I think if this commission could devise some way, I don't care how, some fair, honest way to equalize things so that there will be a fund ready, when these things come, to pay for them, equalize that loss and give some kind of compensation to those that suffer; if we can do that, we will accomplish a great thing. If we can approach anything of that kind it will be a great thing for Iowa to develop something of that kind. Because, you know, if you study this thing clear back, the trouble be- tween labor and capital, we have always been fighting one another. We can reverse that, I think, in this Sta,te of Iowa and I believe this commission can devise some sort of plan by which this thing can be put on the right basis. Mr. Clarkson: If there are no others who desire to be heard, the commission will stand adjourned until ten o'clock tomorrow.. 14 REPORT OF EMPLOYERS' LIABILITY COMMISSION SECOND SESSION— DES MOINES Des Moines, Iowa, March 19, 1912. 10:00 a. m.. Chairman Clarkson called the meeting to order. Mr. Clarkson: It is a pleasure that I am able to say that Mr. Charles A. Pratt, a member of the commission of the State of Washington, is ■with us today and we have concluded to arrange to get out a good at- tendance here this afternoon. We will meet here in this room promptly at 1:30. Mr. Pratt will address the commission, and those who may be present this afternoon, on Employers' Liability and Workmen's com- pensation. If there is anyone present who would like to address the commis- sion we would be pleased to hear them. L. W. Warfleld: I haven't anything specific to say. I just came over to hear. Of course, we insurance men are very much interested in this proposition, particularly eo far as it relates to State insurance companies, and the insurance companies generally, I think, are not standing in the way at all of workmen's compensation acts. My under- standing is that they rather favor the passage of workmen's compen- sation acts, believing that that is the modern and up to date way of handling the subject, rather than the old liability laws which we are having.^ I think that the insurance companies will serve one very in- teresting purpose in this matter and that is, as distributors of infor- mation. I am with the Travelers Insurance Company, which I think does the largest volume of business and they get out instructive arti- cles for the benefit of their agents covering workmen's compensation laws and the development in that kind of legislation and I have never seen anything so instructive and so compact and containing so much information in a little space as some of these articles and we would be very glad to furnish anyone that is interested, with these articles that we get out. I think they might be of some service. Mr. Clarkson: I would suggest that anything along that line that you feel, bearing upon that proposition, in reference to the insurance phase of it or the distributing phase of it, if you will select such parts of those pamphlets that you think are Important and bearing on the proposition and will hand it to us this afternoon or any time in the near future, we will incorporate it in our report. Mr. Warfield: Yes, I will be very glad to. Judge Stevens: I would like to ask if liability insurance is gen- erally patronized in the old countries where these compensation acts have gone into effect, whether the employer still insures against any cost {hat the accidents may be to him under the law, if that is very gen- erally followed? REPORT OP EMPLOYERS' LIABILITY COMMISSION 15 Mr. Warfield: Well, I haven't read very much or heard very much about the acts over there, except In Germany. There, I understand, they have a mutual association, mutual associations that work very satisfactorily. I can't give you very much information on that. Judge Stevens: It is new in this country. Mr. Warfigld: It seems certain that the passage of these laws is going to increase the cost to the employer. It is going to make his insurance cost more. Of course, that is to be expected. I don't think there is going to be very much opposition to that among the manu- facturers and others. The sentiment is, I think, the industry must bear the burden of the loss rather than the individual and I think, while there is going to be some hardship perhaps, at first, on the part of the employers, in transferring this cost to the ultimate consumer. At first, he will probably have to bear part of it himself. That is the natural way when you are introducing any new system. But I think that is going to be accepted as the inevitable result. I might state further: I am sure that the insurance men will be very much inter- ested in hearing Mr. Pratt, because they have a state insurance law up there, and I recently read of one of the difficulties that had arisen up there. I think they make each industry bear the burden of the losses in that particular industry and there are only three powder mills out there and they had a serious explosion out there, where the claims arising under it were $30,000. At the time, they had a very small amount collected and it wiped out one of the powder mills and it left the other two to face the losses, and that illustrates one of the difficulties that there is in state insurance. Mr. Clarkson: What is your idea as to how that could be overcome? Mr. Warfield: Well, they make each industry bear its own accidents. Of course, if you make it general, instead of segregating each one, then you could overcome that. I think, perhaps, the gentleman this afternoon will touch upon that point. Mr. Clarkson: If there are no others who would like to be heard we will adjourn, to meet at 1:30 P. M., sharp. 16 REPORT OF EMPLOYERS' LIABILITY COMMISSION THIRD SESSION— DES MOINES Des Moines, Iowa, March 19, 1912. 1:30 P. M. Chairman Clarkson called the meeting to order. Mr. Clarkson: We have with us several gentlemen who are inter- ested in the proposition which we are investigating and I believe we will call on Mr. Emery. R. D. Emery: Gentlemen of the commission: As I said to one of your members, I wouldn't attempt to instruct this commit^tee con- cerning the mass of literature and the things that have been done, because I have no doubt that you know a great deal more about that than I do. I have read a few of the laws which have been passed in re- gard to workingmen's compensation and know, in a very superficial way, I think, the things that are being aimed at. There are one or two points in connection with this which I have thought might be worth while to call to the attention of this commission. lit does not seem to me, for instance, quite equitable to place the en- tire burden of workingmen's compensation, upon the employers. I think that there is no question but, something ought to be done, in bring- ing the money which is paid out for the purpose of protecting employers, to make it a benefit to the employees. I think that an immense amount of money has been wasted in the war between the employe and employer over the matter of compensation for injuries received. I believe that if this practical waste can be diverged into a channel where it will reach the men who ought to have the compensation that an immense saving can be made, and the men who are most interested can have the benefits of it. I believe, as a matter of fact, that the expense of a benefit of this kind should be partly placed upon the employer and partly upon the employee. There is no question but what this would be, — any form of it will be of immense advantage- to the employee and I do not be- lieve that any of them or many of them will feel that the entire ex- pense of providing insurance should fall upon the employer. It seems to me if this expense were about equally divided between employer and ■ employee the golden mean will be reached as to the burden each should bear. In reading the Washington law sometime ago, I felt that there was an error in the law in one respect. It may be a fact that the State of Iowa or any other state could go into the insurance business and conduct it and it is possible they could make a great saving in doing so. If it be true, I see no reason why the saving could not be made in all lines of insurance as well as in the particular line of employees of corporations. I see no special reason why this particular line of insurance should be singled out and made a subject of state manage- ment, the way it has been done in the law in Washington. As I un- derstand it, there, the funds are collected by the state and disposed of by the state. In fact, the state manages it much as an insurance com- pany is managed. I believe that Iowa can frame a law more suitable REPORT OP EMPLOYERS' LIABILITY COMMISSION 17 to the conditions here which will represent more fully the welfare of every branch of its industries.- Iowa has not only the manufacturing industries, not only the welfare of the laborers who work in them here, but it has a large number of insurance companies. And it seems to me that unless the State has made up its mind that there are a class of activities that it wishes to shoulder up and perform as a State, and wants to enter that far into the regime of socialism, that, it would be best to form a law along such lines as will leave the matters to be taken care of actually by institutions organized for that purpose, rather than for the State to go into the insurance business. Gentlemen, I wish to thank you. Mr. Clarkson: In the event that the commission should see fit to recommend the passage of a bill looking towards requiring employers to take out indemnity insurance so as to assure the employee that he would receive the amount fixed, if any, what plan would you sug- gest as a means to assure to the employer that he would be enabled to obtain indemnity insurance at reasonable rates? Mr. Emery: Usually that matter can be safely left' to competition and especially in the line of this kind of insurance. As I understand it, there has never been even an attempt at organizing the insurance business along these lines in the form of a trust. I think that there is the freest competition along these lines, perhaps, of any one bus- iness in the country. Mr. Clarkson: In other words, your idea is, that the competition, competitive energy for the business, would be a sufficient safeguard to assure the employer of obtaining the reasonable rate? Mr. Emery: I think it would. If it would not, then, of course, I think it would be the duty of the commission and the Legislature to safeguard that by such maximum charges as experience has shown would be sufficient to take care of it. Mr. Clarkson: Assuming that after experience it was found that there were some underground method of agreeing upon rates that would really abolish and eliminate competition, then what plan, if any, would you think could be arranged or enacted so as to protect the em- ployer in that event? Mr. Emery: Personally I have the theory that whenever such con- dition of affairs exists in any line of business, — I wouldn't single out the insurance men — but when any such condition is found to exist in any line of business, I should say the insurance business should come under that general law. I think State interference is entirely justifiable and ought to be put into force. Mr. Clarkson: Of course, I do not want to be understood as inti- mating that I believe that the insurance people will do that; I merely was asking the question. Mr. Emery: I understand. Mr. Clarkson: Now you say that the State should then step in and safeguard it. Now, what particular plan would you suggest by which it could be safeguarded? IS REPORT OF EMPLOYERS' LIABILITY COMMISSION Mr. Emery: The plan is already in force in regard to railroad charges, in some states, some communities. They find out by actual figures what is a reasonable rate, by actually investigating into the mat- ter, and I believe that under those circumstances, if the State felt that the charges were unreasonable that it could enforce just as reasonably on the insurance company a reasonable rate for insurance as it could enforce upon a railroad company a reasonable rate for carrying, es- pecially on insurance under a plan in which the State had made the insurance practically compulsory on the parties connected. Mr. Clarkson: If I understand you correctly then; if such conditions were found to exist, such as I have mentioned, then you would suggest that the State have an insura,nce commission with actuaries to determine whether or not the rate as fixed, by the insurance company, was a rea- sonable rate? Mr. Emery. Yes sir. Mr. Clarkson: And if found unreasonable, with power to reverse it? Mr. Emery: Yes sir. Mr. Staly: Co you believe that competition to regulate the rates in New Jersey, where they are raised in some instances to 700 per cent under this new law; do you really believe that the risk is seven times as great a,s they were before the law was passed? Mr. Emery: I can't answer that question intelligently because I haven't investigated the conditions surrounding it. I really couldn't give an opinion on it. It might be in some cases. I don't know what the insurance companies were rating their insurance on before the law and what the law required them to shoulder later. It might be that in some cases that the risk that they were required to take would be seven times as great. It is probably unlikely that it is seven times as great as it was. As I say, I haven't studied the conditions enough so that I know. Judge Stevens: You are connected with accident insurance and not liability insurance? Mr. Emery: Not liability insurance. I wasn't referring to liability insurance. The plan mentioned would indicate that accident com- panies would write the insurance, not as liability but as personal ac- cident business. Mr: Clarkson: I take great pleasure in having the oppor- tunity to present to you Mr. Pratt, a member of the "Washington State Commission. Mr. Charles A. Pratt: Gentlemen of the Commission, I have come to explain an act, the workings of it, tell how we are carrying it out, doing things that have been time and again believed were absolutely impossible and doing it successfully so far. I am very sorry I have got a bad cold and I am going to cut it short. Ours is a compulsory act. As given in the first section of Declaration of Police Power. I will read that. It is the real gist of what the law is based upon. "The common law system governing the remedy of workmen against employers for injuries received in hazardous work is not consistent with REPORT OF EMPLOYERS' LIABILITY COMMISSION 19 modern industrial conditions. In practice it proves to be economically- unwise and unfair. Its administration has produced the result that little of the cost of the employer has reached the workman and that little only at large expense to the public. The remedy of the workman has been uncertain, slow and inadequate. Injuries in such works, formerly occasional, have become frequent and inevitable. The wel- fare of the State depends upon its industries, and' even more upon the welfare of its wage-worker. The State of "Washington, therefore, ex- ercising herein its police and sovereign power, declares that all phases of the premises are withdrawn from private controversy, and sure and certain relief for workmen, injured in extra hazardous work, and their families and dependents is hereby provided regardless of questions of fault and to the exclusion of every other remedy, proceeding or compensation, except as otherwise provided in this act; and to that end all civil actions and. civil causes of action for such personal injuries and all jurisdiction of the courts of the State over such causes are hereby abolished, except as in this act provided." ■ The abolishing of jurisdiction of courts over personal injury claims applies only to those in the relation of employer and employe in "extra hazardous" occupations. Employes as members of the public have their rights against third persons as heretofore. Suits are allowed against em- ployer, see Sec. 8. Even though the injury or death be caused by the tort of a third person, the employe may obtain compensation by election and assignment, except where a willful act of such other, com- mitted against the employe, be for reasons personal and not because of his employment. It is compulsory. Those coming under the act have to come under it. The workmen have to receive compensation as laid down by the State. The act was attacked as unconstitutional on four distinct gounds. First, depriving persons of property without due process of law. Sec- ond, in granting citizens, classes of citizens or private corporations privileges or immunities not clearly available upon the same terms to all citizens and corporations; and in denying them the equal protection of the laws; third, in providing a species of taxation that is not equal and uniform; and fourth, in abolishing the right of jury trial in determin- ing compensation for personal injuries. However, the Supreme Court of the State by practically unanimous decision held on September 27, 1911, "that the act violates no provis- ion of either the State or Federal constitutions." Of course, there has never been a case taken to the Supreme Court of the State and so far as I know, there never has been anyone started yet. Out of 4,736 firms coming under the act, only 22 suits have been sent to the Attorney General for collection. Only fifty delinquents; that includes everybody. Those that are broke or near broke and a few that wish to fight the a.ct. The insurance agents are the ones that are fighting us and the lawyers. They are dying hard, those too. The in- surance companies themselves are not fighting. When we get to the home office we have very little trouble. It is the agent in the field that has been making the trouble. Out of 2,143 claims already adjusted we 20 REPORT OF EMPLOYERS' LIABILITY COMMISSION have had just three appeals from our decisions. One is a formal appeal in which we have taken up, to be carried up ourselves to the courts to have a ruling de0ning intrastate from interstate commerce. Our law cannot apply to interstate commerce. I think it is the 11th section of interstate commerce acts prohibits the railroads from entering into any such agreement as our law provides for and also; there is a bill before Congress now, known as Senator Sutherland's bill, which is a compulsory act and is now before Congress. If the law does not do anything else it certainly will put a stop to anybody employing girls or any boys or any children connected with hazardous employment in the State of Washington, not of age. "The only case in which we really have an appeal from our decision is the case where a woman fell thru a hole in the floor. She had been ad- vised by her attorney that we would pay all medical and surgical treat- ment. She was hurried off to one of the hospitals that had been grow- ing rich and was carved up for quite a number of different things, hemorrhoids, diseased ovaries and several other troubles, all of which had nothing to do with her. They sent in a bill of $300 and we promptly turned it down and they appealed to the court. That is all that has been appealed from our decision out of 2413 claims fully completed. In section two of the law it enumerates what is the extra hazardous v/ork. It is useless for me to read thru this. If you want to study thru them you can get copies of them and study. Also section three, which is the definitions of what the terms of the act are. In about the middle of section three there is a provision in which, if a man is injured working for a company who has paid into the accident fund and injured by a third party, he can receive com- pensation or he can elect to sue the third party. If he elects to sue the third party and does not receive, or his judgment does not amount to as much as that paid by the commission, we have to pay, the com- mission has to pay the balance. Suppose a man was working for me in my factory and I sent him up town; he was struck by the street car and injured. I haven't to pay him. He is entitled to his compensation. If he elected to sue the rail- road company, all well and good, but he receives his compensation regardless of the fault, and there is one thing I want to speak of right now. When you come to an electrical plant, go to any plant whatsoever and the laboring man must be protected. His interests must be looked after as much as the manufacturer, and is more of an interest to the laboring man than to the manufacturer that the weaker one receives the compensation. Now, where a third party steps in, just so sure you are going to have the dissatisfaction and there is going to be juggling and beating down to save the expense. Mr. Clarkson: Take the case you have illustrated. An employee is sent on an errand by his employer and is injured by the act of the third party, say, for instance, the street car company, and it is shown clearly that it was without fault of the street car' company. Do I under- stand then, that even in that kind of a case you grant the compensa- tion? : 1 REPORT OF EMPLOYERS' LIABILITY COMMISSION 21 Mr. Pratt: Yes, we pay regardless of fault. Mr. Clarkson: For instance the employee brought an action against the street car company and recovered $5,000 and under your compensa- tion act he would only be entitled to $3,000? Mr. Pratt: He would get the excess. Mr. Clarkson: The $3,000 would go back into the fund? Mr. Pratt: No, he receives the whole amount. Now, to illustrate; supposing the man was knocked down and lost his arm here. The law says he must pay $1,500 at or above the elbow. All we would pay would be $1,500. Suppose he went into the court and got a judgment of $5,0'00, he would get his $5,000. On the other hand, if he got a judg- ment of only $1,200, then we would have to pay the other $300. We have got to pay $1,500 for all injuries at or above the elbow. Mr. Clarkson: Supposing an accident occurred, as I have suggested and you pay the injured party the compensation coming to him under the compensation act and then afterwards he concludes to bring an action against the street car company? Mr. Pratt: He is barred. He must assign his claim to us. Mr. Clarkson: You are subject tp his right. Mr. Pratt: Yes sir. If we feel we have got a good case we can bring suit against the third party ourselves, which we are doing already in some cases. At the end of this section there is a very important clause: "The words injury or injured, as used in this act, refer only to an injury resulting from pome fortuitous event as distinguished from the contraction of disease." Now, there is a point that you have to safeguard very carefully. There are four diseases which enter into all accidents. And one which the medical fraternity are combatting with and which gets deeper and deeper; they are the basis of most of our troubles. Syphilis, alcoholism" and tuberculosis. They go hand in hand. A syphilitic is frequently a tubercular person. One thing you . have got to distinguish between and you must bear it in mind from the very start and that is that the compensation for an injury received is the word "accident" We do not pay anything for charity. It is not a charitable institution by any means. Section four is our schedule of contribution. And most employers, when the act was up, got that far and went up in the air and never came down. The rates are very high. They are placed high to meet all contingencies, but the act Is selfadjustable. The rates are self- adjustable. We made a demand last October and we realized a fund of $448,000. On the first of January we began to re-audit every pay roll in the State. When I left home they were just closing it up. We have canvassed the State now four times. It is impossible to take the act to get what the rate should be. The insurance companies don't give them any fair rate. The law was drawn by five employers and five em- ployees. The employers were lumber men and coal men. The lumber men knew what it was costing them. The coal men knew because they kept a very accurate account. The lumber men knew what the 22 REPORT OF EMPLOYERS' LIABILITY COMMISSION insurance companies were charging. The rates for lumber is 2% per cent. They added 1 per cent. The coal men, from experience, knew that their cost was about 3 per cent; therefore, they made the rate 3 per cent. Experience has shown it Is just about twice as high. With the lumbermen, — my firm is in class 29. We have 270 firms. We have realized $16,447.85 and we have paid out $4,371.15, leaving $12,076.70, which will carry us pretty near thru the year. Our rate last year, we paid the in- surance companies a cent and a half and our levy, which is ^, of 2%, or about 62^2 cents will carry us pretty near thru the year or cost us about half of what it did thru the insurance companies. (Mr. Pratt reads from statement, a copy of which is in the hands of Secretary Given, amounts collected in lumbering class and amounts paid out etc. etc. See appendix.) If any class should at the end of the year have a series of accidents and the rate is not sufficient to carry, at the end of the audit, each member of that class must pay into the fund the amount equal to the amount that their pay roll or their payment into the accident fund bears to the deficit. As you understand, of course, our funds are all divided into 47 classes. Class No. 11 in some way dropped out of the list. So there is no class No. 11, but there is 47 different classes. We have created class 48 v/hich is the elective adoption. That is a class where employer and employees, men in non-hazardous as well as extra hazardous, and he and his employees can elect to come under the act. There have a great many done so already. At first we had to fight to get them to come in and now it is a fight to keep them out. When they declared it wouldn't be held constitutional in the United States Courts, the attorneys ad- vising them it was doubtful; to get a man under those circumstances to pay into this fund, it would take some argument, I will tell you. Further on in Section 4, which applies to monthly payments. "It shall be unlawful for the employer to deduct or obtain any part of the premium required by this section to be by him paid from the wages or earnings of his workmen or any of them, and the making or attempt to make any such deduction shall be a gross misdemeanor. If, after this act shall have come into operation, it is shown by experience under the act, because of poor or careless' management, any establish- ment or work is unduly dangerous in comparison with other like estab- lishments or works, the department may advance its classification of risks and premium rates in proportion to the undue hazard. In accordance with the same principle, any such increase in classification or premium rate shall be subject to restoration to the schedule rate. Any such change in the classification of risks or premium rates, or any change caused by change in the class of work, occuring during the year shall, at the time of the annual adjustment, be adjusted by the de- partment in proportion to its duration in accordance with the schedule of this section. If, at the end of any year, It shall be seen that the contribution to the accident fund by any class of industry shall be less than the drain upon the fund on account of that class, the deficiency shall be made good to the fund on the 1st day of February of the follow- REPORT OF EMPLOYERS' LIABILITY COMMISSION 23 ing year by the employers of that class in proportion to their respec- tive payments for the past year." If, in the operation of this act, they found that any one firm has more expense than any other firm in its class, we have the right to take that firm out of this class and advance his rate so that the good manu- facturer should not pay for the manufacturer of the poorly managed concern. There are a good many things entering into that which is pretty hard work to define. I will give you an illustration of some matters that came up last summer. Mr. Lee, who was then Chairman of our commission, and I . were over to Spokane. Mr.' Lee made the address and I explained the law. There was a young fellow who was managing a plant or cement works in which there had been an investment of something over a mil- lion dollars. He was particularly vindictive and against the law. He says, we have gone to work and spent a million dollars putting up a plant which is safeguarded in every way and it is perfect. Over on the west side there is an old plant over there that is killing . men all the time. Now, I don't want to pay for the accidents arising over there in that plant on the west side, and he was particularly mean about it. Well, he was a stranger to me. He asked to let him have the floor but I silenced the fellow in a very short time. I told him we had experience in employing men and no matter how careful you are, how well you safeguard your plant, there is the human factor which enters in, which you can not account for. There will come an accident to your fellow workmen which, under this law, must be paid for and which you can- not charge to .the management of this plant. The last of December I was up there where this plant is. There was one man dead, they had taken the better part off of the hand of another man the night before; I met two men with their arms in a sling and two men on crutches. Soon after that I met the superintendent and I said, what have you got here, a slaughter house? And he said, there was one accident after another for six weeks. There was a plant that was safeguarded and yet it was having more accidents than anybody else. There is the human factor that enters into there which you must take into consideration. If we find that the employer is not protecting his men we can advance his rate. There are some things over which he has no control. Look for instance, at the Pennsylvania Railroad and the New York Central Rail- road today. They have boasted that they never kill a man. Yet they have had one accident after another and today they are advising not to ride on the Pennsylvania. Coming back on the New York Central road that is equipped as fine as any of them. They cracked a train into the Hudson river just after we passed. The acts of God or whatever you want to call it, the human element enters in there, no matter how careful you safeguard. You have got that element to take into account and you can't draft a law that is too drastic in that way because there are some things we can't control. That comes out in the actual workings of the law. "We pay $75.00 for burial expenses. We pay $20.00 a month to the' widow and $5 a month to the child or children, up to $35 a month. We pay $20 a month to the parents until the child becomes of age. 24 REPORT OF EMPLOYERS' LIABILITY COMMISSION Upon remarriage of the widow we pay her $240 and her pension ceases. If the workman leaves no wife or husband, we pay the children $10 a month and the child is paid until it is 16 years of age. We keep a strict account with every firm, every corporation. We know exactly what they have paid into the fund; we know exactly what we have set aside for death losses rising from accidents in that corporation, that parti- cular company. We also keep a strict account with every individual who comes under the act. If he comes back the second time, and we have discovered — they don't seem to think we are keeping a strict ac- count of them and some of them have tried the scheme of a double show- ing and we merely write to the firm and ask if this man is receiving so • many injuries and we find out very quickly. We keep a strict account of the injured men and the individual employer. Of course, our law- goes into quite a good deal of detail. I am merely touching on the principal parts of the law. A permanent total disability means the loss of both legs or both arms or one leg and one arm, total loss of eyesight, paralysis or other condition permanently incapacitating the workman from performing any work at any gainful occupation. For permanent total disability we pay $20' per month and $5 per month up to $35 a month; $20 for a single man; $25 a month for a man and wife and $5 for children. If the husband is not an invalid, the monthly payment of $25 shall be reduced to $15. When the total disability is only temporary, the schedule of payment contained in paragraphs 1, 2 and 3, shall apply so long as the total dis- ability shall continue, increased 50 per cent for the first six months of such continuance, but in no case shall the increase operate to make the monthly payment exceed 60 per cent of the monthly wage (the daily wage multiplied by twenty-six) the workman was receiving at the time of his- injury. As soon as recovery is so complete that the present earning power of the workman, at any kind of work, is restored to that existing at the time of the occurance of the injury the payments shall cease. If and so long as the present earning power is only partially restored the payments shall continue in the proportion which the new earning power shall bear to the old. No compensation shall be payable out of the accident fund unless the loss of earning power shall exceed five per cent. In other words, we pay a single man $30 a month, mar- ried man $37.50 a month, a man with three children $52.50, two child- ren $45, providing however that does not exceed 60 per cent of his wages. That we carry along for six months and there is where the great bulk of our payments goes out. We set aside $34,000.00; that is figured on the table of mortality. If a person is 50 years old we don't set aside as much money as we do at 30. The money is invested by the State Treasurer the same as permanent school funds. We now have invested $50,000. This money, every cent of it, is kept at home and is invested at home. None of it goes outside of the State. Permanent partial disability means the loss of either one foot, one leg, one hand, one arm, one eye, one or more fingers, one or more toes, any dislocation where ligaments are severed, or any other injury known in surgery to be permanent partial disability. For each we RBPOE/r OF EMPLOYERS' LIABILITY COMMISSION 25 pay $1,500 for the injured arm, we pay $1,500 for the leg. We have a schedule which we do not publish which we drew up in this way: Dr. Mowell, who is our chief surgeon, drew up a list of questions, I think some 70 questions and they were sent all over the United States to physicians that we thought would take the trouble to thoroughly go into and study the subject. We received back about twenty. That, with the pension works and the Danish government works, we struck an average and we added a little bit to it so as to make it a little stronger. We pay $1,250 for the hand because there you still have this motion here. We pay $1,500' for the leg anywhere above the knee. It don't always meet each case and therefore we don't publish it. Now, if a man receives a second accident or injury we have to pay him as 'to his disability. If he is receiving compensation and receives a second accident we have to increase his compensation accordingly as to his total disability. If the injured workman be under the age of 21 years and unmarried, the parents or parent shall also receive a lump sum payment equal to ten per cent of the amount awarded the minor workman. If husband and wife are in a state of abandonment when the ac- cident happens we pay nothing for that. I am asked very frequently what we do with foreigners. On investigation we have found that a great deal of the marriages, especially among the Slavonians and lower classes of workmen that come in this country, are known as what is called common law marriages, which costs too much to go to the priest and have them married, therefore they just go to living together We cannot accept common law marriages and the law does not provide for paying of any children or wife in the old country as it is already a state of abandonment. We do pay for the parents, but over there they look upon the law with a good deal more fear than we do here. They require them to come before the Consul General and make affidavit, and in consequence of that we are not having near the amount of fraud that was told would be heaped upon us by the foreigner; that every man that was killed from the old country, would have any amount of dependants over there and they would soon drain the fund in trying to pay the old country claims, but we have side-stepped it in that way." We have had no trouble so far. There is protection in two ways. If an employer feels aggrieved at an award made by the commission he can take us into court and have that reviewed as to the fact but not as to law. If an employee feels ag-- grieved at any decision rendered by the commission, that is, if he feels we haven't paid him enough or the employer feels we have paid him too much, he can take that into court and have the facts reviewed. But so far, as I have said, we have had really one case being taken to court and that was a case we disallowed entirely. If it is proven that a man injures himself intentionally that is, tries to commit suicide or tries to injure himself, we pay nothing. A minor working at an age legally permitted under the laws of the State shall be deemed sui juris for the purpose of this act. There were a number of cases in our State where a boy had been injured and the parents 26 REPORT OF EMPLOYERS' LIABILITY COMMISSION had sued and obtained judgment and the case was supposed to be closed. Then when the minor became of age, he sued again and obtained a sec- ond Judgment. He can't do that under this law; he is estopped. We have the right to convert into a lump sum any payments, any death payments or any total disability payments which we pay, not to ex- ceed $4,000. We have exercised this right only in one case so far; an- other one we have up. This is a case where a woman had a home, that was worth about $2,500. There was $700 outstanding. We have cleared up the mortgage and put the house in condition in which she can real- ize her rent which amounts to about $25 a month. Where the property, the money invested, the equity in it is sufficient, we look after the mortgage, but if the equity is not sufficient we tell them they better dispose of their property and realize as much out of it as possible but we will' not pay out the money. We are importuned very frequently to pay the $4,000, especially among the foreigners. There was a large delegation came down upon us in the mining district. There were sev- eral young widows that thought they were to get $4,000 and there were several that thought they would participate. They didn't read far enough along to see, if they married they only got $240; when that was pointed out to them these widows died very suddenly. If an employer is at fault, the employee can take under the act or he can sue his employer, with all defenses removed and the doctrine of comparative negligence only obtains. We have one or two very bad suits now. The people thought they would play fast and loose with us. One was a man over in Spokane who was ordered to safeguard his machinery. He was protected by the in- surance companies and was sure of them, that there would be no harm done to him, and he had been ordered by the State Labor Commissioner to guard this particular machine. He had a boy slip and fall into the machine and got pretty badly hurt. The insurance company dropped him like a hot potato and we also dropped him pretty suddenly. Now, he has got a pretty bad judgment against him. He didn't care to monkey with us any further. Mr. Clarkson: Take a case where an injury is received by an em- ployee, resulting from the act of the employer in failing to comply with some statutory provision made for preventing it, a safeguard; how do you handle a case like that? • Mr. Pratt: That is just what I was taking up just now. "Employer's Responsibility for Safeguard. Sec. 9. Page 26. If any workman shall be injured because of the absence of any safe- guard or protection required to be provided or maintained by, or pur- suant to, any •statute or ordinance, or any departmental regulation un- der any statute, or be, at the time of the injury, of less than the max- imum age prescribed by law for the emnloyment of a minor in the oc- cupation in which he shall be engaged when injured, the employer shall, within ten days after demand therefor by the department, pay into the accident fund, in addition to the same required by section 4 to he paid: REPORT OF EMPLOYERS' LIABILITY COMMISSION 27 (a) In case the consequent payment to the workman out of the ac- cident fund he a lump sum, a sum equal to 50 per cent of that amount." That is, if we were to pay a man $1,500', or take the powder case; we fined the powder company under that clause the amount to he paid, I have forgotten just what it was, $1,300 is what we had to pay, $2,600 for these two girls; we fined them $1,300. If a boy should lose his hand and we had to pay $1,250 we would fine this company and they would have to pay $625.00. Mr. Clarkson: Is there any greater amount paid to the injured em- ployee? Mr. Pratt: No. (b) In case the subsequent payment to the workman be payable in monthly payments, a sum equal to 50 per cent of the lump value of such monthly payment, estimated in accordance with the rule stated in section 7. The foregoing provisions of this act shall not apply to the employer if the absence of such guard or protection be due to the removal thereof by the injured workman himself or with his knowledge by any of his fellow workmen, unless such removal be by order or direction of the employer or superintendent or foreman of the employer, or any one placed by the employer in control or direction of such workman. If the removal of such guard or protection be by the workman himself Or with his consent by any of his fellow workmen, unless done by order or direction of the employer or the superintendent or foreman of the em- ployer or anyone placed by the employer in control, or direction of such workman, the schedule of compensation provided in section 5 shall be re- duced 10 per cent for the individual case of such workman." All money paid by us can not be garnished. The rest of this is just the mechanical working out of the law, the filing of different papers. Medical Examination. A workman is compelled to appear before our examiner and be examined. If he tries to obstruct the work in any way or refuses to appear before our examiner, his compensation ceases. If an employer misrepresents his pay roll or tries to defraud us ' in any way and we find it out, we fine him ten times the amount that he tried to hold back. In a public contract we hold the State, where the State is doing vrork; we hold the county where the county is doing work; and we hold the city where the city is doing work. All contracts on the city work we hold the city responsible and they deduct from their contractors the amount of the payment. If the city, county or state does it by days work, they, must turn into us their pay roll and we compensate the workman the same as we would under individual .policies. We hold the building, if a building is being constructed and we fail to catch the employer, and an employee is injured; for instance, a man is building a house, we can't keep track of all these things. They will go off and build a house once in awhile and not take out a permit. We watch permits yery closely and if they injure a workman we hold the building primarily responsible. The man who is building the build- 28 REPORT OF EMPLOYERS' LIABILITY COMMISSION ing, it is necessary for him to see that his contractor pays into the ac- cident fund for his own protection. There is a clause for Interstate Commerce. Tliis was put in to keep the act from becoming unconstitutional. Section 19, as I said before, if a man employed in non-hazardous as well as hazardous work, can consent with his employer, elect to come in under the act. There are some things that I am talking now to commissions who are thinking of trying this law. I want to warn you most; Don't try to make it impossible for the commissioners to operate. In some respects our law limits us to $6 a day, $5 for auditors and $6 a day for chief auditors. We have got to employ men at the head of our departments who are capable of going up against men who are receiving ten or fifteen or twenty thousand dollars a year. We have got to have men with good presence, good business ability and to try and find those at $5 a day is pretty hard work, and if it had not been for the hard times I don't know where we v/ould have got them ; leave the commissioners have a chance for their life, when they have got to hire men that are capable and com- petent. I drew up, with the assistance of an expert accountant, our bookkeeping. Governor Hay wanted us to go back east and see if we couldn't find some of the facts there. Fortunately I ran across a man who was an expert bookkeeper. I got him to help me for three months. All we could pay him was $6 a day. When he quit us he was paid just double the amount we were paying. The operation, drav/ing up and working out of the details of this law with a cheap class of labor is a pretty hard problem. You have got lots of hard problems and don't try to do it with a cheap John man. We have an appropriation of $150,000.00, which is appropriated out of the general fund of the State. There was a great howl set up about that first. Our constitution provides that no money shall 'be drawn out of the treasury of the State without appropriation having been made by- the legislature. Therefore the legislature embodied in the bill $1,- 500,000.00, thinking tMfet would be ample to cover all accidents arising in the first two years. That is merely to get around the provision in the constitution of our State. We have, however, an appropriation out of the genera! fund of $150,000. Every cent of money collected from the employer goes to pay the injured worker; not a cent if it can be used in any way for executive work. Supposing we had set aside for all the deaths filed for October, November and December and paid all the dis- memberments and disabilities for that time; we certainly have done that and some more. It was costing us for the first three months $148,000 or $150,000 for three months; four times that would be $600,000.00. $60'0,- 000.00, you can safely say, will cover all of our dismemberment claims of all the amounts set aside for deaths. And our appropriation of $150,00'0, the last time I looked we were $5,000 to the good, or in other words, our appropriation which amounts to $6,878 a month for 12 months will amount to a little less than $82,000, as I said, for the first eight months. REPORT OF EMPLOYERS' LIABILITY COMMISSION 29 Judge Stevens: May I ask what your average montlily pay roll in administering this act has been, including salaries of the hoard? Mr. Pratt: I couldn't give that to you. The chief auditor has It segregated and it is shown to us at the first of each month and I haven't it with me and I wouldn't want to he put on record just now. Judge Stevens: Approximately, you have perhaps 35 men employed? Mr. Pratt: We have now or havQ had, including commissioners, forty- eight, 'Stenographers, office boys, telephone girls, auditors and all, and the doctor we hire, the chief medical adviser, who is paid by the month. That doesn't include the physicians scattered around over the state which we only pay a fee. We pay for an examination; we pay the same fee as he receives for an office fee, that is in the cities; we are paying $3 to $3.50. Judge Stevens: Do you divide your State into districts and appoint auditors for each district? Mr. Pratt: Yes sir. Judge Stevens: How many auditors do you have in your State? Mr. Pratt: We have never had to exceed 19 auditors at any one time. We have let it run down during October, .November and December. I think they had 13; they come and go. We only pay $5, and I go out and get the best men I can and the first thing I know, somebody comes and takes him away from us. We pay our auditors $100 a month. We have had some remarkably good men but every little while somebody comes and takes them away from us because they will offer them $150 or $200 a month. Perhaps we won't fill that vacancy for awhile. We never at any one time had more than 19 auditors in the field. One insurance company told me it cost a million dollars to audit and district the State. We have done it, I think it cost us something like $20,000. In this amount we have had to buy all furniture, all our books, and the books cost us an enormous amount because we keep an individual ac- count with everyone. Judge Stevens: Do you take this expense out of the fund you col- lect? Mr. Pratt: No, that has come out of the $150,000 appropriation which comes from the State. Judge Stevens: It is the purpose of the State to pay the adminis- tration? Mr. Pratt: Yes sir, out of the general fund. It cost us $600,000.00 a year, is what we will have to pay out of the accident fund to meet accident and death claims. That would be the cost of administration, between 15 and 20 per cent as against 51 per cent which the insurance companies claim it costs them to administer their fund. Our fund of $600,000.00 is the same as the total amount raised by premiums of the insurance companies. Now, If there is any other questions you want to ask, I would be glad to answer them. Judge Stevens: You think then that the administration under your law will cost the employer less than it has cost under liability insur- ance? 30 REPORT OF EMPLOYERS' LIABILITY COMMISSION Mr. Pratt: It has cost him less so far. Judge Stevens: And that the saving will be largely the difference in the cost of administration hy the State from what it costs the lia- bility company? Mr. Pratt: It has proven so far. Of course, this is all educational work and from the start, Judge, as a manufacturer myself, before I was chairman, I went around among the employers urging the safeguarding of machinery, urging the lumbermen to have an inspector of their own, paid by themselves, irrespective of what inspection was made hy the State Commissioner, not by our commission but the State Commissioner. As they had to pay for these accidents; to see that they had a stand- ard of safeguarding; to see that all employers in their class were equally safeguarded, equally protected, and they have a committee and they are working along that line. There Is also educational work in the pick- ing of the employees, in the care of the clothing which they wear, the care of themselves, not allowing a man who is an epileptic to work any place where he is liable to injure himself or those with him. This is all educational work which has got to be taken up by the coomrs- sion. We have one man out talking to employees and that is all he does, going around telling them how to take care of themselves to reduce ac- cidents. It is not so much the cost to the industry, as it is to the social side; because an employee, after he becomes injured, his wage earning power is that much reduced, he isn't a complete citizen. He is depend- ing, more or less, upon those above him. He is a burden and to re- duce the cost we must reduce the dismemberments, reduce the injuries. That is the only way we can make this a success. Now, we approve about 300 claims a week; it takes the three of us. Two of us have to be there to approve claims of the physician. You can have as many physicians as you want. "We have a sheet here in which the claim agent makes up the whole thing; it is checked and re-checked so we know it Is correct. It is brought up here and we can see if there has been any negligence, any safeguards, any laws violated; if they are, we can take it up. Now, we must have the employer's account of the accident, then we must have the witness' account and we must have the attending physicians account of what the accident really was and what the dis- ability probably will be. In the main, they must agree. Then we will begin payment, if it is a disability that is going to extend over a month, or if only a slight injury and the doctor says he will be out in less than a month we hold that claim until we get the last report of it. We have selected the best physician in the community. We pay nothing for this pink sheet, as the law requires the physician must make out that report, as the injured person is the physician's patient and he must protect the claim. Our chief physician sends out to the attending phy- sicians this card, every two weeks, to know how the case is progress- ing. When he is discharged he makes out this discharge. The claim agent carries on a separate course of investigation, entirely separate from the physician. If he has left the hospital then the employer must make out this, giving the disability and the time lost, whether he has gone back to work and at what wages. If he has gone back to work at REPORT OF EMPLOYERS' LIABILITY COMMISSION 31 less than what he was getting, we have to pay him in proportion. We put It up to the employer to safeguard his own interests. We are paying out his money, not the state's money; whenever that fund be- comes depleted we have to levy upon them. Therefore, it is for them to sro that we pay nothing more than what is due. Judge Stevens: Do you observe any difference in the size of the court docket and the costs of the cour-t there yet? Mr. Pratt: Bradstreet's man spoke to me the other day at the Club and asked me if I had noticed what falling off there had been in cases filed against manufacturers. I told him no. I had not been up there. He said, it is astonishing, I spoke to the governor about it. I am going to send out an inquiry to all auditors and find out just exactly the difference there has been, but there hasn't been a suit filed against an employer of any accident happening since October 1st. Mr. Clarkson: Do I understand you to say there hasn't been a single case to your knowledge brought since October last. Mr. Pratt: Yes sir, they are barred. I asked Judge Clifford if he had noticed any difference and he said no, because the automobile cases are working us harder. Judge Stevens: Do you examine the employees except when they are injured? ' Mr. Pratt: No. Judge Stevens: You don't examine them for any disease? Mr. Pratt: No. I have some letters here that are very interesting, if you want to hear them. (Letters read and are set out below:) Mr. Clarkson: If there are no other parties who care to be heard then the meeting will be closed and there will be no further sessions at this point at this time. The letters referred to by Mr. Pratt are as follows: "2575 Ninth Ave. West, Seattle, Wash., January 11, 1912. Howard L. Hindley, Secretary, Industrial Insurance Commission, Olympia, Wash. Dear Sir: Replying to your letter, the reverse side hereof, will say that as the injury referred to was not of a serious nature, and since the Seattle Electric Co., has paid my wagps in full for the time of my indisposition due to the matter, I do not feel that I am in any manner entitled to further consideration at the hands of the Commission. "Permit me, however, to exoress my appreciation of your prompt action in the premises, and of this Industrial Insurance Commission, which I regard as one of the best institutions of our splendid common- wealth today. "I return herewith the blanks sent me, and may they find their way to some unfortunate more deserving of your consideration. "Again thanking you for your courtesy and prompt action believe me, ' Cordially yours, (Signed) S. W. Stewart." 32 REPORT OF EMPLOYERS' LIABILITY COMMISSION "Seattle, Wash., Jan. 19, 1912. Hon. C. A. Pratt, Industrial Insurance Commission, Olympia, Washington. Dear Sir: Referring to the operation of the Workmen's Compensation Act un- der the supervision of your commission, I wish to say that the opera- tion of this law is still in its infancy, not quite four months having past since it went into effect, but from my observation of the workings of same, and conversation with our employes at Port Gamble and Port Ludlow, I feel that it is working out all right and is going to be a grand success, a good thing for the employer as well as the employe. "Some of our employes who have been injured and have received re- muneration from your Commission, have expressed their saticfactlon, not only of the promptness with which benefits have been fixed and paid, but also of the amounts received. "I feel sure it is going to be a success, and, when it becomes better understood, satisfactory to the great majority of employers of labor as well as the employes themselves. Yours respectfully, E. G. Ames, Business Manager of the Puget Mill Co." "January 23, 1912. Harold Preston, Lowman Bldg., Seattle. Dear Sir: In reference to the workings of the Industrial Insurance Commission of the State of Washington will say, that we are more than pleased with the results to date. At the time the commission bill was before the Legislature of the State of Washington, the writer favored the bill very largely from a humanitarian standpoint, believing with a great many of other lumber manufacturers, that we would much prefer to pay even two or three times the amount we were paying to Insurance Com- panies, providing we knew the moneys contributed would go direct to the support of th^ injured or their widows and orphans. We had ex- pected that under the bill, the cost would be much greater than under the old plan, but we are pleased to note that if the first three months is a fair example of what we may expect, the cost will bs no more, if as much, as under the old plan of paying premiums to Insurance Com- panies and defending damage cases, and at the same time we are re- lieved of all annoyances and disagreeable features attached to the fight- ing of claims. I have conversed with a great many lumbermen in the past few weeks and have not found a single one who is not pleased with the workings of the law. We have had a number of accidents in our mill and logging camps and our men have been paid promptly and express universal satisfaction, and I am more than convinced that this is one of the best laws ever placed upon the statute books of this or any other State. "Very respectfully, Charles B. Patten." REPORT OF EMPLOYERS' LIABILITY COJIMISSION 33 "MERCHANTS TRANSPORTATION COMPANY. Steamer: Magnolia, Sentinel, Dove, T. W. Lake, A. "W. Sterrett. Tacoma, February 26, 1912. Mr. C. A. Pratt, Industrial Insurance Commissionfer, Olympia, Washington. Dear Sir: . In response to your inquiry as to the results of my observation of the workings of the Industrial Insurance Law: As you- are aware, our company fought this bill when it was up for passage last winter and so did all - the other steamboat companies. As it afterwards developed, we need not have wasted our time and energy because, as you know, the Attorney General has rendered an opinion that steamboats do not come under the law. Nevertheless the writer has taken pains ever since 1he act went into effect, to make careful inquiries as to its workings and has followed the matter very faithfully, having talked with numerous firms who are affected and with practically all of the steamboat owners, who of course are not affected. Permit me to say at this time, that in my opinion, the law as admin- istered by the present commission, is a fine thing and we know that the steamboat owners on Puget Sound agree with me when I most em- phatically say that we wish we came under the act. When the law first took effect it was, of course, se^rerely criticised by people In general, but our careful observation has been that criticism has changed to praise and as far as I know, the fiercest enemies of the act are now very enthusiastic for it. Of course, we can easily conceive that were the law to be administered by an unscrupulous commission it would be a bad thing. But as long as the present commission, or one as thoroughly competent, holds office, it is a benefit all around. Yours truly, Merchants Transportation Company. By P. H. Marvin." "WASHINGTON STATE FEDERATION OF LABOR. Executive and Legislative Committee. President, Charles R. Case, 1518, 16th Ave., North, Seattle, Wash. Sec.-Treas., Charles Perry Taylor, P. O. Box 128.5, Tacoma, Wash. To the Trade Unions of the State, Greeting: The Workingmen's Compensation Act which became effective October first, is daily demonstrating its value to injured workmen. Under its provisions many victims of industrial accidents, are receiving compen- sation, who, under the old system, would have become a burden upon friends or subjects of charity. Two months of experience has, however, demonstrated the necessity of every organization — whether labor, frat- ernal or social — that has the welfare of its membership at heart, par- ticipating more actively in the securing of prompt attention in behalf of its membership. Employers who have heretofore felt called upon to guard against the possibility of recovery of damages, are slow to awake to a realiza- tion of the changes effected by the new law. 3 34 REPORT OF EMPLOYERS' LIABILITY COMMISSION Casualty Companies that have derived Immense profits under past conditions, are opponents of a system that takes away their source of re- venue. Ambulance chasing lawyers who have lived off of damage suits, which they are able to promote under the old liability system, are join- ing hands with agents of Casualty Companies and opposing employers in an endeavor to discredit the new law. It is the duty of our organizations to rally to its support and gain for our membership full and prompt returns for injured workmen. To that end each organization should instruct its officers or the proper committee: FIRST — To secure from the Influstrial Insurance Commission, Olympia, Wash., copies of the law and necessary blanks, to be filled out in case of injuries to employees received in the course of their employment. SECOND' — To thoroughly familiarize themselves with the law. THIRD — To look after injured members, or in case of death, their heirs, and see that necessary blanks are promptly filled out and for- warded to the Commission. FOURTH — To report to your organization and the State Federation of Labor any defects found in the law, its operation, enforcement, or other diffculty encountered, to the end that we may look to a future adjustment of same. Bear in mind that every injury should be reported whether serious or not; that all injured workmen in hazardous employments are entitled to compensation from the day of injury. Aid them in getting it, and you will not only aid the needy but lessen the drain upon your local treas- uries. For your convenience we enclose card, properly addressed, upon which you can designate your needs as to copies of law and blank forms which should be kept on file by the organization in order to make prompt re- ports. Trusting that you will co-operate fully with us in making a success of this important legislation, we remain, Yours fraternally, Charles R. Case, President." Charles Perry Taylor, Secy-Treas." REPORT OF EMPLOYERS' LIABILITY COMMISSION 35 FOURTH SESSION— COUNCIL BLUFFS Council Bluffs, Iowa, Wednesday, March 20, 1912. Meeting called to order. Mr. Orville B. Towns: Secretary of the Council Bluffs Commercial Club, was present and answered questions as follows: Judge Stevens: I wish you would tell us how this proposed legisla- tion is regarded here, among your employers? Mr. Towne: In so far as it has come to my knowledge, well, it is sort of uncertain as far as the employers are concerned. They don't exactly seem to understand fully the meaning of it, and the working people generally seem to consider that the law would be an exceptionally good one, and the reasons that they have given me, in speaking of it is, that it does away with the necessity of long, legal tangles with a possible miscarriage of justice, for them to get what are their just deserts, when they are just deserts, and the laboring people generally have spoken to me and I have met a good many of them and seem to be very much pleased with the situation. They consider it really, as one man said, the emancipation really of the laboring people. Judge Stevens: Do you hear any oppcfeition on the part of the em- ployers direct? Mr. Towne: No, L do not. There is only one man that I know of at all who has mentioned anything in regard to this. He said he didn't have any objection to the law as it was but he said it did seem to him that it might be taken advantage of and that was the only fault that he could find with it at all. That there might be a tendency on the part of many to take advantage of it and yet he didn't wish to say that would be the case. Judge Stevens: He had not given the subject very much investiga- tion, had he? Mr. Towne: No, that is when the matter was first mentioned. Judge Stevens: A great many people who at first were very much prejudiced against this sort of legislation, on investigation, became the best friends. We had with us yesterday at Des Moines, the Chairman of the Commission in the State of Washington, where they have com- pulsory State insurance and it has been in operation since October and he explained its operation. He has had charge of the work prin- cipally and of course^ was well informed in regard to it. Have you heard the law or the State of Washington discussed here any? Mr. Towne: No, I haven't. To be perfectly frank with you I have never heard very much discussion about this at all. It is just a few men with whom I have happened accidentally to speak in regard to the matter. I have heard it discussed once or twice. It has never taken very strong hold here. The laboring people seem to speak more about it and think more about it than the employers themselves. In 36 REPORT OF EMPLOYERS' LIABILITY COMMISSION fact, this morning, when I was calling them up, well, they were sort of indifferent. They would very much like to hear what was being said but they didn't see how it would affect them very much personally. That is what I have discovered this morning over the 'phone. Judge Stevens: Who are the largest eniployers of labor in this city? Mr. Towne: John G. Woodward, Candy Maker, who employes between three and four hundred people, and C. Hafer Lumber Co., Pioneer Im- plement Co., The International Harvester Co., Bradley, Marvin and Smith, jobbing implements,. Keyes Bros. Carriage Facjtory, Kimball Bros. Elevator Factory, and the railroads. Mr. H. A. Colvin being present, was asked by. Judge Stevens: Where is your business located? Mr. Colvin: In Omaha. Judge Stevens: Has your State created a commission similar to this? Mr. Colvin: I think they presented a bill at the close of the leg- islature but they wouldn't pass on it on account of being too short a time to discuss it, so the Governor appointed a Commission of seven men, two as representatives of the employers, and two as representatives of the laborers and three State wide re- presentatives, and they are meeting quite frequently trying to submit a bill to present to the public. As far as our association is concerned, it doesn't look reasonable that the employers should fight legislation of this kind. They seem to be in a receptive mood and would like to see an equitable bill passed in favor of the workmen's compensation. Now, that is their position, as I understand it. They have had several meetings. It is the same in Omaha as in a large number of places. The large manufacturers don't seem to realize the importance of the situation. W. H. Kimball of Kimball Bros. Co., Council Bluffs, Iowa. Judge Stevens: How many employes do you have? Mr. Kimball: We have about 68 or 70. Judge Stevens: Have you given any thought to the legislation on the subject of compensation in case of accident to employes? A. Why, there was something came up about a year or so ago and they were sending out different representatives in regard to the law. They were trying, as I understand, to put it up to the manufacturer the responsibility of the case. Judge Stevens: That is, to pay for accidents regardless of fault? A. Of fault and it would have to be put up to the manufacturer to prove whether the fellow was at fault or not; there was nothing for the laboring men to prove, as I understood it. Q. I think what you are driving at is, that the proposition was to take away the defense of assumption of risk and fellow servant law? A. Yes, I think it was. Q. You carry liability insurance, don't you? A. Yes. I haven't looked into this matter. I think you have a letter from the manufacturers association in regard to this matter. Judge Stevens: In the State of Washington they passed a law whereby the State administers the law by its officers and has classi- REPORT OF EMPLOYERS' LIABILITY COMMISSION 37 fied. the industries in about 47 different classes and collects a rate, based on the rislj for each class and requires reports of each accident and determines what compensation the employee is entitled to and it has been in operation about three months and the Chairman of that commission was with us yesterday and gave us a statement which would indicate that the cost in most cases was less considerably than under liability insurance. That is correct, isn't it? Mr. Clarkson: That would be the inference that one could fairly draw from his statement. Mr. Kimball: Do they take the case in hand and their attorneys handle the case? Judge Stevens: No law suits at all between employer and employee. No occasion for it, where the employee recovers anyaway; no matter who is at fault, he is paid so much. Mr. Kimball: The employee is paid so much anyhow. It would de- pend on the case a good deal, the amount he should be paid, if the other party had nothing to do with it whatever. Judge Stevens: You can't see any reason why a man should pay where he isn't at fault? Mr. Kimball: No, I don't see why he should. They will bring a case against you anyhow. It puts it up to the manufacturer to pay the claim anyhow. You say they are getting it cheaper than the other way? Judge Stevens: I say that is the statement. In case of the lumber- man he estimated that the cost would be about $1.25 and their premium as charged for liability insurance was $1.50. Mr. Clarkson: Here is the phase of it you must not overlook. It is to be remembered there, that under the Washington law they collect from the employers in the way of a tax, pay that into the State funs, out of whioh the injured employe is paid from the fund that is col- lected in the particular class in which the employee was working. Now, so far as the payments for insurance received, it seems to be less in the State of Washington than what they were paying under liability insurance. But the State of Washington pays all of the expense of ad- ministration and that is not taken into consideration in the figures that he gave us as bearing upon the comparative cost. In other words, under the Washington law what the employer has to pay, is a little less than what they are paying for liability insurance, but correctly speak- ing it is costing them a little less, plus whatever the State is paying for administration, which, if you would add the cost of administration it would be perhaps a little more than they have been paying for lia- bility insurance. Judge Stevens: Now, this should be taken into consideration in arriving at the cost. In private liability insurance I think it is con- '•^eded that it costs the liability companies 25 per cent of their premiums *o solicit the business or get the business. In the State of Washington, under the state law, that is all saved, because you are compelled to give the business to the State. The whole of the solicitation is saved. Now, after this gentleman Mr. Pratt was heard yesterday, an agent of the Travelers Insurance Company, as we were leaving the room. 38 REPORT OF EMPLOYERS' LIABILITY COMMISSION handed me this statement in regard to State Insurance in Washington and it presents his ideas of the law. (See Appendix, McKeon's statement.) Mr. Clarlfson makes a hrief statement of the Washington law. J. M. Hibbard: May I ask how this fund is collected? Is it collected from the employer? Mr. Clarkson: Collected thru this commission and they have author- ity to sue thru the regular judicial officers of the State. Mr. Hibbard: What percent, if any, does the employer contribute toward this fund as a tax? Judge Stevens: He pays it all. Mr. Hibbard: My understanding was, each employer was assessed a certain amount. Judge Stevens: What is your argument, that he shouldn't? Mr. Hibbard: I should consider that an employer shouldn't be liable for accidents occuring thru the fault of others. If I am employed by you and thru, my own negligence I am injured, I don't feel you should be liable for indemnity for some- one else's carelessness. If it is care- lessness on your part for failing to provide proper tools in order to carry on this work and you have been negligent In your duty then you should be liable to the employe to a certain extent. I am an employe my- self. Judge Stevens: What do you think of the theory upon which the law is supposed to be based, that the industries should bear all tlie burden and charge it up to the consumer? Mr. Hibbard: I didn't consider that. I have never looked very far into this question. My idea is this: it is rather a new thing to me. I believe that if I am the employer that I should pay a tax, say 50 cents a month to that fund. All men in my employ, according to their scale of wages; if they are receiving a high scale of wages they should pay a greater amount than the man receiving a lower wage. Say I am employing men and paying them 50 cents per hour. Each of those men should contribute a fair proportion toward this amount and men employing cheaper men should pay less, and naturally go into one fund. In case a common laborer was injured he should receive in accordance and a man with a higher rate of wages lie should receive in accordance with what he received. While I am an employee, that is my view on it, — from carelessness on my part or negligence on the part of others. I am a carpenter by trade and I believe they have a similar law in Nebraska. It is just a new thing that has been brought before us. Judge Stevens: Your idea, as I understand, is that both the employer and the employee should contribute a share in making these pay- ■ ments? Mr. Bibbard: Yes sir, but I don't believe in classifying them in separate funds. My opinion is to Judge Stevens: Treat it as the insurance companies do? Mr. Hibbard: Yes, and pay according to a man's scale of wages. I don't assume any man should have full pay, understand. If I am receiving $4 a day, I shouldn't expect $4 a day. I should expect a per cent of the amount of wages received by me. If a man was receiving $1.50 a day he should receive a per cent. I thing the employee should REPORT OF EMPLOYERS' LIABILITY COMMISSION 39 contribute to that fund as well as the employer. I would be just as fair tie other way. I don't believe the employer should be liable for a damage occuring on the particular job that he was not accountable for. Judge Stevens: Do you believe any law should include in itfe pay- ments for immediate care, hospital care and all that? Mr. Hibbard: Yes sir, I do. Judge Stevens: Do you think if a law is passed giving compensation, that it should provide that this risk whidh the employer takes and the employee also, should be an insurable risk, provided that the law also requires the liability company to pay in all cases, just what the law provides should be paid? Before answering that question, let me explain. One of the Jaws proposed is, that in all cases, regardless of fault, the employee should be paid, just as you wish the law, but it also provides that that risk, which you as a laborer and your employer both assume, that risk is insurable; that is, your employer can go to the insurance company and insure against it, if he desires; but it also pro- vides that the insurance company shall pay that amount. It isn't a subject of litigation; he must pay it. How would that kind of a law Mr. Hibbard: I believe in that case that the employee should be entitled to some indemnity. Judge Stevens: Of course, he would get it. Mr. Hibbard: In case he was injured, you asked the question, and he was fully insured by the man employing him. Judge Stevens: If I as an employer and you as my employee, both contributing to a fund, we would perhaps desire to be insured, pro- tected, so that this fund wouldn't be depleted. It might be cheaper ta turn around to a liability company and say, we will give you so much to insure us, that is, you insure me as an employer against loss, and whatever protects- me protects you, because we are both contributors to the fund. Would that kind of a law strike you as fair? Mr. Hibbard: It seems to me that law would conflict with this other in a sense. If you already have this provision made where each contribute to that. Mr. Clarkson: Assuming that this committee should see fit to recom- mend a bill seeking to make a general liability; which would you pre- fer, whether to have a State insurance plan whereby the money would be collected from the employer and employee, as you suggest, and put into the State fund, and out of it pay the injured employes, or require indemnity insurance of an insurance company, to which the employer and employe would pay their proportionate share? Mr. Hibbard: State insurance preferable in all cases. Mr. Clarkson: Supposing that the law so provided that unless the employer should elect to come in under a statute of that kind, all of his common law defenses should be wiped out, namely, the fellow ser- vant doctrine abrogated, contributory negligence law modified and com- parative negligence enacted in lieu thereof and assumed risks abolished, and thereby making it an incentive, compulsory indirectly, to come in under the statute? Mr. Hibbard: I don't believe that would work very good for the 40 REPORT OF EMPLOYERS' LIABILITY COMMISSION simple reason it would be practically the same as we are now. It is hard to make the average man understand that it is necessary to carry this protection. ' ' "i Mr. , Clarkson : You prefer compulsory compensation or compulsory insurance? Mr. Hibbard: Yes sir, if you are going to have anything. I believe we are just as well off today as under this present form. Mr. Clarkson: You wouldn't be as well off as you would be under the new regime if these common law defenses were abrogated because there would be at least 50 per cent additional opportunities for recovery, assuming the statistics are correct as gathered? Mr. Hibbard: How many men avail themselves of the opportunity, while it isn't compulsory. If it is compulsory there might more do so. But when you compel a man to take out indemnity insurance or con- tribute thereto, under this other plan; I have been on big jobs where there were 100 men employed and I should say there wasn't two men that availed themselves of that opportunity. Mr. Clarkson: If the parties would elect to come in under that statute it would authorize the employer to deduct that amount? Mr. Hibbard: I believe that rate is higher than the average man could afford to pay. When you come to make a law requiring a man to pay something like $12.00 a year or even half of that, it might bur- den a great many men. I think this other plan you are suggesting here, it doesn't amount to over 50 cents a month for a carpenter. Now then, for a man receiving a dollar and a half a day, he perhaps wouldn't pay over 15 cents a month. It doesn't work a hardship on the men while it creates an enormous fund in time, especially if it is on deposit and drawing interest. Mr. Kimball: You would have a sliding scale according to the man's pay? Mr. Hibbard: Yes, but have only the one fund. I believe I should share in paying the hazardous risk as well as the non-hazardous because I am receiving higher indemnity in the event of an accident, therefore, I can afford to pay more and take the risk of contributing. Mr. Staly: Will you explain why you should contribute to that fund? Mr. Hibbard: Simply because I am better able to contribute that. Mr. Staly: Take the employe in general? Mr. Hibbard: According to the rate of "wages a man draws. Mr. Staly: I want to get your theory as to why the employee should pay? Mr. Hibbard: Simply because I think he is equally liable, in many cases and another thing, it is a burden to the contractor. I think it is too much of a burden on the contractor. I believe it would injure our industries. Mr. Staly: Upon what do you base that? Mr. Hibbard: Well, the percent of men that are injured. You per- haps have looked Into the statistics. I Ttnow it is a big thing in the State of Iowa, especially if they were compelled to compensate him REPORT OF EMPLOYERS' LIABILITY COMMISSION 41 for indemnity for tlie injury. If they were paying me my wages it wouldn't amount to so much. Mr. Staly: Statistics say that there are 60' to 80 per cent of cases that are not recoverable, under our present law. So there are 60 to 80 per cent that under the present laws there is absolutely no recovery for; what would you do with that percent? Mr. Hibbard: Under our present law it is almost impossible for a man to recover at all. If you had this other law, the laws would be more lenient. Now there is no provision made to pay them, therefore the law doesn't make it compulsory on the part of the employer to pay the indemnity. Mr. Clarkson: If I get your idea correctly, your thought is this: that it is found from experience that there are injuries received by the workmen as a result of their negligence: — Mr. Hibbard: Yes. • Mr. Clarkson: And because of that fact, you feel that it would be fair and reasonable that they should contribute to the fund a reason- able proportion to meet the payments required to be paid, even though they were injured out of their own fault? Mr. Hibbard: Yes sir, that is the idea. Perhaps some of you men don't know the risk the man is taking in that case. Mr. Clarkson: The opponents of that theory put up this argument, or at least, I have heard it; without undertaking to assume now, in fact, I disavow any idea of preconceived idea upon the part of the com- mission along that line, but we have heard it stated by the opponents on that theory you suggest, to be this way: Here is an industry that is hazardous in its very nature and yet it is an industry of necessity, one that society cannot get along without the performance of the work in that particular line. The men engaged in that employment are willing to continue their work, and they say, by reason of the fact that they are taking these extra hazardous risks whereby they must necessarily suffer the pain, which you cannot compensate them for, that society should then be willing to pay them a proportion, a reasonable part of their wages, during the time that they are suffering from the injury, even though it might have been brought about by an oversight upon their part. Now, what do you say, as meeting that theory, as to whether or not you -still feel that it would be fair that the employee should contri- bute to the fund, even though it be found that he was injured as the result of his oversight, commonly called negligence, when he must alone suffer the pain resulting from the injury, which we cannot com- pensate him for, and he must carry that then, whether or not society should not carry the balance of the burden of paying him a proportion- ate share of his wages and when I say society, I mean the consumer of the product which is produced by that particular industry? Mr. Hibbard: Well, I haven't changed my opinion on that. I think yet that the only thing, to adjust that; they receive a higher scale of wages than a man in a less hazardous position. Mr. Clarkson: In some instances they do. 42 REPORT OP EilPLOYERS' LIABILITY COMMISSION Mr. Hibbard: They are contributing a greater amount to that than the man employed in a less hazardous position. Now then, the finished product is sold at a higher rate than that which is manufactured under a less hazardous one so that the manufacturer there should pay a high- er rate for that. I believe that adjusts the thing in the same manner in which I suggested. A man paying according to his rate of wages. Place it on a percentage basis; I don't mean to set the prices. I be- lieve in that way it makes it so small on all employes and employers that it would readily meet all necessities. I think it would tend to reduce the wages because the employer is called upon to protect them against any accident whatever. Mr. Clarkson: If that be true, they say it would only bring about further conflict between employer and employee by way of the em- ployee seeking to obtain a higher rate of wages in order to over- come that reduction and thereby bring about friction, the thing that is desirable to avoid and which it is hoped that the new plan would bring about. Mr. Hibbard: I am assessed so much a month; that is a small amount A man doesn't count the amount he pays for insurance where it is so small. He don't figure. If he is paying a daily expense it is a different thing, 15 or 20 cents to reach his place of employment, but it seems to me 50 cents is a small amount. Taking your ideas of the question, as you present it; regarding the employee being alleviated from any expense whatever. Don't you think it would tend to lead that employee to being careless and indifferent, simply saying, well, I have got insurance any- way, I am not so particular if anything happens to me, I will get my money anyway and the boss has got to pay for it and he isn't so parti- cular about taking precaution. Mr. Staly: Do you carry accident insurance? Mr. Hibbard: No, I do not. Judge Stevens: I would like to ask if you don't think where both would contribute that it would tend to bring about a better feeling be- tween the man that is laboring and his employer, than it would if one was doing it all? Mr. Hibbard: Yes, I do. Judge Stevens: Don't you think it appeals to the natural sense of justice as being fair? Mr. Hibbard: I do. Judge Stevens: Don't you think there would be less liability on the part of the employer to cut the wages in order to recoup what he thinks he is being compelled to pay unjustly? Mr. Hibbard: Certainly. It means 512 a year for me to carry that Indemnity and it is a question whether I can't afford to carry my own insurance rather. Mr Staly: You can't afford to carry it? Mr. Hibbard: I can't afford to carry It for the amount of money it is costing me, I can better afford to take my own risk than pay $12 a year. REPORT OP EMPLOYERS' LIABILITY COMMISSION 43 Mr. Clarkson: Do you feel, if you were carrying indemnity insur- ance that you would be less careful or more reckless in the performance of your work in reference to caring for your own safety than if you were carrying insurance? Mr. Hibbard: I believe it would tend that way. I have had a good deal of experience along that line working with other employes. They endeavor to recover for accidents. Mr. Staly: You don't mean to leave the impression with the Com- ■ mission, that the average man, simply because he has insurance, will wilfully go in and receive an injury;, you don't mean to leave that impression? Mr. Hibbard: Yes, there is men that will do it. Mr. Staly: Not the average man. Mr. Hibbard: There is a ^ood many that will. They work all kinds of schemes especially where they are about out of work. Work is scarce and they are about on the last end of the work and expect to have a lay off. If they can bring about an injury which don't amount to much and they can draw on an indemnity, they do it. Judge Stevens: Your locals have a fund that you can draw on in case a man is suddenly hurt, to help him? Mr. Hibbard: We have a fund, but there is no provision made for that, that is simply charity. Judge Stevens: If the law provided that this fund collected from the employee and the employer, should be used, among other things, for the relief in all cases immediately on injury; that would be giving direct aid in which you would all be benefited and which is not pro- vided in many of these laws, for I think, eight days, or the first week is omitted, where the employe is compelled to pay it all. Now, when the employee contributes his share, be it ever so small; if the law we should recommend provided that the fund should be used for emergencies at once, wouldn't you feel that the employee was getting a direct bene- fit for his small contribution? Mr. Hibbard: Sure. But I don't believe now, after giving that man the. attention, find a conveyance to move him to the hospital, he is taken there and treated; if it proves that man isn't very badly injured, that within a few days he will be working, I believe there should be a limit placed that there should be no further contribution made to that man unless his injury proved to some extent, he shouldn't draw any indemnity in case he isn't there only a few days, only that actual ex- pense. If he is there for a week or ten days and his accident results in the loss of time for three or four weeks, then he should be paid from the date of his injury, but if he isn't injured so as to prevent him from working to exceed one week, I don't believe he should have any further indemnity. I think it should be applied to these cases similar to the law now. Judge Stevens: Your idea is incorporated in nearly all the laws. Mr. Clarkson: Gentlemen it is twelve o'clock. I am sure the meeting has not been in vain. The meeting will stand adjourned until 1:30 P. M. 44 REPORT OF EMPLOYERS' LIABILITY COMMISSION 1:30 P. M., March 20, 1912, meeting called, to order by Chairman Clarkson, who states the object of the meeting to those present. Mr. Clarkson: If there are any present who wish to address ,the meeting we would he pleased to hear from you. M. H. Wood: (Came forward) .Judge Stevens: Just go ahead and tell your view. Mr. Clarkson: "What line of business are you engaged in? Mr. Wood: I am a carpenter. It probably would be a little difficult for me to advance ideas. I might be more competent to answer ques- tions, that were asked me. Mr. Clarkson: We feel more" at ease if the parties will go on and give their own ideas in their own way. We feel we can get a better notion of his ideas in that method. Mr. Wood: I should be in favor of the law requiring a percentage being paid by the employee with the employer. I hardly think it is fair to place all the burden on the employer. I believe it would make an employe more careful of himself than otherwise. Judge Stevens: What do you say about paying him for all injuries, no matter whose fault? Mr. Wood: There are times when the negligence of the employe is such that in equity he wouldn't be entitled to anything. Judge Stevns: That would be when he was wilful? Mr. Wood: Yes sir. Judge Stevens: In all other cases you would be in favor of paying them? Mr. Wood: Yes sir, I should, and relief at once. I know of a case that happened in this city, where a man fell over here at the post office and his back was broken. He lay there and no one assumed the expense for the taking of that man out of there; where, if there had been a fund of some kind so that the persons who furnished the ambulance and the service could have known they would have pay for it, he would have been taken out at once. Altho he didn't lay there very long, of course, but that money never has been paid yet, as I un- derstand. Mr. Clarkson: Have you thought along the line as to how this fund should be handled? Mr. Wood: By the State. Mr. Clarkson: By the State or by requiring the employer to carry indemnity insurance? Mr. Wood: If there is a fund, I should be in favor of its being handled by the State. If the employer Is compelled to carry insurance, if it could he paid direct to the employe It might be all right but being paid by the employer, he has got the money In his own pocket to fight the other man. Mr. Clarkson: But if the law was so fashioned that there were fixed compensation and fixed requirements made in the way of first aid and the employer required to carry indemnity insurance in order to assure payment of those fixed charges, then which of the schemes do REPORT OP EMPLOYERS' LIABILITY COMMISSION 45 you feel would be preferable so far as your inquiry has gone, or have you given that much thought? Mr. Wood: No, I have not. I think probably if it was so arranged that the employer was liable for this first aid, that might be all right. Mr. Clarkson: Are you in favor of payments made in the lump sum or to he paid on the installment plan? Mr. Wood: I should be in favor of the installment plan. Mr. Clarkson: What is your reason for that? Mr. Wood: Take a great many, when they get the lump sum they don't know how to handle it. Mr. Clarkson: The amount would be dissipated? Mr. Wood: Yes sir. Mr. Clarkson: You are a member of the carpenters union here, I take it? Mr. Wood: Yes sir. Mr. Clarkson: Do you have any idea approximately, the number of injuries received in the trade in which you are a member, say during the last year? Mr. Wood: Well, the injuries in Council Bluffs among our men have been very few. Mr. Clarkson: Would you be able to give the approximate number, that is comparative. Mr. Wood: I don't think I would. They are not serious enough to report and for that reason we don't keep any record of them. There have been some, however, that have been more serious. Mr. Clarkson: Does j'our organization pay benefits? Mr. Wood: Well, we haven't any fixed benefits. Mr: Clarkson: Of course, your secretary keeps a record of all that you have paid? Mr. Wood: Yes sir, it would be on the books. Mr. Clarkson: Do you believe you would be able, thru your secre- tary, to prepare a schedule for the use of this commission showing the approximate number of injuries received for the years 1909, '10 and '11? Mr. Wood: I think that would be possible but I think they have been so very few. Mr. Clarkson: That would make it that much easier? Mr. Wood: That is true, but I don't really know how much that would amount to; not but a very little. Those things are controlled by the local and there is no fixed compensation for a man. They hard- ly ever ask anything. It is merely a donation that is given them. Mr. Clarkson: Donation to such person as really is incapable of car- ing for himself? Mr. Wood: Yes sir. We haven't made any donation that I remember of for an injury, for several years. One man got struck in the eye with a nail. It is most always donations that are given where they are without any money or find it hard to get along. There are very few of those; extremely few. 46 REPORT OF EMPLOYERS' LIABILITY COMMISSION Judge Stevens: About how many carpenters are there in this city here? Mr. Wood: There are a great many that work at the trade, but we think we have probably 90 per cent of the mechanics, and we have 130 or 135 members. Mr. Clarkson: 90 per cent of the mechanics in the carpenter trade? Mr. Wood: Yes sir, of the mechanics who are able to command the scale of wages. There are quite a number of our men that belong to the local union. Mr. Clarkson: You mean 90 per cent in your organization? Mr. Wood: We have 90 per cent. I should judge we have 90 per cent of the capable mechanics in the organization. They are refused ad- mission if they are not supposed to be competent. Mr. Clarkson: You do not have any sick benefit or anything of that sort? Mr. Wood: Not in the local, no. Mr. Clarkson : ■ In the organization. Mr. Wood: No, that is arranged by each local union and our local union hasn't any sick benefit. Judge Stevens: What proportion of the carpenters do you suppose carry accident insurance? Mr. Wood: Well, T couldn't tell you but I don't think there are very many. Judge Stevens: A small percent? Mr. Wood: A very small percent. There are a good many in organ- izations that pay a weekly sick benefit. Now, I carry accident insur- ance in the Great Western of Des Moines and I belong to the organiza- tion of the Moose, so that I have sick and accident benefit from each. Judge Stevens: What office do you hold in the union? Mr. Wood: I have been taking care of the funds for nine years as treasurer. Mr. Clarkson: Yo>; say you carry accident insurance; for what length of time have you been carrying that? Mr. Wood: Well, I don't think it has been more than three or four years. Mr. Clarkson: Have you received any injury since that? Mr. Wood: No sir. Mr. Staly: Costs you a dollar a month? Mr. Wood: I pay a dollar a month, that is for $10 a week; pay a little more and get a little more money. K. A. Whitlock,— Judge Stevens: You might state what position you hold in the organization? Mr. Whitlock: Financial secretary. Mr. Clarkson: You have in addition, a recording secretary? Mr. Whitlock: Yes sir. At the present time a great many of the laboring men can't afford to carry accident insurance. I don't feel as though I can myself. Of course, I belong to an organization that will; I will get something out of it in case of sickness or accident. REPORT OP EMPLOYERS' LIABILITY COMMISSION 47 Judge Stevens: What does it cost you a year? Mr. Whitlock: It costs over 75 cents a montli. Judge Stevens: How much do you get in case you are injured and laid up; are you paid hy the week? Mr. Whitlock: $1.00 a day for 13 weeks. Judge Stevens: What are your regular wages? Mr. Whitlock: At the present time, $19.80, a week. Judge Stevens: That would give you then, if you received 50 per cent of your wages, under a new law, it would give you nearly double what you are getting now and paying 75 cents a month for it? If the new law provided in such cases where you are laid up, that your employer should pay you 50 or 60 per cent of your wages if you had been at work, it would give you nearly double the relief that you now get from this private company? Mr. Whitlock: Yes sir. Judge Stevens: Does that cover sickness as well as accident? Mr. Whitlock: Yes. Judge Stevens: You then carry insurance against sickness and ac- cident to the extent of one dollar a day? Mr. Whitlock: Yes. Mr. Clarkson: Gentlemen, I want to introduce to you Senator Saund- ers of Council Bluffs, whom I am going to call upon to address the com- mission. He informs me that he hasn't a speech written up, but from my experience with the Senator, I know that will not deter him in giving some valuable ideas to this commission along this line, the subject we are interested in. Senator C. G. Saunders: Mr. Chairman; Gentlemen of the Commis- sion: I have but a few moments to spare with you, though I wish I had more time. I left some clients in the office waiting for me until I return. Last winter, at the time Senator Clarkson introduced the bill in the Senate, I told him I favored the general principle of em- ployers liability as it is commonly known but that I thought we were most decidedly ignorant upon the subject and that it was a question that deserved a great deal of investigation and very careful considera- tion. I have never had an opportunity to go into the detail of this subject, and I confess that when you come to the question of applica- tion, that I have no very definite ideas. As you gentlemen know, even better than I, practically all the countries in Europe have adopted the principle of caring for employes who are injured in various lines of employment and I am fully con- vinced that it is coming in this country and coming because it is right. I have thought that in some European countries they have probably gone too far and have undertaken to insure the laborer against those accidents of life that are common to us all. The thought of liability insurance, I think, should mean nothing more than this; that the employee should be cared for or protected as against those accidents that inhere in the peculiar employment and that are outside of what I will call the ordinary incidents and events and dangers of life. In England, the man who employs a domestic about his home, insures 48 REPORT OF EMPLOYERS' LIABILITY COMMISSION her or him against any accident that may possible occur upon the prem- ises. No such protection is given to him. No such protection is given to his wife or his children and there isn't any peculiar danger or haz- ard in that employment, and I have thought that the English have gone too far, hut you take for example a railroad. It sends its trains at a terrific rate of speed across the country, bearing the commerce of a nation. If it were not that it is a public necessity it would be decreed by our courts to be a nuisance and enjoined, but they say they must have railroads, they must run the trains at a high rate of speed. We lose sight, perhaps, of the fact that the railroad is more than a mere corporation. It is a great agency that is employed by the public for the movement of the commerce of the nation. Now, if the public em- ploys this highly dangerous agency, it occurs to me that it ought to bear the burdens that this agency creates; and in the last analysis, — that is a term that is sometimes criticised — but in the last analysis, that expense of operation is paid by the public that uses that agency. The men that are employed have a danger and a hazard, they are subjected to a danger and .hazard that the average individual in his work — take myself in my_ work — the merchant in his store doesn't have. Now, we in this country have used the term "negligence" and I have thought sometimes, in many instances, the term negligence as applied practically, is only relative in character. We speak of the fault of the employer and the fault of the employe. A brakeman, for example, is out switch- ing and the ice is a little uneven or something of the sort and he slips, and the question is submitted to a jury as to whether the com- pany was negligent in keeping the working place of the brakeman safe, and the jury perhaps though not evidenced, but theoretically at least, find that the place was safe and that the man should bear that burden that came to him by reason of the accident. Now, he may have been at fault, as we will use the term in law, but not at fault in fact. He makes a misstep; his thought is diverted for a moment by some incident and he goes down and he is injured or perhaps killed. So what in law was his fault, but in fact the accident, grew out of the character of the employment and if he is injured or killed, it occurs to me that he falls in the service of society, by reason of the peculiar hazard of that employment and neither he nor his family ought to be required to bear the burden that follows and bear it alone. It ought to be distributed in society at large that employ the agency. Take a coal mining industry for another. I suppose there is no employment in this country that is as hazardous as that of the coal miner. We need coal. It has become a part of our life. We must have it. I know of no good reason, as far as I am concerned, why every ton of coal that is taken out of the earth should not bear its share of the burdens that come to the men and the death, through their employment in that industry. So I might go on and multiply this thing, but as far as I am personally concerned, I believe in the princi- pal of employers' liability. Of course, when you come to the applica- tion you are approaching another question and there is where the real difficulty arises. Here is a state adjoining us for example, that has REPORT OF EMPLOYERS' LIABILITY COMMISSION 49 made no provision for its workmen. Here Is a manufacturer in Iowa, where it is expected to place a burden, and this man who is manufac- turing in Iowa must sell in competition with the man across the river perhaps, who is not subject to this expense. This is one practical problem for you gentlemen to consider. I have never believed that this payment should be a compensation. My notion is that it ought to be placed upon the basis of a pension. We pension our soldiers who served in the wars of cur nation. We do not base that pension upon thp thought of compensation, but it is rather making a provision so that the one shall not be humiliated by being compelled to resort to the poor house or to become a charge upon the bounty of the public thru the ordinary means of caring for the poor. We don't care to subject them to any humiliation. I, as a lawyer, have had some ex- perience and quite an opportunity to observe the workings of our present law. It is my deliberate judgment that in the majority of cases where compensation is given to workmen and their families, for in- juries sustained, that the money, thru improvidence, does little good. If a pension be granted then the one has an income at fixed intervals as long as he lives, or it it is a family, until the children attain an age where they are capable of caring for themselves, and I personally am thoroughly convinced that the system should be one of pension rather than of compensation. When you come to pass upon the degrees of negligence you are approaching a difficult problem. One mani we say was negligent; another who did the act in just a little different way, was not negligent. Now, to pay one and not pay the other, in my judg- ment, possesses a very large element of injustice because of the fact that they both are injured in the same line of employment and in- jured because they were doing that particular class of work which was hazardous in character. So that I think we should regard these per- sons who are injured in this service and their dependents, just as we do those who serve their country and we should make provision for them so that they can be cared for and so that they shall not become public charges. Now, some of the workmen might perhaps disagree with me and say it ought to be compensation. I think so for the reason that no work- man is compelled to go into any particular line of employment. If he chooses to enter that employment, he is like the soldier who en- lists in the army. He may get shot. He may be killed. He may live to a ripe old age. By entering this hazardous employment he earns ordinarily a larger stipend than he could in an employment that was less hazardous and he takes that chance, and my judgment is that he ought to be cared for in the same way that we care for the soldier ex- cept, of course, I would say that perhaps the pension granted ought to depend to some extent upon the wage that the individual is receiving. I do not mean pension from the government. I am only using the term pension to express a thought. The idea of payments distributed over a period of time, greater or less in length, usually as long as the in- i 50 REPORT OP EMPLOYERS' LIABILITY COMMISSION dividual stiall live, or in case of children, until they shall have ap- proached the self-supporting age. Now, gentlemen, those are my ideas in a general way. I do not know that they are of any particular value to the committee. I should not have come here had I not been so invited to do, by the Chairman, because I feel that I have not given enough study to this Important subject to enable mc to enlighten you in the discharge of your duties; that is, to any considerable extent, at least. Mr. Clarkson: Have you given the subject any consideration as tp the most feasible plan between that of requiring the employer to take out indemnity insurance or create a State Insurance fund out of which it should be paid? Senator Saunders: I have not. My notion is, however, that it ought to be the insurance feature in some form, for this reason. Here is a man that is operating a small plant. Say here is a telephone plant in a small town where there is an in- vestment of ten, fifteen, twenty-five or thirty thousand dollars. Now, if a workman shall be killed and there is a large payment to be made, it almost means financial destruction of the institution. There is a little railroad I have in mind now. This little line that ran for many years between the college and the town of Ames. They ran over a boy and it was a close question of liability but the case was determined against the company and it took all the profits they could earn for 10 or 12 years to pay the one judgment. Mr. Clarkson: Fortunate in not having a second one within the ten year period. Senator Saunders: Yes, it was a matter of good luck. If there had been a form of insurance that they were carrying thru the State or otherwise, that loss would have been so distributed so that it would not tend to impoverish the institution and in the end, the burden would be distributed among a very large number of people. There are a good many practical questions to deal with. In England, I say that immediately after the extension of their law there so as to cover do- mestics and persons in all lines of employment, that the amount of lia- bility insurance just jumped up millions and millions and the enact- ment of the legislation also resulted in the discharge of a large num- ber of people who were advancing in life, because the employers felt they would rather have persons who were young and agile, and not so liable to be injured by reason of their inability to control their move- ments actively. But I am most thoroughly convinced that the idea of a lump sum is an erroneous idea from the standpoint of the man that is to be benefited. I think your Chairman has had some experience in the same line of work I have, law, and he has seen, undoubtedly, a great many cases where, after the litigation was concluded and the settlement was made and the money was paid over, that there was an improvident expenditure and the money soon gone and the last condi- tion was worse than the first, because they had indulged in a period of REPORT OF EMPLOYERS' LIABILITY COMMISSION 51 extravagance and after that had passed they were less able to live un- der the form of living under which they had been accustomed. Mr. Clarkson: I am sure we appreciate your favor in coming up. Senator Saunders: I am simply giving you my views as an outsider. I employ a stenographer and a little help at the house. I am interested in a small telephone company where we employ one man all the time and two or three when we are making some changes, repairs or ex- tensions\ But I think I can look at this, largely from the standpoint of a disinterested individual, perhaps, more so than the large employer of labor, or even the laborer himself. Mr. Clarkson: Now, we have a paper here prepared by a member of the Typographical Union No. 203. Mr. B. F. Knight: This is just hastily drawn up by the Executive Committee. (The paper read and given to Secretary Given. See appendix.) The idea that they take is that the employee should not be assessed any percent of his wages. We discussed the matter very thoroughly and some of them were very much in favor of the ideas propounded by Senator Saunders in that there should be a fund created either by the employers or thru legislation, to cover these losses. Judge Stevens: Are you in favor of reversing the rule where the employer has been in no sense guilty of any wrong or negligence, of making him pay damages? Mr. Knight: Well, that would be a case to be determined where an employer is in no sense responsible for the accident. Judge Stevens: Where he is in no sense at fault would you com- pell him to pay an employe for his injuries? Mr. Knight: No, I don't think he should. But it would be a ques- tion, wouldn't it, of determining who was at fault. Judge Stevens: Take it where there is no question about it, where there is absolutely no question? Mr. Knight: No question as to the fault; except in cases where the hazard of the employment would naturally require Judge Stevens: Suppose a type setter should fall out of his chair while reaching for a type, and break his elbow? Mr. Knight: I can't see where the employer would be at fault. It is not caused thru any fault of his or negligence in safeguarding the employe. Judge Stevens: I want to get at this point so as to let you know the position that we take. While we haven't recommended any bill yet, all of these laws which have been passed for instance in California, Washington, Ohio, New Jersey, Massachusetts, Wisconsin; they all give the employee compensation no matter whether there was anybody at fault or not. If he is hurt in the line of his employment, from the time you enter the type room to the time you come out and engaged in your work, if you are hurt there you are going to get compensation under any form of these laws recommended and the employer has got to pay it. But in some jurisdictions as in Ohio, they have provided that the employee pays one-tenth of the premium. There is no law suit 52 REPORT OF EMPLOYERS' LIABILITY COMMISSION atout it; it is State insurance and the man Is paid promptly, but the employe pays one-tenth of that premium, which amounts to a vei^ small sum. Mr. Knight: Otherwise the employer carries insurance on all of his employes in some liability company. Judge Stevens: It is a State company; it is the employes company just as much; the State administers it. Mr. Knight: In regard to a State Insurance company, we will call it a company, insurance organization; in that case where a man gets pay whether he is to blame or whether it is the fault of the emp-oye or the employer, I think the employe should pay his share of it. It has got to be paid by a tax anyway and why not pay it direct instead of indirect. Mr. Clarkson: In the discussion of this proposition in your local union, the discussion has been along the line of remedial legislation iil reference to the recoveries had for negligence upon the part of the employer. So that I take it you have not discussed the proposition of pro- viding compensation, as it is often times termed, and referred to as a pension by Senator Saunders; you had not taken that into considera- tion? Mr. Knight: Only to this extent that we did discuss the application, in that we believed that the payment of these liabilities should be made by the employer and not by an assessment on employes, either col- lectively or individually. They can form an organization. The idea I discussed was that the employers should organize, as Senator Saund- ers said, in order to distribute this. Mr. Clarkson: That was only taking into consideration such cases as occur from negligence upon the part of the employer? Mr. Knight: Direct negligence on the part of the employer, except In cases where the employment was of such a hazardous nature that a man is liable at any time to be hurt, such as mining and railroading. I don't claim that printing is a very hazardous occupation and in our argument before this commission, we don't take into consideration the printing industry; .it is all the crafts in general. Judge Stevens: I would like to suggest another instance for your consideration and I take the instance frorn your own trade, because it will strike you more easily to answer. Suppose one man in the press room carrying a heavy form, should drop it on the foot of another, in- juring him, thru his carelessness possibly the carelessness of the other party in running against him or being in the way; would you regard that a fair case for the employer to pay the damages? Mr. Knight: I would. For the reason that he should make conditions such in the shop so that these heavy forms wouldn't have to be carried. There should be trucks to load them on. Judge Stevens: Take the case where it was on a truck and he was rolling it, but thru some carelessness which no one could guard against, simply a case of thoughtlessness or absent mindedness that a similar accident should occur? REPORT OF EMPLOYERS' LIABILITY COinilSSION 53 Mr. Knight: I suppose that would be a case of determining who was at fault. Judge Stevens: Assuming that there was no fault on the part of the employer, that is, that he gave them plenty of room, and plenty of equipment of the proper kind and had used reasonable care in sel- ecting his men, that it was an ordinarily good competent man, but he had made a mistake; so that is was in no sense anyone's fault except the co-employee or fellow-servant; what would you say then? Mr. Knight: I wouldn't consider the employer liable. Judge Stevens: Would you consider a law fair that compelled him to pay for that injury? Mr. Knight: Not unless the employee was helping pay the premium on it. Judge Stevens: Now, I will tell you so that you may know that these other states have all included that sort of injuries among the things for which the employer should pay, but the question we are at now is the question you have just answered, whether in such cases there should not be a joint assessment? Mr. Knight: That would not apply in my mind to all occupations again. We will take for instance in mining. One man might be descend- ing or ascending a shaft and some one above might drop something on him accidentally. In that case the hazard of the situation should be en- tered into and I think the man should be compensated for any injury; be- cause of the extra hazard of the occupation, and the same would apply to railroading. Judge Stevens: It is on? of those cases where the person injured could not have avoided it? Mr. Knight: He absolutely could not have avoided it. There is one more thing I would like to call your attention to, that I don't believe was thoroughly brought out in the written statement there. In regard to printing shops, newspaper offices especially. It is more a question of sanitation and ventilation than it is the hazardousness as to accidents. The injury to the health is gradual and I think that laws should be passed enforcing those shops to furnish proper ventilation and sanitary conditions around those shops. I see the State has passed some laws. They have just forced here in the last year, forced the local newspapers, the Nonpareil, to put ventilators over the machines to carry off the ex- hausts and I suppose that went all over the State. They wouldn't do it here and not other places. Mr. Clarkson: You have in mind, of suggesting that to the Legisla- ture in regard to Mr. Knight: In connection with the liability law. Judge Stevens: Your idea is probably that the administration of this law should be connected with an industrial act that would provide safety appliances and devices to avoid vocational diseases? Mr. Knight: That is the idea. Judge Stevens: I think you are right. 54 REPORT OF EMPLOYERS' .LIABILITY COMMISSION Mr. Staly: Did you mean in that compensation for vocational dis- eases? Mr. Knight: I suppose it would have to be proven whether the dis- ease was contracted thru the fault of the employer to properly ventilate and provide proper sanitary conditions in the shop. That doesn't apply to printing offices alone. It applies to all inside work. A goot- many of these department stores and things of that kind that a person coming in off of the street, when you first come in it is stifling in there. I have noticed it myself. There isn't a bit of fresh air and no way of getting any. They are usually crowded places and low ceilings and use as little floor space as possible to display the large amount of goods they have on sale. Of course, in the print shop there is a different at- mosphere to combat with, gas and fumes from metal and things of that kind. Mr. Clarkson: If there are no others who desire to be heard, the Commission will stand adjourned to meet in Sioux City tomorrow at 10: 00 A. M. REPORT OP EMPLOYERS' LIABILITY COilMISSION 55 FIFTH SESSION-SIOUX CITY Sioux City, Iowa, 10:00 A. M., Thursday, March 21, 1912. Chairman Clarkson called the meeting to order. S. H. Lockwood, General Time Keeper, Armour & Co., appeared. Mr. Clarkson: State the attitude in a general way of your company towards this liahility insurance idea. and your experience and the way you handle matters here and what benefit you feel, from your ex- perience, that a law of this kind would have in the way of avoiding litigation? Mr. Lockwood: We feel that the liahility compensation law would be of considerable benefit both to the employer and the employe, and we are heartily in accord with anything of this nature which may be adopted for the benefit of both. Owing to the nature of our business and considering that we operate very little machinery, we have very few accidents, and what we have are of a minor nature, consisting principally of slight cuts from the workman's tools. Therefore, while we are heartily in accord with anything of this nature which may be in accord with any action which may be taken, for the benefit of hu- manity at large. Is there anything further you would like to have me state here? Mr. Clarkson: Prom your experience, by observation or otherwise, do you feel a compensation act would have the effect of reducing litiga- tion? Mr. Lockwood: Yes. We feel that an act of this kind would be very beneficial to all parties concerned, owing to the fact that there are numerous cases which arise that could easily be settled in this man- ner, without resorting to litigation, with equal justice to all parties con- cerned. Mr. Clarkson: Do you have in force a system of giving first aid to any of your employes or all of them, in your line of business in this city? Mr. Lockwood: Y'es, we have, and we urge our employes to come to the time office in every case, no matter how slight the injury, to re- ceive first aid, and in case it is a serious cut or other injury, we always send for a physician, without hesitation, at our expense. Mr. Clarkson: What has been your experience in observing the re- sults attained from a system or practice of that sort as to whether or not it has a tendency to create and bring about and establish a better feeling between employer and employee? Mr. Lockwood: My experience has been that the first aid which we render to our employes creates a much better feeling and closer relationship between the employer and the employee for they realize we are working for their benefit as well as ours to prevent any unnec- essary loss of time from injuries received while in our employ. Mr. Clarkson: You have no system now whereby there is a mutual aid fund maintained in your business here in the city? Mr. Lockwood: No sir, none whatever. 56 REPORT OF EMPLOYERS' LIABILITY COMMISSION Mr. Clarkson: So that the first aid that is granted is paid exclusively by the company? Mr. Lockwood: Yes sir, all first aid that we give and any medical attendance that we give! thereafter is at the company's expense and given voluntarily for the benefit of the employe. N. R. Johnson of the Johnson Biscuit Company. Judge Stevens: What are your views on this proposed liability law? Mr. Johnson: I tell you, I am sorry to say, I am rather ignorant as to the good points of it and the bad points of it. Judge Stevens: Do you carry liability insurance? Mr. Johnson: Yes sir. Judge Stevens: About what rate does your business require you to pay on the pay roll? Mr. Johnson: Our secretary handles the insurance end of it. Judge Stevens: In what line are the majority of your employes working? Mr. Johnson: Our employes are packing and wrapping. The largest percent is female help. Judge Stevens: Have you got any system of first aid or do you have any accidents? Mr. Johnson: Well, for the amount of people we have, I consider we have very few- accidents, but we have bandages and things of that na- ture. We treat and give immediate relief for small accidents. I have help hired, a couple of middle aged ladies. It is our intention to work these two ladies serving during noon hour, hot coffee and a bowl of soup at actual cost and make them kind of on the nurse order and the head departments will give what assistance they can in case of anything serious. We also have every week and have been for several months, have had a visiting nurse talk with our female help as to cleanliness and what to do in case of a scratch of a nail on the finger or anything of that kind. In fact, we have really turned some of our girls into being more tidy just by her talks and she does that tree of charge. Of course, we donate towards the visiting nurse association. Judge Stevens: Have you ever heard any expression on the part of your help as to such legislation? Mr. Johnson: No, it has never come to my ears if they have. Judge Stevens: Is help in your line organized in this State? Mr. Johnson: No sir, nothing west of Chicago that I know. Judge Stevens: Have you ever given the subject of such legislation any thought, that is, as to whether it should be elective or compul- sory? Have you ever read or discussed those laws? Mr. Johnson: No, I haven't. Judge Stevens: You wouldn't be prepared to express any opinion on it? Mr. Johnson: No, I wouldn't, and do justice to both sides. Judge Stevens: We would like to have all the employers in the State look up on this subject and be prepared to inform their members in the legislature next winter, their opinions about it. It will stimulate REPORT OF EMPLOYERS' LIABILITY COMJIISSION 57 a little investigation on the part of those gentlemen who will be elected to pass upon this question. Mr. Clarkson: We would like to hear from Mr. Packer on this pro- position. Mr. L. E. Packer: I don't know very much about it. Of course, I have heard and read quite a little here lately. Our business is whole- sale grocery jobbing business and it is not as hazardous as manufac- turing business, altho we have recently started a little factory. "We have about forty employes there and I answered the questions tnat some of you people sent out from Des Moines, giving our experience and the exact rates that we paid and all that. I have forgotton just what it was. I know our insurance costs us about $160 a year. Mr. Clarkson: How many employes? Mr. Packer: In the building probably six girls. Out in the work house about 35 men and in the office, 35 or 40. If they can get a law that will work satisfactorily we would like to see it put in the shape where, whoever is injured will get all that he can get instead of the attorneys geting it. Mr. Clarkson: What will be your annual pay roll about? Mr. Packer: Well, the employes in the house; that wouldn't include the salesmen. You don't want the salesmen in those figures? Mr. Staly: Are they included in your insured? Mr. Packer: No. Mr. Staly: Exclude them then. Mr. Packer: Between fifty and sixty thousand. Mr. Clarkson: What is your idea whether, say in the event that this commission should finally determine to recommend the passage of a workmen's compensation measure, whether a provision should be made for payment by all employes to a fund and distribution made of that fund by the State, or whether it should be brought about by way of in- demnity insurance. Have you thought on that line? Mr. Packer: No. I have thought about it and I wanted some infor- mation on that subject myself. You take a house like, ours; if we should pay into a fund like that and then carry insurance in addition, it would cost us considerably more than it does now. That is simply figuring on it from a money standpoint. I don't know. Mr. Clarkson: Of course, whichever scheme would be adopted would necessarily eliminate the other. For instance, if you were required to carry indemnity insurance, it would be in such an amount as would be sufficient to satisfy the scale of compensation required by the sta- tute. On the other hand, if it was in the nature of a tax upon the par- ticular industry or the individual employer, towards a fund, then, of course, that would eliminate the necessity of carrying indemnity insur- ance. Mr. Packer: That is the point I wasn't sure of, what the plan was in regard to that, but that is what they figure on, is it, in making it so it would? 58 REPORT OP EMPLOYERS' LIABILITY COMMISSION Mr. Clarkson: Well, I cannot say for the commission that we figure upon either. "What we are really engaged in now, is collecting data to determine whether we will recommend any bill at all or not, but the plans of other States are such, that where one is in force the other is eliminated. Mr. Packer: As far as our house is concerned, we would rather have the State collect it and have that the end of it, and eliminate every- thing else. It looks to me that would be the simple way. Judge Stevens: Wouldn't a provision of this kind, that in case of an injury caused by the carelessness of the employe that he should only be entitled to one-half of the schedule, be a good provision, or some other proportion of it? Mr. Packer: I think it would, and I think it would be fairer than the other way. That is fairer by the employer but you would have trouble in the courts on that proposition. Mr. Clarkson: In the event that the Commission should recommend a measure looking towards the payment of compensation regardless of cost and the employer was required to pay a scheduled rate to create a fund out of which the payment for insurance would be made. Do you believe It would have a tendency to cause the employer to relax Individually towards the careful watching and guarding for the safety of his employes. In other words, make him feel that, well, it is not so important to me now for the reason that here Is a fund out of which he will be paid anyhow and it will cost me nothing extra. Do you think there would be a tendency of that kind? Mr. Packer: I think with some men It would make a difference. Mr. Clarkson: Now, if that be true if applied to some employers; do you feel then that you could safely incorporate a provision providing for the extra tax in the event it was found, from experience, that there was a relaxation on the part of the employer or a tendency upon his part to fail to take the proper precaution provided by statute for safe- guarding? Mr. Packer: That is a question. Of course, there would be some individual cases where that wouldn't work out right. An employer that is careful and considerate shouldn't be taxed to pay for some other man that isn't, but as I understand it you have some inspectors that go around thru the more dangerous places, haven't you? Mr. Clarkson: Right along in that- line, I will say; it is regrettable that the General Assembly of the State of Iowa has been rather derelict in providing for appropriations to properly provide for a sufficient number of inspectors. When we stop to think, the great number of industries that we have in the State though we are in the infancy, yet we have only provided for two inspectors for the State. It is a physical im- possibiliy to give substantial inspection. Mr. Packer: Of course, you take these liability companies that write insurance on elevators and all that. They do make the employers that are not watching it, if anything is wrong and they find It, they make them straighten it out. REPORT OF EMPLOYERS' LIABILITY COMMISSION 59 Judge Stevens: Wouldn't this be a fair way to meet the difficulty; with a proper factory inspection law to go along with this new law to provide that the rate on factories be fixed according to the condi- tions in which it is with respect to safeguards; then there would be no litigation between employer and employee. It would simply be up to the Commission administering the law to see that the factory pay the proper rate. If he had any complaint to make he could either cure it himself by adding the safety appliance or he could appeal to the board to review his rate or readjust. Mr. Packer: There is a point there that might work out all right. I don't know. It would be simpler though, if the inspector found it wasn't right and wouldn't make it right to fine him and make him pay it. Mr. R. H. Burtonsmith : I am somewhat perhaps in a unique position, been in the law side of this and then gotten over into the employer's side of It. As a law student I have pried into negligence cases in the Eng- lish common law, in regard to contributory negligence and I feel that ev- ery thing of that sort should be absolutely eliminated. The only question should be the question of the accident and in investigating accidents for the Travelers Insurance Company, the difficulty of honestly placing the blame where it should be, I have found in my own conscience, to be extremely difficult. Then, as an employer, accidents have occured in our plant that, after they have occured, I could see that the situation was dangerous, a situation I ought to have seen before, yet being in contact with it day by day I was blind to it and I feel that the different classes of business should stand that liability to the risk of accidents and that the employes should not have to carry the burden. The bur- den of proof should not be thrown upon them and that no questions of gross negligence, contributory negligence or anything, any legal ques- tion should be brought into the case because if you get into that and question the fact as to whether the negligence was on the part of the employer or on the part of the employe, you have a situation there that is endless until you get to the Supreme Court two or three times and we all know that by that time the 80 cents goes to the lawyer and 20 cents to the employe, while the situation should be reversed and the 80 cents should go to the employe immediately and the 20 cents be used by the employers in protecting their employes. And if the risk is placed upon the employers, it seems to me that the mutuality of the risk will develop a public opinion on the part of the employers that will absolute- ly compel them to do the best in their power to make their plants safe for their employes. I believe we can depend on the instinct of self-pre- servation to protect us against wilful accidents and I think that is all we ought to be protected against, wilful commissions on the part of em- ployes resulting in harm to them. Mr. W. E. Tackaberry: The present conditions may be seriously against the laboring man. The law as it stands today may be absolutely against him. He may be up against it under present court rulings. Is 60 REPORT OF EMPLOYERS' LIABILITY COMMISSION that any reason why we should go clear to the other extreme and put the whole thing on the employer. Judge Stevens: Mr. Moore, let me ask you one question. Don't you think that the State ought to contribute a share in some way of this compensation which we are to exact from the employer, regardless of fault, inasmuch as the State Is largely benefited, both in the saving of court expenses and in support of the unfortunate? Mr. 0. J. Moore: Yes sir, I do. Judge Stevens: Do you not believe that if the State should defray all the expenses of administration that that amount would be at least as small a contribution as the State ought to make? Mr. Moore: You use the term administration. I don't exactly appre- hend that. Judge Stevens: That would cover the payment of salaries of the men who are to pass upon all these injuries. It would cover the ex- penses of the auditors who would go about, we will call them auditors and inspectors and stenographers, clerk hire, in fact, all the expenses necessary to administer and pay these claims. Now, I will suggest that the State already pays all the expenses of the labor bureau, which would be left naturally a part of this system, factory inspection and these court expenses and other things would be eliminated from the State taxation now; and if the State should pay 25- per cent of this cost, I do not think they would be the loser and I believe that the total cost of the industries would not exceed what they would pay, if they were paying for good liability Insurance, which would cover all ex- pense which will occur thru their fault, if you eliminate the defenses of fellow servant and assumption of risk, which in many cases, I be- lieve, will have to be eliminated in any event and are already eliminated so far as the railroad companies are concerned now. Mr. Moore: I would think that the difference would be very small as against the employer, if any. We will assume we are all carrying liability insurance; that is simply a shift of responsibility from employer to the insurance company, is it not? Judge Stevens: Yes sir. Mr. Moore: Now, relative to negligence on the part of the employer in leaving devices dangerous to the employe. The courts will still de- termine damages the same as they have done before. Judge Stevens: I think not. It would eliminate the litigation. Mr. Moore: In what manner are you going to provide for the em- ployer assuming liability incident to wilful neglect of proper construc- tion on his part of devices etc? Mr. Staly: In some instances they have made it by a fine by im- posing half of the damage upon the employer. Mr. Moore: Why shouldn't he stand all of it? Mr. Clarkson: Upon this theory; just as suggested by Mr. Burton- smith. Mere familiarity at times breeds contempt. You feel that you are complying with it and yet, after the injury occurs you discover that you have not been strictly complying with it. REPORT OF KMPLOYERS' LIABILITY COMMISSION 61 Mr. Moore: There is a feature there of protection to the employer that according to what I learn here, would be lost to him under the new plan. For instance the employer who would avail himself of the protection of liability insurance now, sends for a provisional inspection of his premises before the insurance is given. Mr. Clarkson: No, the moment that the law goes into effect, the insurance starts. Mr. Moore: Under the present system; our plan today, if it was previous to insurance having been gotten might stand as barely pro- vided for. It might have hazards of life there that we were not aware of. "Well, to save ourselves we apply for insurance but before that insurance is granted, the premises stands for an inspection and we are made aware of defects in construction required to place things in proper shape before the insurance is granted. Now it occurs to me .that the law should provide inspection of premises the same as is done now, only more rigidly probably, and where an employer gives proper practical recognition to the dictates of the inspector, and places his property in due form, he would relieve himself of liability, the same as he does under the provisions of protection afforded by the liability company, and damage should fall, upon the employer, only as it would fall under a properly regulated form of liability insurance. Mr. Clarkson: You mean total liability? Mr. Moore: Yes. I look upon the provision of income to the injured to the extent of regular compensation as would be received of a health company. Sentiment ceases when it comes to considering the liability of the employer in matters of negligence, because that is a business pro- position and runs into dollars and cents indefinitely. Judge Stevens: You are not prepared then to approve a law which holds the employer responsible for accidents for which he is not at fault in any way? Mr. Moore: No sir. I hold that there should be a provision of mutu-a character for the employe who becomes injured, whether it be on account of personal negligence or not. Mr. Staly: Y'ou mean the matter of compensation he should have anyway? Mr. Moore: Yes sir, but when it comes to the matter of damages, then I think that subject should be handled upon a basis of real lia- bility, the same as obtained under well regulated liability insurance. Judge Stevens: What distinction do you draw between damages in case of injury and compensation? You use the two terms in contradis- tinction to each other? Mr. Moore: I would say that in relation to a man's daily income that the whole community should have a mutual interest therein and that the affairs of his family living should in such instance become the concern of the whole community, the very fact of the man having been an industrious man qualifying him to such consideration. In the matter of damages which generally enter into large sums, more or less, it becomes a business proposition, as I see it, that should be dealt 63 REPORT OF EMPLOYERS' LIABILITY COMMISSION with upon a business basis, wherein the matter of negligence should determine the employer's liability. Judge Stevens: Let me explain to you that all these laws contemplate the elimination of the question of negligence, unless it is wilful negli- gence, and have for their purpose the payment of a fixed amount for each injury, the same as accident insurance provides and that the em- ploye shall be paid that, regardless of -wjiether he is partly at fault or not. Mr. Moore: You are changing the present provisions of liability in- surance to that of a fixed payment to injured, irrespective of the at- flicted's fault in the premises. Judge Stevens: Yes sir, except wilful. Mr. Moore: For instance, where the employe becomes permanently disabled. Of course, the same consideration, we would give him his compensation. While off temporarily disabled would naturally obtain under the provisions of greater damage. Mr. W. E. Tackaberry: I can't see the justice of the theory that the laboring man should be absolutely exempt from any liability irrespec- tive of what course he pursues in complying with the instructions of his employer. Mr. Clarkson: The Commission will stand adjourned until 1:30 P. M. 1:30 P. M., March 21, 1912, Sioux City, Iowa. Mr. O. J. Moore: As to where the liability or loss would fall in the event of damages declared as the result of negligence or improper facili- tiss; there was a point unsettled. Judge Stevens: Do you think that we ought to recommend a law which would compel the employer to compensate an employe for an injury received for which the employer was in no manner at fault? Mr. Moore: No sir, I do not. I understood, in my consideration of the subject that the commission was acting for the State. Judge Stevens: Which commission do you refer to? ]Mr. Moore: The administrative commission; and that compensa- tion for ailments were to be paid out of the fund established by State taxation. I did not understand that the employer was to vitiate his right to court precedure. Judge Stevens: In that respect you are in error because all these statutes which have been enacted along this line contemplate that the industry shall bear the burden of the injuries regardless of fault; but som^e of the states, say Ohio, has enacted a law whereby the employes contribute by paying one-tenth of the premium necessary to carry in- surance, that will cover all insurance regardless of fault. Mr. Moore: Well, a business proposition, of course, involves busi- ness conduct of the enterprise. The matter of paying a man for ser- vices that he don't perform is not a business proposition. It becomes a matter of sentiment, involving more or less charity and I do not believe it would be just to place the burden or force charity upon any one REPORT OF EMPLOYERS' LIABILITY COMMISSION 63 institution. As I said this morning, when I was under the impression that it was a matter of the Commission dispensing State funds, I do helieve that the welfare of any family that has been left helpless on account of whatever need or disaster, that benefits during the time of honest endeavor, as a matter of community interest or State interest, and I think it would be a good law that would provide for them, but I do not see the justice of an arbitrary arrangement that would give aroi- trary power to a commission to come in and say what an individual should do in support of a number of families whatever might befall. Judge Stevens: Which would you prefer the Legislature would do; to enact a law that the employer should not avail himself of the de- fense of assumption of risk or the negligence of fellow-servant, or a law which would compel the employer to insure his employes against accidents, whether they occured with or without his fault, if you had to decide between one of two such enactments? Mr. Moore: Well now, can you draw a simile? Judge Stevens: Yes, suppose that you and I each were running a packing house and that you had elected to come in under the law, in- suring your employes and I had elected to remain under the law, with my defense taken away, and that we each had an accident of the same kind, that Is, one where the fellow-servant was at fault and not either your fault or mine. I would be sued and I could set up no defense ex- cept that I was not negligent. If the jury found that I was negligent, I would have to pay damages. In your case, your premium which you paid, having elected to go under the law, would compensate your em- ploye fully for his damages, that is the amount fixed by the law. I would have my law suit; my employe would finally be defeated. I would have paid my lawyer and he would have paid his and we would have had the expense of litigation. He would have suffered his injury and have had no remuneration for it. Mr. Moore: Well now, I will tell what my idea of fairness in rela- tion to the treatment of employes under such circumstances. Judge Stevens: Can you tell which you would rather Mr. Moore: Well, the ramification of circumstances under each in- stance would be rather more than I can apprehend at first glance. Judge Stevens: Go ahead and give your answer then. Mr. Moore: I would be In favor of the commission that would be authorized to look after the disabled in such a manner as might be fairly determined, out of State funds created by taxation and in instances where damages are incurred by virtue of either neglect on the part of the employe or on the part of the employer, that established sums be paid according to Ihe injuries inflicted by the employer where it would be proven by the commission that he had not kept his premises according to the inspection of the inspector of the State's Commission. I would feel that to be a fair provision. But arbitrary taxation upon a concern, whether liability raally rested with the concern, I would consider arbitrary, unbusinesE-like and unfair. Of course, the con- duction of business requires business consideration of each of its busi- ness happenings where it affects incomie or outgo, or else it can't exist. 64 REPORT OF EMPLOYERS' LIABILITY COMMISSION Judge Stevens: There are certain inherent risks in the manufacture of most everything, which risks, many claim, should he horne hy the in- dustry. Do you think that there are such risks that should be borne entirely hy the industry or wholly by the employe? Mr. Moore: Well, not long since we had some men piling sugar in the warehouse. The tiers were, as I recollect, seven high. That would he about the height of a man's head. "We had every facility for the proper handling and the most convenient handling of that sugar, trucks and the like, but one of the men, while working there, became en- gaged in a wrestle with one of his companions and a bag rolled from the top tier down and broke his leg. Well, we had no trouble about that. There was no disposition on the part of the employe to make 1 ^ a manner, however, that I am sure he felt was entirely liberal. But I would not feel the justice in an arbitrary ruling by the Commission, acting under a schedule of assess- ments for such breaking of a leg, which ordinarily, I imagine would be large; I would not feel the justice of an assessment rendered under such circumstances. Judge Stevens: If it was done while wrestling it would not be in the course of their employment, would it? Mr. Moore: The hours of their employment for which we were paying. Mr. Clarkson: It is not in the line of duty, however. Judge Stevens: Did the wrestling have anything to do with dis- tributing the sugar? Mr. Moore: I hardly think so. Judge Stevens: I agree with you, there is a case where the accident should not be paid for, wholly at least, by the employer; but what do you think of having the employe contribute a part to such a fund as being beneficial to both in the long run? Mr. Moore: Making it a State proposition? Judge Stevens: Yes sir. Mr. Moore: That would be amply fair. I should imagine that properly based, would work out. Mr. Clarkson: Take the case that you stated Mr. Moore; what was the real cause of the sugar falling? ;Mr. Moore: I presume poorly poised. Mr. Clarkson: Of course, there was reasonable care upon your part and the part of the employee in iolacing that sugar, hence no fault upon the part of either party in the performance of their work. Now, sup- posing an employee had been walking along there in line of duty, going to some other part of the plant, and had been injured; clearly there were no legal liability there on the part of the employer. Mr. Moore: That would be a question, I would imagine. Mr. Clarkson: We will take it for granted that there were no legal liability. Then do you think it fair that the employee should carry all of that burden or would you prefer some other system by which em- ployes under such general conditions, should receive compensation? REPORT OP FJMPLOYBRS- LIABILITY COMMISSION 65 Mr. Moore: Well now, I stated my interest in humanity and the care of those that are needy, that is for good reasons. But a business pro- position exists by virtue of its income being greater than its outgo and unless the proprietor of that business is able to conduct it along lines of calculation that will develop that nature or condition, his busi- ness won't last. Therefore, I hold that his outgo should be based upon a business consideration of things, because no one steps in to make good in an arbitrary way that which would be taken away from him in an arbitrary way. Of course, incompetency in the maintenance of premises properly habitable would put him out of business and he would have to suffer for it, but where he exercises due diligence in providing satisfac- tory premises, I don't deem that there should be vested arbitrary power in a Commission or board to come in and compel that man to pay out of his individual treasury that which is not owing to anyone because of neglect of personal liability upon his part. Judge Stevens:^ It seems to me we fully understand Mr. Moore's po- sition and if we hear anyone else we better proceed. Mr. August Willigiss: I am a manufacturer. Since lunch time I have thought over this matter a little more and in order to concentrate my thoughts I have put them on paper. The love for life and happiness makes every human being cautious to take care of life and limb. The seemingly contributory negligence of the workmen in case of an ac- cident must be charged to the extremie competition among workmen in modern industries to get and hold their job. I cannot imagine a working man to expose himself to danger and I think that industries should bear the whole hazard, even if negligence can be shown on the part of an employee. It seems to me that if the working men were sure that they were protected in all cases of accidents, their standard of efficiency would be raised and the maintenance of a cripple would be taken from the general public and shifted to where it belongs, namely, to the industry where the danger was that he was crippled. Judge Stevens; You think then the public should be relieved of all these burdens and the man who employs labor should stand it all as a class? Mr. Willigies: As a class. My view is that it should be placed in the industries where the hazard is. Mr. Clarkson: If that is your view, how would that industry be able to live, from a business standpoint? Mr. Willigies: Just as much as it has to figure on insurance. They would just have to add this much to its expenses, cost of production. Mr. Moore: I would like to ask Mr. Willigies how ha would provide for the employes who would become disabled incident to having served defunct concerns? • Mr. Willigies: They would not get hurt after the concern has gotten to the wall; they would certainly get hurt while they are still on their feet. Mr. Moore: Supposing they failed 24 hours later? 5 66 REPORT OP EMPLOYERS' LIABILITY COMMISSION Mr. Willlgies: It is in the same line as if I failed to pay my premlur on my fire insurance. Mr. Moore: You wouldn't discriminate against employe's In any sue: way as that in the event the individual employer that they workei for failed, would you? Mr. Willlgies: I think if a problematical case like that could b imagimed, that should be no bar to enact legislation which is on th presumption that business men that have employes are able to pay thet and to conduct their business. Mr. Clarkson: If I understand your position in reference to tha matter; it would be taken Into consideration by the whole' scheme o taxation, similar to the scheme now established by either fire insui ance or indemnity insurance, where they charge a sufficiEnt rate o the whole business to meet general contingencies. Judge Stevens: Are you familiar with the Sherman law? Mr. Willlgies: I am not. Mr. Tackaberry: I will ask if Mr. Willigles has had much experienc with common labor help, the employment of men in common labor? Mr. Willlgies: Not very much, no. Mr. Tackaberry: Then I judge your experience has impressed yoi what little you have, that as a rule, a man doesn't take the chances c an accident to protect himself against an accident, that is, he wouldn take a chance where he thought there was any chance for an accident do you not think that position is absurd? Mr. Willlgies: I think the love of life and limb and of its own ha] piness makes every human being cautious. Mr. S. H. Lockwood: I will say that if Mr. Willigiea was employin seven or eight hundred human beings, as we are, he would find ths there is quite a large percentage of those seven or eight hundred hi man beings who are careless and will be careless no matter what pr ventatives you use and it is an utter impossibility to surround you self or your plant with all of the necessary precautions which wi prevent accidents, no matter how careful you may be and I am quil sure Mr. Willlgies don't look at this matter in a broad minded vie^ There are any quantity of accidents which occur to employes for whic the employers are in no way responsible and never could be prove responsible in a court of law. When you come in contact with a lari number of employes you gradually come to that idea that there are certain percentage of those employes who are looking for all of tl money they can get out of you. They are simply working with thi one aim in view, to' get all the money out of you, either in wages i compensation for wages received and I think every large employer labor in this room will agree with me in that respect. Mr. Howard S. Baker: I am in Uie telephone business. I am in fav of some laws that will protect the innocent and unfortunate workma I am not in favor of the employer standing all of that expense, ho" ever. To illustrate the point, I am going to relate a little accide: that happened to one of our men. I will say, not the class of men p( haps that some employ. He is a man that has been In the telepho: REPORT OF EMPLOYERS' LIABILITY COMMISSION 67 business sixteen years; a well educated man; a man of a great deal of ability and has been in all kinds of hazardous positions, as a man will, in the telephone business; up on poles, tops of roofs and all that kind of thing. During that period he never met with an accident. About a year ago he was on the pavement in an alley throvv'ing a rope up over a wire. An accident befell him in which he slipped down and broke his knee cap, of course, in throwing the rope, broke the knee cap of his leg, and was put in the hospital and remained there a couple months and it was' five months before he was able to go to work. My contention is this; that man is entitled to compensation from some- body. Still it was no fault of ours that the accident happened. It would be the fault of ours if the superintendent sent him up on a pole in a hazardous place to throw it across. His family required income and support, therefore, he, I belie'e should have compensation from some source. Now, I think if that accident had occurred where it was purely our fault, the courts would determine that point without ques- tion in an action for damages against us and we would have been liable for it, which we should have been. Judge Stevens: Why should you have been at fault if he had been hurt on the pole? Mr. Baker: Because it was a hazardous position. Judge Stevens: Would you have been at fault because he happened to climb the pole? Mr. Baker: We will say he went up on his own accord and went to throw a line out and slipped and fell and he had not been instructed to go there but he did go there; if he had been told to go there, wherever a case where the company was liable for paying him in an unusually hazardous position, thei'e would be no question about us having to pay that. Judge Stevens: You have brought us very niosly up to the question; shall the industry assume the burden for the accidents which occur in line of duty, where no one is at fault? Mr. Baker: I say not in all cases. Mr. Moore: Is it your idea, Judge, that the telephone business of the State should assume the liability of that man? Judge Stevens: No, I am expressing no opinion as to what ought to be done but this question is the very question we have got to deter- mine if we report a bill. We have got to cover that very question and it is for the purpose of ascertaining the opinions of employers and employes as to whether we should report a bill that does provide for the payment of such injuries. I am not expressing my personal views on that. .Mr. Baker: In a case where it is proven that the company is liable they should pay the entire amount. Where it was purely an accident, where neither the employe nor employer were responsible, I say that man should be compensated from some one. Judge Stevens: Why? Mr. Baker': Bscause of his faithfulness and the good of humanity. 68 REPORT OF EMPLOYERS' LIABILITY COMMISSION Judge Stevens: Don't most of that faithfulness result in benefits from year to year to your company to the Industry he was working for? Mr. Baker: I will put it as compensation for his faithfulness. Judge Stevens: Who is in debt for that faithful service, the com- pany? > Mr. Baker: I claim the company should bear a portion of that and I claim the man who is injured should bear a portion of it and a certain amount should be charged to the public. Judge Stevens: Now, you agree with me. Mr. Tackaberry: Do you assume that the compensation he has had from day to day is not any compensation for his faithfulness? Judge Stevens: I a!ssume he has rendered equivalent for all that he has drawn. Mr. Tackaberry; Why haven't the company paid him? Judge Stevens: They have paid him. Mr. Moore: I think an individual business assuming the rcspon-si- bility of error and penalty of individual employes, should take advantage then of the mutuality of interest of all people in that same line of business, just the same as insurance companies strike an average on a large number in order to arrive at a rate that they should charge for a certain line of risks. Mr. Tackaberry: It wouldn't be fair for a powder mill to pay the same risks that a jobbing institution would put in. Judge Stevens: Nobody proposes that they should in any place on earth. Mr. Moore: In the end I take it that the whole thing would be settled by taxation. Judge Stevens: The principal part of it would be taxed to the fellow that hires the men. Mr. Clarkson: It is assumed by the advocates of the proposed change that ultimately it would enter into the cost of production. Mr. Tackaberry: Might it not enter into the question of wage? Judge Stevens: Certainly, that enters into the cost of production. At this time the Very Rev. F. J. Brune, V. F., of Alton, Iowa, was present and made an address. His views were afterwards written out and appear in the appendix. REPORT OF EMPLOYERS' LIABILITY COMMISSION 69 SIXTH SESSION— FORT DODGE Port Dodge, Iowa, 10:00 A. M., Friday, March 22, 1912. Judge Stevens: I believe we will come to order and I don't know t what I had better make a little statement in opening, that the law lich created this commission, is the first step taken in this State, think, along the line of legislation, which has for the past 25 years en progressing all over the world, so that now every country in Europe d three of the large provinces in Canada, Quebec, Alberta and British lumbia and in our own country, the states of New Hampshire, Massa- usetts. New Jersey, Ohio, Michigan, Illinois, Wisconsin, Kansas, Cali- rnia and Washington already have passed laws, and in Australia and en Africa they have similar legislation, so that it hardly can be said be a new subject, altho to a great many of us it is a question that s hardly been considered, and it is because of that fact that this com- ;ssion decided that it ought to go to the principal centers where there ire a large number of employes and employers, and -hold open meet- gs to get their views, because there is a great diversity in the different ivs in these different jurisdictions. For instance, in looking over a nopsis of the laws and drafts of bills on workmen's compensation d insurance of the different States in this country, in the United ates, they have different systems as to the question of whether it all be elective or compulsory and what defenses shall be abrogated ,d under what conditions, and the burden or cost, whether it shall shared between the employer and employe or whether it shall be loUy collected from the employer, and then the schedule of compensa- m for different injuries and , how that shall be adjusted, whether a roent of the wage or a fixed certain amount for certain injuries d various other details. But the plan of all these States and coun- ies, whether the system is elective or compulsory, is, to take fi'om the iployer his defenses of assumed risk, fellow-servant law and the law contributory negligence. In other words, where these systems have ne into effect, the employer, if he has comie under the law, he cannot sued for an injury, but the employe must take the compensation or surance which the law provides; and on the other hand, if the em- oyer is not under that law and is sued, he cannot defend on the ground at the accident was the result of an assumed risk or that a fellow- rvant committed the injury or that his employe was guilty of oon- ibutory negligence. He is left with his bare defense as to whether not his negligence caused the injury. That has never been taken i^ay where a man stays out. Now, with that statement which I have made, in order that you can e our purpose; we have not as a Commission prepared any bill to be ot at because we don't wish to set up our opinions in the form of a TO REPORT OF EMPLOYERS' LIABILITY COMMISSION bill and feel that -when we went around among the employers and em- ployed, that we had a preconceived notion of what we should do and he compelled to defend it. The idea was, before we put our conclusions into form, to get the benefit of consulting with the employes and the employers. So we would be very glad to have you gentlemen discuss this matter in your own way. R. O. Green, of the Green-Wheeler Shoe Co.; I have been reading over the synopsis of some of the recent enact- ments in the different states as shown in this pamphlet sent out and I notice, I think, in one state where they exempt the. farmers from the liability acts. There is one feature in regard to the manufacturing industries of the State that I think ought to be taken into consideration very strongly and that is the infancy of the industries that are located in the different localities that are engaged in manufacturing, outside of the development of the natural resources. Such institutions as ours and of others in the different towns, where we have to ship in raw materials and manu- facture the product in competition with manufacturers in other States that are well settled in that business. Now, if a law was enacted that was not divided into classes that would be universal in its application, might create a very serious handicap to us because of other concerns in larger centers not having such laws and not having that expense to bear. The profit in our business is very small per unit, so exceeding- ly small that it is only one step over the line to a matter of loss, and the only way, in our business, that we can make any money is in the volume of the business. We have got to get to a certain volume every year, otherwise it ends in loss instead of profit. Being located away from what you might term the centers of our industry we have a great many handicaps to overcome and any added burden would just simply be that much of a burden for us to overcome. Of course, it might be one argu- ment that might be brought up and say, you ought to get back where the other fellows are. That is true, probably we would if we didn't have our invested interests probably would have discontinued long ago, if we didn't have our invested interests such as our own building and we see we have got to fight it out. Now, in our business there is' very little likelihood of accidents. In the sixteen years that we have been here we haven't had, I don't think, more than half a dozen accidents, none ser- ious. We have never paid out but $50 on account of any accident, none ser- ious happened in our plant. If there was a law enacted tnat would detail upon us a uniform percentage of compensation or assessment upon our pay roll, nine-tenths of that and probably more than that; you might say ninety-nine one hundredths and be still within the bounds of reason, would go towards the payment of damages in other Indus- tries more hazardous. We are the only factory of our kind west of Cincinnati, Ohio. Judge Stevens: What rate do you have to pay on your pay roll now, for liability insurance? REPORT OF EMPLOYERS' LIABILITY COMMISSION 71 Mr. Green: I could have looked that up definitely but I think It Is one-twelfth of 1 per cent I am not far out of the way. I think we get three years possibly for $210.00, based on $75,00'0 pay roll. Of course, it amounts to a little more now, because our pay roll is larger. The three years comes cheaper than take it year by year. Judge Stevens: You have one of the lowest premiums to pay? Mr. Green: Y'es sir, absolutely the lowest. Judge Stevens: What are your views in regard to the advisability of such legislation? Mr. Green: Well, I feel of course, that the tendency has been for years along this line and if there is anything of the kind done, what I would like to see done would be a classification of the different manu- facturers and making the assessments according to their hazard. Judge Stevens: Don't you think insurance companies do that now? Mr. Green: Well, when you bring the insurance company proposi- tion into it, you bring another feature into it. You will find this will be, I think, the effect of any legislation of this sort. It will increase the premium and if we have a universal law it will increase the premium universally. Judge Stevens: Yes, it would naturally increase it some from the fact that the law contemplates compensation for all injuries, whether by fault or not, hence all these injuries for which the injured party is now at fault, would be paid for, and also all injuries in which the employe was wholly or in part at fault. Mr. Green: Make it an arbitrary proposition and the insurance com- panies would base their rates accordingly. Judge Stevens: Yes sir. Mr. Staly: What would you think of a scheme like this: Say we would pass a compensation law in which all classes of injuries, whether by fault or not, of the employe or not, or the employer, and then that the industries be rated according to the hazard of the industry and thus reduce the premiums to be paid direct to the State, the State pay for the administration of it and thereby, as we have from the best statistics we can gather, that it costs at least 25 per cent to get the business, it also costs another 25 per cent to administer that business, so if we would make that compulsory and say it was a State insurance and you would pay the premiums direct to the State, the State administering that and thereby saving 50 per cent of your present rates now, and that would in a measure balance up for some of these hazards which you would have to pay under this law, which you are not liable for now; what would you think of a scheme like that? Mr. Green: Well, I wouldn't favor the classification of the risk as much as I would the classification of the husiness because if a man got his hand cut off in our factory it is the same kind of an injury that he would receive in Mr. Breene's factory, for instance, whereas it wouldn't measure up really the hazard of the business, because there is some busi- ness far more hazardous than ours. Mr. Staly: If we rate them according to the hazard of the business, then you pay that rate and nothing more. 72 REPORT OF EMPLOYERS' LIABILITY COMMISSION Mr. Green: One thing I could see about that would be to arrive at the hazard whereas it would be simplified if we would class the busi- ness. Mr. Staly: I will explain. In the State of Washington the legisla- ture classified the 'industries according to hazards and placed the rate themselves. These rates are paid in quarterly; the law is administered by a commission called an Industrial Commission'. The commission has power to keep close tab upon the accidents in the different industries and different factories and if they find that the accidents are unusually large, in a class which has a lower rate, they can take it from that rate and put it a higher rate, or if they find the amount paid in for premiums in a class is in excess of what they need to pay, they can take them out of that class and put them in a lower class. That is the way they regulate it there. It looks to me that scheme is pretty fair. What would you think of a scheme like that then? Mr. Green: Well, as I understand it, what laws have been passed are really experimental in their nature. We haven't had any experience. I find there is none over two years old. The whole proposition is one of experiment. I am quite clear in this, that if the business are classi- fied, then every line of business absolutely knows just exactly what they have got to meet in the matter of competition in their line and they can regulate their costs accordingly. The cost proposition in our business is a very intricate, difficult proposition. There is no line of business in existence today that has so many difficulties to encounter as in arriv- ing at the cost of making shoes. It is one of the largest single elements of cost in the conduct of the business to employ help to find out what the cost of the product is'. I might say it is almost twice as much as any other single element of cost in the business merely to try and find out what the cost is. Whatever arrangement is made, if any arrange- ment is made, I should think that it would be more equitable to divide the assessment, the employer paying part and the employe paying part and the State a part, and particularly so in a State like ours where the manufacturing industries, what I might term, the miscellaneous in- dustries, which includes all kinds of industries, outside of the develop- ment of natural resources. Your miscellaneous manufacturing is not developed in this State. We have always had the freight rates against us in hauling raw material into the State, so that anything that mili- tates further in that development, is certainly disadvantageous to the State at large, as a whole, so that it would seem to me that if such legis- lation is enacted that the expense should be divided up In some equi- table way to relieve the miscellaneous manufacturing business from any too heavy burden. Mr. Staly: Then I take it that your position is that you would not be averse to this kind of a law being passed, provided that the State will bear part of that burden, and the employe and the employer? Mr. Green: I won't say that I wouldn't be, because I think it is going to come. I have watched It for quite awhile and, I wouldn't say I would be opposed to it, if an equitable arrangement could be made, whereby REPORT OP EMPLOYERS' LIABILITY COMMISSION 73 the burden wouldn't be so heavy that It would discourage and place ua in a position where we couldn't. Of course, our only alternative would be to pull up and go to some other place or else quit the business be- cause there is a point beyond which business cannot thrive, if they get beyond the point of competition. Judge Stevens: You foresee the difficulties in getting an equitable law? Mr. Green: Yes sir, I see that difficulty. Mr. E. J. Breene: I wish to state that my position in this matter would be that to pass a law that would be equitable and right between the employe and the employer, but I think in consideration of your recommendation you ought to take into consideration that we are new concerns in this western country paying high wages, higher wages than eastern factories, higher interests, higher transportation and that if there was a law enacted, the employe and the employer ought to stand it alike and particularly the consideration ought to • be given to the new industries starting here in the western country which are not developed. Furthermore, I think that it ought to be a State law and that all different factories ought to be classified. On that particular question I presume a little information along the ime of our own factory would be what you want. Judge Stevens: Just what we want exactly. Mr. Breene: I have run it thru in a rough way and I will tell you, we employ about 110 men and that we use explosives, also the mining clause is given in our policy, and our pay roll is something between $45,000 and $60,000 a year and we pay a rate of 1 per cent on the average pay roll. During the four years we have been running our plant, we have adjusted all claims without controversy, thai is, without any suit. And the total amount of our claims is 360 odd dollars; and we have paid out in insurance premiums something like $2,300 and we run all kinds of electric and steam power. I would say this, that the wages paid in the west by factories of this kind, are at least 25 per cent greater than factories running in the old established clay districts such as Akron, Ohio and eastern factories, and on that account I think the commission should give some attention to the manner of having the premium or the money paid in for protection, to come in part from the employee as well as the employer, but I would be in favor, I think, of having the law passed and have it given equitable and fair consideration. Judge Stevens: I think that information is very valuable. It is such statistics as we are trying to get. Mr. W. V. Mulroney, of the Mulroney Mfg. Co., manufacturers of over- als, shirts, coats and pants. We have a factory that employs about 100 to 110 people, mostly females, and of course, we are situated kind of outside of the manufacturing district of this class. You take Balti- more, for instance, has got a great many of our class of factories and New York City and all the larger points in the east. Those people have been making our class of goods for generations; their fathers and mothers made them and they know how better than we do and they 74 REPORT OP EMPLOYERS' LIABILITY COMMISSION are able to make stuff cheaper than we are. We see that, because they are able in a great many cases to undersell us and if we were selling goods in the same territory and if they were just as close to our customers as we are, they could sell better because they can sell dheaper - and they can really make better merchandise because they have been at it so many years. We started here as a couple young men nine years ago in the business, without any experience in the business, and worked up to a pretty fair business. Now. they are closer to the market of getting the raw material; they can get it quicker and they can get it cheaper. They are so close to the market of getting the raw material that they can get hold of short lines of goods that some of the eastern factories have to sell out at a less price than we can because they are on the ground to see it, and therefore they can offer it cheaper than we can. In all of these larger centers there is some kind of a place for the help to board "and room, which we haven't got. They can board and room far cheaper than the help in any of these western states and they can get help easier on that account. Our business is a trade and of course a trade, in any trade the help don't get as much at first at they do afterwards. If the help has to pay more for their board and room for the first few months it is harder to get them and hard to keep them. Then there is this the condition, we have to carry a larger stock of the finished article than these eastern men. For instance, overall but- tons, we have got to buy an awful big lot because we can't get it from the east short of three to four or five weeks. The other man can get all of these supplies just as he wants it. He don't have to carry such a big stock and if we happen to run low and have got to pay high express rates if w.e need a shipment in a hurry. If there is a lost shipment we have got to pay very high express rates; that would bring all of our expenses higher. In regard to the law that is figured on being passed, I think, of course, we ought to pay part of it and the men that would get the benefit, the people that would get the benefit should pay part of it also. I don't know of anything else in particular. I think that is about all. .Judge Stevens: About what rate do you pay, one year with another for liability insurance? Mr. Mulroney: Well now, that I don't know, because it is my brother that takes care of the insurance and he isn't here. I would say it is about like the Green-Wheeler Shoe Co. Judge Stevens: You have no great amount of machinery that is hazardous? Mr. Mulroney: Another thing I wanted to mention; We haven't any hazardous machinery to amount to anything at all. In the nine years we have been in business we had one accident whereby one of our help got his finger cut on a cutting machine and laid off four days and we paid his wages while he was off and paid the doctor bill. That is the only accident whereby anybody has lost even half a day. We have oc- casionally had little accidents like a needle going thru a girl's finger, but we have arnica there and stuff to fix it and we have a doctor that REPORT OF EMPLOYERS' LIABILITY COMMISSION 75 takes care of anybody that should get hurt and we have never had any- thing like a serious accident of any kind. Judge Stevens: This little expense, you hear It yourself? Mr. Mulroney: Always figure on bearing It. We have never docked anybody for any time that they were off by being hurt. In fact, one of our drivers at one time stopped to see a ball game and in his ex- citement he jumped off of the wagon and sprained his ankle and we paid him for two weeks while he was home. Mr. J. L. Johnson: I believe our business Is similar to Mr. Green's and what would be sauce for him would be sauce for us, in the sewer pipe business. I think he is a little bit liberal on the difference in wage, however, between the eastern concerns and ours. I believe 25 per cent isn't enough difference. Judge Stevens: You think we are pretty conservative on that? Mr, Johnson: Y'es sir, very conservative and I didn't know the na- ture of this meeting and brought no statistics as to premiums we have paid or accidents that we have sustained in the five years we have been in business, enough to be heard. Judge Stevens: Have you any opinions in regard to this sort of legis- lation that you would like to express? Mr. Johnson: I should judge that our General Manager would have but it Is a little out of my line, traffic department. I have often heard Mr. Armstrong express himself. He is out of the city for an indefinite length of time. Mr. I-I. M. Pratt: I don't know that I have anything particular to say. I haven't been in touch with this proposition at all. I am like Mr. Johnson; I came up to hear what the rest of them had to say. Mr. C. A. Roberts of the Messenger Printing Co.; I wanted to ask whether the size of industries makes any difference. It seems to me, laws in regard to the age limit that have been passed, if I remember right, some small industries were not affected by the law. I want to know whether this makes any difference. Sometimes little competitors bother people who are a little larger. Mr. Staly: In most of the acts that hav,e been passed, those that have less than four do not come under the act, four employes. That Is the smallest number I know of. Mr. Roberts: I am in the printing business. Our business Is most of it inside of the State of Iowa. We could stand, I think, what the rest of our competitors could stand. There are a number of small printing offices. They i,gure if they are making wages they do well. Judge Stevens: In New Jersey they include all. They include the farmer, and there Is no distinction, I think, in respect to the numner of persons employed; absolutely covers all. The State of Washington has a compulsory compensation law operated along Insurance lines, by fixing a rate according to the hazard of the different employment, but they have a schedule of what they call hazardous employment therefore they don't all come in, but it is not based on the number of employes. 76 REPORT OF EMPLOYERS' LIABILITY COMMISSION Mr. E. J. Breene: Even though we had to pay more wages, it would he a safeguard, if there was no co-operation between the employer and the employee, even though the wage should be raised by putting on a tax of that kind. If all the employes knew that they were interested themselves, it would be ii safeguard to the property. I think co-operation between the employer and employe. If the wages should be raised it would be a safeguard to the property and lessen the expense of running the mill. Judge Stevens: We will adjourn until two o'clock. 2:00 P. M-., Friday, March 22, 1912. Fort Dodge, Iowa. Jlr. J. L. Johnson: I represent the Plymouth Clay Products Company and the Plymouth Gypsum Company. We employ at the gypsum mines approximately 50 men and at the gypsum mill 75 men, making a total of 125 men for the Plymouth Gypsum Co. The Plymouth Clay Pro- ducts Co., employes about 80 men. The annual pay roll of the Plymouth Gypsum Co., is approximately $75,000 divided between mill and mine about half and half. The approximate pay roll for the Plymouth Clay Products Co., is about $55,000 to $60,000 a year. The premium on the liability insurance for the mine is approximately 1 per cent and for the two mills, that is, the Plymouth Gypsum and the Plymouth Clay Products mill, about six-tenths of 1 per cent. From what we have been able to gather at this meeting, this Washington law, with slight varia- tions, that is, not dividing the different industries in quite so many classes, would be an ideal law for Iowa. Mr. Clarkson: The Commission stands adjourned until ten o'clock tomorrow morning, to convene at Waterloo, Ellis Hotel. KEPORT OF EMPLOYERS' LIABILITY COMMISSION 77 SEVENTH SESSION— WATERLOO Waterloo, Iowa, Saturday, March 23, 19] 2. 11:00 A. M., meeting called to order and Chairman Clarkson makes a statement of the purpose of the meeting. , George W. Miller: Along this line, I know you will all realize that I am a young man and there are a great many men here and most all of you older than I am, and along that line, I will say; my partner and I are trying to get started in a business to build it up along legitimate lines and hope to be able to make a little more out of it than we can make by being employes of other people and, of course, are interested in the first place from our own standpoint, we are also interested in our employes because we also believe that what is good for us is also good for our employes. There is no concern can hope to exist, for a term of years at least, unless they have the co-operation and the loyalty of their employes. "We have been in business now practically for three years. We have been employers for three years. Before that time we had been employes for a good many years in the same line of work in which we are now engaged and during that three years, on our particular specialty of building concrete bridges, we have paid out pro- bably in the neighborhood of $40,000 for labor and of that $40,000 of labor, the only accident that we have had in the construction has been •one man cutting himself with an adz, an accident which incapacitated this man for a period, I believe, of two days and the only expense was first aid of $2.00 to the doctor,- and I, for the most part, believe that our employes have been very well satined with the treatment that they have received from us in every' way along that line. We are particularly interested in our employes to keep them satisfied. We try to pay them just as good wages as we can, and while our line of work from the ordinary man's standpoint, would be considered a very hazardous work; at the same time, by using due care and diligence in protecting the work- men, we have gotten very good results, and along with that work has been some very large construction jobs. Some of it has included the Cedar River bridges and one of our jobs was taking down an old com- bination bridge; that is, a wooden and iron combination bridge where we had timbers as large as 8 by 14 by 32 and 36 feet long to take down, at a height from 36 to 38 feet above the ordinary flow of the river where that would be considered ordinarily very hazardous. And along that line, I clipped from a magazine the other day, and I won't at- tempt to read all of this. If the Commission would like to have this clipping I would be glad to furnish it. Mr. Clarkson: Anything you may desire you may incorporate it in the record as part of your remarks. 78 REPORT OF EMPLOYERS' LIABILITY COMMISSION Mr. Miller: I am only looking for information. I don't say that tlie workmen's compensation is a bad proposition or a good proposition. I am here to get what information I can concerning it and I want to know about it more and more. Mr. Clarkson : I might say, for your benefit, which will doubtless be for the balance of the audience; the Commission is right in that very atli tude. It is information we are wanting. Mr. Miller: I will just read the sort of summing up of this article: This is in regard to the proposed Sullivan bill. "It will be seen by the employers in the State of New York » »■ * (Secretary Given has the clipping. See appendix.) The men here are working hard for years and years and we have not many disadvantages here at Waterloo in .the way of railroad facilities and freight rates, and as a town and city and as citizens in this city and the State of Iowa, we are interested in anything that will upbuild our town. Of course, we wouldn't be interested in anything that would put some of our industries out of business. Now, along that line: I have inquired a little as regards rates, and I find out that if I was operating in Wisconsin at the present time in the same way I am operating in Iowa, that my rates for liability would be three times what they are at the present time. I am paying out about $300 a year for liability and it would cost me about $900 a year. The question is, whether I can get that additional benefit, and I would think of it along this line; that accidents are unavoidable. We don't try to hurt anybody as employers, we try our best in every way to avoid accidents. We don't know how it is going to affect some of our business men and it would seriously handicap us if some of these men are hurt. I look at it as being unavoidable. Sometimes it is the fault of the em- ploye and sometimes accidents happen where it is nobody's fault. As they say, accidents will happen in the best of regulated families. This is a good proposition. Couldn't if be made so that the employer and employe would share alike in the carrying of the liability premium The employer furnish say one-half and the employe half. And riglit along that line where accidents are caused intentionally by the fault of the employe, sometimes when you would be morally certain that an employe had hurt himself intentionally to reap the benefits of a work- men's compensation law it gives to him. Like an accident that happened at Mason City two years ago this last fall. We were building a bridge there during the high water; had washed out temporarily. We had a foot bridge and it was along the line of public liability and we were forced to bring the people across some runways that we had constructed across the work for our own use, but the high water came up and washed out the temporary bridge that they had been accustomed to cross on and that evening a young m.an came back from work and went across that temporary bridge. Later in the evening he came across again supposed to have been in somewhat of an intoxicated condition and he came back the third time and there was a little step about that much; he came down. Well, he went on; he claims to have fell and broke his hip right REPORT OP EMPLOYERS' LIABILITY COMMISSION 79 here at that place, but he was taken home from a place two blocks from there, and claimed that after he had broken his hip here he had walked to this place two blocks and a half from there. "We could never prove, but it was rumored all around the city that that young man, in an in- toxicated condition, had fallen down an area way and broken his hip and tried to blame us for that accident. He had even gone so far as to have gone down underneath and planted money. I think the boys picked up something like $1.65. You can imagine how long money would stay on a concrete flooring 14 feet on a sloping surface of concrete. Those are some of the things an employer has to contend with. Well, I won't say anything further and I thank you gentlemen for the atten- tion. Mr. Clarkson: Have you examined any of the laws of these states, namely Wisconsin, Ohio or Washington. Mr. Miller: Not particular. I haven't a copy of the laws. A friend of mine here in the city promised to give me these laws a few days ago but so far I haven't been able to get copies of them. Mr. Clarkson: So that I take it from what you say, you haven't de- finitely made up your mind whether you are favorable or unfavorable? Mr. Miller: No sir, I am open to conviction alpng that line. If it is to the best interests of my employes I am for it. Mr. Baldwin: You have been paying $300 a year. Now, if as a re- sult of legislation in this State the rate should he increased, as you say it has been increased in the State of Wisconsin so that you would have to pay $900 a year, and your employes were by the law required to pay one-half of that^ it would still cost you more than it is costing you now? Mr. Miller: Yes sir. Mr. Baldwin: Would you continue to insure, do you think, if the general principle of the Wisconsin law was enacted in Iowa? Mr. Miller: I couldn't say about that. That would be a matter that I would have to take up and work out. Mr. Baldwin: Well, some of these States provide a system of State insurance. Now, when you insure with a liability company you are paying a rate that is based on large commissions which they pay and large expense and dividends to stockholders in these companies. Now, suppose that we would report in favor of a system of State insurance that would eliminate the question of commissions and all that and make your rate, — your rate now is about seven mills, isn't it? Mr. Miller: No, not that high. $900 or $1,000 premium on $40 000 00. Mr. Baldwin: Do you pay on the basis of steel erectors? Mr. Miller: Not on that basis. Ours Is a particular classification of concrete construction. Of course, the steel erection work is a great deal higher than that, three or four times that amount. Mr. Baldin: The rate in Washington is 8 per cent of the pay roll? Mr. Miller: That is about what it is in this State. Mr. Baldwin: How do you know your rate wouldn't be put in that class under a State law? so REPORT OF EMPLOYERS' LIABILITY COMMISSION Mr. Miller: Now when they first began to write liability for concrete bridges they wanted to put concrete bridges in the same class as steel bridges. We fought that until at the present time we have gotten it down to a fraction of what the steel work is written for. Mr. Clarkson: You say "we"; do you mean your own firm? Mr. Miller: I don't know what my competitor is doing. I am taking it on the concern I was with for a good many years before I went in business for myself. They were one of the first concerns to build con- crete bridges, especially thru the middle west and they had many things to overcome in the way of premiums on liability. Mr. Baldwin: What is your actual rate on your pay roll? Mr. Miller: 2% per cent for concrete construction in this State. Now in other States it will cost me double that. Mr. Clarkson: What other States? Mr. Miller: Minnesota, Illinois and I understand in Wisconsin it will cost me three times that. Mr. Clarkson: Have you investigated the rates since the new lia- bility law went in force in Illinois? Mr. Miller: Yes sir, I have right along that line. Just before coming here I secured my liajjility policy with an endorsement for Illinois and the Illinois rate is double that and the agent can't tell me whether that will protect me after the employees compensation bill goes in effect May 1st or not. Mr. Baldwin: If the effect of this law is to double your insurance rate, will it add such a burden to your business that it will be serious? Mr. Miller: Well, here is a proposition. Of course in our business it is a little different from manufacturers at least, it depends on what our competitors do, what we can do along that line. Ordinarily we try to make the man that pays for the job, pay for the liability insurance. It is as much of our cost as the material we put in the structure. So that if every man figures that as part of his costs, it wont he a serious matter, whatever it is. But if there are some figuring it and others not, it would mean simply that should advance your profits. Mr. Clarkson: Are there any other gentlemen that desire to be heard? Mr. Marsh, we would like to hear from you. W. W. Marsh: I am engaged in the Cream Separator business. I want to apologize for attempting to say anything without any pre- paration whatever. I have been out of the State and I didn't really know that the Commission was coming until I received a telegram and I came home here to meet you. I really feel that the work you are doing is of a very great necessity, Outside of the interest that I take as a citizen, I feel under very great personal obligations to it because' it is a work that is necessary to be done. Now I well remember that there was a time as a manufacturer when I thought, when something was suggested along these lines that my interests were antagonistic, necessarily so, to my employees, and I have absolutely changed my mind on that subject. I believe their interests and the interests of the em- ployer are identical. REPORT OF EMPLOYERS' LIABILITY COMMISSION 81 I want to go on record as a manufacturer as saying that anything that we can do to take from this emijloyers' liability or take from this sit- uation the ugly things that now exist, we are willing to go the limit. I have asked some friends of mine who try personal damage cases, what they thought the average man secured out of the money that goes to them from accidents. I have a friend in town here that has tried ovei a hundred cases of that kind, either tried or settled, and he told me he thought they received less than 30 per cent of the money that was ac- tually paid and I hope that the commission will he able to bring out facts of that kind we can reason on them' intelligently before we get thru. Of the one hundred people who received money from accidents he didn't think more than three of them were permanently benefited by the money and some of them had been actually harmed by it, because they quit Work and the money went and after the money was gone they went back to work crippled in a way, not only crippled from the accident but crippled in their habits and that is another feature that I hope the commission will go into. Mr. Clarkson: I take it from what you say then that if, in the event that the commission should see fit to recommend the passage of a bill, that you would favor the payments to be made by installments? Mr. Marsh: I think it is one of the things you will have to consider for this reason: If it is true that only three people who were injured were benefitted that is, a year or two years afterwards by the receipt of this money, if the money was squandered in 97 cases out of 100, it looks to me as though that phase of the situation should be developed and gone into by this commission. Mr. Baldwin: Wouldn't that be squandered just the same whether it was paid under a liability law or whether they got it in a suit for damages? Mr. Marsh: Well, suppose for a moment that we look at this question in the modern way, the relation of the industrial army of this country rather than in the narrow view of employer and employee. Suppose we were to say that the industrial army bears the same relation today to the development of wealth in a State, that wealth secured thru manu- facturing and commerce, that the standing army in the world does when land was the only form of wealth. Suppose we were to say that the State was interested to a certain extent in a man that was engaged in this industrial army and suppose we were to recognize that situation and really have a form of bill that would look after a system of pension or a system of payment from this money in place of the lump sum. I just offer the suggestion as one of the things. Mr. Baldwin: That is the plan under which all of these laws prac- tically have been formed. That is the plan on which the Federal law has been formed, that it is to be paid weekly and some monthly. Mr. Marsh. Suppose you pay them weekly and pay them for three or four or five years and at the end of that time leave the man a pauper. They haven't thoroughly gone into that question as far as a clear cut solution of this question is concerned. If a man is permanently disabled. 82 REPORT OF EMPLOYERS' LIABILITY COMMISSION I don't see why a man should say we will take care of him for two or three years on the basis of a law, then leave it for the State afterwards. These are only suggestions gentlemen; there isn't anything crystallized in my mind and the magnitude of the question you place appeals to me but so far as I am individually concerned I don't really think that 1^. of 1 per cent or 1 per cent additional tax on a manufacturing plant cuts any figure in this matter towards a proper solution of it. Mr. Baldwin: What rate do you pay? Mr. Mash: There is one thing about the rate we are paying today and it will be misleading to the commission. I understand our rate is about one-half of what it should be. Mr. Clarkson: Possibly in fairness to the employer we should inquire as to what his costs is per year for insurance, rather than the rate. Mr. Marsh: We are paying in the neighborhood of $800 to $1,00(5 a year. Mr. Baldwin: What is your pay roll? Mr. Marsh: $350,000.00. Mr. Baldwin: My impression would be that a manufacturing business such as you have, upon the basis of the laws that have been enacted so far, that your rate, that is, by ordinary insurance companies, the State rate such as they have in Washington or Ohio, might be 3 per cent. Now, if that should turn out to be so and your bill for insurance should be $10,500 a year compared with your $1,000' that you are paying now, would you object? Mr. Marsh: Such a thing isn't possible. Mr. Baldwin: Well, I don't know whether it is or not. Mr. Marsh: Well, from my view point. Take the New England rate which includes the personal accident attorney fees which approxi- mates probably 50 per cent and the other cost of this matter and those rates are only about twice what we are paying today and they are com- prehensive and they are accurate. I have all the confidence in them in the world as rates as to what the thing will cost. Take a more com- prehensive view of the situation. To my mind, one of the greatest ques- tions that is involved in the building up of an industrial State. In look- ing at these men engaged in these indiistries, the skilled artisans who are the real making of any city. Why would it be wrong for the State, if this thing is worth doing, why would it be wrong for the State to make a contribution towards this industrial army. I am willing to pay more, if necessary, than we have paid. I would be perfectly willing to have that made a part of the bill. Why should it be wrong for this commissioK to recommend that the State bear a part of the expense to this great standing army? Mr. Baldwin: The State does contribute in England, you know, to the sick insurance. They contribute almost equally with the employer and employee. I think it is my recollection that under the W'sconsin schedule that your rate would be about 3 per cent of your pay roll. Now suppose that was the law and that the State doesn't contribute and that is the net result, would you object to that? REPORT OF EMPLOYERS' LIABILITY COMMISSION 83 Mr. Marsh: If you could settle these ugly questions by legislation, these ugly questions that develop, I don't think but what we could dis- cuss this thing as it is, that missing linlt that is always necessary to fix the blame on somebody and under the present situation, is very fre- quently supplied and possibly a disposition on either side to supply it. That thing must be gotten out of the industrial situation in the State of Iowa because we are not going to have litigation that is passed at the critical point in the case on both sides perjuring themselves. We might as well talk plain. That thing should be eliminated and what should be necessary to eliminate it, I' as a good citizen, am anxious to contribute my part. Mr. Clarkson: I take it, your thought is, by enabling ourselves to avoid litigation we therefore avoid the expense contingent upon and necessarily connected with personal injury cases, therefore the State could well afford to contribute that, if not something in addition? Mr. Marsh: Yes sir. Mr. Baldwin: Would you go a little farther in that line in this direction? Of course you and I have to buy our own insurance, that is, we have to pay for that out of our own pocket. Do you believe that it would be fair for the employee to pay something towards insuring himself? Now in Ohio the law does provide that he shall pay 10 per cent. The State runs an insurance company and twice a year every employer has to send in a certain rate of premium which has been fixed for his industry by the State authorities. Now the law there authorizes the employer to take 10 per cent of that premium out of the wages of his employees; do you approve of that? Mr. Marsh: Well, I can see nothing, no reason that would justify us taking money from a man for an injury. I really think that is only a matter of bookkeeping in the long run. Mr. Baldwin: That is to say, you would have to put your wages up to meet It? Mr. Marsh: Yes. If there was some moral effect to be secured from that, my mind doesn't comprehend it, if it is. If it is a fixed rate why would he be interested? Mr. Baldwin: The rate will be lower if there are fewer accidents and if in that way you enlist the attention of the men in all schemes for pro- tection of machinery and reducing the number of accidents, can you see any objection to a man contributing towards it? Mr. Marsh: I don't believe that the amount of accidents which will occur that will be caused by carelessness on the part of the employee will be very great, provided we could go into this matter in the form of in- struction and the rigid inspection and the compulsion of the things nec- essary to avoid accidents. It is only a year or two ago in the State of Iowa where nearly every shaft had a projection on it that might tw;st a fellow around it. I remember a lot of our members objected to the law and the inspectors were not treated courteously when they undertook to enforce that phase of the law but this is a matter of education. To re- vert to your question; I never thought myself that the payment of a 84 REPORT OF EJIPLOYERS' LIABILITY COMMISSION part of the wages of the employee would accomplish the purpose to any great extent, I never thought it would. Mr. Baldwin: What proportion do you think the State ought to con- tribute? Mr. Marsh: I think that could be answered very distinctly and vsiy plainly, if the New England Mutual on investigation, their figures prove reliable to the State of Iowa as a manufacturing proposition, providing we was to pay on the basis of the New England figures today that the State should contribute all that is necessary to make up whatever defldit there might be in any bill you recommend. I insure in the New England Mutual for this reason that every 90 days or oftener we have an inspection by a competent man whose business it is to visit factories and he makes us a written report and when we started with the New England Mutual we were paying 1.08 and last year our rate was eleven cents. Mr. Baldwin: That is 1.08 per cent? Mr. 'Marsh: That is fire. I am speaking of the inspection that eli- minates hazard. I believe that one of the great means of accomplishing our purpose will be by eliminating all possible causes of accidents and it isn't being done in the shops today and will not be done until there is a rigid inspection. This seems incredible but it 'is true as applied to our own shop. Mr. Baldwin: You pay for your liability insurance to a private com- pany which must make a profit and must pay a large commission and all that. Now, the Massachusetts people have undertaken to greatly reduce the cost of this insurance by authorizing the organization of mutual in- surance companies among the employers. Assume that a law that in- creased liability very largely, is passed, so that as Mr. Miller fears that the regular liability insurance rate will be multiplied by three; he thinks so. Take that for the extreme point of apprehension. "Would it be feasible for all the employers of Waterloo to organize in a mutual way and have an actuary fix rates for each industry, depending upon the hazard in that particular shop, then have your regular inspection and have your own lawyer and your own doctor and make your own examina- tion and take care of yourselves; is it feasible to do that with an in- dustrial community? Mr. Marsh: I would think that would be very feasible as applied to a State but I doubt very much as applied to one city. Mr. Baldwin: Can't you get an actuary? Mr. Marsh: Yes, but in all questions of insurance it is the average risk that warrants a man going into it. If we were going to limit it to the risk we would — for instance you have a law in this State, you won't permit an insurance company to begin unless they have so much business on their books. Mr. Baldwin: The law would have to recognize that form of mutual local insurance companies. Mr. Marsh: Suppose the third or fourth day after we started we were to have a $25,000 judgment filed against this local organization. Mr. Baldwin: You couldn't. REPORT OF EMPLOYERS' LIABILITY COilillSSION 85 Mr. Marsli: That would put us out of business unless it was coniT pulsory. My theory is, if we were to have a State wide organization, then the average risk would be attainable the very day you started, and the risk of putting you out of business would be eliminated. That would be my objection to the local. Mr. Clarkson: I take it that in the event this Commission should see fit to recommend a bill with reference to compensation, you would strongly urge in connection therewith, a rigid inspection? Mr. Marsh: I thoroughly believe that is the very big part of your work. Twelve o'clock noon, adjournment was taken until 1:30 P. M. 1:30 P. M., meeting called to order. Mr. Baldwin: I would like to ask Mr. Marsh one question. You have in your shops a system of sick insurance; is that compulsory? Mr. Marsh: No sir. Mr. Baldwin: To what extent do your employes subscribe or come in? Mr. Marsh: Not over 25 per cent and then only as we agitate it. It is a case of agitation constantly to keep it up. Mr. Baldwin: What proportion of the cost of that insurance do you pay and what proportion does the employe pay? Mr. Marsh: We divide it equal. For a dollar that the committee collects, for the dollar they pay we pay another dollar. Mr. Baldwin: It would be perfectly feasible to extend that to all your employes? Mr. Marsh: The further it was extended the better it would be for all of us. Mr. Baldwin: Why don't you undertake something of the same kind as to accident and upon the same principle? I don't mean to say divid- ing the expense equally but upon same basis of mutual contribution and taking care of your own accidents the same as you take care of disability from sickness. Mr. Marsh: That would require an improvement on both sides which I don't believe is possible to secure. There Is always a third party to intervene and he gets something out of it. We are up against the class of people who want a lot of money. Mr. Baldwin: That is lawyers who take damage suits? Mr. Marsh: Well, to speak plainly, lawyers; yes. Mr. Baldwin: What I had in mind, whether we could frame a law that would make it to the interest of employers to form these mutual associa- tions for compensating the employee and relieving the employer from liability to these damage suits, under the pi;otection of some law. Would you favor that rather than a rigid cast iron assessment made upon each employee such as they made under the law of Washington or Ohio? Mr. Marsh: Well, this resolves itself, from my view point, into a practical question. I don't think you could ever have a voluntary or- ganization that would be practicable. You have got to make it cast iron. 86 REPORT OF EMPLOYERS' LIABILITY COMMISSION You have got to make it so we particiiDate from force. Where we are compelled to participate, that takes care of the problem and under the law we eliminate the objectionable people. This morning I didn't have our rate. As I find it, we are paying 29 cents under a three year con- tract, with 10 per cent discount, which runs it to about a 26 cent rate. Mr. Baldwin: Does that mean 26 cents on each $100' of the pay roll? Mr. Marsh: Yes sir. Mr. Baldwin: That is % of 1 per cent. Mr. Marsh: That is right. Mr. Baldwin: % of 1 per cent Is your insurance rate? Mr. Marsh: Well, if 26 cents is % of 1 per cent, that is. Mr. Baldwin: 25 would be. Mr. Marsh: I will take your word for it. The New England Mutual rate for our work would be 48 cents, about twice as much. Mr. Baldwin: I asked you this morning if you should be up against the rate that Mr. Miller thought that he had found might be applied to your business, of 3 per cent; how would you like that? Mr. Marsh: Well, those questions that are suppositious questions. We are not going to be up against. Mr. Baldwin: I only based it on what Mr. Miller said. Mr. Marsh: I have no doubt you could frame a question that would scare me to death, but from my view point; suppose we were to have the New England rate, which the manufacturers of New England pay, and meet liabilities that incur. Mr. Baldwin: What is their rate? Mr. Marsh: 48 cents for our class., Mr. Baldwin: % of 1 per cent? Mr. Marsh: Yes sir, twice what we are paying. If that could be enacted into a law, something similar to that, so that we would pay what is demonstrated to be sufficient to cover this work and then have the State participate in anything that was necessary; I don't see what objection there could be from a manufacturers' standpoint; I believe on that basis we could all get together. Judge Stevens: Is the 48 cent rate to which you refer, under a policy covering all insurance received by the workman regardless of fault or all Injuries sustained thru the employer's fault? Mr. Marsh: I am not prepared to answer that. Judge Stevens: You can readily see that there is a great deal of difference, can you not? Mr. Marsh: Yes sir, that is, if you view it from these two angles. But if in connection with this law there was a rigid inspection law, which would estimate the chances of accident then and as just a matter of opinion. I believe then we would be able to cover it with the ordin- ary rate. Mr. Baldwin: If it turned out as a result of this, if you are paying $1,000 for liability insurance, you have got to pay $10,000; you may be facing that problem, I don't know. I am basing it to you on mere facts; would you favor a law that brought about that result to you? Mr. Marsh: I would have to answer a question of that kind? Would REPORT OF EMPLOYERS' LIABILITY COMMISSION 87 I favor a law that would increase my liability insurance ten times; that if I could get out of it in addition, for the ten times increase, if I could get out of it a condition of satisfaction among our people and eliminate the disagreeable features that I would be willing to pay it, but I don't think we face any such condition as that. Mr. Ross Burt: We are operating a gas and electric property between this city and Cedar Falls. ,Our business, perhaps, is as hazardous, possibly more so than most manufacturing institutions and for that reason our people give this subject more attention than a great many institutions do. I was very glad indeed to hear Mr. Marsh this morning state the position he did in reference to his attitude towards the question. It outlined very closely our own attitude towards this matter. We, perhaps are obliged to go a step farther, because we not only have the employes to deal with but we have the public as well and it is our aim, in every- thing we do, as near as it is possible, for a human agency to accomplish the purpose, to make it safe for those who work for us and for those who come in contact with our business to conduct their affairs. We feel that anything that we do to promote the health and safety of our employes is directly for the benefit of our business. We couldn't do otherwise and therefore in the event of an injury, we not only go to every limit possible to take care of the individual but we aim to protect the individual in his work. We have the private liability insurance both for the employe and for the public. While we secure our protec- tion from large injury suits, we at the same time go beyond that pro- tection. We don't depend entirely on it. We aim to give the individual every attention it is possible to give him. We pay him his wages while he is off duty, for instance. We pay his doctor's bill while the insurance company doesn't reimburse us to any extent for that expendi- ture, simply in the case df legal matters or damages. It was my pleasure recently to have the matter brought effectively to us that we should consider our employes as much a part of the institution as we are our- selves. The officials of our company have taken that stand not only in reference to accident but in reference to other matters and I am proud to say today that we have never had a strike in our corporation and we don't aim to have one because we feel that we can treat our men as they were a part of our institution, that they will feel as much interested in our work as we do ourselves. I have had very little op- portunity to compare the various State laws that have been recently drawn. The Illinois law which goes into effect in May, has created quite a little comment, and I notice some of the companies with which our concern is connected, are going to place themselves under that law. I didn't have an opportunity to inquire into the full reasons for that, but as I understand it, there are certain advantages, both to the employe and the employer. It seems to be a reasonable law. The question of cost to us is based on the insurance we pay, and is about the same, I believe, as Mr. Marsh pays. We have a pay roll amounting close to $100,000, employing 11.5 or 125 or 130 men at various seasons of the year, and I don't know as I can give you any information that will as- sist you more than what was said; that whatever law is passed it will 88 REPORT OF EMPLOYERS' LIABILITY COMMISSION be our aim to live up to it and I will say that we will go beyond it. In every individual case that requires attention we give it that attention and aim to do it. Judge Stevens: Do you in your business manufacture electrical ap- paratuses or do you operate electrical plants? Mr. Burt: We operate the plant entirely. Judge Stevens: You have men actually operating dynamos and re- pairing light and power wires? Mr. Burt: Yes sir. Mr. Baldwin: For a similar industry the local rate in Ohio is $2.65 fixed by law. That is ten times your rate. Mr. Burt: Your question, as I understand it, is, whether we would consider the additional rate exorbitant and whether it would be pos- sible for us to meet that expenditure for this purpose. Mr, Baldwin: Whether you would regard that as putting such a bur- den upon your industry that you would regard it as oppresive if you had to pay ten times. Mr. Burt: That is what I mean. I possibly would add to what Mr. Marsh has stated with reference to the inspection and results of inspec- tion in reducing the hazard. If some means could be found or deter- mined to make an apportionate reduction in that expenditure by reason of reducing the hazard, making it an incentive to have a good inspection and to carry out the purposes of the inspection, if that would result in a reduction in that charge, it would seem to me to be a splendid thing. I believe we would be perfectly willing to pay any additional charge that would be involved, if it resulted in the beneficial effects that were brought out by Mr. Marsh. Mr. Baldwin: As far as Mr. Marsh goes, he would be willing to pay double what he is paying now, provided the State would assume every- thing beyond that. That is a very different thing from what you may have to face. I think you employers ought to face the possibility of some such rates as I have quoted to you, because so far as we know, those are the rates in force? Mr. Burt: It seems to me that whatever rate is made, if it proves beyond reason and is exorbitant and the corporation finds it impossible to con- duct its business and pay these rates it will soon be known and it will not only affect the corporation, it will affect every institution, it will affect the men that are connected with the institution in the long run. While it might prove at the start satisfactory, at the same time, if we pay ten times as much as we do now, it would possibly put a burden on us that would make it necessary to go to the voters for a higher rate in our gas and electricity. We couldn't conduct our business without the necessity of going into bankruptcy possibly. We can go to the voters perhaps, and get a higher rate but if it was such a burden on the company that it put us out of business, you can see it would af- fect every kind of business. Mr. Baldwin: You understand this commission would not recom- mend a law that would have the effect of driving the industries of the State into bankruptcy. REPORT OF EMPLOYERS' LIABILITY COMMISSION SO Mr. Burt: Unless there was some compensation as the result of that. I think it is unfortunate that every corporation does not feel just as much the necessity of that inspection. We pride ourselves in doing as much of that as possible. People who come in from the outside will see things that we don't always see. I believe if that inspection business was brought about by this law, if it could be reduced some way by reason of that inspection, it would accomplish the purpose. Judge Stevens: Have you had anything to do in connection with your company with the insurance end of it? Have you taken out policies and made contracts with insurance companies? Mr. Burt: I will say, I have come into the management of the con- cern only in January and that this matter has come to my attention simply from the outside. Judge Stevens: Up to this time you have had nothing to do with the liability insurance? Mr. Burt: At the present time I have not. Mr. Baldwin: You don't know what the attitude of your company would be if your rates were multiplied by six or ten? Mr. Burt: Only as I have recently been in contact with them along this line that their interests, it seems to me, would be protected, only in so far as the compensation that would come from an increased ex- penditure along that line. If we paid ten times as much as we are paying now for liability insurance and that expenditure resulted in a vig- orous inspection or that brought about a condition that assisted us in conducting our business more safely and prevented the hazardous con- ditions that might exist at the present time, I think it would be possible to carry It out. Mr. Clarkson: Are you able to give the commission the number of injuries that have occured in your business say for the last three years past, in the different departments, or have you made a report along that line? Mr. Burt: No, my connection with the concern has been such that I think I could say definitely that the number would not exceed five. Judge Stevens: Paid any death loss? Mr. Burt: We have had two: Judge Stevens: How much did you pay for each? Mr. Burt: The last case I think amounted to $4,500. Judge Stevens: How much is the total amount of liability insurance you paid in these three years? Mr. Burt: $3,000; $3,500 possibly. Mr. Clarkson: Were those brought about thru settlements or litiga- tion? Mr. Burt: Litigation. Mr. Clarkson: My inquiry was to determine the number of employees injured within the last three years. Mr. Burt: There have been no deaths in our employees. Mr. Clarkson: Have there been any injuries? Mr. Burt: There has possibly been three or four cases of that sort in the last three years. 90 REPORT OF EMPLOYERS' LIABILITY COMMISSION Mr. Clarkson: Were settlements made thru litigation? Mr. Burt: We have had no litigation of that sort at all. Mr. S. D. Moore: I am in the general contracting business. I have the privilege of representing before the commission the builders exchange of this city, an organization consisting of general contractors and builders, employing directly 800 mechanics and indirectly 400 artisans who work with our men on the buildings, although not directly in our employ. The average liability rate on our business for the past few years has been $2.50 per $100 of pay roll. As near as I am able to as- certain it is about three times the actual cost of the accidents that have occured, due largely to the fact that the business as conducted in Waterloo is not particularly of a hazardous nature and we are of course compelled to compare it with business in similar lines in larger cities where business is more hazardous. The question of this employers' compensation bill has been discussed at numerous meetings held in our exchange during the past year, ever since the question came up in the last legislature and the consensus of opinion that has developed in these meetings seems to be a recognition of the fact that the care and com- pensation of injured employees is a burden upon the community which must be met and which can not be in any way avoided. We are in favor of a compulsory law that will be equitable, just and economical or in other words, one that will distribute the burden of the care of the injured upon the ccmmun'ty in a fair way. We have every confidence in the ability of the commission to use the information they have acquired during their investigation to apply this information to a law which will work out in detail as soon as the fundamental principles are estab- lished. We believe in a compuliory Iew for our own protection in compe- tition. We are subject to the competition of contractors and builders who are not primarily responsible. They having nothing to lose will carry their own risk. It mi'ght be argued that they would become res- ponsible thru the money they would make In not paying for Insurance but the tacts prove that they don't. The contractor is subject to the competition of the irresponsible man who does not carry liability insur- ance, and for that reason we favor a law that makes it compulsory. We believe in a law that will cover an econom^ical distribution of the bur- den. It is well known that less than 40 per cent of the money that is paid out by the employer for the benefit of the employees, reaches the men to whom it is intended and is deplorable. The multiplication of at- torney's fees is due somewhat to the inability of the average employer to get justice before an average jury, simply because of an unnecessary ill feeling that exists. Mr. Marsh has gone into that much more fully and that in brief is our position in the matter. The question of details can be left to the working out as a result of the information that is obtained in these hearings. Gentlemen, I thank you. Mr. Baldwin: I would like very much to get your view as to how that could be equitably distributed. Do you mean to say the State should bear part of it and the employees a part or what do you mean? Mr. Moore: As Mr. Marsh said this morning, it is largely a question REPORT OF EMPLOYERS' LIABILITY COMMISSION 91 of bookkeeping. In our particular line it is a very simple proposition because if the law is compulsory we simply add the cost of the liability to our estimate of the cost of a building; the man who builds the build- ing pays the insurance; he gets it out of the tenant and the tenant out of his customer and it comes back to the community in a direct chan- nel. Mr. Baldwin: On that theory the employer would pay it all? Mr. Moore: The employer would pay nothing. In the first instance the employer would pay it all. Of course, incidentally it gets back to him because he undoubtedly is the customer of the tenant that is oc- cupying the building that he has built for his owner. It gets back to him finally. It is a burden that the public must bear and the public is bearing it now. The great trouble is now, it is not equitably distri- buted. Judge Stevens: How would this strike you? That the State pay for the administration of such a law including factory inspection, that the employee contribute a small portion from his wages. How would those two provisions strike you as a contractor? Mr. Moore: I think that question in my opinion was answered by Mr. Marsh very well this morning. The question of the employee bearing a portion of the cost f''om his wages is simply a matter of increasing his wages to a point where it would cover that item and it would simply be a matter of complicated bookkeeping. Judge Stevens: As to the other part of the question, as to whether in your opinion the State should pay for the administration of such a law on the theory that it saves also by taking all these cases out of its courts and being relieved very largely from the necessity of aiding and giving money for charity. Mr. Moore: It would be my personal opinion that it is almost nec- essary for the State to take on a portion of this work either in the capacity of administrator or in the nature of a tax or an appropriation to m.eet it. .Judge Stevens: What do you think of the idea under such compul- sory law of giving the employer the privilgge of organizing mutual in- surance companies, or if he chose, insure under one of the private lia- bility companies? Mr. Moore: In either case the State should have such jurisdiction over the private liability company or over the mutual company that the re- sult would be practically the same. Judge Stevens: Eliminate the litigation? Mr. Moore: Eliminate the litigation. Judge Stevens: And make the company absolutely responsible for the schedule of payments? Mr. Moore: Yes sir. Mr. Clarkson: Assuming that this committee should see fit to recom- mend a bill whereby there were arrangements made for mutual insurance companies, I mean the employers to organize a State Mutual, but giving the employer the right to insure if he saw fit, in an insurance company. Would there in your judgment be a tendency upon the part of the in- 92 REPORT OF EMPLOYERS' LIABILITY COMMISSION surance companies to segregate the cream and leave the refuse for the Mutual company to take care of? Mr. Moore: There would be that tendency undoubtedly. Possibly it wouldn't be exactly in the line of the work of this Commission but the result of our discussion has been that we would favor a National law rather than a State law. Mr. Clarkson: The farther you spread it out the thinner it would get? Mr. Moore: That is not due to our own position but the competition coming from another state must employ the labor in Iowa and must necessarily come under the Iowa law; but in case of the manufacturer, he must compete with this finished product from another State. We be- lieve he should be entitled to protection, therefore the law should be National rather than State. Mr. Clarkson:. You are in favor of the new scheme of compensating the injured workman, if the details can be worked out so as to not over- burden the industry and permit, as time goes on, to develop it as con- ditions may arise and show the necessity of improving the law as we go along. Mr. Moore: Yes sir. Mr. J. W. Wrath of the pork packing industry: I didn't come up to impart information because I don't have any to impart. I thought per- haps I could get some information that would be of advantage to us in our own business. I was not here this morning and I do not know what phase of this question was discussed. There is one phase we are all interested in and that is the matter of litigation in damage suits. We have had one or two instances where that matter was brought very forcibly to our notice. I don't believe the employer of labor regrets the paying of any sum of money that is within reason, to an injured employee and I believe the expense of the matter of injuries ought to be borne by that industry and as has been stated here before, by the public at large. But as usual, in cases of injury, especially if the at- torney gets hold of it, the injured party gets very little of the money and he is dissatisfied and the employer dissatisfied. We had a case a few years ago where a boy came and asked employment when we were putting up ice. The foreman refused to employ him. By and by he gol upon the ice chute and got to work and before the foreman of the work got to see him, he fell off that chute and broke his leg. The day that acci- dent happened he was 15 years old and two or three weeks afterwards when the attorney got hold of him he was 16 years old on that day. The boy had a broken leg and he was a young man and it wasn't a serious mat- ter. The case was properly handled by the physician and we didn't v/ant any trouble about it so we went to the young man's parents and offered to pay the doctor bill and pay his time when he was laid up. In the meantime the attorney got hold of the case and he wouldn't permit the boy or parents to do such a thing. After visiting back and forth they made a demand for $1,200 which we refused to pay, of course. We offered to pay the expenses in the case and the boy's time. The upshot of the whole matter was, they brought suit in the District Court for REPORT OF EMPLOYERS' LIABILITY COMMISSION 93 $5,000. The liability company in the meantime, we got into a little dis- pute with them and they questioned whether or not they were liable because the policy didn't mention ice harvesting. The work was done on our premises but the policy didn't include it. They employed an attorney and we employed an attorney and the other people had an attorney and the agreement was finally that the expenses was divided between the liability company and ourselves. It was finally settled at $600'. The liability company paid $400 and we paid $200 which made a total of $600 and the boy got $200 out of it, when we offered to pay him $250. The boy lost his time for six months and he lost $50 in addition. That is a case, if it could have been taken away from an attorney and could have been settled by some other method, it would have been a benefit to the boy's parents and saved us a lot of trouble and litigation. Mr. Baldwin: Suppose you had under the law been obliged to pay 50 per cent of that boy's wages for five years; how much would that have amounted to? Mr. Wrath: Probably $450 a year, I think the rate we were paying for that work. Mr. F. M. Michael: I am in the painting and decorating business. We pay on an average $800 a year for a journeyman painter thru the State. We pay as liability insurance $1.50 a hundred which amounts to about $12. It is no proteot'.on only in case of loss. It seems to me by paying say that amount of money or whatever might be determined to the different grades as to their work that would take away the law suits and at the same time give the man a chance for his money. For instance I have had four or five men hurt in the last year. They lost from three days to two weeks time arid I would rather pay that money or even more money to some insurance company that would pay him for his loss of time and for his damage without any law suit, without any question about it. That is to pay it as a protection or to give a fat job to some lawyer. The unnecessary litigation makes the unnecessary expense and we all of us have heard of the high cost of living which all these things adds to. Mr. H. L. Erickson: I am a carpenter. I am one of the committee representing the carpenters looal of this city with a membership of 260. The sentiment of the carpenters seems to be that we want a com- pensation law and one whereby we can make settlements without going to this litigation, as haj been brought up here before. We have had a case right here in our own city where one of our members four years ago last May fell off from a ledger on the railway coaster that was being constructed at the electric park and because there was a change being made he lost out and received nothing and had to pay for his lawyers besides. The engineer in engineering the construction of the railway coaster didn't get the dips just right and it seems the clause he lost out on was because it has been constructed and it was the change that was being made and of course it went to a lot of litigation and took up a lot of time and took up a lot of the State's money and the consequence was that the man that got hurt didn't get a cent out of it and besides he was 94 REPORT OF EMPLOYERS' LIABILITY COMMISSION Icser although he was hurt so that today he still shows the effects of it and it was four years ago last May. Judge Stevens: Was he at fault in any way? Mr. Erlckson: I think not. I can answer that by no. The ledger that he fell from had been loosened and when it was renailed It wasn't nailed permanently, they had only drove one nail in it and he came along to where this was and stepped down on the ledger, consequently his weight pulled the ledger loose and he fell. .ludge Stevens: Whom was he working for? Mr. Erickson: A C'aicago firm that puts up these railway coasters throughout the country. Mr. Clarkson: I assume the Court held that it was a completed structure and afterwards they were making some necessary preparation for their own safety? Mr. Erickson: Yes sir, it was in making the change. The carpen- ters also felt that they don't think the employee should bear a part of the expense of this compensation because the wages of today aren't so that they feel they could afford it and feel right about it. If an employee would have to contribute a part of his wages he would feel he should have a little more wages to make that up. Judge Stevens: Does the carpenter feel he ought to be compensated where no one else is to blame for his injury except himself? Mr. Erickson: That is a question that wasn't brought up. I couldn't a.nswer that. Judge Stevens: In case we recommended a law giving the carpenter just the same compensation in cases where he was wholly at fault and where he was partially at fault and where his employer was wholly at fault, on the theory that he is damaged just as much and his family suffers just as much in one case as in the other and we propose to pay him the same; now in such case would you feel that the carpenter should contribute a small amount to make up that fund? Mr. Erickson: No sir, I do not. I feel there should be some way devised whereby the carpenter or employee of any institution or any occupation should be free from bearing a part of that expense. Judge Stevens: Don't you think there would be just as much reason for asking the employer to pay for something else that he in no way was responsible for. For instance, the carpenter is injured by getting on a street car returning home from his work. Do you think the em- ployer should pay for that? Mr. Erickson: If I understand you right, no; that wouldn't come under that. Judge Stevens: In case that injury ocoured before he quit work by the carpenter's own recklessness and carelessness. Mr. Erickson: I would answer that, that I don't think there is any carpenter that would knowingly put himself in a position where he would get hurt. Judge Stevens: Suppose the case that you cited, suppose in that case that this same carpenter who fell and was injured had nailed that scaffold himself and therefore knew that there was only one nail REPORT OF EMPLOYERS' LIABILITY COMMISSION 93 in each end and forgetting that for the moment had stepped upon it and fallen, do you think the man who hired him should pay for that injury? What do you think of that kind of a case? Mr. Erickson: "Well no, I don't think that an employer ought to be responsible for a case of that kind. Judge Stevens: In order to make that look reasonable to everybody, wouldn't you favor in such cases both sides contributing some? Mr. Erickson: No sir, I do not favor the proposition of the em- ployee contributing. Judge Stevens: In any event? Mr. Erickson: No sir. Judge Stevens: Under any circumstances no matter how much he was to blame? Mr. Erickson: No sir. Mr. Baldwin: "Why wouldn't it he better to have the State pay in a case of a misfortune of that kind? Mr. Erickson-: I think, the State could well afford to pay part of th's compensation for the reason. If this litigation is done away with they would be saving all that money that it costs the State to carry on these law suits. Mr. Baldwin: "What part would you think the State could afford to pay? Mr. Erickson: I hardly feel able to answer that. I haven't figured that out, but I believe the good judgment of the commission could" com- pose a law whereby the State, if there was a law passed, make the State pay a part of this compensation that would be within reason and fair to all. That is what we would like to see, is a fair compensation. Judge Stevens: I see your idea that where an employer does insure or protect all of his men for the injuries, the State should pay a part of it? Mr. Erickson: Yes sir. Mr. Clarkson: Do you carry accident insurance? Mr. Erickson: Not at the present time I don't. Mr. Clarkson: Are, there any considerable number of the men in your line of employment that carry accident insurance? Mr. Erickson: I think there are. I did carry accident insurance until some time ago. Mr. Clarkson: "What has been your experience from obsei'vation whether or not men who carry accident insurance are or are not inclined to be indifferent to their own safety or otherwise. In other words, from your observation of those who carry accident insurance, have you noticed any difference in them, being more careful or less careful for their own safety or either way? Mr. Erickson: I think I have answered j'our question already. So far as I am concerned I haven't noticed any difference. Judge Stevens: Have you noticed any difference about the rapidity ■with which they get well, whether they could work sooner if they were not insured than they could if they were insured? 96 REPORT OF EMPLOYERS' LIABILITY COMMISSION Mr. Erickson: Well, I don't think there has been any cases come up that I have had the opportunity to notice that. It would seem like it would he natural if a man was carrying insurance, he might possibly wait a few days longer than to try to go to work. If he was in such circumstances that he needed the money and possibly would try to go to work a few days too soon and perhaps lay him up again for a longer time than what it would have been if he had laid off two or three days more. Judge Stevens: How would it operate if the employer was paying him while he was off for not doing anything? Mr. Erickson: I don't suppose he would want to go to woi-k until he was right sure he _was good and able to. Mr. H. L. Bloom: I am an electrical worker. I am one of the re- presentatives from the organization. We have a membership of forty. We favor an employers liability commission. There are so many times that a man gets hurt he has nothing for his family and at times the only support he gets is from his local organization. They take up a collection where they have no fund, Our organization has a six weeks benefit of $5 a week for six weeks. But in serious cases where they have no money in the treasury they make donations, at different times. But what we would like more than anything else, is a law enacted to prevent a great many of these accidents, and giving room enough for a man to go up to the top of the pole without coming in contact with these wires. We would like to see something done in order to keep them farther apart, giv? a man room to get up. We would like to get a little general protection there and we would like to have that in- spected the same as the factory inspection. We would sooner have tliem prevented from getting hurt than get any compensation after we are hurt. Mr. J. G. Miller: I am a general contractor and employer of labor. We have from 10 to 30 and 40 employes. From a humane standpoint I rather favor a liability act that would compensate all men alike, and eliminate the question of responsibility. That is, not raise the question whether a man is really responsible for the accident or not responsible, because there are so many cases where the widows and orphans of those who are injured have a necessity for what is coming to them and it would eliminate the question of litigation. As far as I am personally concerned I have always run my own risk. I never take out any in- surance simply because I know that about 70 per cent of the money paid to insurance companies towards lossss never reaches the one that is injured. For that reason I» consider I can afford to run my own in- surance company, my own insurance. If I understand it correctly, the German Government has a law whereby all men alike that are em- ployed at whatsoever labor it might be, are insured and if they are hurt In any way they are taken care of by a commission that is elected or appointed for that purpose and for my part I would favor a law which would provide a reasonable compensation, not an unreasonable compen- sation, to the one that is injured, and that the amount be paid to such REPORT OF EMPLOYERS' LIABILITY COMMISSION 97 people that are injured, be governed by a commission and litigation eliminated. That is my personal sentiment in the matter. Mr. J. F. Deets: I am a carpenter, I have been a contractor in the T am in favor of some statutory law to compensate the laborer that will not be a hardship- toward the employer, and be satisfactory to all concerned. I believe that many of the injuries received all over the State of Iowa could be settled more satisfactorily out of Court than they are in. I had one incident in my family about 12 years ago. My oldest boy was working here in Waterloo and he got injured. He went into the factory in a certain line of employment by my consent. The owner of the factory put him running a machine and didn't notify me of the case and I wasn't aware of it and when I came home from work one day my boy had been brought home in a carriage injured. The manufacturer, however, came with him and brought the doctor and he met me in the block that I lived in and told me the occurence and he was sorry it happened and told me how it happened. He had two doctors, however. The boy got his hand crushed in the machine. The doctors treated him as well as they knew how, and the next day, I am not prepared to say or mention the number of attorneys or representatives of attorneys that solicited me to start an action against that factory. I gave them the answer I wasn't prepared to consider that proposition at that time. I think about six weeks thereafter I got a letter from the owner of the factory requesting me to make a visit to the factory. I went over to see him. As I came in he mst me and took me into a private room and said, "Mr. Deets, I expected to have a notice served on me ere this, by an attorney for a law suit. Now, I want to tell you what we propose to do. We propose to pay all the doctors bills that have accrued or will accrue from the injury. Further than that we expect to pay the boy his wages all the time he is laid off and when he is able to come back to work his place is open." It satisfied me and I tell you most heartily. Therefore, I say, thru litigation one may not recover what he would recover thru an amicable settlement. Mr. Ray Reddington: I am from the plumbers and steam fitters organi- zation. There are about 25 in the union I represent. I was just in- structed to state that the organization favor an employers' liability law whereby, if possible, litigation would be eliminated, and to also state that they were not in favor of imposing any of the cost of the main- tenance or reimbursement of an injured party, by the workmen them- selves, directly. 3:40 P. M., commission adjourned to meet at Dubuque Monday A. M. 98 REPORT OF EMPLOYERS' LIABILITY COMMISSION EIGHTH SESSION— DUBUQUE Dubuque, Iowa, Monday, March 25, 1912. 10:25 A. M., meeting called to order by Chairman Clarkson. Mr. Clarkson makes a statement of the object of the meeting. The following employers were represented by a committee: Loetscher-Ryan Mfg. Co., Farley & Loetscher Mfg. Co., Carr, Ryder & Adams Co., H. B. Glover Co., Rider Wallis Dry Goods Co., Nietz Mfg. Co., The Adams Co., McFadden Coffee & Spice Co., A. Y. McDonald Mfg. Co., E. B. Prekenbrock & Sons, William Lawther Co., .Jas. Beach & Sons, Bell Brothers Co., Klaner Mfg. Co., Flick-Zieffrecht Box Factory, Duduque Casket Co., Iowa Coffin Co., Union Electric Co., Key City Gas Co., CoUis Co., Dubuque Beat & Boiler Wks. Mr. J. M. McFadden: I am in the coffee and spice business. Last week the employers met to appoint a committee to appear before your body and it was their idea that a law along those lines would be helpful to the employer and the employee. A law that would be framed so as to give each one justice, one that would be fair to the employer, would not be burdensome on the employer and would be equitable and just to the laboring man or employee. It was the consensus of opinion that such a law should be administered not only administered by the State but in the form of insurance and that the State should take charge of the collecting of it and the distribution of it and that it should apply to all lines of trade and industry. It was their idea that a certain percentage of the amount paid the laboring men for his labor, the amount of his wages, should be paid for temporary disability and that a fixed amount should be paid in the case of death or total disability. As to whether that should be paid in a lump sum or whether it should be distributed was a question in which they varied somewhat. That is a matter of detail anyhow and would probably be worked out by the commission or the legislature in the end. A great many were of the opinion that it would be better to have the payments distributed over a number of years than it would to have it paid in a lump sum. It was also the consensus of opinion that the amount to be paid in case of temporary disability should be a percentage which we will say for ar- gument be 60 per cent of the wages paid. "We haven't prepared any fixed report or recommendation to bring before the commission but we are anxious to see such a law and we want it to be so framed that it will not require the employer to carry the ordinary liability in- surance. That the law will be sufficient in itself and the payments that will be made from a basis of the pay roll shall be sufficient to cover that part of it and that it will not be a burden on them in addi- tion to carrying the ordinary indemnity insurance. REPORT OF EMPLOYERS' LIABILITY COMMISSION i)d Mr. George J. CoUis: We manufacture machinery and wire goods. The men that are appearing before you are very widely divergent in their political views, perhaps very largely due to their birth and education. Some of them are even poisoned with the virus socialism but generally they have agreed that they want to do what is absolutely right. They do not wish to question when a man is injured whether it was his fault or whether it was the employer's fault. I think, although this phase has not been brought up that they would like that the State Government should appoint inspectors who would be competent to advise them when any portion of their machines were dangerous and point out where the danger lay and how it might be obviated. I think they are all prepared to receive and adopt suggestions. Speaking for myself, it hurts me when ? see one of our employees injured to the least extent. We, I think, all agree that no law should be put upon our statute books which is un- fair in its application. ■ I mean there should be nothing in the law which should say four or five or m.ore. It should apply to every man. If it applies to the employer of five men and doesn't apply to the em- ployer of four men, there is something being treated wrong by this State. I am not going to take up at this time the objections which we are liable to meet in trying to get thru such a law; that must be for the State legislature to deal with. But the objections which are liable to arise should not prevent this commission in recommending what they believe to be a just law Now as far as the 60 per cent is concprned, I know that some of us have differed a little. I think it is hardly enough, and I figure there are quite a number of men who work for $1.50 a day. II is insufficient and we should put no law on our statute books which does not admit of a living for those who are injured so that personally I thing 60 per cent isn't enough. Being an employer for twenty years I have never yet permitted anyone of our employees to suffer one cent of loss on account of an injury. We have paid all their wages and the doctor bill, besides this we have paid protection from the ambulance chaser. I have found that when the full amount of wages is paid that there is a tendency to prolong the period of disability. This I am posi- tive of and yet I have investigated the cases and as far as I was able to apply my judgment as to the parties they were paying it to, were generally honest but I find that an easy job applied to most of them and for some years past we have made it a rule that where the party was able to walk to the factory, that if they could do nothing else but sit in the office and read magazines, they were there and if we wanted to send them on an errand anywhere they were there to be sent. We found it better and they were more willing to come back to their regular em- ployment just as soon as they were able to do something. We are pre- pared to pay our share. If at any time I should be called into compe* tition by the employer from another State I want, before these employers can enter into any contract here that they shall give a bond to this State that they will pay their share of their liability to accident. It would be unfair competition for the employers of Iowa to enter into com- petition with employers of another State if we had to pay this tax and they were exempt from it and in the making of this law I think we 100 REPORT OF EMPLOYERS' LIABILITY COMMISSION should have this In mind that Iowa Is not at present looked upon as a great manufacturing State and we do not wish to put anything in the way of its becoming a manufacturing State and any law which should be put on the statute books should be of such a nature that it would give the employers of labor the confidence that they are not going to he wiped out of existence by some misfortune over which they practically had no control. Another point which should be considered by this commission and recommended to this legislature, is the money that we are at present paying for this supposed protection, is practically all going out of the State. You can obtain the figures, no doubt you have them. The amount of money that is collected by these so called insurance companies. I might give you our experience along this line. The year before last, we had a clause in our insurance policy whereby the company was to pay the doctor bills. We had an accident, a boy had his arm broken. "We sent him to the doctor whom they had stated should be the sur- geon, and he wasn't at home and we sent him to another. That sur- geon set the arm and gave the boy careful attendance and put in a bill of $20, which I think you will agree with me, was quite moderate. He was off some four months. It happened to be what is termed a colles fracture down in the bone of the wrist. It was quite a long time before it was set. When we sent in the bill to the insurance company they offered us $10 and wouldn't pay anything until we gave a receipt in full for the doctor's bill. We settled on these terms. At the end of the year we owed them $24 and we settled for $4,. so we got the full amount of our bill. Before we accepted another policy we submitted it to our attorney. Our attorney went over the policy and marked on it, "this policy is of no value." The wording of it is such, as it is made out by clever attorneys, for the purpose of defeating the object, which you should change. And we submitted it to the Insurance com- panies and four different insurance companies turned that policy down. At last after four months we got an insurance company which would accept that policy and under it we are working at present. If we should have an accident; last year we were fortunate in not having the least accident of any kind, this year so far, just a very slight one, not amount- ing to anything. But we don't know whether that policy would really stand the test if it had to be carried thru to the Supreme Court. Mr. Clarkson: There are some of the laws that fix the minimum amount which should be paid per week, in the event that the 60 per cent should bring it down to an amount that was deemed inadequate, that then they fix the limit say $6 or $7 a week, something like that. * Mr. Collis: I think that would be fair so that the one who is getting a large wage would not be getting a very large amount, whereas the one who would be getting a small amount would not be getting sufficient allowance. I am at present a member of the Grand Trunk Railway in- surance. I worked for that railroad for over 20 years. I was a member of their committee on insurance; they have an insurance committee. I think their experience would- bs of value to the commission, and I would REPORT OF EMPLOYERS' LIABILITY COMMISSION 101 recommend you to write to H. B. Moore, Secy-Treas., Grand Trunk Railway, Montreal, Can., and' get it. Every employe of that company is insured, over 12,000 employes scattered over three or four thousand miles of territory, so it would be a very fair experience to go by. I might say; since I was 12 years of age I have been insured. Not particularly for my own sake but for the sake of the other boys who were in that Insurance years ago ; I am still paying ■ that Insurance. Judge Stevens: What does it cost you? Mr. Collis: 58 cents a month pays my insurance, basing that rate at the time I was 21 years of age, and that 58 cents has paid $4 a week in case of sickness as well as accident; $100 at death of the man or $50' for his wife, and that society has not only paid its way but in just the local society which I am connected with, altho there are over a mil- lion members in it, the Ancient Order of Foresters, I might say, the management, the cost of management, is % cent per member per annum. I don't know whether the State of Iowa could manage it as cheaply as that; it shows the possibility. We have property valued at $14,000.00 today and ample funds for carrying on what we have promised to do. Mr. Clarkson: What period has it been in existence? ikr. Collis: About 150 years. It is one of the oldest of societies, about the same age as the Manchester Order of Odd Fellows. Mr. Clarkson: You say they pay accident insurance as well as sick benefits? Mr. Collis: Yes sir. Judge Stevens: Do you favor an elective or compulsory law, that is, requiring everybody to come in? Mr. Collis: Compulsory. Judge Stevens: You also favor administration by th(^ State and at the State's expense? Mr. Collis:. Well, we talked over that this morning and Mr. Conner would perhaps be in a batter position to speak of some of the dangers that might arise from that. If the committee which should have to deal with the administration in local affairs was made a financial affair with a salary attached, somebody is going to be after the dollars rather than rendering service. Mr. Nicholas Conner: I believe if I understood the sentiment of our committee, we favor as general as possible, a plan of insuring all people or men employing labor. I believe the committee agrees with me on that and that should be compulsory by the State of Iowa and the intention is to have every employer of labor in this State bear his part of the burden in order to protect as many of the employes as pos- sible. That was the sentiment of the committee. The different States, as I understand, that have these employer's liability acts, may be ad- ministering them in a different manner, but the sentiment of our com- mittee was that this law should be as broad as possible. Judge Stevens: We are confining ourselves as the other States have, so far as the United Stat2S is concerned, to those disabilities, permanent 102 REPORT OF EMPLOYERS' LIABILITY COMMISSION and otherwise, that grow out of accidents which occur in the course of the employes' employment. Mr. Gonner: It is a question of labor legislation. This form of legislation belongs under the head of labor legislation. The European government have been passing that kind of legislation and executing it for many years. The question is up to the State of Iowa, do we want to protect our laborers against accidents. We, as business men of this committee representing the employers and manufacturers of Dubuque seem to be of the opinion, we would like to have all the employes cov- ered. It appears to me, however, gentlemen that the State will have to pay for any service rendered and I wish to state that I don't think any accident insurance given by the State should in any manner be confisca- tory, should in any way confiscate property. I don't think any fair minded American would agree to that. The State has not the right to put such tax upon him even to protect the worker, that it would be confiscatory in its nature. I would want to express that as my personal^ opinion at least, and I view the problem as a journalist from the stand- point that there are three parties interested and they are, the employer, the employe and general public, representated by the State, in this case, the State legislature. If I understand your functions, you are merely investigating the conditions, hearing public sentiment and if anybody can bring you statistics you are glad to receive them, facts and data. It seems to me if this idea of accident insurance is properly understood there will not be any objection in the country. Even the farmer, who in social matters is perhaps not as advanced as the inhabi- tants of the city, because he is isolated; he isn't in as much contact with the general public as the man in the city but we feel that the farmer also ought to carry his share of the burden if he is employing labor. "We should realize that in a farming State like Iowa the farm of today is undergoing a change; undoubtedly you will hear the 'echo of that in the legislature. The farmer of today, if I can see the proposition, every farm is becoming an industry, in other words the farm is becom- ing industrialized, becoming a factory, if you will call it. He is employ- ing machinery and the accidents of machinery that are concomitant to it, are there. It seems to me that idea should be expressed in the legislature. The farmer should carry his burden as well as the city man. I don't know what else I could say on the subject. I believe you are gathering the statistics and facts you want. I certainly agree with Mr. Collis that the men who are to carry out the law, if any is passed, should be absolutely free from any political influence that is, any par- tisan influence. We want the burden distributed over all those who em- ploy labor; take as much of the burden off of the employe as possible but make the laboring man, the employe, a responsible party. If he is getting benefits he certainly must be willing to carry his responsibility.' We want no favors from anybody, but if I receive anything from anybody, I am willing to reciprocate as far as I get the benefit from it. We must look at the laboring man as the one REPORT OF EMPLOYERS' LIABILITY COMMISSION 103 who is least equipped to help himself. If I understand the social ques- tion right, there are three factors that must help solve the social pro- blem and the accident question is one of them. Self help, State help and the help of religion or churches. Self help is if the laboring men get together in their unions and try to better their conditions. If the employers get together and protect their interests and I believe you will say that the manufacturer's association are trying to do what is fair in coming before you saying they are willing to carry their part of the burden but they want absolute justice and we are appealing to the State for this law. We would like to have the State come in now and assist the self help of the manufacturers and laboring men to get a fair accident insurance. It seems to me accident insurance properly understood and the burdens properly distributed will be for the welfare of us all, the employer as well as employe and also the general public, the third party interested. My profession is a journalist; I am editor in chief and also proprietor. It ought to be an easy matter to protect our workingmen to the full extent of any reasonable protection that can be demanded for accident. I look at the. problem in the broad light of social service, that is, of the general welfare. We are all working in the same direction. I am positive if the problem is clearly under- stood and all the incidentals wiped away the general impression and de- mand will be, we want that kind of a law. The State of Iowa wants that law, the people of this State want that law and we want it to be as attractive as possible. I merely suggest that the commission do not overlook the fact of all these efforts of self help, little insurance so- cieties. Find out how many social affairs have accident insurance be- cause that is the problem before you. How many social affairs for ac- cident insurance are working in these your local self help centers, be it in congregations, parishes or whatever you may call it. They are all eminating from the same social centers, by which we are all being moved in this matter. Mr. J. M. McDonald: I don't know but what there are others here more qualified to speak here than I and evidently much better informed than I. There is one thought occurs to me, however, and that is, that in my estimation it is not so much a question for your consideration to obtain what might be termed the equitable distribution of this bur- den as it is to obtain what might more properly be called an equitable protection to the workingman. I don't think it makes so much differ- ence whence that protection comes or just exactly how that protection is distributed. In the ultimate outcome I think it is bound to be dis- tributed more or less equitably. But the thing more particularly before you, in my opinion, is to protect the man that is injured and incapaci- tated and I think you are on the right track when you are trying to provide him against such hazard. I think he is entitled to his wages. I believe he should not receive full wages because we must all consider that the human being is about what he always was today, he isn't much different and there is an inclination on the part of all of us to get something for nothing, if we can, to prolong these periods of idleness. I can't say whether 60 per cent would be enough in the general run 104 REPORT OF EMPLOYERS' LIABILITY COMMISSION but it strikes me to have 60 per cent a minimum, then I believe on top of that if you would establish a maximum of probably 80 per cent and let the commission that distributes this fund decide which the man should receive. I think also that the laws in some States are rather equitable in possibly not giving anything for the first few days and I think legislation along that line would meet with the approval, of prac- tically everyone. I think most of us who are today paying for liability insurance would welcome from every standpoint being relieved of that obligation. Being relieved of letting others squander the money we are paying not so much that we are jealous what money they get and keep for themselves as it is because the money that we pay is paid for the specific purpose of aiding the man when he is injured and today he is not getting it. I firmly believe that we who are paying liability insur- ance today are paying all that the laboring man would reasonably ask for, if it got into his pocket. If it is distributed around as it ought to be and insure every one. We are not talking about what I pay to it as an employer of labor nor what the next man would pay. If you set out to protect the laboring man, I can't for the life of me see how you can legislate and cut out any laboring man because he happened to be employed in a particular way or because he happened to be employed with only two or three others and not two or three hundred others. I think one scheme that might be considered is with regard to medical attendance. You are liable to go on the rocks very strong in the method of handling what might be called the medical attendants in attending these cases. The doctors fraternity is one on a very high plane no doubt, but they are subject to everything as well, that the rest of us are sub- ject to. You are likely to squander a great deal of money if cases are paid off one p.t a time. I think the experience of liability insurance com- panies is very valuable along this line. Most insurance companies pay only for what they call first medical aid. Our firm like many others, have never considered that just. They insist on entire medical aid. The first attention that a man needs is not all of the obligation, he ought to be taken care of thru the entire sickness. The insurance companies invariably do not do it but they permit you outside of their policy thru their own doctor, to engage that doctor for what they call full medical attention. Now, if we were to pay him individually as he might render his bills I am quite well satisfied" it would amount to eight or ten times more than we are paying. He is very glad to take what he gets from the insurance company for first aid and take what we give him to con- tinue that medical attendance down io the time that the man is on his feet again. Judge Stevens: Would you in preparing a law, have the statute de- fine this matter of medical attendance and its schedule of compensation or would you leave that for the commission that is to administer the law, if passed, to regulate by rule, authorizing them to make rules for the employment of medical attendance and fix the fees for it? Mr. McDonald: That is a question I hesitate to answer because I don't know much about legislation but it would appeal to me at first REPORT OF EMPLOYERS' LIABILITY COMMISSION 105 sight that it would be well nigh impossible to incorporate what I just said on that subject in the law itself. I think it would have to be by the commission's ruling. That is one loophole where a lot of money is liable to be squandered. What I want is the workingman to get that money; he is the man that ought to have it. Judge Stevens: I see that the legislative committee in Wisconsin found and reported that under the present system only 29 per cent in 1904 to 50 per cent in 1908 of the amount paid by employers to casualty or employers' liability companies to indemnify them against liability created under the present system, reached the injured employes or their dependents and the latter's attorney. Mr. McDonald: I think that is a high percentage. That is higher than I thought got into the hands of the men. Judge Stevens: They further say in 1904, in order for an employer to pay about $18 to an injured employe for or on account of injury, it required $82 to carry the $18 to him. Mr. McDonald: If the insurance company can carry our firm today, say at a dollar, I don't see why the State can't carry it with their ad- ministration which would be at a minimum amout of expense. Mr. Clarkson: The difference is accounted for, as claimed by these people, in this: Liability Insurance Companies are only liable for such injuries as were proven that the employer was at fault and in which the employe did not contribute or was not brought about by the fault of a co-employe or was not a risk incident to the employment. In other words, taking the statistics as gathered by the New York commission which show that about 50 per cent of the injuries received by employes were without fault of either party but under the law the employe carries that burden; about 25 per cent was the fault of the co-employe; the employe carried that burden; about 15 per cent was brought about as a result of the negligence of the injured employe himself; he carries that bur- den; about 10 per cent was the fault of the employer for which the employe would have the right to recover, providing he did not contribute to the injury received. That would be the only reason which the in- surance companies would fix the rate. Now, the law in force in Ohio contemplates paying for the injuries however received regardless of fault and the rates are adjusted accordingly. Mr. McDonald: Some of us have been paying that for years and we haven't found it burjiensome; we have been paying their wages and tak- ing care of them. We do that in spite of our insurance. Mr. Clarkson: Are you able to furnish us for the years 1909, 10 and 11, the number of men that you have engaged in the several depart- ments in your business? Mr. McDonald: I think you have got that on file in the State De- partment. You get those reports from us every year. Mr. Clarkson: In addition to that can you furnish us data for the three years mentioned showing the number of persons injured and the length of time they suffered from the injury and the amounts paid? 106 REPORT OF EMPLOYERS' LIABILITY COMMISSION Mr. McDonald: I aai not sure I could give tlie length of time in each case. I could estimate it very closely, I think. Mr. Clarkson: If this Commission is enabled to obtain data showing the number of employes in the several departments of any given busi- ness for a given length of time and the average wage paid during that period of time and the number of injuries received in the several depart- ments and the length of time they were out of employment, and the number of deaths as the case may be, we can then tell you to a rea- sonable certainty, approximately correct, just about what it would cost you to operate under the new scheme as generally proposed. Mr. McDonald: Well, it is our very experience along that line that makes me heartily in fa\or of this compensation act. Judge Stevens: Wliat have you been in the habit of paying in case of death? Mr. McDonald: We have never had such a case. I think there is no greater injustice than to have either large or small concerns, but particularly small concerns, stand on their own in- dividual basis, in case of extreme accident, because you can readily see that you will wipe that fellow off the face of the earth.. The only reason we are carrying liability insurance is not because of little accidents. We are hedging on these boiler explosions. The little things we are perfectly wiling to pay ourselves. We are paying money today on the top of our indemnity insurance that they won't stand for. They say they are not liable, we go ahead and pay it. Mr. CoUis: We pay all the expense except 80 per cent of the doctor's bill; we pay all the wages and the balance of that 20 per cent of the doctor's bill and it didn't cost for 13 years but 62% cents on $100, but we were fortunate. Judge Stevens: If a man is going to become liable to insurance re- gardless of his own fault, will it not stimulate him to adopt more pre- ventive measures to prevent accidents? Mr. Nicholas Conner: It certainly would. Judge Stevens: That would be a natural result, wouldn't it? Mr. Conner: Indeed. Judge Stevens: If that is true, would it also stimulate the employee if he was paying a small per cent, one-tenth of the premium out of his wages;, would it stimulate him to assist in preventing accidents more than tho he was not contributing to the fund? Mr. Conner: It hardly can be denied and yet we know that the labor- ing man is the man who is less able by power of intellect and by economic conditions to help himself. Judge Stevens: True in some respects, I think you are right but what is the objection to his contributing; is it his lack of means or is it because it will make the employer about as much or more work in some cases to keep the account? Mr. Conner: It would all depend on the view that I take of it. If I take the social justice view point then I would have to consider on both sides whether the employer is doing his duty in protecting the men and also whether the employe is doing his duty towards his boss. REPORT OF EMPLOYERS' LIABILITY COMMISSION 107 Judge Stevens: Of course no one wants to pay a man who wilfully hurts himself nor no one wants to protect a man who wilfully hurts his employee but we have cases every day probably somewhere, some careless fellow will hurt himself and do it very negligently, even reck- lessly. Now, should he be penalized by paying him one-half the re- lief which he would have gotten if he had not been guilty of gross negli- gence or shall we not? Mr. Gonner: Then it is no more a matter of justice, it is a matter where the equity part comes in. Judge Stevens: Shall we recommend any penalties either way? Mr. Gonner: I suppose I could only answer that in the generality, you would have to get as close to that proposition as you can. A de- finite answer on that, I don't see how anybody could give that. Judge Stevens: In some States I think they double the amount which an employee can recover, that is, that he is entitled to under the schedule, that is where the employer has been grossly negligent or where he has neglected to put in a safety device after he has been noti- fied to do so or the statute provides he shall. On the other hand, an employe wilfully disobeys or fails to carry out instructions in re- gard to his own safety, that he gets less. Mr. Gonner: I can perfectly realize your difficulty in distinguishing between social justice and social equity. I might say to a laboring man you are doing your duty and give him a little more. Judge Stevens: Can you administer such laws as this and leave it to the commission to favor one party because he is good and another because he isn't? Isn't that the very thing that we must avoid of all things? All the criticism nearly against the administration of the German law grows out of the claim that there are favorites and dis- crimination and you have got to hew to the line. If you administer these laws you can't give anything out of charity, there is no charity in this; it is justice. He can have what the schedule says if he comes within the law and nothing more, isn't that true? Mr. Gonner: Yes sir. Twelve o'clock noon, this meeting adjourned until 1:30 P. M. 1:30 P. M; Dubuque, Iowa, Monday, March 25, 1912. Judge Stevens: I don't know whether you gentlemen expressed your- selves as to whether all employes should come within this law. Mr. McDonald: We intended to make it cover everyone. Our only idea was to make justice to all alike. This is a matter of justice and equity all around. We couldn't see why some poor fellows in one parti- cular vocation should be excluded. Father Heer, St. Boniface League of Iowa. Membership of four to five thousand, a German Catholic organization of Dubuque. I have no definite suggestion to offer only I came to show my interest in the move, I appreciate very highly that the State of Iowa is taking up the question. We all feel that such a law is needed. We all under- stand that the danger line has been reached. The law will be just to all 108 REPORT OF EMPLOYERS' LIABILITY COMMISSION concerned. Of course we know that the capitalists are able to protect themselves, the poor laboring man is generally not able. But there must be justice and if the law is just it will work no hardship to any- body but it will surely do good to all. It will bring peace and peace means contentment and that will mean prosperity, Mr. Max Rathberger: I am a printer by trade and represent the Dubuque Trades and Labor Congress. We have between 35 and 44 unions. There are over four thousand members in this city. As you all know gentlemen, laboring people are rather ignorant, consequently we have put this down in black and white so we won't forget any of the points. (The statement was read and handed to Mr. Given. See appendix.) Mr. E. D. Burt: I am a painter by trade. I was working, well, it is pretty near two years ago now, for a firm here in this town and I was working on a ladder, I told them I didn't think it was safe and he said he would have it fixed. Well, he brought in another ladder; I told him that ladder didn't look very safe but I would try it. I started to work on that ladder and went upon the roof. While I was working up on the roof of the building and he came around and he brought another ladder. He said he had a pretty good ladder and he set it up against the house and he came up on the roof. I supposed the ladder was all right. When I got thru on the roof I «'ent down and we put what we call a ladder jack on. It is an iron bracket that we put on two ladders so we can extend a plank from one ladder to the other, while they are both leaning up against the house. And I and another workman we got on there and done one stretch down and we moved the ladder. I got up there and we worked until ten minutes to five. Each one of us was on one end of the plank, we were probably 18 feet apart, when the round of the ladder broke and we came down. There was a concrete walk under us and we dropped 18 feet. I struck a bay window on the way down; I dropped probably five feet when I hit the bay window and it started me head first. As soon as I seen I was going head first I tried to turn over and both feet struck on the concrete walk. I had my ankle broke, this bone here, and the plank struck me across the instep here and crushed the Instep down. I was taken home and laid up for nine months. The only thing I got out of it was $4 a week that my local union gave me. Some of them wanted to know why I didn't sue them. You take a working man when he is laid up for nine months he aint got much resources to go to law on. Here I am now crippled just because there aint no law to protect me or help me out. Mr. Staly: In all of these laws that we have, the schemes that have been proposed, it has been proposed to wipe out the employer's defense. Now, in all cases of accident where the employer is at fault, they should pay for it. That is your idea, is it ? Mr. Burt: Yes sir. Mr. Staly: In all cases where the employer and the employe are at fault, fehould they pay for it all the same? Mr. Burt: Well, certainly the employe doesn't hire himself out to b€ injured. It is an accident. Unless it can be proven that the em- REPORT OF EMPLOYERS' LIABILITY COMMISSION 109 ploye done that act intentionally then we certainly don't expect an em- ployer to be held responsible. Mr. Staly: Are you of the opinion that the employer should pay all of that? Mr. Burt: Well, we certainly object to the employe paying any. We are paying our just share of taxes. Mr. Staly: That is just exactly what we want you to explain to this commission, why? Mr. Burt: For the simple reason that we are only hired out to do our work and perform our work and if any accident happens, if a building collapses or anything on the machinery goes to pieces and the employe is injured, we don't say the employer is responsible, but you can't hold the employe responsible for a condition of that kind. Mr. Staly: ■ What would you say as to a law that would be so framed that the State should pay part, the employer should pay part but you would not have the employe to pay anything for any of these accidents? Mr. Burt: Under certain conditions, and the condition is this: Where this law is universal all over the United States we would not object to pay a share towards it, for the simple reason that we are not stationed all our lifetime in one spot. We may be paying 10, 15 or 20 years into the treasury of the State of Iowa for that very purpose and then we move over into Illinois and we have paid our dues for what, for nothing, because we could not collect here if we got injured in Illinois. Mr. Clarkson: Some of the States have established a scheme by means of which the employer contributes the fund to the State. Now if this commission should see fit to recommend a bill to the next General As- sembly, and they would recommend that the bill should be so framed and provided that nine-tenths of the premium should be paid by the employer and one-tenth by the employe but that the fund created thereby should be utilized exclusively for the payment of compensation to in- jured employees while in line of duty, no matter how they received the injury, save and except it was done wilfully, I exclude that; then the public should come in and say that from the general fund of the peo- ple at large that they will pay from that general fund all of the costs of administration and inspection and all that would be essential and nec- essary for the proper administration of the law. Mr. Burt: Yes, but according to that idea the workmen would be compelled to pay double. In the first place he is of the people of the State. He will be paying taxes towards keeping up that very thing and then again he is called upon to pay his shars to that very compensa- tion fund. Mr. Clarkson: Wouldn't that be true of the employer? Mr. Burt: Absolutely not so in proportion because where there is one employer there is probably 50 or 100 employees. Let the S^ate pay for it entirely. That would make the State careful in the construc- tion of buildings. It would make them careful when machinery is put up for the simple reason that the State is directly interested in that factory. 110 REPORT OF EMPLOYERS' LIABILITY COMMISSION Judge Stevens: If I understand your last remark, individually your opini6n would be that the state should stand the whole expense? Mr. Burt: Yes sir, that is my individual opinion. That is not the idea of the Trades and Labor Congress. Mr. W. S. Meuser: I am in the lumber business but interested in two small factories, wood working factories. From the little experience I have had as an employer I can say that the management of those two factories are very much in favor of some such law that will be justice to the workmen and also fair to their families etc. We have paid out considerable money for protection and never yet had an accident but what we settle ourselves. I believe that if you can find some law that will in your opinion meet with the approval of the people I believe we will get along better and it will be a justice that will be done to the workman and agreeable to the employer. Mr. Clarkson: What is your idea of the proposition of the employe contributing? Mr. Meuser: Well, as a matter of fact I think they ought to contribute something. Mr. Clarkson: Why.? Mr. Meuser: Because, to have them interested in the proposition as a partner. Mr. Clarkson: Wouldn't you immediately create a condition in your locality that the moment they were required by law to contribute 10 per cent, immediately get up a wage fight controversy again. Mr. Meuser: I don't think so. We at one time considered in our small factory to see if we couldn't get the boys interested in a mutual accident policy embracing all the men but for some reason or other we dropped it, but from what we could gather they were all in favor of it. They all do it now. They are all in some accident company or some sick benefit company. Speaking along the lines of what we believe is fair and just; we understand you are only considering the matter of ac- cident liability. Furthermore, if we go a little further than that, we believe in old age pension. Of course, you are not supposed to consider that, but we believe that should be introduced some time. Mr. McFadden: WTiere an employe has had the protection for five years, my idea is, he has had his money's worth. He has had com- pensation in the protection he has received and there is really nothing left in the treasury for him and when he goes into another State he is able to partake of the law as it is there. There is scarcely any state where there isn't some kind of protection. Mr. Clarkson: The commission will stand adjourned to reconvene at Cedar Rapids tomorrow morning at ten o'clock. REPORT OF EMPLOYERS' LIABILITY COM1\!ISS10N 1 II NINTH S{-:SS1()N-Cr-DAR RAPIDS Cedar Rapids, lov/a, Tuesday, March 26, 1912. 10:45 A. M. Judge Stevens makes a statement of the nature of the meeting. Mr. R. S. Sinclair: As far as any legislation along this line I think I can safely say that the employers here in Cedar Rapids are in favor of it. We have our troubles -with the present system and we would be very glad indeed to be relieved of it, providing the relief isn't greater than the trouble itself. As to the details of it. That is a matter of pretty long and extensive study and I don't know that we have gone far enough into it to do very much in the way of recommending or really expressing our views very decidedly on these matters at the present time. But we have asked for a, meeting of employers this afternoon and I think there are a good many of them pretty well interested in it here and will probably be up and we probably want to have an expression of opinion from them as well as some expression from you as to what you can set before us as things to be considered especially. Mr. Clarkson: The Commission is in the attitude of not knowing anything about it. We want to be informed from the fellow who ulti- mately must have to do with the law, if one should be enacted. Judge Stevens: I think you can also add that very likely we have in- vestigated more than some of those who will be before us and glad to impart any information that we have along those lines. The Chairmaii of the Washington commission mentioned himself with reference to their law there, that they ought not to have so many classes; he would reduce it, I think he said to 8 or 9. I thought I would reduce it to one. I would fix the rate which each hazard should carry and make that subject to change as it would appear necessary from time to time. Mr. Sinclair: What is the object of dividing it at all? Judge Stevens: I never heard of an insurance company that did. Mr. Clarkson: I think they were strongly impressed with the idea, the necessity of each industry carrying its own burden so as to not in- ject into the general scheme the thought that an industry that v/as not at all hazardous would in any wise be carrying the burden of the hazardous industry. Mr. Sinclair: One of the great dangers that I see in this whole thing is the possibility of imposition on the part of the injured man, against the employer. As I understand, reading the accounts of the German law, that has been one of the difficulties of the operation of it, that the accidents have increased tremendously and the cause of the accidents have increased tremendously, partly because they are not able to protect fully from that thing. That is one of the most difficult things to handle. 112 REPORT OF EMPLOYERS' LIABILITY COMMISSION Judge Stevens states the method in which the Washington people have started out, outlining the Washington plan. Mr. W. H. Dunshea: In the District Court for the last year our Court expenses was $42,000.00 and one of the J udges expressed the opinion that half or nearly so of these costs were personal injury cases and a very prominent lawyer who was here at the time and he was with the firm who have a good deal to do with injury cases, both as attorney for liability companies and for the pailroad, said he thought it would be more than that. But figuring it even at $20,00'0 out of $42,- 000, here is one out of 99 counties, if this law was in operation, that would take this business out of the court. Judge Stevens: If it saved $1,000 to each county on an average in the State of Iowa, it would save enough to administer this law and administer it in splendid shape, and it would save more than that to the unfor- tunate. Mr. Sinclair: Every time a case is fought it goes up from court to court and the man that really don't get the benefit, if he is injured at all, if he gets it at all, he don't get it until possibly he is dead. Mr. Dunshea: I think the employe is going to be benefited by it even more than the employer. What makes a manufacturer or employer of labor hot under the collar is to know he is being held up for a sum far in excess of what it should be and knows that half or sometimes more of this is going to the lawyer that may have had something to do in working up the case. Judge Stevens: Can you think of any reason why the farmer should not come in? Mr. Malcolm Smith: No, I think he should. He is an employer of labor. Mr. E. E. Pinney: I think if the employers and employes would par- ticipate and join in that fund it would in many cases be a great aid to the employer in the matter of ferreting out such cases that are not right and just, in the way of injuries, as they are the parties who pay them. I think that would be a fine plan if it could be made compulsory from both sides and the cost to the employer and employe would not be bundensome at all. Mr. W. M. Cherry: That brings up the thought. There may ntt be anything in it. In communities where labor organizations were fairly strong and where they got together and agreed on their wage scale, after all, wouldn't the payment of this work back to the employer? Judge Stevens: Yes sir, that is one of the points that is always made, that it isn't requiring him after all to pay anything because it will come out of increased wages anyhow. Mr. Pinney: I think it wouldn't be burdensome enough to call forth such a drastic move as that. Judge Stevens: If it is all put on the employer, why shouldn't they say, well, with this additional burden, we can't pay this wage? Mr. J. C. Loomis: I personally couldn't see any objection to having the employe pay. The union might say here, our scale for 1912 will be REPORT OF EMPLOYERS' LIABILITY. COMMISSION lU 70 cents higher and the employers assume our compensation to the fund. Judge Stevens: What are you gentlemen paying for liability in- surance? Mr. Smith: In these travelers insurance companies U. C. T. and Hawkeye they pay $9 to $11 a year. Judge Stevens: You get liability insurance for nine hours a day or 8 hours or 10 hours according as your factory is running and you don't pay for an accident or get indemnified for an accident unl6ss it occurs on your premises and you pay on the pay roll. What' are you paying? Mr. Loomis: On an average of about 2% per cent. (Another gentleman) We pay 75 laundry. Mr. Sinclair: We pay 60, packing house. Mr. Clarkson: I have a revised list here that might be of some in- terest along that line. The list follows: Iowa, 1911. — Liability. Premiums. Losses. London $82,074.00 $45,301.00 Fidelity & Casualty 41,871.00 14,856.00 Maryland 33,299.00 32,516.00 Travelers 30,900.00 23,494.00 Casualty Co., of America 23,522.00 10,405.00 American Fidelity 18,037.00 7,581.00 Ocean 13,533.00 11,301.00 Employers Liability 11,149.00 5,940.00 Standard 7,531.00 3,813.00 F. & D. Co 6,078.00 1,303.00 U. S. Casualty 5,624.00 2,800.00 Royal 5,038.00 711.00 ' New Amsterdam 1,443.00 272.00 U. S. F. & G. Co 514.00 Frankfort 53.00 $280,666.00 $160,293.00 Average Loss Ratio, 57 per cent. F. & D. Loss Ratio, + 21 per cent. 12:10 noon. Commission adjourned until 2:00 P. M. 2:00 P. M., meeting called to order. Mr. R. S. Sinclair: I am of the meat packing house. The manufacturers of this city have during the last two or three days been talking this matter over a good deal. We have not in the past got together to talk it over until the last two or three days. And, of course, we are not prepared to go into a subject of this vast importance and this vast economic value in a way that we would like to at this time. We have, however, been thinking of a good many things and have come to the conclusion that In the main, we are very much in favor of legisla- tion along this line, especially with proper safeguards on certain features of It. Our reasons for this can be enumerated possibly in this way. In the first place the tendency of the present system at common law is so much to create friction between the employer and the employe that we desire almost any system that would remove the friction. I believe 11-4 REPORT OP EMPLOYERS' LIABILITY COMMISSION that there is no sort ol! agitation that is so effective and right to set class against class as it is over a matter of personal injury cases and if this sort of dispute and difference between employer and employe could he removed, we would be much farther along toward a happy mutual existence between the different* classes of the employer and the workman. In the second place, I believe that one of tha chief advantages of legisla- tion of this kind, if properly enacted, would be the great benefit that would come to the injured person himself, as he would get the benefits due in case of injury and that without delay, which cannot be obtained under the present conditions. As we have talked this matter over we have also come to this con- clusion, I think, quite unanimously, that the increasing risks incident to the introduction of modern machinery, have made It almost neces- sary that some kind of legislation should bs put on the books of the State, in order to help thg workman bear part of the cost at least, of the injuries that must necessarily come to him on account of these improvements and we believe that this cost, part of it, certainly a large part of it should be part of the expense of the manufacturers or of the production of the goods that are to be produced by the industry and in that way we believe that the theory can be carried out in practice, that this cost can be distributed over the goods manufactured in such a way that it will not be a burden on anyone. Further, and one of the chief reasons for us favoring this legislation is that we want to get away from litigation and from not only the cost of it but from the tremendous waste of litigation, especially in these damage and personal injury cases. And I think that on those grounds we have a common ground to stand on, not only employers but the •workman also. Now, as to the objects that are to be obtained by such a law, from our standpoint. And I really feel, as far as I see it now, that these are objects that can be equally held in the main before the employes. First of all we desire that as far as possible, any third party be eliminated in the relations between the employer and the employe, that is, in the settlement of these injury cases and especially that no third party sbould get any profit out of this business, as far as possible and I think the purpose of that object is clear enough, that we desire to eliminate the attorneys who are so willing to stir up trouble for the manufacturer and for the employer on account of these personal injury cases and not at all for the benefit of the employe but simply really and ultimately for the benefit of his own pocket book. Then another object that I think a law of this kind should try to accomplish, would be this, that acci- dents should be prevented and not only that compensation should be made for them. I think that should be one of the chief objects of this law. And another danger however, that comes in here is the question of the protection of the employer from imposition and simulation on the part of an injured person, making his injury apparently more than it is. And I don't feel really that there should be any question on that point between us at all. Then another object that I think should be REPORT OF EMPLOYERS' LIABILITY COMMISSION 11.5 borne in mind is that tiie injured employe should receive all the benefits without unnecessary delay and without litigation. That all employ- ment, including farming, should be involved and covered by any law that is put on the statute books, any law of this kind. Any employ- ment, in fact, that is in any way hazardous or liable to produce acci- dents. If we don't cover them all, what is the use of covering any special employment? As far as the manufacturers of the State are concerned there was one thing that we want in regard to the question of awards that should be established, that these awards should not be so great and that this whole law, in fact, should be such that it would not put the manufacturer of this State in any disadvantageous position in relation to the manufacturers of any other State in a similar line of business. We want to build up Iowa factories. There are lots of small institutions in this State. _ There are not so very many very large ones and it is clearly to be seen that any heavy damages will come with more force and more weight upon a small institution than they will upon a large one and I think that is an important o}Jject to be enter- tained in the work of this Commission. As to recommendations, I am afraid we are not able to make very many very definite ones. There are a good many plans of course, already worked out in different States and when it comes to these recommenda- tions as to the details, there is moie difference of opinion, we find, amongst us, than when it comes to the objects and purposes and the benefits to be gained by such legislation. To my mind at least, I feel that this law should be so put on the books that it should tend to bring the employer and employe very close together in his relations as protect- ing and benefitting the injured party in any damage suit or damage case, for I think, if it is possible, we should eliminate the thought of any suit in this law. Just exactly the method of doing this I am not very well able to specify but it seems to me that the Commission who administers this law, if such is established, should work as far as possible to bring the two sides in the case together, the employer and the employe. This can be done to the benefit, I think, of both classes. Now, there is one point that, to a large extent, we are absolutely in a unit on, and that is, that the State should' stand the expense of the administration of this law. We are told that the District Court here cost during the last year about $42,000.00, probably 50% of which would be chargeable directly to personal injury cases. If this cost is eliminated it will certainly go a very long way, if not more, and I believe more than taking care, it will more than take care of the entire administration of this law, so that at least the cost of the administration of this law should be borne by the State. The purpose of that first of all should be that the man who is injured should get the entire benefit of the award under the law so that there should be no waste at all to the funds that are appropriated for such purpose. Now, the next recommendation would be the very careful inspection of factories so that the conditions may be improved. This to further the object that I mentioned a little while ago that this law should be a law to make improved conditions in factories rather than to simply IIG REPORT OF EMPLOYERS' LIABILITY COMMISSION i:ompensate for the injury, both of which, of course, are very necessary things. And it seems to me that if in this law there should be the establishment of a central fund such as is established in Washington, that the differences in the different establishments as to the hazard, could and should be adjusted by the differences in rate charged for eacli establishment. That the elements to take into consideration should first be the character of industry and then second, the amount of production that is afforded by that particular plan and third, the character and the history and experience of that particular plant during the preceding year. That is simply a suggestion and I do not know that all those of us agree on that point but I make it simply for what it is worth. Then the feature of this law that has perhaps puzzled us most is just how to get the best protection from this matter of imposition and simulation on the part of an injured person. We believe that on the whole the method established by the' German law of the employe and the employer joining in the first expense in a fund to take care of that first expense at least, is the most satisfactory, that it places the employe in a position where he should necessarily take an interest in the administration of that fund and to see that it is not administered with any degree of imposition on the part of the injured party. That seems to me to be the best way to accomplish that. Whether it would be wise to make a fine for carelessness on the part of the employe also or not, I am not quite sure, yet in my own mind, but there possibly might also be a way by which it might be accomplished. That is, a reduction in the amount of award in case the Commission should determine that the injured party was largely responsible for that injury. Another one of the chief difficulties that occurs to us is the question of administration of this fund, if such fund is established. We want to get it out of politics. We want to remove all political influence from it just as far as possible. Therefore, we feel that the Commission should not be either an elective Commission or a Commission appointed by the Governor or any other official or department; that the two sides definitely interested, the employes and employers, should have an equal oppor- tunity of selection of two at least of the members of the Commission, providing the Commission is three, and- that possibly those two could then appoint some one who is mutually agreeable to them and thus establishing the Commission on the basis of various arbitration commit- tees that are so frequently established to settle differences between employers and employes. Of course, to avoid litigation, that law should contain a table of awards specifying exactly what amount of award should be given in every case. I think that is done in practically all the other laws of similar kind but it seems to me to be important and also there is this point raised in a number of the other laws, that when an alien leaves the country, that his benefits under the law, if he is drawing any, should cease. It Isn't right that a man going out of the country should take with him the benefits that he is drawing from this country. That is not the purpose of the law, it seems to me. The purpose of the law is to prevent the suffering on the part of the injured parties. While not finally and altogether approving of all of the features REPORT OF EMPLOYERS* LIABILITY COMMISSION 117 of these laws, it has been our general opinion that as far as we have laws in our hands, that the German and the Washington State laws are in the main the basis upon which to draw up our laws. Now I say that Is simply our opinion expressed without as deep a study into the matter as we would like to make, or as we feel we ought to make, but so far as we have gone, this is about the suggestions that we have. We would like to say, however, that it seems to us that before this com- mission finally decides what shall be done that it would be well for us as manufacturers, perhaps the manufacturers of the State and other employers of the State to have an opportunity of consulting over this matter again when you have determined the general drift of the laws that you have in mind, simply with the purpose of bringing before the legislature when it meets and when you introduce a law as nearly satis- factory to both sides in this case as possible. With these suggestions, which we have talked over to some extent, I leave the matter. Mr. Clarkson: How many employers does your committee represent — I take it you have selected a committee. Mr. Sinclair : We selected a committee first of five, that was increased to eight. And yesterday we had a conference of about thirty of the employers of the city here and we talked over most of the features of what I have said but not all of them and I don't want to claim that all of these features have been thoroughly discussed by us. Some of them I will take the responsibility for tho we have mentioned them but have not come to a unanimous decision on all of them. We have had some expression however on most of them. Judge Stevens: About how many employes do the manufacturers have in this city, just approximately? Mr. Sinclair: I am sure I don't know. Mr. Smith: 5,500. Mr. Sinclair: 75 factories, besides that there are contractors and others. Mr. C. B. Kent: I am a painter. I came here as a representative of my trade also as a member of the executive committee of all the trades from Cedar Rapids. The working people have long thought on this line of compulsory compensation. We have put in many weary hours studying this matter. We have seen our brothers torn and mangled and laid up and we have dug down in our pockets to see that their little ones have had something to eat. We have done this time and time again, hence we are interested in a liability law. Of course the very nature of our calling precludes us making any recommendations but I would like to say a word in regard to the raising of a fund by the mutual aid of the employer and employee. There are no laws, I ■ believe, that give an employe anywheres near what his regular rate of wages is. If you would contemplate a law that would give a man 50% of his wages in case of injury and the fund from which this compensation was to be made was accumulated 90 % by the employers and 10 % by the employees, 118 REPORT OF EMPLOYERS' LIABILITY COMMISSION the reasoning of the working man is that the employe would be paying 60% of his compensation, because he is contributing the 50% that he must lose anyway, together with the 10% that he must pay into the fund. Then on the other hand the working man looks at it, that when you compel him to pay into a fund to reimburse himself for injuries sustained while serving another that it is un-American to compel a man to do anything of that kind. If we want accident insurance the country is full of schemes and companies to furnish that accident insur- ance and it should be a voluntary matter. Now a manufa'cturer or em- ployer if he should need a team he goes on the open market and buys a team. If one of those horses gets killed it is overhead expenses. It is charged to the regular expense of running that particular business. Now he hires a working man at so much a day or so much an hour, and he has no interest in this wotking man; now this is purely from a commercial standpoint, not a humanitarian standpoint. He has no interest in this employe other than the amount of product that he can derive from his labor and if he is injured, if the employer should pay the man that is injured a reasonable compensation, the next man will want more and the next one more and as long as there is no legal status on which to fix that, the employer can't pay anything, he must go to the Courts and litigate and this litigation today, I believe is costing the employers more money than any reasonable compensation act would cost them, if they had to contribute the whole amount and I believe there are many employers who will agree with me on that. That is the main feature. The working people are anxious for some sort of compensation and we figure that this compensation should be a regular running expense of the business in which the man is employed. I believe that is all Mr. Chairman. Mr. Clarkson: The fact being that a certain percent of the injuries oc- cur as the result of the negligence of the injured employe, would there be any unfairness as a proposition of abstract justice, in asking that the employe contribute towards a fund which was going to compensate him for injuries no matter how he may receive that injury, whether it was the fault of the employer or fault of the employe, the fellow servant or co-employe as we term it, or conditions which neither party could have anticipated in the exercise of reasonable care and caution? Mr. Kent: Organized labor takes the stand that the personal injury cases are the legitimate expense of the business transacted whether due to carelessness or other causes, that they are the legitimate risk of the business that should be borne by the people that profit by the business. The working man don't make a profit, he simply works for a living. That is our standpoint of view. Mr. Clarkson: So that in your opinion or rather from the opinion expressed by organized labor, that it would be an abstract justice, that the employe who even was negligent himself, even grossly negligent you might say, should receive compensation and without contributing to the fund? REPORT OF EMPLOYERS' LIABILITY COMMISSION il9 Mr. Kent : Of course you see, you put- it in that light it changes it somewhat. There are a few employes like you have drawn a picture of but not many. There are many lines of employment that drills a man down physically so low that he becomes careless in order to ivoid a little muscular exertion because of the fact that his muscular exjrtion has been so severe towards the close of the day. Then there is the fellow that is grossly careless; but granting that is so, he is in a very small minority; then to compel the large majority, it is really to compel them to take out accident insurance the way the working people look at it. We don't think it is the right thing; we are solid in a union against that. Mr. Clarkson: Wouldn't the same thing apply to the employer, when a man who is inclined to be cautious and careful and prudent and in- dustrious towards caring for all of these mechanisms that are necessary for safeguard, and yet his money is going into a common fund to help pay for, it might be said, fot the injuries received in an industry of like kind and character where there was less care and caution? Mr. Kent: Yes sir, but there is State laws in regard to factory in spection that overcomes that to some extent. Mr, Clarkson: Wouldn't the same thing apply if State laws were enacted so as to prevent conditions arising where the employe was re- quired to expend his physical energies to a point where it was depleted so that he could not care for himself; wouldn't the same thing apply to that? Mr. Kent: Yes, I expect it would. Mr. Clarkson: Then under such conditions would it not be fair or would it, as a matter of abstract justice, that the employe should con- tribute to that fund out of which the employes in general were going to receive compensation even tho it could be proven that the individual was grossly. negligent, and in using the term "grossly negligent," I do not mean one who stuck his finger in there for the purpose of getting it hurt; I don't mean that kind of an injury. Mr. Kent: Well, it 1.=? like I stated before. We haven't had the time to give it a deep study. We haven't had the time to go into this here in Cedar Rapids at least, as deeply as we would like to, but in as far as we have went into it; these are not personal expressions. They are opinions gathered from our discussion. "We are opposed to being com- pelled to pay anything into a liability compensation fund such as is con- templated in Iowa now. Judge Stevens: What would you think would be a fair percent of wage to give the man who was temporarily disabled say, of his weekly pay, suppose he earned $12 a week. Now, in case he is laid up, what would be your idea would be a fair allowance during the period of total disability? Mr. Kent: Well, of course, that Is a matter we didn't discuss. I don't know. It seems to me that nothing short of full wages would be 120 REPORT OF EMPLOYERS' LIABILITY COMMISSION justice. If it is just that a man puts in his life or any part of his life for a given compensation and thru service rendered in that given occu- pation he becomes incapacitated for a time or for all time, that the full wage would be justice hut whether the law can render justice in this instancp or not, I do not know. We didn't discuss that phase of the question. Judge Stevens: On, that basis, if a factory ran long enough, it would have two sets of employes, one working and the other disabled, they would be paying them equal amounts? Mr. Kent: "Well, hardly. I think when they found out they had to pay them there wouldn't he so many men hurt. Judge Stevens: Did you discuss the matter of whether the employer should pay for any injury that was occasioned in returning from work or going to work after leaving the premises? Mr. Kent: No, we didn't discuss that at all. Of course, that would be foreign to the field it would seem to me. Judge Stevens: You think then the liability hegins and ends on the premises? Mr. Kent: On the premises, yes sir. Judge Stevens: Suppose a case where an employe should remove a safety appliance for his own convenience and it should result in his becoming hurt; do you think then the employer should pay him just the same? Mr. Kent: I think the man ought to he sent to jail. Judge Stevens: That doesn't answer the question. He would have to live if he went to jail. Mr. Kent: The County would be feeding him while he was in jail. Judge Stevens: Do you see any difference in such a case as that than where a person is hurt wholly hy his own fault where he hasn't removed a safety appliance? Mr. Kent: O yes, Lord, yes. The one man, in my mind, has committed a crime, the man that removes a safety appliance from a machine that his employer put on there, inasmuch as it may not he only himself that would get hurt but his fellow workman may get hurt. Judge Stevens: Most of these laws provide from 50 to 65% of the wage where the employer pays regardless of fault and as I understand it, your assembly here thinks that they should pay 100 % ? Mr. Kent: That is the wage earners standpoint of this town at the present time. Of course, we don't expect to get that much. We are talking about justice when we say 100%. Judge Stevens: I don't exactly understand how you claim it would be justice for a man to pay a damage occasioned by another's fault; how do you come to that conclusion? REPORT OF EMPLOYERS' LIABILITY COMMISSION 121 Mr. Kent: Because the manufacturer is surely responsible for the people he hires. If they show that they are careless he should soon dispose of them and if he doesn't dispose of them and it results in the injury of a fellow employe who isn't necessarily careless, it would naturally seem that the fault would go back to the man that he retained in his employ, a man that was careless of other people. Judge Stevens: I grant you that, but you are citing a case of simply holding the employer for the injury caused by a fellow workman. I am talking about cases where the workman who a.sks the relief is himself to blame. Where is the abstract justice in requiring the employer to pay him? Mr. Kent: There may not be any abstract justice in the proposition that you cite now but experience has taught the wage earners that in a law constructed along those lines that we would be no better off than we was before, because of the fact that a man's bread and butter depends on an employer; he must have an employer. Now, in a case like you cite, a man cannot go into the Courts and prove by his fellow workman by the side of him that he was not careless and you would have the same system of law suits on your hands, according to the wage earners idea, as you have got now, with no liability law. Of course, we are only workingmen, we don't claim to be bright in these things. Judge Stevens: Suppose, as in almost every case in this country this fund is raised wholly by the employers. I think there is only one State where the employees contribute and they only contribute one-tenth, not of their wages but one-tenth of the premium, which makes it ordinarily % or % of a cent a day. Now suppose the employer pays the whole of it and I might state further that these laws vary from 50% to I think 66 2-3%; do you think that is reasonable? Mr. Kent: Well, personally I don't know but what it is. I would have to admit that it was. There would be no way of getting away from it as I can see. I would get away from it if I could. Mr. Baldwin: Take some lines of employment like a switchman; there is no particular skill in regard to learning the business of switching. Now if that man was working on a farm he probably would be paid $35 a month but as switchman he is paid three times that. What is that other two-thirds for? It is for the risk. He takes that risk and he is paid for that risk. Now when the employer has paid for that risk can you see any justice that he should also insure that man as part of the expense of that business? Mr. Kent: Well, what you say is partly true but we don't look at it as altogether true. There is another phase of that I might say a little bit on and that is this: Because of the fact that the switchman's life is very hazardous there is very few people cares to enter it and even if a switchman knew or if there was a law already that would compensate the switchman in full for the balance of his expectation of life in case of death or injury you would still find that the applications for positions 122 REPORT OF EMPLOYERS' LIABILITY COMMISSION as switclimen will be so sliort that they would still have to pay these high wages because a man don't care to get Itilled just to let his family have his wages the balance of his normal life. Mr. P. T. Dunn: We appreciate the fact that the manufacturer is not opposed to a law of this kind. If a man is injured and he is con- valescent after the injury, the physician tells him it would help him some if he took a visit; he has friends in the foreign country and he wants to visit them. He ought to forfeit that benefit if he takes that visit. In regard to factory inspection. We have factory inspectors. There is no law that compels the ov/ner of the factory to furnish proper ventila- tion and proper sanitary conditions. The inspection is all on dangerous machinery and elevators and machines of that class and an employe may work there and he may thru bad ventilation and poor sanitary conditions may contract a disease, he goes home and is sick for two or three months and he dies. Now the way they construe this proposed law, now he wouldn't be entitled to any benefits at all from the fact that while investi- gation was started it might be proven his death was thru poor ventila- tion of the factory or bad sanitary conditions. Mr. Clarkson: Your thought is that there should be remedial legisla- tion so as to avoid vocational diseases as well as personal injuries? Mr. Dunn: The factory inspectors should be compelled to have them furnish proper ventilation and proper sanitary conditions. Mr, Clarkson: What is your idea about the proposition of contribu- tion? Mr. W. L. Cherry: I think that is very good. I think it will be only slightly felt by each employe and I believe they will take an interest in the fund. It will have a. tendency to make them observe it and to see that it is properly applied. I think there will be a tendency towards less accidents where they have a mutual interest in it with the em- ployer. Mr. Clarkson: Do you feel that because a man contributed 10% of the premium that he would then stop and think, well now, here if I get injured I am going to have to help pay myself and I will therefore have to be more careful? Mr. Cherry: I think so. He would have a financial interest, only one- tenth of what the employer might have. Mr. Clarkson: Supposing a case where a line of industry was well organized and they were required to pay 10% of the premium, don't you feel it would only be a question of bookkeeping then that they would come right back ultimately and hammer away until finally there would be a raise of wages to meet whatever amount they were required to con- tribute? Mr. Cherry: There is a possibility finally it will revert back to the employer. Conceding that is so, nevertheless the moral effect I believe, on the employe, will be good. REPORT OF EMPLOYERS' LIABILITY COMMISSION 123 Mr. Clarkson: Your idea is that even conceding that condition should prevail, the fact that they are both contributing would bring them closer together and feel they had a mutual interest, one with the other, and a more harmonious condition prevailing and it would be worth the amount? Mr. Cherry: Yes sir. Mr. Clarkson: Supposing on the other hand your competitor, his em- ployes were not organized and therefore not enabled to fOiCe the em- ployer, your competitor, to bring up these wages so as to meet that requirement, would you not be at a disadvantage to the extent of paying — Mr. Cherry: We would. Mr. Clarkson: Then would not the ultimate results in that condition be worse than if you just contributed the whole, or would it, in your judgment? Mr. Cherry: I think not. Mr. A. Poe: In regard to the employes contributing to this fund. My opinion is that if all employes were compelled to contribute to the fund that it would do away with fraud, that they would not be willing to pay, if some of the men were getting more money than they were entitled to and that they were staying off longer than the injury warranted and that the working men themselves would help detect that fraud if they were made pay a small part of it. Mr. Clarkson: In what way would we be able to check up so as to detect the dishonest riople? Mr. Poe: If a man is hurt and he stays off two or three weeks, the working men know he isn't hurt to that extent and see him around his house and they know he is off and getting wages and we can't check up on individual men. Mr. Clarkson: You think they would report it? Mr. Poe: They would report it or make him return to work earlier if they were paying some of his time while he was off. Mr. Dunn: As I understand it, nearly all the manufacturers at present partake of some risk, they are paying a premium on their employes. The public must pay that premium for the employer, he doesn't pay it himself. It is taxed on to the expense of doing business. If he pays a certain amount to the State the same thing will take place; he takes it from this risk company and pays it to the State. If the employe is com- pelled to pay any part of this fund it must come directly out of his wages and the only way he has for recompense is to go on a strike and have his wages raised. Mr. John H. Taft: I want to emphasize one particular point with reference to the application of the Washington law so far as it benefits the Iowa manufacturer. As an illustration; I am engaged in the manu- facture of ladies clothing, cloaks and suits. We have got perhaps six factories of that kind in Iowa and we couldn't endorse any law that 124 REPORT OF EMPLOYERS' LIABILITY COMMISSION would contemplate that the six factories engaged in the manufacture of ladies garments in Iowa would have to assume this great hazard that might come to our industry on account of these injuries in other factories and as there are so few of us. So that I think the Washington law so far as that particular feature of it is concerned ought to be eliminated in Iowa. I believe any law we endorse should have that clause in mind that the law that is proposed should be a law that would cover all of the various industries of the State and that those of us who are in an industry that have very few competitors we ought not be on a basis by ourselves. Mr. Clarkson: How would you suggest that defect could be overcome if at all? Mr. Taft: Let it all go into one general jack pot. I am heartily in favor of a workman's compensation law of some sort. I think it Is the thing we ought to have. I am inclined to think it will bring the employer and the employe closer together than perhaps any one thing that we could possibly do and after all there is more in this world than getting the other fellow's labor and distributing our dollars. We want to have a mutual like for each other rather than a mutual dislike and I think this would be one of the things that will do that very thing and yet I as a manufacturer would like to look over the proposed measure. I should like to talk it over with brother Kent and some of these other fellows here and know that we are getting the thing that we both can heartily endorse and approve of. There is no doubt in my mind but what we can come to a mutual understanding that will be satisfactory to both of us. Mr. C. L. Bartlett: I am a building and general contractor. My opinion is that pretty near all of these laws tend to make the employer careless as well as the employe, perhaps not so much on the part of the employer because his charge is fixed by some basis other than his own acts and his own carelessness or carefulness in carrying on the proceeding. That should be eliminated. The surety companies, we all pay premiums to take care of our risks, rather to try our law suits. I have several cases in court; I would like to see them settled, but I have got to go into law the same as other men do. The policy is all wrong. Every right minded man is of the opinion that there should be com- pensation to the man that is injured and that compensation should be paid by the public. It S3ems to me it is wholly immaterial whether it is paid pro rata on the pay roll of all employes of the State or whether you have a different rate for this line or the other line of occupation according to the hazard. It all comes out of the public wealth anyway and even tho you tax one more or less, it is simply taxed up to the product and taxed up to the people, whether the employer pays it, the employe pays it or the public as a whole pays it. They are the only ones that pay it and the details of how you tax that up isn't very material, but I believe that the individual action of the employe should fix the compensation which he must pay for his protection or must pay for the injury sustained because of his wrongful acts. There may be REPORT OF EMPLOYERS' LIABILITY COMMISSION 125 injury without wrongful action but for the injuries sustained on his work. For instance I carry oh a piece of work and I claim, as probably every other contractor does, to carry it on with less hazard to the em- ployes lian others because of the fact I carry it on with less hazard I get a lower rate. All these things are taken into consideration. I claim our risk for accidents is less than one-third of what it was ten years ago because we watch carefully as to the existing conditions and avoid accidents. It is only brought down that way because it. has been to our financial interest to do it. You take away that financial interest and we cease to bring it down. As to the employe paying part of it, it seems to me it is really imma- terial. I think he should possibly pay part of it. It is going to come out of the public anyway. It comes out of him as a tax payer. His wages will be fixed in proportion to what his net compensation is. I do not believe he should have full compensation when he is laid up. There is no question but what he would be laid up longer, some men would, than if he wasn't getting full pay. We see it right along. A man commences a case in court; he pretends he is in bad. Not one man but plenty of men, no more laborers than anybody else. They will pre- tend they are sick and limp around a long time after they ought to be at work. The compensation should not be full. It should not be that which encourages dishonesty or collusion and it should not be that which encourages carelessness and every law I know of encourages the care- Jessness of the employer. I guess perhaps there is some that isn't. Cer- tainly the Washington law isn't any good. In determining who is engaged in a business it seems to me we would have to be very careful in making recommendations as to what is an advisable law. Now, in most industries it is definite and easy to tell who is In business and who isn't in business, but in the contracting business and building business one day a man is a carpenter and. another day a contractor. Unless the law is very careful in defining who a con- tractor is and following up in such manner as to make everyone who engages in construction undertaking pay a big lot of it would get free of paying, like house permits and one thing and another. Suppose you take a permit for building everything that goes up in town, still they don't get permits for but very little of it. Mr. Clarkson: Mr. Bartlett, is it your idea that under the present scheme of insurance and liability that a man is rated according to the hazards of the .industry in which he is engaged and that his carefulness in his business is taken into consideration as an element in determining his rate? Mr. Bartlett: I know it is in our business and I know it is in a great many. Mr. Clarkson: If that be true do you feel that it has any influence upon him in causing him to be more careful, fearful that his rate might increase. Mr. Bartlett: I am sure that it does. 126 REPORT OF EMPLOYERS' LIABILITY COMMISSION Mr. Clarkson: Your idea is, the individual employer should be the unit for fixing the rate upon tiiat employer? Mr. Bartlett: Yes sir, I do. Mr. George T. Hedges: I am in the real estate business. There is another phase of this question I wanted to speak of and that is this. As I understand from the manufacturers that have as- sembled here and have had a conference together they all believe that a reasonable lavjr would be a good thing and that is what I wish to en- large on a little and that is this: We, as you gentlemen all know, and as we all have a great deal of pride In Iowa, as everyone should in their own State, we know this, that we are the only State in the union that for the last census showed we had a loss in population. We are trying to build up the cities of Iowa. I am a director in this Commercial Club We have fifteen directors here. This commercial club puts in a great deal of work trying to build up Cedar Rapids. Now then, if we pass an unreasonable law, manufacturing industries are not going to come to Iowa to locate. We have got to be reasonable in matters of this kind as well as other things. Now, for instance, the commercial club of Cedar Rapids often times get on track of manufacturers that wish to change locations from the east to the v/est and we sometimes get them out here or sometimes perhaps before we get them here, we find, that just the matter of freight rates is such a difference that they will not locate in Iowa. Now then, if that same condition prevailed in regard to an employers liability law, that was drastic and unreasonable and very much difference in its unreasonableness from those of other States and where the employes were paid full compensation and other States paid .50 per cent, that would preclude, in my opinion, getting manu- facturers to come to Iowa to locate. That is the one feature that I wanted to speak of. Mr. Clarkson: The Commission will stand adjourned to meet at Davenport tomorrow morning at ten o'clock. REPORT OF EMPLOYERS' LIABILITY COMMISSION 127 TENTH SESSION— DAVENPORT Davenport, Iowa, Wednesday, March 27, 1912. 10:20 A. M., meeting called to order by Chairman Clarkson. Mr. Clarkson states the object of the meeting. Mr. N. V. Ely: I feel as though I was in this meeting under false pretenses because I am not a manufacturer, altho I do represent some manufacturers but I also very often represent the other side in ques- tions of this sort that come into court. As I understand it, the idea is to obtain from both the manufacturers and employes their ideas of what such a bill should contain and something of the detail of it. I presume that this Commission is perfectly familiar with the New York law and the Massachusetts law especially. In Massachusetts, I under- stand there was almost a complete failure of that law because it was an insurance plan, that is, they organized an insurance company and pro- vided that when so many employers joined this company with so many employes, that certain rules of law with reference to the assumption of risk, contributory negligence etc., should be wiped out. But that the limit of their liability should be as fixed by that statute but it was optional with the manufacturer and with the employe whether they would come under the terms of that act and after it was enacted into a law the manufacturers almost unanimously declined to come under it or pay any attention to it because it was a mutual insurance company and the limit of their liability was indefinite and unfixed. I don't know what the plans of this commission are or what their ideas are, but the manufacturers, as I understand it, now, of this city, are not opposed to any reasonable fair law fixing the compensation for injuries to em- ployes. As far as I have been able to learn, the vice of so many of these laws is in providing a very materially increased liability, that is, you fix it in such shape that the employer is liable for many more ac- cidents than he is under the common law but in the enactment of these statutes and the objection and difficulty that manufacturers have is, that in so many of the States they have permitted the common law lia- bility to remain. That is, if you say here, we will wipe out the fellow servant rule and the assumption of risk rule and the contributory neg- ligence rule and thereby increase the liability of the manufacturer, you still leave with the employe the right at his option to proceed on his common law liability. So that in _ case of an accident happening, the man that is hurt, if he has got a cause of action against the employer 128 REPORT OF EMPLOYERS' LIABILITY COMMISSION win refuse to abide by the provisions of this employers' liability act, but will bring his action under the common law and recover the in- creased compensation provided under the common law itself; In other words, fixed by a jury as to how much you are to recover. When this injury occurs in such a manner that there would be no common law liability, then the injured employe turns around and says here, I will bring my action under the employer's liability act so that you do not in any manner protect the employer but you simply in- crease the liability. The effect in New York of that liability act there was such as to increase the insurance rates somewhere from 100 to 150 per cent, that is, the liability insurance. So that when you are considering a bill of that kind and in considering the rights of ths employe, the rights of the employer as well should be considered. The suggestion, as it appears to me, based on the Massachusetts plan of an insurance that must be handled and controlled by the State, for in- stance, that all manufacturers must pay into this insurance fund of the State of Iowa, a sum equal to perhaps 50 or 75 per cent of the cost of their liability insurance under the rules as laid down by the insurance company. I say 50' or 75 per cent for this reason, that the expense of handling this business and caring for this business would be much less for the State of Iowa than it would be for the insurance company. The State of Iowa would be doing this business, not for the purpose ot making a profit but for the purpose of taking care of the men who have been injured in the industries of this State so that you could eliminate a very large amount of the expense and you could eliminate the idea of profit from it entirely. And I believe you will find this to be true, basing it upon the theory that about 26 per cent of the money that is paid by the manufacturer actually goes to the employe who is injured. The other 74 per cent is used in paying attorney's fees and paying costs, commissions and things of that kind and in defending these cases. There isn't a big manufacturing association or concern but what has got its lawyers employed and its claim agents employed. They have got to be taken care of and they have got to be paid. Great costs and expenses of that sort have got to be paid so that if they will figure that on the basis of a percentage and on the pay roll as the insurance company does, I believe that the manufacturers of the State of Iowa can pay a reasonable amount to every man that is injured without regard to the manner in which he is injured; without any nu«s- tion of whether he was negligent or whether they were negligent or how it may have happened; that they could pay them a reasonaole sum of money so that they would not be wards at the expense oC the State or County but would be taken care of, self-respecting and self- supporting for less money than it costs the manufacturer today to pay the liability insurance. Mr. Baldwin: Who is to pay the other half? Mr. Ely: I believe that the State of Iowa should pay a proportionate amount of the expense of taking care of those cases. I believe that the employe should be required to pay a portion of that expense. REPORT OP EMPLOYERS' LIABILITY COMMISSION 129 Now, when you come into the legislature and when you come to take your hill, of course, here you have got our legislators from all sources. We have got a lot of farmers and people interested but this is true; they cannot say that there is not benefit derived to the people of Ihp State. In the first place you avoid a great deal of crime. A man who can't work, a man who has nothing is much more liable to commit crime than a man who has got something to live on. You would avoid, under the statistics as I understand them, a certain percentage ot ex- pense in taking care of men who are mentally unbalanced. That would be a saving, but the greatest saving in my judgment would be in the lessened expense of the maintenance of your courts because the time required now in trying personal injury cases and in litigation that grows out of personal injuries; it is very much in a great many of the courts of this State and that expense has got to be borne by the tax payers of the county wherein your court is held, and your Supreme Court the same thing. It is simply overloaded with personal injury cases, and the time taken there in going over these cases, if put on to the other cases that do come there, would perhaps prevent the ne- cessity of the increase in the number of the members of your Supreme Court. Mr. Baldwin: Your idea is in a State Insurance Company, the em- ployer to pay half the premium, the State half and the employe — Mr. Ely: Even make the employer larger than that if you like, but say half for the employer 25 per cent for the State and 25 per cent for the employe. Mr. Baldwin: Do you suppose we could ever get such a law as that kind passed? Mr. Ely: I am not sure. I believe this Commission could do most anything that I could, but whether this commission could I don't know but the idea is this; if that is a starting point, the result, you gentlemen in enacting your laws know that all these laws are the result of com- promise. You never go in there and get a law as you write it down in the first place but you will compromise and talking and considering and the result is a law. I don't pretend to say that should be the basis, I don't know, but I do believe that sort of theory, if worked out, would put you in a position where you can recompense employes that are injured even where there is no negligence on the part of the em- ployer and you can't do that, in my judgment, constitutionally under any statute, fixing the liability on the part of the employer for injuries where the employer is not negligent. That was the basis of the appellate court of New York, holding that bill unconstitutional, because they undertook to say that the employer must pay for injuries incurred where there was no evidence of negligence on the part of the employer. And they held that as taken improperly without due process of law, and I don't believe it could be done in this State but with your insur- ance plan or a plan on that basis you could recompense men that were 130 REPORT OF EMPLOYERS' LIABILITY COMMISSION hurt. The only questioij is, was he hurt and how much was he hurt, and let your Commission determine as to how much he should receive from this fund that is provided for that purpose. Now, I will concede to you gentlemen that this is crude because it hasn't been carefully prepared at all but it is the idea that I believe, from coming in con- tact with these laws in these six or 'seven different States, that it is going to be the practical outcome in all of these States sooner or later, and I believe it will be done here in this State. Mr. Clarkson: If in your judgment liability cannot be fastened con- stitutionally for the full amount, how do you reason it out that it can be done so constitutionally for a portion of the amount, say 50 per cent? Mr. Ely: Because you are simply levying there in one sense dues for this insurance organization that you have here in this State. You are compelling your manufacturers to pay so much money for the re- compensing of employes who are injured. The question of how they are injured doesn't enter into it as between the manufacturer and your committee. Mr. Clarkson: If the tax was applied at 50 per cent to create a fund to which the employer is required to contribute say 50 per cent, that would still be for the purpose of and to pay claims of injuries to em- ployes wherein there were no fault upon their part? Mr. Ely: Then the only objection that could arise as to it that I could see would be if one desired to raise that question it would siriply be with reference to the payment of some particular claim. Theye claims to be filed by the employe and these claims go lo your commission. If the < ommission undertook to pay a claim, the only objection that could be raised wru]d be that it was improper to be paid out of that fund and would simply apply to that particular claim. Ther^ is a mass of detail that, i will concede you, that has got to be worked out, tliiU T don't know how you will work it out. I don't believe that the constitutional question could be raised as against the disposition of this fund. I would make a further suggestion. You have a factory act that the inspection, of course, must be made as it is made or more carefully, possi- bly, than it is made. I don't mean that in criticism because I don't know. I know this, we run in, every once in awhile, to the proposition that a manufacturer hasn't complied with the statute with reference to his machinery. If possibly a man who is injured by unprotected machinery, that is where they haven't complied with that statute. Let that manu- facturer be soaked, say 100% more because he hasn't complied with that statute and let that money go into the insurance fund but make it a penalty now against this manufacturer for not complying with the statute. You would think these big manufacturers over the State had complied with it, but I found one in Waterloo the other day, the large manufacturer, Galloway & Co., a big factory that didn't have a guard on an emery wheel, or boilers or pipes from one end to the other. It is a big factory. There is an inspector lives in Waterloo but it wasn't done. So I would suggest REPORT OP EMPLOYERS' LIABILITY COMMISSION 131 along that line, if you lind these people that don't coniply with that law, that they be punished aside from the percentage that goes into this fund, in some way compelling them to comply with that act. I helieve the great secret in having the employe and the State contribute to this fund is in the protection of the fund itself. We know there are many men that are hurt that are not hurt nearly as much as they think they are hurt. We know there are such things as fraudulent claims. Those things exist now. If you have the interest of the employes, the other employes in that factory, the opportunity of such fraudulent claims Is much less than it is if they say, well, here John is hurt, it don't cost us anything, let John go ahead. He may be out here playing base ball but he can't work. Now, let John go ahead, we won't say anything, we will keep still, It is nothing to us. But if these employes were in a position where they were digging up to pay for John because John couldn't work and they saw John out here playing ball, you would hear something from those other employes. The State should be Interested because it saves to the State and because the pressure that will be brought to bear on our legislators to increase the amount that they shall receive for these injuries. If they are interested, if the people of the State are interested, if the tax payers are interested, then that can be used in balancing up the account, because what the legislature wants, and I will say frankly what the manufacturer wants and what the employe wants, I believe, is some fair, honest method of adjusting these^difficulties and save the expenses and lawyers' fees, and let the money go that comes from the manufacturer, to recompense the men that are hurt and cut out all these middle men. If there is anyone who has any more opportunity of fixing the price of their product any more than the laboring man, I don't know who it is. If you will look at the scale of wages that is paid and has been paid, going back for the last 10 or 15 years, you will find expense is added to the price received for the labor as well as it is on the price of the product. That is where it is coming finally, out of the consumer. The manufacturer isn't going to pay it. II you will put it in such shape that the manu- facturer can figure it as a percentage and put it on as a charge, it isn't such a material matter as to what it is, but they know what it is. Mr. Clarkson: If the employe was enabled to and ultimately would cause his wages to be increased, to reimburse him for the amount that he was required to pay to this fund, where is the advantage to be gained? Mr. Ely: The element that enters Into it is here. You are increasing the liability. We have what is known as common law. That fixes certain liabilities and those liabilities are fixed between the employer and em- ploye. The purpose of this act is to increase that liability on the part of the employer, to increase the number of cases where he must pay. Where does the benefit go? Primarily it goes to the man that is hurt. I think that cannot be disputed. Here is a man who is hurt and he hasn't any claim under the law as it stands. It was his own negligence or contributory negligence or fellow-servant. He hasn't any right to re- cover a cent but he is entirely laid up and will be forever. Now your 132 REPORT OF EMPLOYERS' LIABILITY COMMISSION law comes in here and says, here in such a case this employe shall be permitted to recover so much money, a proportionate amount. Now, is he in a position where he could raise an objection to pay a certain portion of the expense/ on account of this law that is passed for his benefit? Mr. Clarkson: If it is true that he can fix his wage and would ulti- mately cause his wages to be increased sufficient to reimburse him for the amount that he contributes to this fund, wherein would there be any benefit derived by the employer; why not the employer contribute it in the first instance and avoid that circuitous route of bookkeeping? Mr. Ely: There is one element there that I intended to speak about that enters into it and that is the element of co-operation between the employe and the employer. The difficulty with this liability insurance is that instead of letting the men and the employer get together, it drives them apart. Here comes a proposition where you can settle an injury on a reasonable sort of basis. You can't do it with an insurance company because they won't stand for it. They will simply put it off and put it off and drive it down and grind it down until the very least money that can possibly be paid to this man is finally paid to him. With the interest of the men themselves with the employer, where their interests are mutual it brings them together and their interests are the same and they help each other instead of driving them apart. So that element in it, aside from the actual cost to the employer should be considered, in having the employe interested. * Now, as an attorney interested in personal injury cases, I would say to this commission, by all means, leave the common law liability there, because if a man gets hurt and he has got a common law liability the recovery is very much more but in considering this matter, if you cut out the common law liability then on the other hand you should give to your employe something added for what you take away from him. Mr. Clarkson: What do you have to say about the proposition of creating a fund there, so to speak, in the nature of a fund from a tax or assessment, the employe believing and realizing that no matter how the injury may occur, whether from his own fault or the fault of the co-employe, he is protected anyhow and it thereby makes him sort of dependent rather than independent, prior to the injury, of course? Mr. Ely: I think th.i same argument would apply to any man taking an insurance policy. He has got something to rely on if he gets hurt or sick or dies. His family has got something and it may take away from him that feeling that he has got to hustle and save. I believe this, that these men that are working are just exactly such men as you and I are. They look at things as we do and they will look at this bill, if there is some provision made for their welfare, just as the manufacturer will look at it, that it is, in case of an accident just as your insurance policy covers you in case of an accident and there is nothing there that I can see that would possibly cause them to feel that they are dependent upon some- body's charity because that isn't it at all. It is their right the same as their wages is their right. REPORT OF EMPLOYERS' LIABILITY COMMISSION 133 Mr. J. F. Porter: I am in the street railway, gas and electric business. I suppose altogether in Iowa and Illinois we have something like one thousand employes. We operate in Davenport, Rock Island and Moline. Of course, gentlemen, upon this question of employers' liability, it is one which I haven't given sufficient attention to be able to say just exactly what kind of a law we should have in that line. I believe originally the Commission that had that law under consideration in Illinois proposed to make the employer and the employe come under the law. About the time the law was ready for its passage the decision in the New York case was such that it declared that same law unconstitutional, and as a consequence our Illinois legislators made a law which gave the employers and employes a right to elect as to whether they should come under that law and as we see it the law would be against the employer there from the very fact that in case the employer elected to go under the law the employe isn't compelled to elect and when he takes his choice of coming under the law, if he happens to be injured in a way the employer isn't responsible, then the employer pays, while if he sees fit he may go under the other law while it takes away some of the defenses, the majority of the people in Illinois can't see that it is to the advantage of the employer. Now, I imagine, while the laws of the State of Iowa may be different and you may be able to make a law which will compel the employer as well as the employe to come under the law, then it seems to me it might be arrived at in a satisfactory manner, but so long as you leave it to election I really don't see how you can make a law that will be equitable all around. Mr. Baldwin: If the Illinois law was compulsory, would your company come in under that law? Mr. Porter: We would be disposed to. If it was so that nobody had any election; if they just compelled us to pay and the employe con- tributes, surely we would come under it. But as it is, it looks very much as though we would be compelled to refuse to go under it and stand on our rights. Mr. Clarkson: Notwithstanding your common law defenses are re- moved? Mr. Porter: Yes sir. Mr. Clarkson: Do you feel that you can better afford to protect your- selves against injuries that may occur, with your common law defenses removed, than you can to come in under the law and pay the schedule rates provided by the statute? Mr. Porter: I believe the advice of our attorneys are, that in one re- spect we would be compelled to protect ourselves under the laws sub- stantially as they are in practice today, while we have certain supposed rights under the common law, at the same time the conditions wouldn't he materially changed as before a jury. As far as the desirability of having a compensation law in order that everyone may be justly treatsd, I believe the manufacturers and employers are anxious for that kind of 134 REPORT OP EMPLOYERS' LIABILITY COMMISSION y. law, but unless it is equitable they can hardly be expected to go under the law. Mr. Clarkson: What is your idea about the matter of contribution by the employe? Mr. Porter: I see no objection to any legitimate plan which would work the situation out satisfactory. It makes little difference to the em- ployer how he pays his money providing it finds the place it should go. If the employe is to get it I don't know as it makes any difference to us as to whether we should pay it in an insurance fund than it would be to pay it direct. I see many good points in Mr. Ely's suggestion of having it a mutual arrangement but of course, it is on the theory that is argued that the wage earner would necessarily pay a portion of it which would be naturally added to his wages in one way or the other. It would naturally come back to the employer and he would pay it and it would be passed on to the consumer and I presume in our line of business, while our rates are fixed or their natural tendency is for reduction, at the same time if those were added to our costs then of course the reductions we would necessarily face continuously wouldn't come as rapidly possibly. Of course, the natural tendency in our line of business Is to pay more for what goes into our product and get less. That is the trend of the times. Mr. Clarkson: I would like to ask Mr. Ely another question. How do you propose that we could get away, if at all, from the disturbing condition that sometimes is felt of keeping the project out of politics, if we should have the State conduct and administer the State insur- ance company so to speak, because that is about what it would amount to. I mean by that when I say out of politics, I mean in this way: Don't you think there would be a natural tendency for the men who were ap- pointed or elected or occupying the position of administering this law, to be inclined to cater to the injured party because of the fact he has got the greater number of votes? Mr. Ely: Well, I presume the same rule would apply there as does with the court or with any other legislative office, as it does with the man in the Senate or the man in the House. He knows these things exist. There are men that these things will affect; there are men that they won't affect. You have got to take it just simply as it is. Your commission must, of course, be men who are, they have got to be human and at the same time men who are honest and will look at these things and not permit the thing to get into shape that it did over there in Ger- many, where every fellow, it didn't make any difference what he was doing or how he was hurt he is going to have a pension and of course, that will bring you down to this question that you have got to meet: if you cut out your farmers entirely from the operation of this bill, I don't know whether you intend to do that or not. Mr. Clarkson: At this time we have no intention of anything. Mr. Ely: You have got to have people that will administer this office just exactly as you have with your courts, people that will act under REPORT OF EMPLOYERS' LIABILITY COMMISSION 135 the law and construe that law honestly and fairly and squarely. We ean't get away from politics any more than you can your elections to the Supreme Court. I don't believe the men that occupy the positions and would occupy this kind of a position would yield to that influence. Of course, the influence is there and they have got to resist it. I don't know whether you are holding meetings in the country or not. But the question arises with the manufacturer and employer of labor, if we are to contribute here and take care of these injured people, why shouldn't our farmer friends take care of their injured people. Mr. Baldwin: Very much of the argument in favor of these laws, as you know, is based upon this fundamental idea that this insurance can be treated as part of the expense and go into the product and be passed on to the consumer. That isn't so in the case of the farmer. He can't get any more for his hogs or his corn or his products and his prices are fixed entirely independent of any local questions in the State of Iowa. Mr. Ely: That is true to an extent but they will hold the product until they are ready to sell it and fix the price in that way. Of course, if these things are practicable it might work out even in that way. I don't know how many employes are injured on the farm as compared with the number that are injured in manufacturing; I believe it would be very much less. There is one thing I didn't state to you. That is this idea. In the matter of compensation, that it should be so provided that that com- pensation should go to the employe as his wages went to him. I can ^ show you almost any number of cases where there has been material recovery on the part of the employe. Judgment has been rendered and affirmed and paid and the employe received such portion of that judg- ment as was coming to him in a lump sum and almost without exception that money has been gotten away from that employe within from 30 days to a year's time, so that when he has got done with it he is lame, he is maimed and he hasn't got a dollar. It gets away from them like a good many of you people know. Mr. Harry Fendt: Mr. Chairman, Gentlemen: You need not expect a polished speech from me and I don't think it is the place to do so, and I have not been here long enough to have a thorough command of the English language. I am a representative of the brewery workers of this town and I was sent here to present our views. Of course, we know nothing, as the Chairman said, we don't intend to bring in anything; as yet it is only investigation, of course, we didn't discuss anything in this line. We did discuss the bringing up of the fund. Now, we as workers are all together against paying a cent towards this fund because we don't deem it necessary. Mr. Ely stated we are in a place to dictate the wages. I believe he is altogether wrong because it is not so. It is the supply and demand that causes all this and I read the other day in the United States bulletin No. 150 it says, the average skilled mechanic of the United States produces $2,471.00 worth of value and he receives in return $435.00 in wages. Now, I would like to know where we as 136 REPORT OP EMPLOYERS' LIABILITY COMMISSION workers have anything to do or where we get our share of it. I don't think we do. I have only been a hrewery worker for a short time; I believe I can speak for all the rest, that they are all opposed to paying a cent towards it. Another thing; about the whole of Germany receiving a pension. I believe that is slightly exaggerated because the tendency of the manufacturers haven't the whole run of this compensation fund. They have got their own way of remedying it and they surely don't intend to give more than they need; they have got their own doctors. There is no lawyers at it because any man can plead his own case. Lawyers are strictly prohibited to plead their case before these courts of appeal. But I have known a man to lose the point of his finger and a man will receive a pension for six months; then the doctor will say you have got use of that. I have been in the labor movement over there and I have studied these things. Whatever they write about it here, it is . not so. There is two sides to this. There is no use denying the fact there is no harmony between capital and labor. Judge Stevens: Are you familiar with the plan that has just been adopted by the brewers and their employes? Mr. Fendt: I am. It hasn't been adopted, I don't think it will be adopted; it will be voted down I believe. I am not in a position to state what it will be. Judge Stevens: That proposes that the employes shall contribute, does it not? Mr. Fendt: Yes sir, y^ cent out of a dollar in wages received. Mr. Clarkson : If we should see fit to recommend a bill and the General Assembly should enact it as a law whereby the employe would receive compensation regardless of how the injury occured even tho the injury might have occured as a result of the injured employe's negligence him- self, yet he would receive compensation. Now, as a matter of abstract justice doesn't it appeal to you as fair that it would be nothing more than reasonable that he should contribute to the maintenance of a fund out of which that payment is going to be made? Mr. Fendt: No, I don't think it is. The manufacturers derive all the profits from the working system. The wages as a rule are so low. Mr. Clarkson: The wages are so low, they couldn't afford to con- tribute, is that the thought? Mr. Fendt: Yes sir. Mr. Clarkson: The objection then is just bottomed on the idea that the wages are such that they can't afford to contribute? Mr. Fendt: The wages are so low, down to the very bottom I don't see how we should contribute to anything else. Twelve o'clock noon the Commission adjourned until 2 P. M. 2:20 P. M., Meeting called to order by Chairman Clarkson. REPORT OF EMPLOYERS' LIABILITY COMMISSION 137 Judge Stevens: Mr. Fendt, we will say it is conceded by both sides that tlie employer should pay where there is any negligence whatever on his part, and regardless of whether the employe contributed to it and also that he should pay where it was the fault of the fellow servant. Now then, there is only left the class of accidents for which no one is at fault. There are many such accidents. We will say the employer pays for all but those, what is your reason for thinking he should pay the whole of the damage from such accidents as neither party is at fault? Mr. Fendt: I maintain that the worker is receiving such a little thing out of his work that the employer should take all the responsibility, that even if he were to receive more you want to do away with these lawyers for the fightin,? courts. You start the thing going right away, who is going to decide whose fault it is. You will have the same law again. It will take years and years to decide whose fault it was. Judge Stevens: Now, I think you have given one of the reasons and 1 think one of the best reasons that are assigned for putting that class upon the employer also. What ground would you assign for not putting a part of that, say one-tenth of that on to the employe. Would it be solely on account of his poverty? Mr. Fendt: Yes sir. Judge Stevens: Now, suppose at the end of the year that the employer had lost money and that the employe had saved some out of his earnings. He received good wages and plenty of work and he saved and the employer had absolutely had a loss in his business; would the argument of poverty still be good? Mr. Fendt: Supposing he had saved. How much had he saved? He had no business to be in this business if he can't make good. Judge Stevens: You believe that in equity and good conscience the employer should stand it all? Mr. Fendt: Yes sir. Judge Stevens: Now, do you think the State should contribute a little, in case we recommend a law which will avoid all law suits, absolutely give speedy and adequate relief to the employe? Do you think now that if the State is required to pay for the administration of the law and cost 01' operating such company or plan, would that be right? Mr. Fendt: I don't see that the worker could object to that as long as they got theirs. Judge Stevens: Is it right to ask the State to do it? Mr. Fendt: Yes sir, I believe it is. The taxes are borne by the majority of the people, and the workers are the majority. They indirectly have to contribute to it arid let the State as a whole bear it. We are really not after a pension. We are there to try and save our limbs and our health. We don't want pensions. We would rather be protected against accidents and a liability act will have that tendency I can assure you. 138 REPORT OF EMPLOYERS' LIABILITY COMMISSION Mr. Mathew Gorman: On behalf of the machinists of the town I a^ instructed to represent them here today. I haven't any address prepared on this question hut we have discussed it and we are ready to submit the following suggestion along the line of a bill. (Mr. Gorman reads the paper and it is handed to Secretary Given) Mr. J. W. Bettendorf: It is a very difficult proposition I fully realize. It is a matter that requires a great deal of study. I dare say that most manufacturers are inclined to be in favor of some compensation laws that will relieve the workingmen of the burden but it is a question in my mind whether the burden should be entirely thrown upon the manufacturer. There is a moral effect that should not be overlooked in having the em- ploye made a party in "Contributing to a fund such as has been mentioned, in the insurance fund or State fund. The cost must necessarily be borne by all. It cannot be borne entirely by the manufacturer neither by the employe. If a part of it is borne by the employe, necessarily his wages must be increased. He must earn enough more so that he can pay this portion which he may be asked to pay, consequently that increases the cost of production. The manufacturer, after he has added up the amount of labor, the cost of material and all of the fixed expenses, he arrives at the actual cost of his product, to which he adds the per- centage of profit that he figures or as a general rule he is entitled to as a manufacturer. But if the employe is made a party or asked to con- tribute to this fund he naturally is interested in seeing that it is not abused, whereas, if he isn't made a party to it he loses all interest in that respect. Therefore I think it would be no burden on the employe, not any more than it otherwise would be. Because, as I stated before, it simply means necessarily advancing the wages to compensate for this additional burden, if it may be so called. It necessarily is going to increase the cost of the goods manufactured and it will in course of tiipe simply equalize itself. It is only in my mind merely affecting the purchasing power of a dollar. Years ago we were paying considerably less wages for labor than we are today. The purchasing power of the wages at that time was a great deal more than it is today. Judge Stevens: You are not opposed to a reasonable compensation law? Mr. Bettendorf: No. I am not. Judge Stevens: Would you prefer it to the present conditions? Mr. Bettendorf: Well, if one could be framed and passed that would be better than our present conditions, I would say yes. Mr. Clarkson: Better in what respect? Mr. Bettendorf: That is, that more justice would be done in both cases, both to the employe as well as the employer. Mr. J. C. Mead, Fin. Sec. Loc. Union, International Brotherhood of Electrical Workers: I would like to ask Mr. Bettendorf if it wouldn't be about as satisfactory to him to pay the entire cost of the liability himself as to have to raise the wages and have the workmen chip in to- REPORT OF EMPLOYERS' LIABILITY COMMISSION 139 ward furnishing the amount of money. At the present time he has to carry liability insurance to protect himself and his company and if to pay this compensation liahility he would have to raise the wages, he- sides chip in his proportionate share, I can't see but what it would be just as equitable for him to pay the entire amount and not necessarily raise his wages. Mr. Bettendorf: I would prefer to raise the wages. As I stated before, merely for the moral effect that it would have. The men would be in- terested with the manufacturer, therefore, I think it would be a good thing both for the men and for the employer. Mr. Pendt: Who pays for the insurance now. Don't the workmen pay for it at your place. Don't they deduct 25 cents a week; they did when I was there. Mr. Bettendorf: We ask all of our men, make it more or less com- pulsory, that all of our men carry sickness and accident insurance when they enter our employ. They pay 25 cents a week. We furnish full medical aid and hospital expenses. They get from $24 to $40 a month during the time of disability according to the classification. The lia- bility insurance we carry ourselves. We used to carry a policy in the old line companies but we had to carry the insurance then and we have to carry it so we come to the conclusion we were foolish in paying a commission when we have to carry it anyway. Because, unless the insurance company makes money on our risk they will not carry us or any other manufacturing institution. Besides the insurance companies interfere. They come between the employe and the employer. The' employer's hands are tied. He cannot make a settlement with the em- ploye, if the employe should be inclined to settle. It must be turned over to the insurance company or the manufacturer must act under the direction of the insurance company. Mr. Baldwin:. You are subject to be sued at law now the same as anybody else, notwithstanding this insurance? Mr. Bettendorf: Yes s'r, just the sam.e. This insurance we refer to is merely that we want the men that are in our employ to be in a posi- tion that they can take care of themselves by having it made a saving by a deposit of 25 cents a week so that in case of sickness or accident they have something laid up to take care of them during that time. Mr. Baldwin: That buys them the right to a certain amount of re- lief? Mr. Bettendorf: Yes sir, it gives them from $24 to $40 a month salary as you may call it, gives them full medical aid. We furnish the doctors and in case it is necessary to send the patient to the hospital we pay the hospital charges, so that for $13.00 a year the employe gets that protection. Mr. Baldwin: Is that arrangement satisfactory to your men? Mr. Bettendorf: It has been, yes sir. 140 REPORT OP EMPLOYERS' LIABILITY COMMISSION Mr. Baldwin: How do you know that? Mr. Bettendorf: Because of our experience as compared to what it was before. Mr. Clarkson: How many employes do you have? Mr. Bettendorf: About one thousand. The company doesn't carry that. They buy Insurance from an old line company; we turn that over to the insurance company. We make the collection. We employ the doctors and pay the hospital charges. Judge Stevens: The insurance company pays that salary? Mr. Bettendorf: They pay the $40 or $24. Mr. Clarkson: Does that cover all accidents regardless of how they occur while in your employ? Mr. Bettendorf: All accidents, or anywhere else as far as that is concerned; all accidents for 24 hours. Judge Stevens: The liability company is only liable for what hap- pens on the ground? Mr. Bettendorf: Y'es sir. Judge Stevens: For the hours that they are at work? Mr. Bettendorf: Yes sir, if an employe is injured after leaving the works he is necessarily thrown on the general public. Mr. Clarkson : Is there any difference made in the rate between em- ployes who are engaged in a line or department that is not as hazardous as some other department? Mr. Bettendorf: No, they collect full rate but the amount of salary or compensation is reduced according to the hazard or increased. Mr. Clarkson: In other words, the person who gets $24, is that based on the amount of salary that he is receiving or based upon the hazard of his employment? Mr. Bettendorf: Well, the insurance company classify them common laborers and this kind of labor and machinists and pattern makers and carpenters come under a different one. Mr. Clarkson: What is that classification based on, the hazards of the industry? Mr. Bettendorf: Evidently so, yes sir. It is from the insurance company's experience. Mr. H. G. Dutton: I am a carpenter. I want to say that the matters suggested by the machinists here is about the general sentiment of the carpenters' organization in Davenport and I think the argument presented since I have been here go to substantiate that claim. Now, you can argue all along this line' you are a mind to, this has got to be paid by somebody. The cost of insurance or liability or whatever you might call It, has got to be paid by somebody and it has got to be REPORT OP EMPLOYERS' LIABILITY COMMISSION 141 ^ added to the cost of ptcduction. If you divide this between the em- ployer and employe it necessarily follows that the employe has got to have an increase of wages to meet that extra cost. If it is carried by the employer it will be added to the cost of production and the ulti- mate consumer will pay it; otherwise the employe can't- live and pay his share without an increase in wages, I don't believe. I want to say that the people I am representing, the carpenters, are in favor of this cost being borne by the employer. Mr. Clarkson: You are a member of the carpenters' organization? Mr. Button: Yes sir. Mr. Clarkson: What is your membership in Davenport? Mr. Dutton: On the outside, a little over 300; in the shops a little less than 100; right in the neighborhood of 400 all told. Mr. Edward Gardner: I want to state why I believe the burden should be borne on the part of the employer because of the fact in the past it has proven that employers have been very lenient in their working departments, they havo been lenient in employing men with sufficient knowledge to understand- the American language where they could communicate with each other and point out the dangers and opera- tions of machinery and in many instances they have employed men that have no skill in operating machines at all and the result is, there has been terrible losses thru these accidents and I believe that if this insurance is borne on the part of the employer he would be careful in the hiring of his men, he would be more careful in safeguarding' his machinery and would be far more careful in the employes that he hires to operate these machines and in the long run it would be beneficial to him. Mr. J. C. Mead: I am secretary of the Electrical Workers Union. It is a Tri-City local .union. We maintain a sick, accident benefit fund for the benefit of our members. We tax them nothing for that. It is taken out of the monthly dues and in case of sickness or accident we pay to a married man $8 a week and to a single man $4 a week, for a term of 13 weeks. If the member is in good standing and he died he is furnished with the sum of ?100 from our general office to pay his funeral expenses. Our dues are $1.00 per month. I have drawn up a little letter here which I wish to turn ever to this commission relative to the idea of placing this death liability at $5,000. (Letter read and handed to Secre- tary Given.) Mr. Nathl. French: I don't profess to represent either the employers or employes. This is a subject that I gave a great deal of attention to years ago and in expressing my views several years ago on the subject I was considered a socialist by my fellow manu- facturers but I believe they have progressed a little. I believe we are here today as the result of the evolution of our ideas as to social rights and social duties. I don't know today whether we have progressed far enough to enact a law at the next legislature, but if we don't do it at 142 REPORT OP EMPLOYERS' LIABILITY COMMISSION the next we will probably do it at the one after. Such a law is going to be enacted. The feeling nowadays is that every man in civilized society is to some extent his brother's keeper and owes him a duty, that he doesn't stand and live alone. There is a feeling that the man who works with his hands is valuable to the State as well as the man who works with his head, that the great asset of any State are its workers and that it is of the utmost importance that these workers be protected from accident, sickness and in every possible way. It is a great asset to the State of Iowa to have a body of skilled workmen. It should be the policy of the State of Iowa to get skilled workmen and to retain them when they come here and therefore the State of Iowa with the present public sentiment in favor of protecting the workmen, if it can devise a just and practical law, one that will work, should do so. Now, there is the matter of policy, you have got also to consider whether it is practicable or not. We have been trying in Iowa for years to start manufacturing. We want it to grow. You gentlemen can see at once we have got to compete with Illinois, Indiana, Ohio, Massachusetts New York and all the eastern states. You can see that a law, if you were to pass a law and increase the limit from $3,500 in case of'death, to $15,000, you can see at once what a blow you will hit manufacturing in the State of Iowa. Here are these laws and you are at a great disadvantage. They would say, we will think it over, perhaps we better stop at Illinois, get as close to Iowa as we can. So I say as a practical question, you can only go so far, until your neigh- bors will also go farther. Now, I am aware that Minnesota has no law. I am aware that there is but little manufacturing there that comes into Iowa to compete with Iowa products as compared with the other States and I believe it will be a very short time before Minnesota has a similar law. I believe there are going to be laws of that sort all over the coun- try. The question is, how can we solve this problem, how can we look after the workers of Iowa who are the greatest asset of Iowa, so to speak, and putting it more broadly, the men who work with their brains and the men who work with their hands. Today the great pro- blem is to help the man who works with his hands. He needs help more. If you merely come to a person in trouble and keep coming you run great danger of doing him the greatest possible injury. If you put him in the way of taking care of himself you build him- up and make a better man of him. The very first thing this Commission must ask itself is, what will be the effect of this law upon the people we are going to try to help. Is It going to deteriorate them in character, is it going to make them depend on others and lose their independence, if it is going to puit them in the attitude of a superior class watching the others to get something from them, then you are going to do a great deal more harm than good. It is because of the danger of injuring while you are trying to help that I have taken the liberty of coming before you and talking, I fear rather too long. At the very outset when you try to frame a la-w you are right up against the practical question of what you can do under REPORT OF EMPLOYERS' LIABILITY COMMISSION 143 the constitution of the State of Iowa. They tried it in New York SXaXii to pass a law requiring each individual to pay for accidents occurinf in his shop, even tho' he wasn't in the remotest degree to blame. The Court of Appeals of New York declared that unconstitutional. I don't see how they could have done otherwise. They violated every idea of justice and every idea of common sense and law. I don't know what the courts will decide hut if you can't make it compulsory directly you can't do it with a club. Now, isn't there som^ way out of this? I believe there is a very clear constitutional way and the best possible way. I believe the State under its taxing power has a right to tax manufacturers and farmers and others employing men in which there is apt to be an accident and say to them, regulating the fees according to the risk in- volved in the different occupations, say to them you pay the State Treas- urer of Iowa so much; we are going to use that money now to compen- sate the people who work for you and are injured while working for you and we are going to do it according to our ideas of justice. It seems to me that the State can certainly use that taxing power to protect what may be called the soldiers of industry, the essential elements of civiliza- tion, whether they work in the factory or on the farm and in my mind there is no doubt but what the State has that power under the doctrine of taxation and that the law cannot be held unconstitutional. You will never get up a law that is entirely just in every respect, but approximate it as nearly as may be under the circumstances. What kind of a law are you going to pass? Who is to bear this burden? How are you going to divide it? If on the one hand the manufacturer might say and the farmer might say, as a matter of fact, according to statistics, only 10 per cent of the accidents are due to the negligence of the employer, therefore, I should only pay 10 per cent. I think v/e ought to have a broader feeling of humanity than that. I say that the manufacturer should not only pay that 10 per cent but you have got to look a't the benefits he receives from that law. It is almost a necessary incident of his business and if he is one of the few successful ones in business he is making a profit out of it. Now when you fix a rate down as low as $3,000, as is the ease in New York or $3,500 in Illinois, you are evident- ly fixing a rate for that 10 per cent of cost very much below what the manufactururer would have to pay. So that I believe, looking at what he gains from it and his freedom from employing attorneys, the bene- fits he has and the number ef cases that he ought to make compensation for outside of this law or independently of it, I think it fair to fix his proportion say 50 per cent or might even take 60 per cent, but it ought certainly be very much more than 10 per cent where, under the present law, he is to blame. Now, we come to the question, Avhat are you going to do with the rest. The State of Iowa derives a great benefit from this law. By the State of Iowa I mean the people of Iowa. It derives a benefit in having the money cared for and the widows and orphans looked after so they won't become a public charge and where a man was badly injured so he might not be able to obtain work, shouldn't the State of Iowa receiving 144 REPORT OP EMPLOYERS' LIABILITY COMMISSION all this benefit pay a part. How are you going to pay that part? The State of Ohio, when they passed a law, said the State should pay all the administration expense. What that would amount to I don't know, may be 25 per cent. I believe it would be wiser to have the entire ex- pense of administration as well as the amount to be paid out to the em- ploye, to have that all raised let the employer pay 50 per cent of the amount to be paid out and whatever the expense of administration. Now what shall the State pay? Now, it is a mere estimate to make now, but say 25 per cent. Take that sum in view of the benefit received by the people generally. You have 25 per cent left for the employes to pay. In 90 per cent of the cases under the law they were not entitled to recover. Now they will be called 'upon to pay 25 per cent of the amount. It seems to me that would be a very moderate and just law and you might fix it at 20 or 22 or you might say 30, but I say they ought to pay an ap- preciable amount. I am perfectly aware that the employer in factories where he can pass it on to the geheral public is going to pass on to the general public all he pays and from the standpoint of dollars and cents it doesn't make one bit of difference whether he pays the 75 per cent, the addi- tional 25 per cent of the employe or not. He can pass it on. There are some cases where they can, but I say ne should not do it for this reason; if the employe pays his 25 per cent that is directly or indirectly thru the employer, he is then as a citizen of the State supporting one of the best institutions of the State. He is paying his share and will have his self respect and he ought to have it, and there is no reason why any law should be passed that will put him in a position where he thinks he has put something over on some one else or robbed some, one else. So far as I am concerned, I will tell you practically how it would work out. The amount he would have to pay would be about % of 1 per cent, I figure. In employing men, if. my partners agree, I would state to the men your wages are just what they have always been and % of 1 per cent more to cover this insurance, that is your compensation that we pay. If the insurance doesn't cost that much we are going to turn over the money into a sick fund. We have a sick society and they will get the benefit of it. Now, you may say that is a mere matter of form but I tell you form counts for everything. The employer says in fixing your wages I deduct that amount or I pay you so many cents an hour and pay you also this tax which I will send to the State; if there is any balance left over you will get it. In talking about this shifting of taxes; the manufacturer can do it, unless you fix the rate so high that the manufacturers in Illinois will pay much less in which case we might get the worst of it. You can't always shift it though in all occupa- tions. The street car company might have difficulty in shifting it. The street car company couldn't raise their fares to six cents, that would be all out of proportion. As a practical question, I should think it would come directly out of their pocket. There is an effort throughout this country and in Iowa and every- where to try to prevent the maiming and killing of men as well as to mitigate the suffering resulting therefrom. That phase of the ques- REPORT OP EMPLOYERS' LIABILITY COMMISSION 145 tion hasn't received the attention it deserves and yet in all the laws that are passed you will notice that idea is incorporated. For instance, it is provided that if the accident occurs by reason of the employer re- fusing or neglecting to comply with the command of the State that he use certain safeguards that in that case the employe can sue at common law and get more money. I think the method of punishing the manu- facturer is defective. I think there should he no recourse to the courts whatever. I think the employe should get his regular amount hut I think in addition the State should have the right to collect from the employer who didn't use this safeguard, an equivalent sum and it should do it in every case. To throw it into the courts is to thi-ow it into the question as to whether that was the cause of the accident and everything else and the main object of the law, that is, practically, is to stop as mucti litigation as possible. Therefore, it should be provided that in that case the employer who has caused an accident by refusing to comply with the laws of the State, should not only pay the workman the sum provided in the compensation act but he should pay a like sum into the State treasury to go into this fund. Now, what are you going to do with the employe. Are you going to encourage him to be negligent? The idea was very ably presented that if the employer pay the tax that he would be more careful. Well, now, inasmuch as the accidents or a great majority of them, occur from the negligence of employes as compared with those which occur from negli- gence of employer, what are you going to do about the employe? Are you going to turn him loose and say, be as negligent as you please, we don't care. I say exactly the same rule should apply and it should apply, not merely that the State has any grudge against him or isn't sorry for him, but merely in order that we may prevent the maiming and killing of people. It is as essential and even more essential that he should be taught to be careful. Now, I think that the statute for compensation while it punishes the manufacturer who won't comply with the rules established by the State, should likewise punish the employe. The employe who takes off the guard to an emery wheel that the manufacturer has put on because commanded by the State, and then gets hurt because it wasn't there shouldn't be allowed to recover. The employe who goes into the shop and gets hurt because he is drunk shouldn't be allowed to recover. When I say I think he should not re- cover when he violates laws, don't understand me to say that the em- ployer ought to be able to make a set of rules to govern the employe and if the employe violated any of them he shouldn't recover. Some employers would make so many rules that an employe couldn't breathe without violating them. What I mean, that certain definite cases where that matter of danger is so well established that the State for instance will require a manufacturer to do it that in those cases or similar cases the manufacturer can call the attention of the authorities of the State to the matter and say here I want this rule to apply in the use of this machinery and I want authority to post it in my shop informing the men that they must not tear off the guards from the emery wheels, in- to 146 REPORT OF EMPLOYERS' LIABILITY COMMISSION forming them they have got to use the safety block under a trip hammer which I provided for them. Now as to the workings of a law of this sort. I confess very frankly that If we have a State insurance fund to which the manufacturers and farmers would pay, that it has got to be administered in one of two ways. You have either got to do it thru what might be called bureau- cracy or you have got to do it thru the Courts by means of litigation. I think the State board should have the power to determine all the cases. They can't have a hearing in every case; there wont be enough of them even if they sat separately. They should have the power to send what we call a Master in Chancery down, an inspector who makes a finding of fact and conclusions of law and brings it to them and I think it ought to end it. The trouble with the German system is, there has been re- view and review, rehearing and appeal and everything and that is bad for the working man and it is bad for the employer. It is bad for the State. Have one hearing and let it be final and let this board regulate the manner in which it will hear it. You may think there is a constitu- tional question involved there, the right of a jury trial. I apprehend if this is done thru a State fund raised by taxation no such question can arise. How much should this law include? You have got to consider what is practical as well as what is just. Certainly you can include two classes at the outset. You can include most of the manufacturers and you can include the agricultural classes. The accidents occur on the farms and in the factories rather more on the farms than in the factories. On the plan of State insurance. I believe it is just and equitable and constitutional and I don't believe the other plan is altho I say it is no telling what the Courts may decide. They may decide you can't make a man directly liable when he hasn't done anything wrong, hasn't injured the other man in any way, you can't do that. But you can penalize him and take away his defenses unless he agrees he will pay it. They may decide that; I doubt it. Mr. Clarkson: The meeting will stand adjourned to meet in Bur- lington tomorrow morning at ten o'clock. (See appendix for Judge French's written argument.) REPORT OP EMPLOYERS' LIABILITY COMMISSION 147 ELEVENTH SESSION-BURLINGTON 10:15 A. M., March 28, 1912, Hotel Burlington, Burlington, Iowa. Mr. Clarkson opens the meeting and makes a statement of the purpose of the same. Mr. B. C. Noelke reads a paper that he has written and the same is handed to the Secretary. (See appendix.) Mr. Clarkson: Do you represent the manufacturing interests of the city? Mr. Noelke: Yes sir. Mr. Clarkson: What line of business are you engaged in? Mr. Noelke: Wood working business, manufacturing, mill work, plan- ing mill. Judge Stevens: It is your idea that this fund which would be raised by taxation on the pay roll would be a uniform tax regardless of the risk of the employment? Mr. Noelke: Yes sir. Judge Stevens: That is to say, a cigar factory that used no machin- ery would pay the same rate into that fund that a contractor erecting a building would on his pay roll, the one being strictly non-hazardous employment and the other being an extra hazardous employment? Mr. Noelke: It may seem from one standpoint that there should be a difference made there but it would take a wide scope to cover each and every industry. Mr. Baldwin: Isn't that difference made now in your insurance premium? Doesn't the steel erector have to pay three or four times as much as the cigar maker? Mr. Noelke: Yes. My point was that if there is any law at all it should be to protect the employer from an attack or a decision. We are supposed to use every possible precaution towards the prevention of accidents. Judge Stevens: Suppose you fail and are negligent in any respect, what are you going to leave for the employe? Mr. Noelke: In that case I have provided that the employer should pay the penalty. Judge Stevens: How is he going to pay it, thru suit? 148 REPORT OF EMPLOYERS' LIABILITY COMMISSION Mr. Noelke: Yes sir. Judge Stevens: You are going to leave the right to sue? Mr. Noelke: Yes sir. Judge Stevens: How are you going to avoid the objections to the present system then by the change you suggest? Mr. Noelke: There would be a: fund created to take care of these cases. There would likely be a scale provided for the different classes of injury and accidents and be in the hands of the State entirely. Judge Stevens: Y'ou are in favor of putting the whole thing in the hands of the State? Mr. Noelke: Yes sir, after having provided them with means and funds. Judge Stevens: In other words, you would tax the employer to raise a fund, then leave the State to administer that fund paying it out to the deserving and conducting the defense for the employer so he wouldn't have any suits on his hands? Mr. Noelke: Yes sir, that is the idea exactly. Mr. Baldwin: That would put all the burden of providing for this fund upon the employer? Mr. Noelke: I don't believe it properly belongs there but there seems to be a tendency to want to make the employer pay not only for what he receives in labor but any accidents that may occur. I don't admit that if every precaution has been taken that the employer should pay anything, but as a matter of charity, help cases along. Mr. Clarkson: Lets look at it from a strict business standpoint and not regard it as a matter of charity and disregarding what the tendency might be among others; what is your individual idea about the matter wliether or not the employer should or should not pay it all? Mr. Noelke: He should not pay it all. Mr. Clarkson: What percent in your judgment should that contribu- tion be? Mr. Noelke: A small percentage I had thought, 1 per cent of the yearly pay roll. Judge Stevens: How would you raise the rest if that should prove in- sufficient to meet all the cases of injury? Mr. Noelke: There is- no way of knowing whether it will or not. Mr. Clarkson: Assuming that it would not? Mr. Noelke: That the employe pay a tax to a small extent. Judge Stevens: How much are you going to have the State pay, if anything? REPORT OF EMPLOYERS' LIABILITY COMMISSION 149 Mr. Noelke: Well, I wouldn't suppose the State would have any- further obligation further than putting the matter in the hands of the Commission or in the hands of somebody to look after it. Judge Stevens: What do you think about leaving the option to an employer the right to pursue his way under the present law or to come in as he may elect under such new law as you have suggested, that is, making it optional whether to come in or not, or whether it Is better • to make it compulsory and bring all within the law? Mr. Noelke: Well, if there is going to be any law in that line it would seem that It should be compulsory. Judge Stevens: Suppose' it is compulsory. Would you leave an elec- tion to the employer whereby he could insure under the present liability system or go into a mutual company made up of those wtio are under the law and each contributing his share? Have you ever thought of that method? Mt. Noelke: From that view, taking that point into consideration I have thought that if this tax was made on a basis equal to the rate of insurance that we would be obliged to pay would eliminate the need of liability insurance. Mr. Clarkson: If I get your idea of the matter correctly, it is that you would tax the industries of the State for the purpose of creating a fund to render, what might be termed, first aid? Mr. Noelke: Yes sir. Mr. Clarkson: Then their compensation would be in the nature of damages, if they were entitled to it, after furnishing proof of negli- gence? Mr. Noelke: Exactly. Mr. Clarkson: Wouldn't that just maintain our present scheme of constant litigation and more or less disturbance to the individual em- ployer from constant menace of law suits, keeping the burden upon the tax payers to supply the Court expense incident to personal injury cases and still require the employer to carry liability insurance to the constant menace of being hampered by the ambulance chaser? Mr. Noelke: I don't think it would. It simply lets the employer out providing he has met every requirement or demand that may have been made upon him for the prevention of accidents. Mr. Clarkson: How would you prevent that litigation, what is your thought about it? Mr. Noelke: By placing it in the hands of the State to look after and protect us as employers and wage payers. Judge Stevens: Do I get your idea, if I put it this way, that you would have an inspection by the State and if your factory was found to have complied with the statutory requirements the State should de- fend you and protect you from any damage suits for negligence? 150 REPORT OF EMPLOYERS' LIABILITY COMMISSION Mr. Noelke: Yes sir, and we pay for that protection thru this tax. Judge Stevens: Now suppose they got a verdict against you, if there is any right to sue left at all, by showing that you haven't complied with it, do you want the State to stand that burden, having collected the tax? Mr. Noelke: No sir, not it it can be proven that there has been any negligence on the part of the employer. If there is any way to frame a law that will prevent absolute litigation why it is beyond me. Mr. C. E. Turner, representative of the locomotive engineers. Mr. Turner reads a letter that he has prepared and the same is handed to Secretary Given. (See appendix.) Judge Stevens: Wouldn't you be willing to contribute to that fund and pay a share knowing that it was to be used regardless of fault and that the law stepped in and compelled the railroad company to contri- bute in all cases, wouldn't you be willing as a brotherhood to contribute to that? Mr. Turner: I would, individually I would. Judge Stevens: Do you think employes in other lines would be willing to stand a portion of the expense of paying every workman some- thing, regardless of his negligence and regardless of fault on the part of anyone? Mr. Turner: I expect they would. Judge Stevens: There has been quite a little discussion, some have favored it but the majority are opposed to paying anything by the em- ploye. Mr. Turner: Well, I carry myself individually $4,500 life in- surance. Judge Stevens: Isn't there a great many laboring men that don't carry any? Mr. Turner: If I could get compensation for my labors I would dis- regard the rule. I wouldn't drop my insurance. Judge Stevens: There wouldn't be so much necessity for it? Mr. Turner: No. Mr. Baldwin: When you are hurt now you have the right to sue and recover whatever amount that the jury will find to be the full amount of damages? Mr. Turner: Under the present law, yes sir. Mr. Baldwin: You expect that to be taken away from you; is that right? Mr. Turner: Yes sir, according to my letter and according to the statements I have read, they are willing to give that up. REPORT OF EMPLOYERS' LIABILITY COMMISSION 151 Mr. Baldwin: What proportion of your damage do you expect to be paid to you then under the law? What ratio, what proportion or ratio of your damages? Mr. Turner: I say they argued the question of taking it from a wage standpoint of 50 per cent. Mr. Baldwin: That would he satisfactory? Mr. Turner: Yes sir. Mr. Baldwin: For a limited period? Mr. Turner: Yes sir, a limited number of years. Some say eight, ; prefer ten. You take a limited number of years now. Say a man is 30 years old or 26 years old and he gets hurt, he is injured, totally disabled and the majority of the laws that havei passed, say eight years, now that man is only 35 or 38 years old. Then his compensation quits. He is in the prime of life, and wants to live a long while yet and that injury is just as great when he is 38 years old as when he is 26 years old, as far as total disability is concerned. Mr. Baldwin: Of course, you probably recognize it wouldn't do to make it for life. Mr. Turner: It might do for some that don't live very long. Mr. Baldwin: As a matter of fact it wouldn't work equitably, would it, because an employer would then have two classes of employes, one on pension and one on pay roll? Mr. Turner: Yes sir. It would be well to make it a number of years; he might provide for himself in later years. We have a totally disabled railroad men's home at Highland Park in Chicago. We maintain a home for disabled and old age. Twelve o'clock noon. Commission stands adjourned until 2 P. M. 2:00 P. M., Commission reconvened. Mr. Clarkson: If there Is anyone present who desires to address the meetins, we will be ?.:id lo iear from yo'i. Mr. George Millard: Not being used to making addresses I would respectfully ask that the chair would ask me those questions which I handed up a list; it will enable me to bring forward these points that appear to me pertinent. Mr. Clarkson: I will turn the matter over to Judge Stevens Judge Stevens: Among these questions, first you wish to be asked, why should not all who receive and all who pay wages be included. Mr. Millard: My theory of that is this: That the source of wealth being labor and no man being able to receive all the benefits or fruits of his labor that certain proportion of it goes to the community at large. When it is proposed to give special benefits we all should contribute equally thereto, the wage earner and the wage payer. That it should 152 REPORT OP EMPLOYERS' LIABILITY COMMISSION not be confined to any one class of wage earners. Why, for instance, should I he exempt from that class, where a man working in the shop comes under that clause. I am classified, for instance, by the insur- ance companies or liability or accident insurance companies as a safe risk as men perhaps in their shop. Why would I be exempt? Why shouldn't I have the fruits of this and benefits of this and why shouldn't I pay my proportion to it? Judge Stevens: What business are you in Mr. Millard? Mr. Millard: I am employed by the Murray Iron Works Co. Judge Stevens: Are you the manager of the plant? Mr. Millard: No sir, I am a clerk. Judge Stevens: How many men do they employ? Mr. Millard: Anywhere from four to five hundred. Judge Stevens: They manufacture engines, boilers? Mr. Millard: Engines, boilers, castings. Judge Stevens: I see your second question is, why, if all are not included, is it not cla^s legislation. What do you wish to say about that? Mr. Millard: I wish to say that it seems to me to be class legislation when a certain portion of the community are picked out for benefit and a certain portion of the community are picked out to pay that benefit. Judge Stevens: Do you think it would be any more class legislation than the law is, which requires railroad companies to pay damages for fires regardless of whether they are at fault or not? Mr. Millard: No sir. Judge Stevens: Do you think it would be any more class legislation than the law which requires railroad companies to insure passengers and freight and pay for all damages to freight regardless of fault and damages to passengers absolutely? Mr. Millard: No sir, because they have acknowledged a certain amount of risk and that amount of risk is capitalized and added in on to their charges. Judge Stevens: You think there would be a difference in principle? Mr. Millard: Yes sir, entirely so from my view point. Mr. Clarkson: Assuming that this committee should decide upon re- commending a bill by the terms of which it would provide for a fund to be administered by the State out of which all damages, I mean com- pensation to employes, should he paid; your idea is that the employe should contribute to the payment of a part of that fund? Mr. Millard: Yes sir. REPORT OP EMPLOYERS' LIABILITY COMMISSION 153 Mr. Clarkson: Your idea, Is bottomed upon the conclusion that be- cause he is getting special benefits out of it is the reason why he should contribute. But now, take a situation like this, where an employe for instance, in your business, who is subjected to hazards and conditions surrounding him and that I, as a lawyer, am not subject to in my office, and he by reason of his work, it would be expected in the common ordinary affairs of life, that he would receive an injury. Now the work performed by him and the product produced by him is one that is necessary, we can't get along without it. Hence, when a man is willing to undertake that kind of work either because of necessity or otherwise, while I am not subjected to that kind of work and if he receives an injury he must necessarily assume the burden of the pain which I can not help him, I can not render him any assistance along that line; but why should I feel it unreasonable or inequitable or unjust that I would pay a little more for the product in order to contribute the full amount to pay that man who necessarily would lose his wages by reason of the injury, while he is employed in that manner he is performing a work that is necessary for society in a product that subjects him to a hazard which I am not subjected to and other persons similarly situated? Mr. Millard: My view of that is this sir. That every man who per- forms labor gives a certain amount of the fruits of his labor towards the community that it is necessary for your well being that that man work, it is necessary for that man's well being that you work. All labor is paid and all pay is made up in my opinion of three items; one is the physical effort, the other is skill and the other is risk. Now we pay a man $4 a day or $3 or $2. There is a certain amount of risk; that risk is recognized by the Murray Iron Works Co. The risk is recognized by the employe, that has been capitalized by mutual consent and the pay is given and the pay received are the amount that has been settled on as equitable for that risk. Mr. Clarkson: In other words, you feel that theoretically the com- pensation in the way of wages received is presumed to be adequate for the risk which he assumes in the performance of his work? Mr. Millard: Y^es sir, the wages made up of that. Mr. Clarkson: Theoretically he is persumed to save enough out of that so as to take care of himself? Mr. Millard: Yes sir. Mr. Clarkson: During the time of injury? Mr. Millard: Yes sir. Mr. Clarkson: Isn't that more theory than actual practice? Mr. Millard: I consider it more practice than theory. Judge Stevens: The third question relates to the question of whether such a law would make the wage earner careless of himself and his fel- low employes. What do you think about that? 154 REPORT OF EMPLOYERS' LIABILITY COMMISSION Mr. Millard: Wh^n you take away from a man tlie incentive to lay by for his own future and for those dependent upon him you malie him careless. When you provide for him and his fellow employe compen- sation when he is injured in the work, whether it he his fault, Ms fellow employe's fault or the employer's fault, what incentive is thera for him to use extraordinary care. There would he none because if a man hasn't the incentive to lay by a certain proportion of the fruits of his labor, what is there left for him? Judge Stevens: You wind up with a question every time. Do you think the kind of law which has been passed in some States and about which we are talking now, would tend to pauperism rather than other- wise? Mr. Millard: Yes sir. Mr. Baldwin: Have you ever carried accident insurance? Mr. Millard: I do. Yes sir, I am enjoying it now. Mr. Baldwin: Don't you think you are just as anxious not to be in- jured? Mr. Millard: Yes sir, but I am paying for that. Mr. Baldwin: Does that tend to make you any more careless be- cause you carry an accident policy? Mr. Millard: No. Mr. Baldwin: Then why should an employe become careless before he is injured under this policy? Mr. Millard: That which you have for which you have paid with the fruits of your labor is your own and is dear to you; that which comes to you without effort is of very little value. Judge Stevens: Do you think in principle so far as being class legis- lation that such laws are any more class legislation than the law of Oklahoma which compels the solvent bank to pay the depositors of an insolvent bank? Mr. Millard: No sir, I consider it on a parity with it and I think the results would be similar to those which have been in Oklahoma. Judge Stevens: Isn't the depositor just as much benefitted when he gets his deposit whether it comes by virtue of contribution from other banks? Mr. Millard: Yes sir, but when he becomes a depositor in that bank his money is working for himself and working for the bank and t'nere- fore part of the fruits of the labor of that money which is the labor of himself? Judge Stevens: You ask if such legislation doesn't take away that very great, if not greatest incentive to labor and lay up for the proteciion of self and family; what do you think about that? REPORT OF EMPLOYERS' LIABILITY COMMISSION 155 Mr. Millard: I think if you provide for a man's family, those wno are dependent upon him for which he contributes nothing that there is no incentive left to that man to advance himself. No incentive for him to labor and lay by part of the fruits of his labor to protect those depen- dent upon him. Therefore that man will come to the conclusion that the world owes him a living. They have acknowledged they are going to take care of my family no matter what I do. Judge Stevens: What is there in this law that would discour.ige him from taking out additional insurance or putting by something in the Savings Bank against a rainy day? Mr. Millard: If a man is in a position where he earns $1000 a year he might be supposed to lay by 10% for the care of his family. Now if an amount equal to 10% is provided for him without his having to lay up anything for it, why should he spend that money for additional insurance. Jude Stevens: What is to prevent you reducing his wages the amount that it costs you to pay the loss? Mr. Millard: Because the wage scale today has grown up by custom and experience. The pay for doing certain work is well established. You cannot cut that down at the present time because the man who has been doing that kind of work has so regulated his expenditures that he must have that much to go on. A man must necessarily regulate his expenditures by his income. Judge Stevens: If you can't cut them down you have got the other recourse to put it on to the fellow that buys your engines, haven't you? Mr. Millard: Provided you pay for it but how are we going to make him pay for it if the other man can produce it for less. Judge Stevens: I grant you that point in your argument is good. Mr. Millard: If there is ten engines in the market and only one buyer, he is going to buy the cheapsst. Judge Stevens: I see that while you are not a public speaker as you have said, that you have covered already in your answers the balance of the questions. Mr. Millard: I would just like to say one word for myself. I have worked with my hands as a laborer, as a skilled laborer, I am both receiver of wages and payer of wages. Mr. Baldwin: Do you object to the creation of a fund for taking care of disabled employes? Mr. Millard: Yes sir, I do. Mr. Baldwin: Do you mean to say that if the State by general taxation would make these payments out of a fund that is rsct^ives from taxation that you would object to it? 156 REPORT OF EMPLOYERS' LIABILITY COMMISSION Mr. Millard: I wouldn't object to it, not because the burden would be equally distributed but I would object to the theory of the law on the assumption that it is class legislation that is repugant to our form of government. Mr. Baldwin: That is to say if there is to be a tax to raise a fund to take care of disabled employes, that tax should at the same time take care of other people who are disabled? Mr. Millard: Certainly. Why should there be any distinction made between myself who happened to earn a living by working at a desk or my twin brother who works in the ditch. Judge Stevens: Who proposes that there shall be any difference be- tween one employe and the other? Mr. Millard: In all of these bills that I have read, which are not a great many, it has been confined, the benefits have been confined to certain workers and the payment of these benefits has been from a cer tain confined source, neither were general. Mr. Baldwin: You don't think it would be practicable for us to provide a system of insurance to take care of everybody who gets injured in- stead of the present plan? Mr. Millard: If it is fair for one, why shouldn't it be for all. Mr. Clarkson: If I correctly understand you, you are opposed to this sort of legislation because it is fundamentally based upon the wrong principle in that it removes the incentive for the man to stand on his own merits individually? Mr. Millard: Yes sir. Mr. W. H. Shelly: ^ am engaged in cigar making. I wish to state that there seems to be more or less misapprehension in regard to this legislation. There is quite a few that seems to look at it in an im- proper light as I understand it. Some of their objections seem to be very weak. When you consider the fact that organized labor dates back to the 14th century that they have been struggling to better their con- ditions and the fact remains that they are bettering their conditions, ought to make a nation or State proud of the workers that are endeavoring to better their conditions, that is the kind of citizenship to be proud of. The workers are not trying to have this legislation passed in the dif- ferent States in order to wring a certain amount from the employer or bring a burden that is not what they are after. The manufacturer may say it will be an added expense. It is proven in Germany where the factories over there are marvelous in equipment in the appliance of safety devices, that this added expense that they feared so much, has actually proved a reduction in the cost or damage suits and injuries that they had previously. That being the case it wouldn't increase the cost but it would force these people to be more careful. You can go to some of them and ask them for any necessary appliance iiud you will get it. Others will ignore you and fight you and you won't j^et it. REPORT OP EMPLOYERS' LIABILITY COMMISSION 157 It is utterly idle for a man to say that a man making $1000 a year can save so much, because that is not the wage of the workers. Triere is any amount that is making under $400 and you can't base it that way. We have got to base it on a law that will be equitable to all concerned. When it comes to destroying the self incentive, there is only one way, according to my understanding that the self incentive of the worker could be destroyed and that would be to attempt to give him all that he produced in other words, the idea of socialism. If you come to that then you destroy the self incentive, never under a wage syst.^m. The worker is not looking for an advantage from the employer; they are not looking for charity, they are looking for justice. But in a country where they hear so much about justice the workers are no longer satisfied to remain placid while justice survives on the lips; that is the way a good many are looking at it. I am acquainted with quite a few workers. I spend my time among the workers. By this keeping on fighting each other and saying we have got nothing to arbitrate we have got nothing to adjust we have got nothing to settle, you are engendering a current into the workers of this country that broods no good whatever and the object should be to come together because when it is all said and done the only thought that should be the uppermost in the mind of every man in this country is progress, not progress here or progress •there but progress in the fields of labor. The majority of the workers are conservative in their views, but the fact remains this legislation is coming. They have had it in the old country and certain States in this country. According to reports of the council that visited Germany and Europe, the majority of the manufacturers over there are absolutely satisfied, better so than they was previous. They have re- duced the accidents something wonderfully. The only object as I un- derstand it, is to get a law that will be somewheres near satisfactory. As far as satisfying every man, that is out of the question. You can't do that on either side, but it seems to me that if this Committee will meet with the State Legislation Committee of the State Federation of Labor that has got this matter in hand representing the workers of the State, they will meet with that committee in an earnest and hones.t endeavor to reach a solution of this problem, I see no reason why they can't do it. Judge Stevens: I would like to ask you if, in your opinion, the passing ot such a law in Iowa would promote a better feeling of co-operation be- tween the employer and the employe? Mr. Shelly: Undoubtedly, because it would bring them closer together. Judge Stevens: I wish to state to you now, we have been in about seven of the largest cities in Iowa and have had the representatives of two or three hundred manufacturing establishments before us and with two or three exceptions, including the gentlemen that just spoke to us, they appear to be unanimously in favor of such a law and that the majority of the State Manufacturing Association last year were in favor of it. 158 REPORT OF EMPLOYERS' LIABILITY COMMISSION Mr. Shelly: They are in favor of it, anyone that studies the questi:)n hecause it Is coming whether they favor it or not. This law is coming because it is advanced legislation, it is what is known as progressive legislation; that is what this country needs, that is what every civilized country needs. Some look at it as a burden. The aim is to make con- ditions safer for the worker. If a man has got the right to sue to-day, that don't amount to much because by the time it is settled he doesn't have much left. That has been absolutely proven. He don't get much out of it so it is a mistake to continue along the old more or less bar- barous lines. Mr. Baldwin: Are you in favor of a law by which the contribution toward this fund should be made from employer and employe and the State jointly? Mr. Shelly: I tell you in regard to the method of making this safe for the employer. I wouldn't split hairs, understand. If a law is passed which could be rendered just that would be, that the worker wouldn't be asked to contribute an unreasonable share of his wages understand, I wouldn't object to the worker contributing a certain amount, the employer a certain amount and the State a certain amount, providing you see a ground to have it declared constitutional, made a law that will stand. I am in favor of anything that is constitutional. Mr. Baldwin: In Davenport yesterday it was suggested that the em- ployer pay 50% and the State 25% and the employe 25%. Mr. Shelly: If it would he shown that the 25% isn't too high for the employe, I am in favor of it. Judge Stevens: Don't understand that the 25% was suggested as 25% of his wages. Mr. Shelly: I didn't understand it that way. It has been suggested by some; let them go together on mutual consent. We know how that would result, some of them would come in and some are actually doing it now; they are pensioning their men and offering premiums in different ways. Why, because they have embodied progressive ideas. They realize the worker is responsible for their wealth, helping to make their wealth and they are willing to give him something back. If this law is passed to protect the worker you still have your in- spector. In the States where they have passed these laws they have still got their factory inspectors. If this law does come, which it finally will, still it will come to the point where you take care of the old thru pen- sion. It will finally come where you will pension the old worker whora he has put in his days in honest labor. You will have to give him a pension. It is the duty of the country to take care of its citizenship. He has put in his years in honest toil. If he has done his absolute best he has been a success regardless of whether he has saved a dollar or not. Mr. Clarkson: By what method of logic do you reason it out that it is a matter of right and duty that the employer shall pay a tax or damages, if you please to term It, either way, for an injury for which he in no wise in the slightest degree was at fault? REPORT OF EMPLOYERS' LIABILITY COMMISSION 159 Mr. Shelly: "Well, you must consider the fact that there are accidents and injuries that are unforseen. Mr. Clarkson: Take just such injuries as that; why in reason and justice, why compel the employer to pay that; why should he do it? Mr. Shelly: Is it criminal to ask an employer to pay because it is recognized that he is better able to pay than the worker is able to stand? Mr. Clarkson: It is just a question then of financial ability? Mr. Shelly: No, it is not a question as to financial ability, because if that is the case the worker might really have more financial ability, but the combined efforts of the workers has built this man's industry. I am trying to point out that we have both got to work together. Mr. Baldwin: Don't you think the working class suffer more from sickness than they do from accidents? Mr. Shelly: Yes sir. Mr. Baldwin: Don't you think they suffer more from non-employment than they do from accidents? Mr. Shelly: Yes sir. If you bring about legislation that tends to shorten the hours and bring about better working conditions and better sanitary conditions it stands to reason that you are reducing sickness to a large extent, does it not. If you work along the lines to reduce sickness and reduce these faults you are finally going to do away with poverty. Judge Stevens: If it should be found that it would be equitable that the empoye should contribute a part to this fund so as to take care of all laborers, do you think the laboring men would object to a law which had a provision in it that a certain amount of his wages should be taken to contribute to that? Mr. Shelly: I don't think that the laboring men as a whole would object,, providing the rate wasn't too high. But I take it, in general, there would be some objections, but I don't think the laborers would as a whole, if it was known as an elective proposition. Judge Stevens: Haven't your labor unions adopted resolutions objecting to any law which would require them to contribute? Mr. Shelly: Yes sir. Judge Stevens: Don't you think that they have been hasty in that before investigating and determining whether it would be equitable or not? Mr. Shelly: "Well, in a certain senss you might say it was hasty, in another sense you might say they were absolutely right, in backing up fixed ideas or convictions or right priniciple and if they were they cer- tainly had a right to adopt the resolutions. 160 REPORT OF EMPLOYERS' LIABILITY COMMISSION Judge Stevens: You think it will be no more expensive to pay for all losses without litigation than it is to pay for the small percent for which they are liable now? Mr. Shelly: I think it would be cheaper because they would have fewer losses. You bring about more safety devices and better sanitary conditions you reduce sickness and if the safety appliances are put in you reduce accidents, why don't you reduce the cost of running that plant. This added expense they talked so much about is really a re- duction on the whole. Mr. E. C. Dentz: I am foreman of a machine shop, the Murray Iron Works. All I have to say in this respect, I was appointed as one of the committee. I made a business of going around the shop and talking to a number of men and their opinion, the majority of them was in favor of a law something like there is in the other States and in most cases they were in favor of helping a good thing along. A good many of them have accident insurance now and I don't know just what the rate is in that but they are willing to help this thing along the same as they are the other, to get insurance. My opinion in regard to this compen- sation law is this. It looks to me as tho every man that employes any- body ought to be in it, whether it is one man or a hundred men or more. You take it even in the dry goods store. There is danger there, a man may get crippled in an elevator or a lady. I suppose it is only for men, I am not sure. Take the farmer, you take the machinery the im- proved machinery they have out on the farms now. They may use the machines for a month or two and the next year the man forgot really how to handle it. It seems to me if this law can be carried out about the same as the insurance companies are carrying it now, about the same expense, I don't believe there would be any employe would have anything against it or even a trifle more and I don't see why it should- n't because these insurance companies generally have a good many offices and they generally want their wages, but in my opinion if there is a law which would take in everybody whether there is any responsibility at all. A factory inspector comes around and tells me, here you go to work and put safety devices on and cover that up there and I comply with that law and in that way it would take all the liability off the employer. Suppose I hoist up an engine or boiler weighing five or ten tons, if the chain breaks you can't say the foreman or employer was liable for it, you couldn't see inside that piece of steel. Mr. E. A. Florang: Burlington Basket Co. We employ altogether 125 to 150 people. I have put my ideas in writing. (The statement is read at this time and handed to Secretary Given. See appendix.) Mr. Carl Leopold: Of the firm of Leopold & Co., manufacturers of office desks. We have now about 125 employes, which is a fair average for the last two or three years. I haven't given this matter much thought in regard to arriving at the details of what the law would consist of for the mutual benefit of the employe and employer but I have had brought home to me in business REPORT OF EMPLOYERS' LIABILITY COMMISSION 161 to some extent a good many minor incidents that have happened in our institution which is altogether a wood working plant. In four years wc have had exactly 25 minor accidents to our men, none very serious, the loss of a finger probably the greatest, but they will always come in the wood working industry and we look for them. We have been able to protect ourselves thru insurance, at a reasonable cost. We, do know however, that if we had not had this protection of insurance, xve certain- ly would have been forced out of business. We know of at least six cases where we would have had expensive law suits on hand if we had not had the insurance companies behind us. The desk business is absolutely on a competitive basis. We have no way to control prices. They are fixed by the law of supply and demand or in other words your compet- itors. You have got to meet the market if you expect to make office desks and unless it is entirely satisfactory to the buyer he wont do the business. That being the case and knowing the small margin in the business it would look to me that an industry of that kind, by the way, the only one in the state, would be sure to be driven out of business if we had to take all the risks without any chance for protect- ing ourselves thru either insurance or in case we wished to carry the risk ourselves. Nearly every accident that has occurred there has. been written statements made in which the deposition of the injured was taken. I believe in nine cases out of ten they have admitted it was their own carelessness and taking too many chances in handling their machines. I have noted on account of the strong competition we have always had to deal with we haven't been able to pay the amount of wages that I personally would like to pay them; we couldn't afford it, competition has been very strong. We have many good laborers in our employ that have been with us a good many years. Most of them own their homes, they are married men and have families. I have often thought it was a shame they don't get more than they get as compensation for their labor but that is a matter of competition we can't get around and we are doing the best we can. Now at the same time when these accidents have occured I have seen many cases where those men were made un- fit to earn what they had been earning thru these accidents and I have often thought I would be glad to do something for these people. There- fore I have made up my mind I am very much in favor of a law which will provide compensation for injured employes, but we have got to con- sider that if we stay in business, how much of it can the employer stand. Other States in which our competitors are located, may be better fixed than we. If you put too much penalty on the manufacturer in our line you would simply drive him out pf business as regards being able to meet competition. Personally I would be glad if such a law was enacted and a fund provided in which the manufacturer, the employe and the State participated, and to take this risk off my mind. I would be glad to contribute and take a chance on contributing, as the owner of this institution, a certain percentage to that fund but it certainly would be only just that, every employe should contribute his share and I do think that the State should take a hand in the matter because they are cer- 11 162 REPORT OF EMPLOYERS' LIABILITY COMMISSION tainly interested in keeping these laboring people in the best possible condition to take care of themselves in their old age and in the future, I have a little plan of my own that the State should be divided into districts and the manufacturers in certain districts should be separated in a group in which they could take care of their own affairs to some extent. If you are going to deprive them of the benefit of in='*- surance you must give them an opportunity to protect themselves. If such a fund is provided and mutually contributed to by the employer and employe and the State, each group take care of itself without making it too heavy a proposition. I don't see why such a thing wouldn't be practicable. You have the insurance tables of these insurance companies who have been providing insurance for a long time and insurance could be provided in this way on probably just as low a basis as we are getting it now. Mr. Baldwin: Why do you say you would be deprived of the pro- tection of your insurance? You mean to say that the liability companies would not insure you? Mr. Leopold: Yes sir, just exactly. As I understand, some of the States have passed laws now in which the employer has no defense whatever. He can't even insure himself. If I am to be deprived of that insurance, for heaven's sake give me something else to protect me or I would certainly have to go out of business. I would be perfectly willing to contribute as much as the rate is now or even more towards a fund to take care of these people provided the State would put thp thing in such condition that I would not be responsible beyond this fund. I tell "you gentlement, my experience has been in my business that carelessness is 75% of the cause. The men will all admit that. That don't prevent them from, at least six cases that I know of, going in with a cheap lawyer and if we had not had that defense we would have been in the hole for a whole lot of money and a long law suit in at least six cases. But the case wasn't good enough and while they did try to embarass us a little, they were up against the insurance company and they dropped the thing. I am not saying this to criticize the men because I don't blame those poor devils. He is only to blame as far as his own actions were concerned. These poor people his family have all got to suffer for his negligence and it looks to me that is the reason why I would be in favor of something of this kind, very much of the German plan that mutual insurance should be provided for these people regardless of this fact of contributory negligence because it is the people that are dependent on them that suffer, and for that reason I would be willing to contribute my share even in such cases v/here the law saw fit to do away with this defense we have had in this country all the time. If the insurance companies can afford to carry this risk on the percentage, for instance, that I pay now, that the em- ployers, working together with their own men, each mutually contri- buting to such fund, that the manufacturers could come out, at a cost not greater than they are paying today and the benefits would cer- REPORT OF EMPLOYERS' LIABILITY COMMISSION 163 tainly be a great deal to all concerned because, while we must admit that there are many cases where a manufacturer would contribute in a case where he was in no way to blame for the disability of an employe, there are also many cases where the employe who was injured thru the fault of no one. It may not be the manufacturer; a machine might fly <.to pieces in which no one is to blame; he seldom gets what he is entitled to. He generally has to fight and he distributes his benefits among the lawyers. I have seen so many cases of that kind. Luckily for myself in this business I have never had a fatal accident nor had any case where there was really anybody much to blame except the employe himself. I should be very much in favor of an act in which we should all contribute to the fund for the benefit of the disabled laborer. W. H. Grupe and E. C. Denz made brief statements. Mr. Clarkson: The commission will stand adjourned to meet in Ottumwa tomorrow morning at ten o'clock. (See appendix for additional written statements of E. C. Noelke, C. E. Turner, E. A. Florang and others.) 164 REPORT OF EMPLOYERS' LIABILITY COMMISSION TWELFTH SESSION— OTTIJMWA Ottumwa, Iowa, 10 A M., Friday, March 29, 1912. Judge Stevens makes a statement of the object of the meeting. Mr. J. A. Lukins: We have a membership of 76 street car employees in Ottumwa; about four are not members yet. Judge Stevens: Is there any other line of workmen that you represent in any way? Mr. Lukins: No. Judge Stevens: As I understand you as a representative — Mr. Lukins: I am a representative of the street car employes. We haven't had any very serious accidents in our employment. We have had several little accidents that might be well to mention. Mr. Clarkson: I beg your pardon just a moment. It is not so much to determine now the character and kind of accident but what is your Idea as to the scheme or the plan that should be established for com- pensating workmen for injuries received, if any? Mr. Lukins: Well we think the Workmen ought to be compensated. We have looked very thoroughly into the different laws of the different States, particularly so in the last month, you might say, along the lines of the Washington law, I believe, would be mostly satisfactory to our organization. Of course there is some things in there that we don't ap- prove of quite so much as we do in some of the others but I believe that comes the nearest in meeting with our ideas of any law that we have gone into yet. We would like to see the workmen compensated and' we think it ought to be in a lump sum in place of dividing it into different funds as it is in the Washington law. I believe, if I understand it, the different manufacturers are divjded into separate funds. We are not in favor of that because it puts the man with the small industry up against a proposition that it would be liable to put him out of business. We don't care to put anybody out of business and we figure to put all in one fund and then rate the man according to his hazardous occupation and if it is found by a careful record that thru his carefulness in providing the safeguarding of machinery that his accidents are less, his rate will be lowered and on the other hand if thru his negligence in safeguarding the machinery his accidents are greater, his rate will be increased. Now we would rather see that all in one fund than a separate fund. I be- lieve that is all I have to say in regard to the matter. REPORT OF EMPLOYERS' LIABILITY COMMISSION 165 Mr. D. F. Morey: I am engaged in the brick and tile business also operate a coal mine. I am speaking really for the employers of labor and we had really not given this matter much attention until the first part of this week when a meeting was called and a committee appointed to look up these things. A great many manufacturers have not prob- ably given this matter the attention that they should have done and we were, as a rule, pretty green but this committee got the service of a man to put in a couple days looking these matters up and we have had a couple meetings and had a good meeting here last night and have gone all over the different laws of the different States and have investi- gated the German and the English laws as far as our time would permit and I think it is the unanimous opinion of the committee and of the people that were at the meeting last night that the employers are in favor of a law of this kind. There were 35 or 40 at the meeting and practically all lines of industry in the city were represented and there were some gentlemen from outside of the city in this district, coal men, packing house men, brick and tile men, planing mill and in fact I think almost every industry that is carried on here in Ottumwa and near Ot- tumwa. We are in favor of a law that will do away with litigation, that will compensate the laborer in the best way possible which I think is, giving him an allowance of so much a week, not paying it, that is, out in one bunch of money so it can be gotten away with quick but helping him along and making the money go as far and doing as much good as possible. We as employers, I think, want the very best that can be brought out that will be fair and reasonable to the employers and the employe. Now I don't know as I can say any more than that. The manufacturers, we have a good bunch of them here, they are all represented this morn- ing and the employes are here and it is up to each one to speak for himself. Mr. George Heindel here has helped us in this matter ana he has got some memorandum and we as employers, really the employes for that matter, would like to hear from him because he has the thing down in better shape than anyone else. Mr. George F. Heindel: I am going to apologize in the beginning for the length of time it may take me to present the views I have on this question. I have given it more or less consideration for several years, particularly since we have begun to adopt this class of legisla- tion in this country, which of course, is in comparatively recent years. I don't believe it would serve any good purpose for me to discuss my per- "ve it general because it seems to me that that general clause would open the way for what constitutes this wilful act. I have looked upon this question from the broad view point that the employer and the employe have a mutual desire in going into this thing to meet on common ground and on a REPORT OF EMPLOYERS' LIABILITY COMMISSION 185 basis of mutual helpfulness. There is no doubt that this kind of legis- lation will be a benefit in some respects to both parties and that the two greatest benefits will be in the reduction of the number of injuries and in the elimination, so far as possible, of legal controversy. Mr. H. L. Waterman: If you don't have some provision of this kind that an employe counldn't recover where he wilfully violated the rules and regulations and ' safeguards or the use of them, wouldn't it tend in the one case to prevent accidents as now? That is a thing that seems to me is equally important and more important than it is to have compen- sation for injuries and if these restraints are strictly enforced and he knows that he cannot recover if he wilfully neglects to use these things that have been provided, won't that tend to induce him to be more care- ful? Supposing that a man deliberately neglects to do what he is speci- ficially instructed to do; what would you do in a case of that kind? Of course, in drawing a statute, I don't mean to leave it open that in oases of had judgement or anything of that kind that he couldn't recover. But I think there ought to be something along that line that would prevent them from wilfully neglecting to do a thing when they knew or had been instructed to do it. The same as he has in regard to some appliance about a machine to prevent injury. If he don't use that, he has been instructed to use it, it is provided for his use; if a man in a room is told to prop his room and he fails to do it, refuses to do it, neglects to do it, it seems to me if he knows he can recover under these circum- stances he will take chances about like he is doing now. Mr. Clarkson: Do you believe it fundamentally wrong in principle, the new scheme that is claimed to be proposed? Mr. Heindel: I don't know that I have sufficiently formulated even in my own mind, such objections as have occurred to me to make a representation that will b.e of much value. This is abolishing and radi- cally departing from the theory on which we have been proceeding and adopting a theory that the employment should pay as a part of the cost of production the damages sustained by reason of injuries, whether these injuries be the result of the fault of the employer or of the employe, so far as negligence is concerned at least. The greatest difficulty con- cerning this kind of legislation is to attain the greatest degree of bene- fit. We ought to be able to have every person within the purview of the law operating under it. There ought to be one rule of liability for every employer and one rule of compensation for every employe and that probably within the limitations of our constitution we can accomplish but must have an optional law whereby this employer is under the law and this one isn't undei the law; this man is defending his law suits in a court and his employes are enforcing their rights thru common law actions and this employer is contributing to a fund and his employes are drawing from that funa for their injury. Like many other laws, we can't meet the conditions which arise in our neighboring States. There is not a shadow of doubt that the adop- tion of this kind of legislation will ultimately increase, in a substantial 186 REPORT OF EMPLOYERS' LIABILITY COMMISSION way and in an apparent way the cost of production. It will cost, if you add 2% to pay roll, that is about the percentage of the hazardous em- ployment in Germany; if you add 2% to the pay roll you increase the cost of production that 2% of the pay roll and you thereby make it im- possible for the person who pays that to compete outside of the State in which he is operating, with these employers who don't have that cost of production added. Mr. Clarkson: Does that 2% in Germany include bick benefits and old age pensions? Mr. Heindel: 2.7% includes sick benefits and the estimates of the German authorities are that .7% covers the sick and old age pension feature. , Mr. W. C. Minnick: I am a carpenter representing the Ottumwa Trades and Labor Assembly. We have possibly a membership of 1400. I wish to state in the first place that the union men of Ottumwa are not advocating a law for the purpose of getting money getting payment for injuries so much as to try to have a law enacted that would make the employers of labor safeguard their employes to the best of their ability. We are trying to minimize the dangerous features of the dif- ferent employments. We have studied several of the laws and decided to advocate a law along the lines of the laws of the State of Washington. I think the greatest advantages would be derived from the obligatory law but I doubt whether our Supreme Court will sustain an obligatory law. Mr. Clarkson: Merely because of its constitutionality? Mr. Minnick: That is why I speak of that. If we could not make it an obligatory law that the employe would be in the same position that he is under the law of Illinois, especially if he was employed by a judg- ment proof employer a man that you had no way that you could collect damages from. Mr. Clarkson: Supposing it was elective and after he had once elected then it was just as firmly and abidingly fixed upon him as if it was made obligatory by law, there wouldn't be any distinction then? Mr. Minnick: If he elected to come under the provisions of the law then he would have to pay the premiums into this fund but if he re- fused to come under the provisions of the law his employes would be in the same position that they are under the Illinois law. Mr. Clarkson: Under the law to-day an employe can not recover if the injury occurs as the result of negligence of the co-employe, that would be wiped away. According to statistics about 25% of the in- juries occur as the result of the negligence of the co-employe, so that if a man refuses to come in under the compensation law. that would be wiped away and he would be better off to that extent at least. Mr. Minnick: He would be better to the extent that his employer had no defense but he wouldn't be better to the extent that he could collect a judgement even if he got it against him. Of course, you understand REPORT OF EMPLOYERS' LIABILITY COMMISSION 187 it is only equitable that the industries pay these premiums according to the hazard of the employment. We believe that is right. We believe also that all of this premium should be paid by the employer. There has been some reasons brought out here that if the employe was to pay part of that premium ihat he would simply come back and ask for an increase of wages and the employer would naturally have to pay it. We have another way of looking at it than the way it has been brought out. The man that works for a wage has no way of passing down his expenses on to the general public, while the man that employs him has. For instance, I am working for a contractor, if my employer pays me more than I get at the present time he will naturally figure that additional cost into the product of my labor and the general public has that to pay. In other words, it distributes the insurance premium among all the people, where it ultimately would have to go anyway, if the employes were organized and would dernand an increase in wages sufficient to pay their premium in this insurance. So we think it will simply minimize the way of raising this fund and save considerable clerical work; it would save considerable friction between the employe and the employer if the employer paid that premium in the first place and added it to the product of .his employes. The man that refuses, that doesn't live up to the strict provisions of the law, that doesn't use every safety appliance possible to safeguard his employes, that individual or set of individuals should pay an additions,! premium, he should be penalized further so as to make it to his pecuniary interest to live up to the provisions of law to safeguard his employes. Now, we are going on the principle that the workers of this country, together with their employers want to conserve the rights of the workers. We are not looking so much into human family, as to the men that have to work. We also believe like Mr. Heindel and like the Ohio law, that the expenses of dispensing this fund should be paid by the State. There are certain industries that the dangers of accidents that are practically minimized and we appreciate and realize the fact that these industries because they are practically danger proof should pay _ some of the recompense to the men that are Injured in the line of industry that carries certain elements of danger in the employment. We think that the State should pay all the expense of administering a State in- surance fund. We believe this, that where an injury is permanent, that where the man that is injured is in his right mind, that he has a nor- mal mind, that he should have the right to have the money in a lump sum. Now, it isn't right and it isn't American to presume that all of the workers that are injured in employment are men of insane mind simply because they work by the day, that they are not capable of con- ducting a little business if they had the capital to start that business and if they are entitled, we will say, to $2000 under permanent dis- ability act, this man should have the right to have that $2000 to em- bark in some business. It should not be compulsory on them to accept that $2000 to be spread over a period of from 5 to 8 years. There are cases, I know, that would not by rights come under that. There are men, that if it could ha shown that they are not capable of conducting 188 REPORT OF EMPLOYERS' LIABILITY COMMISSION their own affairs that they should have a guardian appointed. I know lots of them and I think there should he provisions made in this law where they can show their capability of conducting any kind of business that their disability would not hinder them from going into, that they should he allowed to have the money that they were entitled to under this State insurance law, to go into that business. Then if they made a mistake they couldn't blame the law, they could blame themselves. I don't know as there is much use going any further into the discus- sion of this because I believe from the attitude that has been expressed here today by the employers and from what I understand the attitude of the employers all over the State has been that there won't be very much trouble in getting a law that both sides of this controversy will accept. Mr. Clarkson: You say that one of the principal things for the work- man desiring this law is that of preventives. Now, if that be true, why would it not be better to have a commission appointed who will take all of the factory laws and all other laws pertaining to safety devices in every avenue of industry and re-write them and make them rigid, strong and strict and appoint a sufficient number of men who are specially qualified in the particular departments of industry in which they would be expected to be employed as inspectors, after first passing an examin- ation showing their peculiar adaptability and competency in the work and rigidly enforce the laws in that way and leave the laws alone that have been fixed among us and become firm as a part of our institutions of which every man is more or less familiar and have knowledge of and adjusted himself to it and arranged his business so as to conform to and be a part of it, why would that not be a better method than to undertake to revolutionize the system upon which we have adjusted ourselves for years? Mr. Minnick: Mr. Chairman, there are certain elements of danger that cannot be taken out of employment, certain elements of danger that it is impossible to eliminate. Take a mining industry which is a very dangerous industry. There is bound to be men employed in that in- dustry and they have to take certain elements of risk in their daily toils. They should be lecompensed, their families should be recompensed ■when they are killed, without having to resort to the Courts and paying out, as Mr. Heindel said, 40 to 50% of the damages recovered to an attorney. We believe the dependents of the people that get hurt should have this money, not the attorneys, for it isn't the attorneys that get hurt. These men go into this dangerous employment and assume certain risks. They go there as servants of society and society should pay them for taking these unnecessary risks. Now, under a rigid system of factory inspection, these men that are inspecting, they will inspect a factory and they will say, here is a saw guard, that may be a saw guard and it may not be a saw guard. It may look all right and yet there are times that that machinery has got to be operated without these safeguards where they might say that the employe wilfully took a guard off of a machine, yet it would ne impossible for them to perform certain parts of the REPORT OF EMPLOYERS' LIABILITY COMMISSION 189 work without taking that guard from the machine. Now, what would you do in a case of that kind? Would you say that employe removed the guard and he should not be recompensed; I say not. That man should be recompensed for that work. Another thing: Men will take risks so that they will be able to make enough to pay tor their subsistence and irrespective of whether they get a finger off or an arm off. There is nobody that could pay any employer of labor for the loss of a hand, no money will do it. No money will pay an employe but the risk of a finger, the necessities of a family will force a man to take dangers, to go into dangers that anything else would not. They will even risk their life. And knowing the condition that society is in at the present time, well, we might say the money question conditions, knowing this, we believe we ought to have a law that would not only make it impossible for the employer to violate the present laws but it would make it to his pecuniary interest to make conditions even better than the laws are. And yet I will say this that I don't think that any law ought to exclude the employer from certain rights, in other words, from the absolute wilful disregard of personal safety of an employe. We ought to have conditions where a man can maintain himself and Lis family without having to take unnecessary risks. Competition is going to enter into this thing to a certain extent but these laws are gradually being taken up by the different States and they are a good deal along the same lines, paying possibly the same recompense to the workmen that are injured and it is only a question of a short time until the competition along that line will be eliminated. We do think that to get a law that will be obligatory for the employer to safeguard his machinery that it will be dollars and cents in his pocket. He will find out in a short time that through the safeguarding of the ma- chinery and the employment of his employes that it will reduce the dan- gers of injury to an extent that it will be money in his pocket and we know it will be added happiness to the human family. Mr. Samuel Mahon: There is a thought that occured to me that might be of some use. Accidents are common to all humanity, whether he is an employe or an employer or a man working for himself. Now, isn't this fund which is laid away as it were or provided for in the nature of, the old saying, of laying away something for a rainy day. And isn't the employe or any man liable to an accident, to look upon it in that light, as something- to provide for an unforseen accident or emergency and then why shouldn't he participate somewhat in providing that fund as against unforseen accidents and emergencies. It seems to , me there is something in that in support of the idea that the man it is going to benefit by .i fund of that kind, should participate in it. It is part of his own protection. Mr. Minnick: As conditions are at the present time it takes all that the man gets as wages to support himself and family and if there are any merchants here they will know that a good many of them can't pay their debts at that. I don't believe the working man on an average 190 REPORT OF EMPLOYERS' LIABILITY COMMISSION is in a position to stand any proportion of this. It costs all tha;t ie gets as wages to live and support his family and sometimes more; that should be a sufficient reason that society should recompense him and raise this insurance fund to support him in case of accident and to support his family in case of death. Mr. F. V/. Simmons: It seems to me that ■■■while v/e are trying to deliberate amongst ourselves and ■work out and advise and give ■what information we can to this commission that we must take the broadest kind of a view of it we can and use all the intelligence we have a|t our command. Mr. Minnick suggested a thing which I agree with most heartily about the whole matter, whether there is any legislation or whether there isn't. That the great principle we don't want to lose sight of amongst ourselves in what we call society, is the preservation or conservation, if you please to put it, of life and limb and also pro^ perty incidentally. Now, his position if I understand him correctly, is that we have economically and scientifically put work down to the level of what capital employed in the industries of our country and paid to employes, is about as low a minimum as we can go and make any money for the capital employed; dividends for the capital and wage for the employe. He has about conceded that is the situation. Of course we have monopolies and great trusts and all that sort of thing. We are not discussing that feature of the financial situation but if that is his position, and then right along just after that thought or that concession or that admission in the argument there is an objection raised to a percentage contribution to this insurance fund. I can't quite see why all of us should not help pay that. But Mr. Minnick then says ,that the wage earner would pay that anyway. It is true that capital and labor has equalized themselves as far as what one can afford to do the other. Then we ought to distribute the burden of any expense that the State is out, along the lines of raising this fund, equitably distribute it amongst ourselves, whether we have got stock in a factory or whether we are working. Mr. H. L. Waterman: This thins Is in its experimental state In this country and it seems to me there is one objection towards going in and helping experiment along this line. Iowa is a very conservative State. We don't go off half cocked in this State on any new proposition, we are very conservative but at the same time we think we are pretty liberal and pretty generous and all that sort of thing, but this thing is in an experimental state. It started over across the waters in defense of the throne; that is the reason they got ahead of us. Now, we have said there is something good in them; I admit it freely. I know people and so do you that have received permanent injuries that it is a pretty hard thing to look upon, where it was no fault of theirs, pure- ly accidental. I see all these things and they appeal to me but it is an experimental stage and had wa not better wait a little while until the three or four States that have just come in, in fact, just adopted this, have tried it out a little bit and see how it works? We are all at sea REPORT OP EMPLOYERS' LIABILITY COMMISSION 191 as to just what we shoriM adopt, whether it is the Washington plan, the Ohio plan; they are all different. It seems to me that is one argument against taking any hasty action along that line. I think it would be better to delay it a season or two until we see how these things work out. Mr. Heindel: If we support this kind of legislation at all it is in the view that society should pay for the injury to its members, rid of every consideration. It is in the view that society should pay for the injuries to its members, perhaps that is the correct doctrine, but if that be true, why select one class of society and say that we will provide a means by which they shall be recompensed for injuries without pro- viding a means by which all members of society shall be recompensed for injuries? "Why shouldn't we compensate the farmer who cuts him- self with a corn knife. Why shouldn't we compensate the farmer driv- ing his team to town and has a runaway and gets his leg broken? Now we are not ready to go that far, we select a class. We say we shall select the employes in a certain class of industrial employments and we shall tax the public according to the theory of Mr. Minnick, we shall tax the public by making this in such a form that it can be added to the cost of production and thereby to the cost to the consumer so that the employe in certain capacities shall be compensated. We say to the coal miner, to the employe of the factory, to the employe of the railroad or such other people- as may come into our classification, you are selected as the very class who shall be compensated, regardless of common law rules, shall be indemnified for such injuries you sus- tain. We propose to tax the public by adding to the price of your pro- duct thru the employer. It seems to me that that is in addition to what I have heretofore said, an argument that almost ought to be conclusive on the proposition that the employe may in justice be taxed somewhat for the special privilege, the special favor which is conferred upon him in selecting him as a class to whom this beneficent principle shall be applied. Bear in mind that society, that the farmer who handles the corn knife or whose team runs away or the lawyer who may fall on a defective sidewalk and break his leg, or the employer who may be injured in his own factory or elsewhere, these people are not compensated but as consumers they contribute just in the same proportion as the' employe does. The employe gets the benefit of the contribution; why is it unjust that he should pay what is a trivial compensation for the special privilege conferred upon him. Mr. A, L. Urick: President loTa State Federation of Labor. Member- ship approximately 40,000: I feel somewhat like an interloper to come to the city of Ottumwa to a hearing before this commission but from the fact that it was impos- sible for me to be present at the time of the hearing in the c[ty of Des Moines, and in so far as my interests are somewhat State-wide or at least the ones that I have the honor of representing, I thought that this being the last day of the hearings of the commission that I would try and at least appear for a few minutes and it was because 192 REPORT OP EMPLOYERS' LIABILITY COMMISSION of the feeling of an irterloper that I haven't taken any part in the questions of debate that has been taking place heretofore. We have lately evolved a new science, that of sociology, a' science in which we feel an interest in on^! ancthrr and we am trying to r ri^b tho re- sponsibilities that an duo from cne person to another. We are doing this, as we believe, in the interest of society. It is true that the change contemplated by a measure of this kind is a great change, as has been well stated here. These changes have been built up from time to time, that is, the employer's defenses, until now they have become recognized the world over as being unjust. They are In the interest of one -class of society as against the interest of another class of society that is rendering a distinct service to society. We believe that when a man enters into an employment that he does something of value. He creates something that is necessary for all society to have and we believe that the principle that should be followed in the line of compensation for injury is that the burden of risks of that calling or occupation should be charged against the product just exactly the same as interest or if you please, the price of the raw materials that go into the production of the commodity should be charged against it. I recognize some of the difficulties that we have in this country in the introduction of laws of this kind, because we have first a National Legislature that enacts the laws and they are the laws for the nation. We have in our country some forty separate governments all of which may enact laws and because of this greater number of governing pow- ' ers, we do run a great danger of inflicting injury upon the employers or upon the industry of one community as against the other community. We recognize that but yet that should not be a reason for hesitancy for the matter is one of principle, justice and right. It is true that a number of States have adopted a plan of this kind and I do not believe that Iowa should hesitate for one single moment in doing that which they believe to be in the line of justice and right and because of that I believe that now is the time. We have had the benefit of the experience of the other States and we should not desire to shift our burden still farther into the future but we should get into the game and do our part towards the working oiLt of the problem. Personally, if it can be done, I believe in the compulsory plan. I believe in it because there can be some degree of regularity in the ap- plication of whatever the law may be. If the compulsory plan is an impossibility I would favor the elective plan as a step in the right direc- tion but I realize this, that under the elective plan that certain of the employes who are rendering this same service to society as other em- ployes are rendering, may not receive compensation where other em- ployes would receive compensation. I am not in favor of the employe contributing any part of the money to a cpmmon fund out of which this compensation shall be paid, because I believe that just as soon as we do that we are driving away from the very principle that we are trying to establish. Speaking about the employe paying part I do believe this, as has been advocated, that there should be a plan of compulsory payment REPORT OF EMPLOYERS' LIABILITY COMMISSION 193 and that the payment should he in accord with the risk incident to the injury and I believe likewise that the careful employer should re- ceive advantages in the rate as against the careless employer. I be- lieve in this compensation, not alone for the purpose of relieving so- ciety but I believe in it as a matter of right to all concerned. Now in assessing the matter, a larger percentage against the careless man than you would against the careful man, and that careless employer, assess- ing the 10 per cent against his employes, you would simply be penalizing the employe for the carelessness of the employer because you would assess them to a greater extent than you would the employes of the careful employer. I believe this commission and every one present in the room will agree with me that a careless, negligent employer should pay a higher rate than should the careful employer and yet you would turn right around and you would penalize the employe for the care- lessness and negligence of that employer. The making of each employe an inspector because of the reason that he appreciates the fact that with many injuries, this 10 per cent or whatever the percent of assess- ment against him may be, would be greater, is to my mind contrary to what the result would be if the plan was attempted. I realize this now that one of the great complaints against the labor organizations is that they interfere too much with the management and it appears to me where you are attempting to bring into play the making in a way of every employe an inspector over the other employs that you would simply be bringing into existence more and greater complaints on the part of the employers as against the individual workers and where there was an organization of workers, against the organization. In fact, instead of having a greater discipline and working out more satisfactory in that factory, I believe you would have less discipline than you have now. I do not believe that the argument along that line is a good one or would work out in fact. I am not of the opinion that the wilful negligence of an employe should be so broadened out as to include at all times the doing of things in the factory that are in a way contrary to the law, because all of our people do not know the law. Where a man is deliberate in inviting injury I believe he should be penalized, where it can be shown that he was deliberate in the inviting of the injury, he should be penalized and should not recover. Under all other circumstances I believe him rendering this service to society should entitle him to recovery even tho he may be a trifle at fault at times. I want to say this to the commission that up to the time of the crea- tion of this commission, I believe part of the commission will bear me out, that I made every possible effort towards the bringing about of the first step towards the employers' liability and workmen's com- pensation act. Since that time I have been somewhat busy and I have not gone carefully into the laws that have been enacted. I simply speak for the principle. The principle of the entire thing is that the man rendering service to society in putting forth his labor power, that 194 REPORT OP EMPLOYERS' LIABILITY COMMISSION he should be protected against the risks incident to his particular calling. The employe has no opportunity of shifting any per cent of his burden but by the payment coming out of the sums raised from the employers who contribute according to the size of their plants, they can charge that and fix the charge to the public to the consumers just exactly the same as they now can include the price of raw material, the rental of the building, the cost of machinery, the cost of insurance or taxes and the interest charges. And in so doing it the entire burden comes back ultimately to the man who profits because of that industry and because of that labor. It comes back and the man pays it who consumes that product and that is where I believe it should go. I be- lieve that the rate should be divided according- to the risks of the particular industry. I believe that the rate should be increased with the increased negligence of employer and decreased in accord with his carefulness of employment. I do not believe that any part what- soever of the fund should be raised from the wages of the employes because I believe it to be wholly wrong to the principle that we are advocating. The man entering an employment does so first for the purpose of self-preservation, that is, to get the necessaries of life, but h^ puts forth likewise all of his powers and must necessarily put them forth if he expects to receive compensation for his service. Society is benefited in that man performing useful services. No man of society is perfect, not any more than you can make a perfect machine. He renders unto society the best there is in him. While it is true, in the line of contributory negligence that the man's mind may not be per- fectly clear at all times; there may be surrounding him in his employ- ment certain things that have a tendency to dull his mind at certain times. There may be certain things that have entered into his em- ployment that have made him nervous. It has all been because of his employment and. because of those things the man is bound to make mistakes that will sometimes result in injury, but having rendered the best that he could to society, that man should be protected by so- ciety. I do believe that a man being deliberate in the removal of safety devices that there should be a certain penalty added. I would penalize the man in the same way that you now penalize a man under the statutes for instance, of this State. The man who refuses to get the safety devices for his machine, that is, I would do it in the way of a fine upon the man. There is one thought that I want to call to your attention because I doubt whether the thought had ever been suggested to the commission. That is the matter of compensation for injury to the young man working as an apprentice who may become permanently injured and who is paid compensation only upon the amount of his earnings at the time. The thought isn't original with me but it was so novel that I thought it should be called to the attention of the commission. Mr. Clarkson: I have here a communication from Rev. F. J. Brune. The Reverend appeared before the commission at Sioux City, and there presented his views and stated he would like to reduce them in REPORT OF EMPLOYERS' LIABILITY COMMISSION 195 more concrete form to writing and that they be incorporated in the record. I will not take the time to read them. They are a repetition of much that has been said here and what he said in Sioux City and I will ask the Secretary to incorporate them in the record. (The com- munication was handed to Secretary Given. See appendix.) Mr. M. C. Gilmore, Attorney at Law: It seems to me that the only point of difference between the employers and employes has been as to whether the employe shall pay a part of the fund. Now, I think all are agreed that such a law would be just and I know from conversa- tion with some of the employes here in the city that they would rather pay 10 per cent toward the fund than not to have the law passed so as a practical matter for the State for the workmen to agree to pay a contribution, but they are not the controlling weight when it comes to the enactment of a law. If "by agreeing on the payment of 10 per cent of the fund by the employes, it seems to me that it would be bettel as a practical matter for the State for the workmen to agree to pay some part of this compensation and have a law passed without friction or controversy and pas.ied in the very near future rather than have tha controversy extend ovev two or three terms of the legislature and no immediate relief be given to the workmen. It seems to me as a practi- cal matter it would be better for both sides to make a concession now, than to fight it out over^ a mere pittance of 10 per cent of the fund, whether that should be paid by the employer or employe. 'Mr. Phil Phillips: I believe the main objection to the employe pay- ing part of this per cent that they consider they have to pay it double, that they have to pay it first for themselves, then as consumers. I be- lieve that they go on the assumption that because a man employs them that he is the only one that is interested in the employers' behalf and I don't believe they take into consideration the fact that a company might be composed of a great many people, and they are consumers as well as the employe and in a way are employers and I don't know in the first place, if it was agreed that the employe should pay a cer- tain percent, I believe the 10' per cent would simply be an arbitrary figure but take the 10 per cent, it seems to me with the small per cent that the employe would have to pay of that 10 per cent as consumers wouldn't anj^^where near be equal to what the employer has to pay for the other 90 per cent as consumer himself. Not only that but the em- ployer in everything that he buys for his factory is paying this addi- tional cost. The only place that he doesn't pay th's additional cost is on the product that he himself manufactures and goes to somebody else. Everything that he buys includes that cost and he has to pay it there also. Mr. W. E. Cook: I am contracting and running a planing mill. We employ all the way from 25 to 100. In the questions that have been brought up in regard to the employe paying a part of the percentage. Now, I don't consider it the money that he pays in. The way I con- sider it is that he makes a better employe. Now we have in our mill 196 REPORT OF EMPLOYERS' LIABILITY COMMISSION only one foreAian and one manager. It is impossible for that foreman to watch each one of the employes in that mill and see that he com- plies with the laws and doesn't remove the guards from the saws or the machines. This is done in a great many cases and if the employe is a contributor to this fund he acts as watchman or foreman over his fellow workman. There Is a great many workmen will listen to a fellow workman rather than listen to the foreman or boss. If a fellow workman goes to another workman and says here, if you are Injured on that saw It is going to cost me a dollar or two dollars or three dol- lars, whatever the percentage may be and another one goes to him and says the same thing, I think he is more liable to listen to his fellow workman than he is to his foreman or boss. Mr. Clarkson: What would you say to a statute making it your duty to go and file an information against that fellow if he took the guard off? Mr. Cook: Well, that is all right in a way but sometimes you don't want to go that far with a workman. My experience has been, it hasn't been the new workman or inexperienced workman that raises these guards off of the saws. It is the most experienced men you have that take the chances. We all of us don't have any more workmen sometimes than we want and we sometimes have work that we couldn't stop at that time and tell this fellow to go or discharge him simply because he wasn't complying with that rule and that law. I think if they were paying a small percentage that they would watch each other and have less accidents and also in that way reduce the fund, and reduce the assessment. Mr. Clarkson: The Commission will stand adjourned without date, subject to the call of the Chairman: REPORT OF EMPLOYERS' LIABILITY COMMISSION 197 THIRTEENTH SESSION— DES MOINES Pursuant to call the commission met at the State House and held an open session June 4, listening to P. Tecumseh Sharman of New York. By a mischance happening too late for correction the address was not taken in shorthand, hut it may be described as an elaborate review of the work- men's compensation laws of foreign countries and drawing the conclu- sion that state fund insurance plans like those of Ohio and Washington are a radical departure from the line of success and necessarily involve grave political and actuarial difficulties. Mr. Sherman contended for the English system of judicial administration and private insurance and cited New Jersey as an American state with a safe and sound system, affording a wholesome contrast to the dangerous experiments of Washington and Ohio. Mr. Sherman afterwards filed with the commission statistical data and documentory matter in opposition especially to the state insurance plans. He recognizes that in many of the European countries the employers' legal obligation to pay compensation, from its, inception, has been coupled with a further obligation to insure its payments. These two obligations, he says, are entirely distinct and independent. Insurance is a difficult economic problem, and some of the European methods for its solution, about which there is much loose thinking and writing, are extremely dangerous. Common rsense, therefore, dictates that the question of what shall be the employer's liability should be kept distinct from the ques- tion of insuring its payments; and that we must devise the methods and means for safely and economically insuring it, — if it be decided that the employer should be compelled to insure it. But in America we are rushing ahead, confusing these two questions, and producing hodge-podge measures — such as the Ohio law — which sacrifice many of the advantages of the compensation law for dangerous and unsound methods of in- surance!. Such was his general line of argument. 198 REPORT OF EMPLOYERS' LIABILITY COMMISSION APPENDIX The following expressions of opinion in writing were made at the request of the commission; in some instances in addition to the views advanced at the public hearings and in others in lieu of oral discussion: HON. SMITH M'PHERSON, UNITED STATES DISTRICT JUDGE. I have your memorandum and blanks with reference to the inquiry now coming forward in Iowa by the Employers' Liability and Work- men's Compensation Commission. I have taken great interest in this matter, and only wish I could give time to the consideration of the ques- tions involved. But I can give very little time. I have had some conversation and considerable correspondence with one of the members of the commission, sending him all the literature that I thought would be worthy of consideration. In my opinion it is one of the greatest works to be accomplished, in many respects, and if worked out, much suffering and poverty will be alleviated. Present methods are utterly inadequate. In many instances there is no liability, and an employe must go through life maimed and crippled, without a fair chance to earn a living. In other cases where there is a liability, he is oftentimes delayed, and then only gets a partial recovery, by reason of the practice that has grown, of sustaining eon- tracts with lawyers for a percentage of the recovery, and this percen- tage sometimes as high as 50 per cent. I can see that your commission has very serious questions before it, by reason of our written constitutions defining the scope that legisla- tion can take. E. C. NOELKE OF BURLINGTON. Any law placing responsibility on the employer who has met every re- quirement towards the prevention of accidents would seem an injustice. Accidents will occur under any and all conditions. Under hazardous conditions where labor is employed the difference in wages paid for that labor is supposed to compensate the risk, and with this the responsibility of the employer should cease. It would seem impossible to enact a liability law that would place the smaller or moderate industries in a position to know what to expect or to provide for. More rigid inspec- tion and enforcement of laws for the prevention of accidents should be REPORT OF EMPLOYERS' LIABILITY COMMISSION 199 agitated and where such laws are disregarded and accidents occur therefrom, the employer should be held responsible and be made to pay the penalty. In many cases if not In most cases the employe that may meet with accident or injury while engaged at work is unprepared to bear the bur- den and to meet this condition and from a humanitarian standpoint there should be some provision made to meet these cases, and if a law would be enacted whereby all industries or employers of labor would be taxed at a specific rate based upon their payroll a state fund could be created for this purpose. With such a law as this and the enforcement of laws for every possible means towards the prevention of accidents it would not only eliminate the unrestricted and unlimited attack on the em- ployer but would give relief to injured or those dependent upon him and permit the employers to operate with some certainty. E. A. FLORANG OP BURLINGTON. I am ■ in favor of a compulsory workmen's compensation law provid- ing for the payment of specified amounts to workmen according to the injury he receives. The legislature to pass a law to that effect leaving the amount of compensation to be paid and other details to be deter- mined to a commission of the Iowa Manufacturers' Association, other employers of labor, representatives of the different labor unions, and your Commission. The question of compensation or the amount to be paid is one that requires careful study, therefore in order to do justice to the workmen as well as the employer this must carefully be con- sidered. In determining the amount of compensation to be paid for the various injuries, other state laws should be investigated with a view of not loading a burden on the Iowa manufacturer which might injure or pre- vent him from competing with his competitors in other states. After determining the various amounts to be paid for different injuries under this law, the execution of this law is to be placed in the hands of a permanent commission of three men. One to be selected by the Iowa manufacturers, one by the Unions or working men and the third one by the legislature. This commission is to determine the following: First. They are to establish a schedule under which the different em- ployers are to be assessed. This may be determined by the statistics of the old Employers' Liability Co. Second. This Commission is to determine the percent to be paid by the manufacturer, the workmen and the state. It is my opinion that this should be about as follows: Manufacturer 50 per cent, workmen 25 per cent, and the state 25 per cent. TMrd. All claims under this law to be made through the employer on the Commission and to be paid to the employe through the employer on receipt of satisfactory proofs of the correctness of such claim. My object in suggesting that claim be made and paid through the 200 REPORT OF EMPLOYERS' LIABILITY COMMISSION employer is to save the employe the necessity and expense of engag- ing some attorney or some one else to do this for him. Fourth. This commission to be in control of a rigid inspection system, compelling all employers of labor under penalty of a fine to safe- guard their employes to the best of their ability and to adopt such protective measures as may from time to time be recommended by this Commission through its Inspection Bureau. It Is my opinion that the safe-guarding and prevention of accidents is almost of equal Importance as the Compensation act. I thoroughly believe in the old time worn saying "That an ounce of prevention is worth a pound, yes one might say a ton of cure." Regarding specified amounts. to be paid for total disability or death it struck me this morning that this might be based on the natural ex- pectancy of the life of the Individual at the time the accident happened. The remark has been made here this morning that if a man was totally disabled by an accident at the age of 26 and a certain amount paid him during the next eight or ten years at 32 or 34 he would still have a num- ber of years to live without anything to live on. It is my opinion that it would be better for the man to pay him a smaller amount for a longer term or In other words spread the payment to be made over a greater number of years. However as I said before, the question of the amounts to be paid and mode of payment requires more study, than I have been able to give this subject; I therefore offer you the latter thought for what It's worth. I believe every reasonable minded manufacturer and employer of the state will concede the necessity of a law for compensating the workman for injuries he receives In the course of his employment. The question as to whether indemnity In the case of sickness and old age pension is to be added to such a law Is one which I believe had best be left for some future date. Personally I am heartily in favor of this; however for the present I believe there will be enough complications to unravel and problems to solve without bringing these matters in. C. E. TURNER OF BURLINGTON. I have been appointed delegate to see you and urge your active sup- port on certain legislation this session; we hop© you will exert your- selves on much needed reform. The benefit over the country will be beneficial beyond belief. The following statements were adopted by the Brotherhood of Locomotive Engineers. Div. 151. The Industrial growth of America has been so phenomenal that the old doctrines of assumed risk, contributory negligence and fellow-servant have become not only unjust but Iniquitous in their practical application to modern manufacturing. The labor organizations of this country have labored earnestly for the enactment of the employers' liability law and it Is a tremendous step In the right direction. It is plainly the duty of the REPORT OP EMPLOYERS' LIABILITY COMMISSION 201 labor organizations to exert every effort and never rest until we have in this country a compensation act. The modern employer of labor makes the ultimate consumer pay not only the original cost, but for all the wear and tear of machinery as it becomes old and discarded. He makes the consumer pay for tax, breakage, repairs, insurance and lost ac- counts. He takes into consideration everything except the wear and tear of human life, and the death or injury of a workingman is the only thing which the ultimate consumer does not pay for. While the courts drag their slow processes along, helpless women and injured and dis- abled men suffer. Neither the employer nor the employe has been to blame for this. Statistics disclose that employers of labor in America have paid to nine surety companies premiums to the amount of $23,- 523,583, while injured workmen and their families have received of this sum only $8,358,795, which means that two-thirds have been dis- sipated in costs and profit. The ultimate consumer has paid all this insurance but the injured employe has not received it. Experience has been that even with large recoveries, at the end of five or six years of litigation, the damages recovered were speedily dissipated and that a very much smaller sum secured without litigation would have been not only cheaper for the employer but infinitely of more value to the employe or his family. Many of the states are considering workmen's compensation acts. All the great countries of Europe have them . now in force. The weakness of the proposed acts consists in the fact that they are optional and not compulsory in their character. In the exercise of the police power of the state you have a right to pass a compulsory workmen's compensation act for all those employments which you deem to be dangerous to life and limb. The courts of the states are overcrowded with actions to recover damages for injuries to persons or loss of life. You must provide for additional courts unless something is done to clear the dockets. A reasonable, just and fair workmen's compensation act applying to dangerous employments and compulsory in its character, should be enacted, and as this act will not be automatic, there should be created an industrial court, and all other courts should be deprived of jurisdiction over these accident cases. Neither lawyer nor pleading should be permitted in this industrial court, but a bare letter disclosing that the terms of this act had not been complied with by the employer should be sufficient to require the court to act of its own motion in enforcing the law. The creation of this industrial court will not be an additional expense upon the people of the states. Upon the contrary, it will clear the dockets of the various circuit and superior courts of industrial accident suits, and will, in due season, reduce the number of circuit and superior courts. As accidents usually occur be- cause of machinery and appliances being improperly safeguarded and out of repair the terms of the act itself would spur an employer to per- fect his eauipment. Upon written complaint however, as to lack of re- pair or safeguards, this court should have power to compel improve- ments. This would eliminate much of the necessity for inspection. The railroad employes' organizations are compelled to have some kind of in- surance or benefit for disabled members or deaths to protect its members 202 REPORT OP EMPLOYERS' LIABILITY COMMISSION as all insurance companies will not accept them, the labor is too hazardous. The railroad companies will not employ labor in the transportation de- partment over the age limit of forty-five years of age. Because of thests evils labor organizations are a necessity. There is no question but that we are far behind the times in the matter of compensation for in- juries and death. It is but simple justice that the cost of injuries and fatalities of modern industry should fall upon the industry itself and not upon the poor disabled soldier who is least able to bear it. I hope what I have said will bring some benefit. ■ ROBERT L. M'KEON OF DES MOINES. The State of Washington is now in the insurance business in connec- tion with the Workmen's Compensation lav/. Already the commission reports that it is deluged with claims from employes, most of whom have sustained injuries of little consequence, but who regard the state as the German workman long has done as a sort of almoner to deal out bene- fits which under ordinary circumstances would not be considered worthy of mention. As a sample of this law it should be pointed out that all industries of ^ similar kind are compelled to contribute equally despite the fact that no two plants are ever equal either in management, efficiency or safety. There are in Washington not enough industries in each line to pro- vide a fair average on which to base rates or figure probable losses.' No scientific calculations are, under these circumstances possible and the manufacturers in that State may well consider, as fraught with peril, the situation that confronts them. As state fire insurance in California at the time of the San Francisco fire would have placed a paralyzing burden upon the people of California for years to come and prevented in a great degree the rebuilding of the city, so in all cases where in- surance is localized the burden of one great accident would probably under the Washington segregation plan bankrupt the industry which suffered the accident. Almost with the going into effect of the law the effect of the segrega- tion of the different occupations and the bearing of their own burden of compensation and the danger to industries represented by only a few plants became apparent. There were in the state on the passage of the law only three powder mills. Two of these had paid their assessment, the third had held out for a lower rate, insisting that it should not be assessed on the same basis as the other two concerns on account of the numerous safe-guards which it had installed and with which the other companies were not equipped. The State commission investigated the matter, found this representa- tion correct, but declared that the rates were fixed by the compensa- tion law and could not be changed, no matter how unjust their applica- tion might be. REPORT OF EMPLOYERS' LIABILITY COMMISSION 203 An explosion a few weeks ago in one of the powder mills which had paid its assessment, killed eight people, and the dependants of each person under the compensation act are entitled to a monthly payment of $20, calling for an ultimate payment in each case of about $4,000, or a total of over $30,000 for this one accident, while the state has in hand as the contribution to meet this loss just $270. The commission has now arbitrarily scaled the amount to less than $9,0'00, and as the property of the mill where the disaster occurred was wiped out by the explosion and this concern is bankrupt, it is claimed that the two other concerns should pay the amount of the deficit in the insurance funds. Imagine the storm of lurid comment if an insurance company had done such a thing. It is interesting to note that the best protected concern gains nothing by its efficiency, but may be compelled to pay in company with the company now remaining, the whole loss Imposed by the accident for the least efficiant member of the industry. All are taxed the same, the bankrupt plant which does not pay, the average plant which ought not to pay the bills of its competitor and the better equipped plant which refuses to pay at all. A premium is placed upon accidents, and protec- tion and efficient safeguards are penalized. Nothing is more certain than that the individual employer if made ' responsible simply to his employes will exercise more care in the conduct of his business in .providing safe machinery and eliminating danger points, than if he was merely taxed for a common fund. Any fund for workmen's compensation raised by a tax generally on the employers without regard to the individual liability of any one employer will work injustice upon the modern well equipped plant by compelling it to con- tribute for the payment of death 'and injury inflicted by antiquated and carelessly managed plants. The State insurance law as it exists in Washington will either shortly be repealed, or if continued, will end by driving out many of the in- dustries it now has, as well as giving pause to many who would other- wise enter. IDEAL HEATING COMPANY OF OSKALOOSA. During 1909-1910 and 1911 we have had no accidents hence have not paid out one cent by reason of, accidents either in payments to employes, to doctors, attorneys or to liaiblity companies. We have employed during this time from 3 to 7 men, at an average wage of about $10 per week each. We will further state that we have not had an accident in ten years among our employes. We have never carried liability insurance. Within twenty years we have had two small injuries to employes that we paid doctors to attend, they cost -us less than ten dollars. We do not contribute to any relief association. You can put us down as heartily in favor of a liability law that will take care of the injured employe without court costs, attorney fees, etc. 204 REPORT OF EMPLOYERS' LIABILITY COMMISSION THE BROWN PAPER COMPANY OP FORT MADISON. "We are returning your report, filled out to the best of our ability. In the thirty years we have run this mill, we have had only two ac- cidents worth speaking of. Both were boys and both not attending to their work at the time they were injured. However we settled both cases out of court. In the thirty years we have run this mill, we ha.ve never had a law suit, never sued anyone, never were sued, on any account whatever. So you see it is our policy to cut out lawyers, as far as possible and we think this would be a good policy for everyone. We believe that there should be some sort of workmen's insurance against accidents and have this policy in our minds. Let the state, for example, take the present rate levied by the Employers' Liability Com- panies as a basis and add this amount to the taxes of all employers. Then have competent factory inspectors go through all the plants In the country and if they are run in a dangerous way, compel the owners to correct the trouble. Now when an employe is hurt, he should be examined by a competent physician, who is acceptable to the state and a report made to the proper authority and an order given on the state treasury to be drawn from this Employers' Liability fund for the amount which the injured is entitled to, and the amount he is entitled to should be settled by a regular schedule, each member of the body, hands, feet, eyes, and so forth, should be at a regular price, the same as ar^ fixed in certain ac- cident policies. The penalty for falsifying in any case, should be very severe. The fact that the factory had been inspected by a state agent, and his orders carried out, should release the employer from all liability so far as imperfect machinery is concerned. Of course, if the employer should order an employ to do certain work which proved to be danger- ous and caused him to be injured, he should then be liable to suit for damages. We think that if this department was properly and economically handled by the state that there would be a surplus, but when this sur- plus became large enough to make the proposition safe, the levy could be reduced. To fix the liability loss upon each individual factory would put many of them out of business if they were forced to pay whether accident was caused by their own negligence or not. Some factories are infested with a treacherous lot of workmen that will work up all kinds of schemes to beat the "Boss." We have not been troubled with that but some of our acquaintances have. Then again, accidents come in waves. Some factories seem to have an epidemic of them for a short period, and the claims might fall upon them just at a time when they could not stand the expense. In otaer states, where Employers' Liability Laws have been passed, the insup ance companies have raised the rate until it is a great burden. REPORT OF EMPLOYERS' LIABILITY COMMISSION 205 So we are opposed to any kind of Liability Law unless it were handled somewliat like the above. WATERBURY CHEMICAL COMPANY OP DBS MOINES. Your general circular No. 1 just received. The writer has gone over the questions in this circular very care- fully, and as far as our line of work is concerned this will not fill the bill by adding the cost of accidents to our employes by advancing the cost of the goods we manufacture. In the first place, our preparations are sold at a fixed price, which we can not advance; therefore, we would be paying out of our own pockets all of the liabilities. We much prefer the old way of carrying the indemnity Employers' Accident protection, and we hope that the suggestions you make of adding these costs to the production of the goods will not become a law. HART-PARR COMPANY OF CHARLES CITY. We are returning herewith blank filled out in the best manner possible. We are very much interested in this subject and hope that any law passed relating to same will be of such a nature as to give the greatest possible relief and remove those uncertainties to industrial work grow- ing out of our present liability laws. We have had within our works an association which has been work- ing more-or-less along the lines as suggested in many of the compensa- tion schemes. After watching its workings for two years, we have learned some of the defects of such systems, but on the whole believe that our scheme is a splendid feature and that, with a few corrections, it is al- most ideal in its principles and applications. It combines relief for the two disabilities of accident and sickness, thereby we are able to bring to the organization the support from our company with an amount which should care for practically all accidents due to our industry and also the support from members of the association, that is the employes, an amount to care for all disability thru sickness. Thus is brought to- gether the common interest of the employer and the employe. With the employe contributing so largely to the expense, we are then able to throw the administration of this Relief Association entirely into the hands of the employes. The fund for benefits is made up by assessments upon the members of the Association as well as by the amounts contributed by the Company. Thus, for every benefit conferred, every member must feel the burden of the expense. This brings about wholesome and right tendencies. Every member is interested in seeing an honest administra- tion and in preventing beneficiaries from receiving funds in excess of legitimate benefits. Our association pays the full rate of wages during the time of disablement. Under any other system than the foregoing such benefits would be beyond all reason and lead to many evil tendencies. We believe however that this line of benefit can be kept up in this As- sociation without undue tax upon its members or the Company. It is 206 REPORT OF EMPLOYERS' LIABILITY COMMISSION a well known fact that where accidents and sickness insurance is granted by Government administration or even hy the old line insurance Companies, that at least one-half of the sums paid out for beneats are illegitimate by reason of the beneficiary pretending sickness, extend- ing the time of sickness, or getting benefits for trivial injuries. "We be- lieve this will always be true where the close associates of the benefi- ciary, as well as himself, do riot feel directly and proportionately the expense of such benefits. Where the funds for benefits are raised en- tirely from industrial companies and the Government, we believe the system would become vicious in the extreme, as every associate of the man injured would go in for greatest haul possible for him. It is also a well known fact that the average physician looks at the beneficiary of insurance as an excellent source of income and is much inclined to keep the beneficiary under his care as many days as possible and in many cases they will recommend several days of benefit to a man trivially injured, when if the same man were upon a farm working for himself, he would go back to work in fifteen minutes. This we believe has been the chief weakness in our Relief Association inasmuch as we are depen- dent for reports upon the several local physicians and they receive re- muneration largely in accordance with the duration of the disability. We will soon correct this with the employment of an Association Physi- cian upon a fixed salary. For the foregoing reason, any system of legal compensation should consider very carefully the relations of the physicians. While' our Association provides for a considerable benefit in case of certain dismemberment or death, it will be noticed that no large fixed sums are paid out, the benefits being continued in weekly in- stallments for a period leading up to one year after tne disablement in ques- tion. The wisdom of such an arrangement in any compensation scheme would seem obvious. We trust your committee will pardon us for the suggestion heretofore made and those which we now add. We realize that the task before your committee is one of great difficulty and yet one which should be accomplished with all the dispatch possible. We realize that any com- pensation system which may be placed upon our statute books must be uniform in its working. We very greatly fear that if it must be admin- istered by state officials and must be largely in the hands of local phy- sicians, that very great waste, by reason of paying illegitimate benefits, will result. We fear that if the funds are raised entirely from indus- trial concerns and the state, that the tendencies will be for even greater waste. Under such general system or scheme, it is hardly possible that the beneficiary will receive more than a fraction of his usual wages during his disablement. A much lower income than while working is about the only arrangement under such systems which would have a tendency to send the employe back to work within proper time. Never- theless we believe that a system within the larger bodies of workmen can be worked rightly which will give to them their full income at just those times when they need it most. Accordingly, our great fear of a compensation law if it be obligatory or forces every employer to work under it, will make us drop the breadth and scope of our present com- REPORT OF EMPLOYERS' LIABILITY COMMISSION 207 pensation system and do something less for our employes. The best tendency of our present system is that it tends to build up co-operation and friendship between employer and employe. Any legal system should be studied to effect the same result and we fear at best that we would be deprived of this feature of our work. We would then earnestly request that your commission in any pro- posed law make provision for recognizing local organizations which may exist in the larger industries especially where such systems are broader in scope and cover a larger field than that proposed in the legal compensation. In case the employer is paying as great or greater amount for compensation than the legal system, he should be relieved from further liability. At least the amount which he may pay the employe for such compensation should be deducted from any liability under the law. Judging by the results which have been achieved with our relief work within our works, we will feel much inclined to do more and more in this respect and we believe that any large concern em- ploying a considerable number of men, if they could be brought to start such a local system as we have, would soon come to feel the same way about it and would willingly grant care and compensation for all the misfortunes of employes to a greater extent than can be brought about under a legal compensation system applying to all industry. " H. V. MERCER OF MINNEAPOLIS. I have received and read with considerable interest the very able document of Mr. French, which you so kindly sent me. Without going into detail and without knowing the provisions of your constitution, I think the conclusions he reaches are wrong so far as applicable to the Minnesota Constitution. After a most thorough study of it, I am clearly of the opinion that, — 1. As applied to the Minnesota Constitution and to the states gen- erally the idea of imposing compensation upon every industry that has accidents arising in and' out of the course of that industry is a clearly constitutional power, if the acts are properly drawn. With the New York decision I disagree and I think the most of the abler men of the country do likewise. I am taking the liberty of enclosing to you as applicable to that decision a short pamphlet which I wrote for the Legislature immediately following the rendition of that decision before any outside court had criticised it. This was prepared very hurriedly and is not as brief or able as it might otherwise have been. I am also taking the liberty of sending to you a brief which I read to the Interstate Convention on this matter at Atlantic City in 1909, which is the first document, so far as I am aware, that points out how this sort of legislation could be maintained under our constitutions. I am also having sent to you a copy of the Code with the Minnesota re- port which in the notes in the back will point out the justification for the various sections of the Code. 208 REPORT OF EMPLOYERS' LIABILITY COMMISSION 2. As applicable to the state of Minnesota and many other states, I think the idea of workmen voluntarily entering the employ or re- fusing to voluntarily enter the employ of persons on the theory of election is bad as a matter of morals and contrary to the public policy of most states. I realize what the policy of Iowa was and the law which brought forth the McGuire decision, which I believe is the 219th United States. But generally speaking, any law which leaves to either side the power to say whether or not in any particular calling or any particular case it is a law as to any particular party is contrary to the general scheme of our constitutional government and is in fact and in law a delegation of the legislative power. • 3. With any idea of putting the state into this sort of business through the theory of taxation, I have always disagreed since I looked into it. I think it wrong in both principle and law. In the first place the idea of protecting the workmen so far as the employments are con- cerned is, in my judgment, clearly within the police power; but the police power is a rule of regulation. It is a means of governmenit to protect the general welfare so that individuals will conduct themselves within legitimate lines. Its purpose is to accomplish right action be- tween the individuals; its means is to make rules and regulations by which they shall be conducted. The state, wherever this can be done, has no business spending the public funds to take care of purely per- sonal obligations such as these are — obligations that are constantly grow- ing out of private rights and out of private conduct and which ought to be controlled by general rules and regulations. To allow, therefore, the use of public funds for taxation to carry on such private business would mean a constitutional amendment in most states to permit the public funds to be used for private purposes. In dictating a letter of this kind into a phonograph without opportunity to correct it, I realize that I may be misunderstood upon this point, but I want to make it clear that every liability in every tort action has been a priviate liability from the time when the tort action started, going back further than America, or England, or Rome, and even back into the Code of Hammurabi. A substitute for the private action of a remedy of this sort is no less private because it is made by virtue of a rule under the police power any more than is the tort which permits a privajte action for violation of a criminal statute, like receiving deposits in a defunct bank, or violating any rule of the police power which creates private damages and for which a right of action now exists in prac- tically all the states In many forms. We may reason, or argue, or apologize to the system or to the necessity for such laws as this in every form and by every means within our power, but the fact is that the concern which puts in motion those agencies which inure to the detriment of workmen ought to be held responsible sufficiently to re- quire it to exercise all of the precautions and diligence that are neces- sary to prevent any accident that can be prevented and to carry the cost of injuries to workmen on a fair and limited basis the same way as it carries the breakage of its machinery at the present time. By every rule of economy, morals and justification by law, this should REPORT OF EMPLOYERS' LIABILITY COMMISSION 209 be passed on as an overhead charge on the cost of production. It is so carried now In the cases where accident insurance is carried, where liability insurance is carried, or fire insurance is carried, or Insurance upon property Is carried and it can just as well be extended to men with proper limitations and safe-guards. This sort of legislation will fail in its primary purpose if its tendency be not to prevent accidents and the greatest method of preventing accidents is to place the liability in a certain way by compensation upon those who have it within their power to prevent the accidents. The shifting from tort liabilities from the employers in cases of negligence and from employes in cases of contributory negligence onto the state will not solve this problem. It is not right that it should be placed upon the state and the solution will never work out properly in that method. 4. As to the question of state insurance, all of the objections against taxation can be urged against that. Whether the paternalistic feature is exceedingly dangerous the countries in Europe that have had such schemes for a few years have had preparation in institutional govern- ment and institutional families that had made preparations that ours have not made. "We are an individual, rather than an institutional people. Paternalism has no place in our government in matters that can be otherwise controlled. Those in charge of these movements ought not to do anything to prevent the regulation in the most reasonable and rigid way of insurance companies of a private nature. Undoubtedly they are one of the evils of the present system, but again we come to the rule of regulation in proper manner, which is a function of the state under the police power, rather than paternalism, which is not a function of the state under our theory of government. A liability should be fixed, it should be certain, it should be speedy, simple, direct and well safe-guarded. The insurance should be so regulated that insurance companies cannot say one thing in coarse print and take it back in fine print. Prevention, again, is the primary object of this legislation. Security against waste on the part of the employers, against loss and heavy taxes on the part of the public, and in favor of prompt and com- plete payments to the extent given by the law on the part of the work- man. This means that the insurance must be clearly regulated, but any principle which is put into operation that undertakes to substitute pa- ternalism for regulation will not work out well in my judgment. In other words, the insurance should be curbed so that it cannot from any standpoint do an injustice to the unfortunate men who are dependent upon this scheme and this can be done and it ought to be done by the state in the passage of further means of regulation and security as a condition of allowing such insurance to be undertaken upon the part of any company. It is done in fire insurance now in most states and it can be done in this insurance just as well. When this is done, it will leave to the genius of private enterprise the power to solve the financial problems on the best and most economical basis as it U 210 REPORT OP EMPLOYERS' LIABILITY COMMISSION now does in fire insurance and our courts 'will be rid > of the present litigation to the greatest extent and much of the waste that now exists will he soon cut down. I do not believe it is possible for a state to enter this line of business in a paternalistic capacity and carry it on well. I do not think that has been the history of any state or any country that has undertaken it. I was in "Washington to attend a meeting of the Committee of the National Bar Association upon this question some time in March. A gentleman was there from Washington State. He was explaining their system and I had been friendly to the general scheme, so far as main- taining the idea of compensation is concerned, and had furnished much of the legal authority upon which the Attorney-General and those in- terested in the Washington case had written their brief and was, there- fore, not in position to take unkindly to what this gentleman had to say, but before he finished his talk he let drop the fact thajt their system was complicated and incomplete in that they had a large amount of money accumulated and yet could not re-adjust it from one fund to the other and therefore could not pay all of their claims in one or two instances — one that I remember in particular. And there isn't any way of getting out of this unless the impetus for thrift and economy and safety is placed upon every industry and upon each in- dividual in that industry, or prevention and economy, so far as those people are concerned will not reach the highest state. Unless the matter of insurance is regulated fully and completely under the police power, advantage will be taken by private enterprise as against the workman. Unless private enterprise is left to compete on these questions of in- surance so that under proper regulations the state and everybody in it may have the advantage of the impetus for profit, the greatest economies will not be used. • Unless the state confines itself to those matters which are properly within the police power, — the regulation of dangerous business, the regulation of the means of insurance, the regulation of prevention of accidents, rather than entering into the transaction of that business in the ' hope that by competition it can regulate them, it will be going outside of the police power and outside of the constitution in most states and outside of the best rules of economy and statecraft. In looking through Mr. French's article and without taking it up in detail, I notice a great deal of valuable stuff and you will permit me to speak generally, as I believe there is no point in there that we have not thoroughly considered. The classes of cases cited wherein the state has by public taxation taken up matters like deficits upon bankruptcy, and the regulation of taxation for sheep killing dogs, and poor and improvident families' and all that sort of thing have distinctive features •from this. The bank guaranty funds are more analogous to the postal service. Everybody, substantially, uses them, and the means there are simply to protect against the deficits after the private individuals have paid all that they can pay according to their legal obligations and an incidental taking of property is maintaihed for that purpose; but in this case the employers are not insolvent people and if they have suf- REPORT OF EMPLOYERS' LIABILITY COMMISSION 211 ficient property, there would be no necessity for applying that unless It be in a remote line of cases. The case of sheep killing dogs is one ■which has aroused a great deal of difficulty among farmers and many of the states have legislated upon it upon the theory that dogs often hunt in packs and it is difficult to trace the sheep killed to any par- ticular dog and that dogs are things which people have no right to keep any way, except by permission, and that when they become a menace to the community and they cannot tell which dog did the par- ticular damage, every fellow who keeps a dog might contribute to a general fund. The same thing is true of the saloon case cited in the Minnesota decision, and the poverty laws are likewise simply the pro- tection for the remnants of society which fall upon the general public by reason of the fact that there is no place that they can place an in- dividual responsibility. These exceptions do not exist in this matter and, therefore, there is no basis for resting paternalistic legislation upon that ground. REV. F. J. BRUNB OF ALTON. The efforts of the last General Assembly of Iowa to enact a law com- pensating the laborer for injuries received in the performance of his duty was certainly a step in the right direction. Too often employer and employe antagonize each other; frequently the manner of adjusting damages for injuries received increases the strained relations between capital and labor. Hence the serious efforts of all lands and states to find means of bringing employer and employe more closely together. It is time that the great State of Iowa fall in line with other states. True, Iowa is an agricultural state, and there may not exist the same cogent reasons for the contemplated legislation than in some other states; yet there are many thriving industries and growing manufac- turies that demand the enactment of such a law. The undersigned voices the sentiments of the St. Boniface Fund, a federation of German Catholic societies of Iowa, representng some 5,000 voters in all parts of the state, that the time has come to urge such legislation, giving the employe just and fair compensation for injuries received in the per- formance of his duty, without the long and costly process of the courts. Such legislation would greatly diminish the bitter feeling and strained relations, unfortunately too often existing between employer and em- ploye; it would hasten the fair adjustment of damages and thus pro- vide for the dependent family of the injured laborer; It would save the state and employer and employe the vast sums now spent in tedious court proceedings; it would above all bring into closer and more friendly relations the mutual interest of both employer and employe. Any thinking man must see the necessity and utility of the contem- plated legislation; in fact it would seem like carrying water unto the Mississippi to adduce more arguments for the necessity and utility of such a law. 212 REPORT OP EMPLOYERS' LIABILITY COMMISSION There can hardly he any serious question ahout the practicability of such legislation. Similar laws are working well in many countries and states both of Europe and America. Wtiy should it he especially dfficult to operate such a law here in Iowa, where conditions are at least not more complicated than in other states? Of course, in framing and operating such a law, the various parties benefited by such legis- lation, as well as the various degrees of hazard in the different in- dustries much be considered. As the state would be benefited by such a law, as well as the employers and the employes, all three, it would seem, should bear a part of the burden. The state would save the many costs of indemnity trials, since very often the costs are taxed against the county or state. The employers would save the big salaries of their "legal lights" often employed to resist claims for indemnity and too often to defraud the laborer of the just asked for compensation. The employes would also save the fees of attorneys to press their claims and conduct their cases. It would hardly be right to tax all the costs to the employers. The contemplated legislation would promote care- fulness in conducting the industries of the state. It would seem then that the state and the employers and the employes would exercise a greater care, if ALL THREE were to shoulder a part of the burden created by the new law. Besides, the various industries have certain inherent dangers connected with the operation of such industries, thereby inducing a greater or lesser hazard to the life or limb of the employes. The fund to be created by the new law must be accumulated by the FAIR AND PROPORTIONATE ASSESSMENT of the various branches of industries. If I were permitted to make any suggestion as to the division of the new burden, I should not wish to put the entire burden on the employers as some may desire; neither would I exempt the state from all liability in the matter. As indicated before, the state would save in many cases the costs of the indemnity trials. Now, to counteract this gain, the state should bear ALL EXPENSES OP ADMINISTRATION OP THE PROPOSED LAW. This would certainly induce the state to be more strict in tjhe enforcement of safety appliances and other precautions in the operation of the various industries. It would be interesting to know the costs of indemnity cases now Incurred by the state; and it is pretty safe to as- sume that the expenses of administration of the new law would NOT EXCEED the costs referred to. Under the proposed law the employers would have to pay a fixed and fair sum to the injured employe or his family. This amount would, to a very great extent, be made up out of the expenses which under the old law said employers are paying the attorneys conducting their defense and resistance to the claims filed. It is well known that the amounts spent in this manner run into the millions. If to these' millions the employers add the amounts at times paid to the employes, it is again safe to assume that such millions would be sufficient to com- pensate the injured employe or his family. Hence, it would seem fair to assess NINETY per cent of the liability fund to the EMPLOYERS, REPORT OF EMPLOYERS' LIABILITY COMMISSION 213 in proportion, of course, to the number of laborers employed and to the lesser or greater hazard of the respective industry. It has been said by some employers that a liability and compensation law would make the employes exceedingly careless, yes, that they would wilfully and recklessly expose themselves to immediate danger of losing life or limb. Such an assertion is gratuitous and only indicates that the employers making such assertion and charge, have a very low opinion of their employes. The instinct even, if the expression be permissible, of self-preservation would shrink from such violation of the fundamental laws of nature. But, as the employers under the law contemplated would save the attorney fees, etc., and in order to meet the above flimsy objections of some employers, the employes should be assessed TEN par cent of the fund to be created under the new law. This precaution would render the employe doubly careful, as he himself would have to pay in part for his injury. The burden thus proportionately divided would not fall heavily on any one, and state and employers and employes would combine in carefully conducting the industries of the state; a good feeling of mutual interest would be the natural consequence. Whether ALL employers and laborers should be included in the pro- posed law is a debated question. Some wish to include FARM and other common laborers; others would limit the new law, at least at the be- ginning to factories, railroads, and other dangerous industries. Careful students of the question seem to favor a law, NOT including farm and other common laborers for the present. As far as the undersigned is familiar with the industries of our state, a law NOT including farm and other ordinary laborers would be preferable. In the interest of our prosperous state, particularly in behalf of our honest laborers, the hope is here expressed that your Commission will be successful in fram- ing a suitable law to be submitted to the next General Assembly of Iowa. Personally, dear sir, permit me to thank you and the other mem- bers of the Commission for the kindness accorded me when in Sioux City. If, I can be of any further assistance to you or to the industries of the state, I am at your service. TRADE AND LABOR CONGRESS OP DUBUQUE. If it please your honorable Commission the • wage earners and me- chanics of the City of Dubuque, the men who eke out a bare living for their wives and children by selling their only stock in trade— their brains and muscle — submit to you this small missive for the purpose of ac- quainting you with our ideas on the question at issue: The Employers' Liability and Compensation of Injured Workmen. While we have no doubt but that your honorable body is trying to arrive at a just solution of this vexing question, we are almost certain that no State Legislature will ever be able to put a satisfactory law upon the statute book, treating both sides to this question in a just and fair manner. Our present laws dealing with the above subject have outgrown their usefulness and have become antiquated in our times of progress. Con- 214 REPORT OF EMPLOYERS'- LIABILITY COMMISSION -ditions on the economic field in our twentieth century can not he treated with eighteenth century remedies. The laws upon our statute books today may have covered the needs of those times — when our present; industries were partially unknown and partly in its infancy; when a workshop employing two to four men was considered large business — in short when nothing was known of our grand industrial system which -employs millions upon millions of mechanics and laborers. The most unjust and unreasonable laws of today are: 1. Hazard of Occupation or Assumed risk, 2. Negligence or Fellow-Servant and Contributory Negligence, and 3. The Law of Contribution. We will treat upon these three subjects together, since they are alike unjustifiable from- a common sense view point — always provided, however, that they are adjudicated solely from a common sense view. No worker of today has control over his fellow worker — he is hired to work and mind his otvn business — to deliver the goods, as the saying goes. He has no voice in the selection of machinery, in the erection of scaffolding, in the building of trestle ?work in bridge building nor in the overhead work in tunnels. He has but two alternatives: either to work or not to work. It is just as ridiculous for a court to assume, >iecause a ladder was unsafe, to say that this is contributory negligence because the other fellow built that ladder as it is laughable to say that the brickmaker is responsible because this brick building is falling down on you, gentlemen. It is as good a joke to say that because a railroad train hit a split rail and logically the rail maker is responsible as it is funny to claim that because a fly-wheel on a steam engine flew off the axle that the engineer is responsible and to charge him with contributory negligence. Assumed Risk is more of a tragedy than a serious question — we are assuming risks daily from our birth until the undertaker hauls some of us to the potter's field — but we certainly can't assume a risk for which the Creator has not intended us. We are supposed to earn our bread in the sweat of our brow — we can't be expected to assume any other risk but give to the employer the best there is in us, give him the time we hire ourselves out to him and help utilize his investment, which is dead capital the moment we refuse to work or sell our muscle and brain to him — we are certainly not giving the employer our very life to first exploit and then to take it 'in the bargain. Were such the case conditions would be worse today than in the slavery days — when the slave was injured and unable to perform work, the master was compelled to take care of the man's wife and children. If we are expected to assume a risk, as is expected of us today according to numerous court decisions, who will take care of our families? Laoor under our economic system can and will not compromise on the question at issue. The government, of which labor is the larger proportion, must protect the laborer against the encroachment on our REPORT OP EMPLOYERS' LIABILITY COMMISSION 215 inalienable right to sell our labor — the thirteenth amendment to the constitution of the United States prohibits the selling of lives. "Neither slavery nor involuntary servitude shall exist within the United States or any place subject to their jurisdiction." We consider the interpre- tation of the existing laws upon the subject at issue a crime upon man- kind and a direct contradiction of our written constitution. The opponents to this measure for the protection of the worker will say that a law of this nature will drive them out of business — maybe it will — but is business worth more than human life? The great ma- jority of industrial systems of today are insuring their help now and in case of an accident collect the insurance and — pocket the money. The insurance companies do the fighting in the courts through their hired lawyers, under yearly salaries, and the poor widow and orphans get in nine cases out of ten "what Paddy shot at." The lawyers eat up nine-tenths of everything in sight. Labor of today demands a law which will in at least some small measure recompense an injured workman, a widow or the orphans. We abhor charity — we expect the State to protect and take care of its citizens, the very men who constitute the state. Labor even demands more — we are a part of the very society which constitutes the state and therefore we are entitled to just as much consideration as for instance the postofflce employes and the war veterans who receive pensions ■ after serving society in one or the other capacity. Of course, we understand you gentlemen are not here for this purpose — your duty is solely to investigate and work out a plan by which both sides to the question can be satisfied. We demand an absolute abrogation of all restrictions preventing an employe when injured to receive a fair compensation as is the case now. It matters not what brought the accident about — it's a thousand to one chance that no sane workman will seek accident for the purpose of obtaining compensation — life is too dear to us and we love our family more than the almighty dollar. With us it is: keep body and soul together— the business system of today seldom has body, flesh, blood, heart or intellect. In closing we wish to say that we are not insistent that the employer must pay damages under all circumstances; but the. government must force the employer: First to throw such safeguards around his work- shop so as to bring accidents down to a minimum; second, to permit the employe to examine such surroundings and prohibit a discharge when the worker v^arns an employer of the unsafe condition of his workshop, factory, mine, etc. It is the state's duty to frame a law which will actually compensate fi worker for injuries received while performing work for the man or corporation which hired him at so much per. Such compensation must not be in the. nature of charity— it must be sufficiently large to protect the worker, the wife and the children from want for such time as the worker is incapacitated to again perform his duty. In case of death the survivors of the worker must be protected to such an extent as ■216 REPORT OF EMPLOYERS' LIABILITY COMMISSION to give every offspring a fair chance to prepare for the coming life struggle and without throwing the widow upon the mercy of charity or land her "over the hill to the poor house." As citizens of the state we are already paying taxes in one shape or other for the support of the government and we therefore most strenuously object and protest against any kind of a law that would compel us to pay even partly into a fund for Workmen's Compensation. We are selling our labor only — if the employer takes our life in pur- suit of greater dividends and longer joyrides he must pay for that life he takes without our permission. The cities are made to pay every day for injuries received on public highways on the presumption that it should have seen to the safety of the pedestrian, — on the same pre- sumption we are entitled to compensation for injuries received while w© are delivering what we sold to the employer: namely, our brains and muscle, or, if you please, labor. MATHEW GORMAN OF DAVENPORT. Members of Davenport Lodge No. 388, International Association of ' Machinists, through the undersigned, submit to you for consideration the following suggestions: Compensation act should apply to employers having in their employ- ment five or more persons who elect to come under its provisions. Every employe is deemed to have accepted unless he gives notice to the contrary. If an employer elects not to accept the act he is deprived of the common defenses of assumed risk, fellow-servant rule and con- tributory negligence except that the latter shall be considered by the jury in assessing the amount of recovery but not barring him entirely from damages. Liability for death $3,000 if the deceased leaves persons dependent upon him. In case of total incapacity the compensation should not be less than $6.00 or more than $15.00 per week when the injured per- son has dependents, to be continued during the dependency. Payments to be due and made promptly after the first week. Commutation : A lump sum to 'be given in lieu of all permanent injury claims shall not be legally acceptable until one year after accident, giving the injured person time to recover from the shock and consider well all the cir- cumstances. Provisions should be made to protect citizens of Iowa employed in the state by nonresident employers. On the refusal of an employer to pay a claim arising under a com- pensation act a suit should be entered against him by the state re- lieving the claimant of all expense. This course should be taken be- cause of its effect on the employer in showing him that the employe shall not lack support and financial aid in prosecuting the claim to the ■end. REPORT OF EMPLOYERS' LIABILITY COMMISSION 217 Young persons, such as apprentices who have definite expectations, of advancement should not be restricted to minimum compensation. An industrial accident hoard should he created by the act to which disputes and controversies concerning compensation shall he submitted. The Board should have in its employ an attorney and physician or surgeon at sufficient salary, and no permission to engage in private practice. Employes of the state and its political divisions should be subject to the compensation plan without choice. Private contracts or agreements contrary to a compensation act should he null and void. All expenses for administration of the Board should come from gen- eral taxation and compensations should come from a fund levied by the state on employer and in no case should employes be required to con^ tribute into any compensation fund. E. D. BURKE. In the painting craft as it is necessary to work on scaffolding and ladders the most of the time endangering the lives of the workmen,, it is necessary to have some law amendment to protect the employe in such a way that he will be held in no way responsible for any accident or death of fellow workmen. But all responsibility be on the contractor or the owner of the building they are working on and in case of death or disability the sum of five thousand dollars ($5,000) be paid to said heirs, and that he receive of all pay and doctor bill for time he is- laid up. JAMES H. SELDEN OF MUSCATINE. I think the subject of your committee is of the greatest importance to the building interests of the state as well as to the Iowa working men both laborers and mechanics. Under present conditions I, a con- tractor, do not know my legal responsibilities or liabilities to my mea that may be injured while in my employment. I am at the mercy of a tricky lawyer or an unscrupulous and designing workman. During my 25 years contracting I have had very few injured employes, only five men, three of them were men that were honest and fair men and did not ask aid or an indemnity. Two were dissipated men that would have made me pay heavily for slight injuries if I had not had positive proof of their being previously hurt and dissipated before they came to Work for me. Thus, you see while I have been fortunate I have my experiences that tell me a clearly defined law relative to my responsibility is an urgent demand. First I believe that the law should be clear and emphatic in making every employer of men, women or children provide every possible safeguard to the life, limb and health of the employe. Second, that any contractor neglecting to do so should be held both financially and criminally liable; punishment to be in proper degree to the amount of neglect of the employer and degree of injury to employes. 218 REPORT OP EMPLOYERS' LIABILITY COMMISSION Third, that the state should have a commission or a department of the state laborers' commission to receive reports of such neglect when properly reported and sworn to, whose duty is to see that the injured person is properly protected and paid for his injuries, the State prose- cuting the offender and the one Injured to receive the amount of prose- cution. Fourth, while I am in favor of the ahove regulations, severe as they may seem, I am not In favor of the employer assuming any responsibility beyond that of properly providing every protection pos- sible. I believe the law should not take away' from the employe his personal responsibility. Let him bear his share of the dangers by being made responsible for his own carelessness and neglect and above all his sobriety when at work or so conduct himself when not at work as not to injure his physical and msntal strength. The employe, and Jiis associates are responsible to each other by their conduct and not make their employer responsible for their injuries of themselves or of each other. To illustrate the point, A and B working for Mr. C. on a building as hod carriers. A was drunk one night and went to work next day. At the top of the building he let his hod of brick fall on B, who was crossing on the first floor, and B was badly injured. Now, I don't think Mr. C, the contractor, was in any way liable for the Injuries to B. A, when he went to work, was apparently sober and had worked three hours previous to the accident all right; whether drunk or sober I believe A and B both assumed responsibility of each other or fellow workman's liability and responsibility in guarding each other and them- selves against injury and I believe A by law should be held criminally liable for the injury he did to B. This did happen while I was an ap- prentice learning my trade. A was discharged and B taken to the hospital and out of kindness of heart, but no legal obligation, Mr. C. did help pay expenses of B. Now, a word about indemnity insurance. "We now insure against accidents, -that is, the indemnity company promises to defend any claim for damages in the courts and if we are prosecuted and beaten at law they have to pay the loss up to certain amounts. I believe these com- panies should not be allowed to write indemnity insurance unless the policy read certain rates classified by the state law for different kinds of injuries received or in case of death not a given amount, say $3,000 or $5,000, according to the earning capacity of the employe and as I have said the State Labor Commission bureau should collect from the' indemnity company for the injured employe and not as now through the civil courts. Take the case of collection out of the lawyers' hands. This, in brief, is my idea of what the new law should embody; clearly defined protection to both the employer and employe yet the state law to regulate indemnity insurance companies and cost of collections by Labor Commission and not by local lawyers and above all quick settle- ments of honest claims. REPORT OF EMPLOYERS' LIABILITY COMMISSION 21* J. A. MEARS OF DES MOINES TRADES AND LABOR ASSEMBLY. As a representative of the Des Moines Trades and Labor Assembly,, appointed by tbem to appear before you and present some reasons why the laws affecting the liabilities of the employer for death or accident,, of or to the working men of this state, should be changed, I beg to state that I believe a law should be enacted by our State Legislature, which would provide that the burden of maintaining the progress as well as. the delinquency of manufacturing and merchandising, and the developing of the various industries of the state, should be borne by each of such industries. It seems that the progress feature of the manufacturing: and developing of the state has been taken care of either by court made laws or by the statutes of the various states as well as our state, and the burden of delinquency is now shifted on the people either as a com- munity or as individuals, or relatives of the affected or injured person. Our present law contemplates complete financial recovery but con- tributory and comparative negligence decisions have abridged and -almost abrogated the true intent. The fact that persons injured are often alone at the time of the acci- dent and even when not alone, the witnesses are either interested on one side or the other, or excited, making their evidence somewhat uncertain, which makes the chances of recovery indefinite and uncertain, and un- fair to both the employer and employe. The experience of long years. of litigation under the present plan, shows the inadequacy in handling cases of personal injury to the satisfaction of the community. I need only to cite to you, the vast number of cripples which our system of industry has made and who are now either the objects of public charity or the objects of charity of their friends or relatives. A great many of the personal injury cases which are prosecuted in our courts, are prosecuted by the injured person through attorneys and for a fee varying in amount, in accordance with the desires and wishes of the attorney who prosecutes the case, or his agreement with the injured party or heirs or representatives. I believe this practice is not for the best interests of either the employer, the injured party, or the public in general, as it tends to do great injustice to all of these and often results in excessive damages in some cases and grossly inadequate compensation in others. An attorney employed in such cases Is active in his own interests and seeks to recover all he can possibly make a jury believe his client or the injured party is entitled to for the act or omission complained of. The client is often too poor to employ counsel and pay the retainer fees in advance, mora especially since the expense occasioned by the injury or accident complained of, has in- creased his expenses, or depleted his financial ability. A contingent fee also may be a blessing in these cases, but it does not get the money where it properly belongs or where it will do the most good to society at large. These cases are often taken on a percentage varying from 25 to 75 per cent for the attorney who transacts the business and ths injured man gets the balance, the employer or casualty company, which ever it may be, is often obliged to pay an excessive judgment or to 220 REPORT OF EMPLOYERS' LIABILITY COMMISSION subject the litigant to review on appeal, a possible reversal or retrial. During all the time these processes have been goring on the injured party or his family has been without support and in many instances a charge upon the county or object of charity. A law should be enacted with a provision included which should pro- vide for immediate beneiits contemplated by such law. Our people now pay an amount equal to whatever these compensations might amount to in various ways. The taxes which are being paid by the people maintain the poor of this state, is one item which might be included and add to this the lack of earning capacity of persons thus injured and then the expense of the litigation including salaries of various of- ficers in the courts. I believe this expense to be unnecessary and if properly expended and put where it belongs, would maintain a depart- ment in our state where this fund could be distributed and the law administered in a way to be of great benefit, not only to the injured party but also the industries of our state. The money that Is now going to New Jersey or other states where casualty companies have their headquarters, is a positive waste. The percentage of the amount paid to these companies which is used by them for their maintenance, getting of business and such other expenses I am informed varies from 33 per cent to 75 per cent of the premiums they receive. If this is true and they are still able to accumulate such vast wealth it seems that a provision could be made by our state which would hold this money in Iowa for the benefit of the ones who create it by their labor. If this can be done you will readily see we will have both the money and the cripples while now we have only the cripples to take care of. It would only be fair to the community, by community I mean the tax paying public, to have it protected by thus retaining the 33 per cent to 75 per cent of expense necessary to develop the accident and casualty in- surance business and give this to the injured person and thus protect Iowa against the abuses which they develop under the present system. To name these abuses I believe they affect both the employer and em- ploye and possibly the attorney fee; the additional charge upon various communities occasioned by accident; the long and slow process which is required by the court to realize, even in case a recovery is had; the ability of the casualty company and those who employ large num- bers of men to eliminate evidence material to the case, and many other abuses could and would be changed if we developed a system whereby the injured party or those dependent on him, would, under proper con- ditions and provisions, be provided with actual necessaries and charged to the industry which should carry the expense rather than the com- munity. The merchant adds freight and rent and other expense to his goods, in fixing his price; the contractor adds cartage, etc., to his price; the railroad company adds items concerning same, and the manu- facturer and all of them adds all of this and casualty insurance as well, which goes out of this state and is used to fight damage cases to make paupers out of our citizens and not to pay them either the liability or compensate them for the time lost, caused by the injury. REPORT OP EMPLOYERS' LIABILITY COMMISSION 221 When we get to the question of compensation, however, we have a much more complex one than that of mere liability for death. I believe that a compensation law, providing for a payment by the manufacturer for industry from $1,000 to $3,500 for the death of any one engaged in his employ would be much better for all parties concerned than the present uncertain and indefinite plan which has been handed down to us from our ancestors. We must bear in mind that we are now in a new age. Things are done different now than they were when these laws were made, upon which our decisions are now made, and we should meet conditions as they are by enacting new laws which will do the greatest good to the greatest number rather than by trying to force the conditions to fit the law. It would be hard to fix an absolute table of damages for injuries received because circumstances in and surrounding each case vary greatly in regard to the number of persons affected by the injury as well as by the nature of the injury itself. One injury may not keep a person from his work for any great time immediatoly following the accident but the same may result in his life being shortened for any number of years up to 10 and 20 and still not completely or even greatly incapacitate him at the time or within a few months following the time of the accident. I know of a case which happened in Des Moines of a young man falling in construction work. He was in the hospital two weeks, got out on the advice or the doctor, felt very good and settled his case with the company for which he worked and is now unable to earn a living in any way. The doctor in this case was employed by the company for which he worked. It needs no stretch of imagination to charge that this physician treated the injured party with the intention of making him feel that he was not injured and misleading him into an unfair and unjust settlement of his claim. With a proper law compensating men for injuries re- ceived in the line of their employment and having the employment or industry pay that expense would have made such a condition as above recited impossible for he would have known that he would have been taken care of in any event. It might be argued by the opponents of this plan, that the enactment would tend to increase the negligence and decrease the care each work- man should be required to use and exercise in order that the greatest amount of work should be done in the best possible manner but I believe that the fact or assurance that the man or his family will be taken care of in case of an accident befalling him in the line of his employment would increase his interest as well as quality and quantity of his work in the particular industry in which he might be employed. I believe a law should be enacted wide enough in its scope to qover all the trades in which any considerable number of men are employed. The manufacturer and other workmen than the one injured should be protected against the wilful misconduct of any workman. And the law as laid down by the decisions of our courts regarding the assumption of risks and the fellow servant rule should be clearly and specifically defined. Under the present system a man practically sells or rents 222 REPORT OF EMPLOYERS' LIABILITY COMMISSION his person to an industry and takes all the chances so far as his life is concerned with but a remote chance to recover in case of injury. It is a gamble, a bet, that he returns to work la the morning or to his family at night. There is one feature, however, of such a law which should be carefully written and considered and that is that it must be so arranged that it must not be an additional tax upon the employe for by so doing it will serve as a reduction in wages. The particular industry affected should pay the "rent and freight" and a fixed rate in tho particular lines clearly defined and tabulated such as the mine, railroads, building lines, manufacturing establishments and other classi- fications and the sum paid by each should be determined and fixed. The' application of such a provision should, no doubt, in Iowa be made to apply to all employers of more than three persons, not including members of his family who reside with him. It should also provide that the Injury complained of should be in the line of the business of employer and for which the employe was employed or requested to do. A provision should be included no doubt, which would make it un- lawful for an employer to exact or demand of an employe a waiver of the legal rights contemplated in the law at any time before the In- jury. I believe no such limitation should be placed upon the right of the employe to adjust such difference after the injury has occured. There should also be a provision included that would require the report of an accident to be made directly to the custodian of any fund that may develop or to someone in charge of the department which would have the administration of this law in hand. It will be readily seen that if the provisions contemplated in this suggestion be enacted that it will take from the trial of cases several of the questions which were formerly questions of fact for a jury in the trial pf cases and might be considered an abridgment in the right of trial as provided in the constitution but care should be taken to perfect and include the right of either party to show any court under this law the fact of the in- jury and whether or not it happened in the usual line of employment in the industry in which the employe was employed when injured. There are various degrees pf liability in damages and the nice distinc- tion drawn by our courts have shown that some legislation is necessary to meet the advance of civilization in order that the same perfection may be attained in this branch of life as is being attained in the pro- fessional and business life. The system affecting the rights of parties for damages in case of injury to his person is changed from the time and condition that all rights for damages would die with the person in- jured to the present arrangements whereby any person affected might sue and recover what damages they might claim or prove as a result of the injury. The courts have made this recovery doubtful and the law enacted should provide that employes and those dependent upon them should be protected without the necessity of long drawn out litigation with results always in doubt both to the employer and employe. In Illinois covering the period of time investigation was being made by employers' liability commission there were 614 cases in all lines, 14 of which were in court at the time of the report, 111 pending settle- REPORT OF EMPLOYERS' LIABILITY COMMISSION 223 ment, 281 adjusted out of court, possibly on contingent fees as mentioned "before, and 204 reported as absolutely no recoverment. This shows the commission the necessity of such a law for the protection of so- ciety at large. The percentage of recovery is too small and tha number of injured persons too great to allow this Important feature of this controversy to go by unnoticed. The courts, however, reverse the rules previously held that the acts of the master were the acts of the servant and now hold that the acts of the servant are the acts of the master, especially when it affects the servant. We must- realize too that a different rule should be applied to strangers and visitors which affect the law which should be only those who are regularly employed in the line of industry or particular trade affected. As to the constitutional provisions which might be reflected or af- fected in such a law I have only one suggestion and that is, that if ths constitution of this state or of the United States precludes the enact- ment of such humanitarian law as is contemplated in your deliberation, the constitution as well as all special enactments should be made to conform to the people's wish and to keep in touch with whatever is for the best in humanity. In other words, if the constitution is wrong and does not meet the present day needs it should be changed or amended in the manner provided by law in order that it might conform to what is best for civilization. A report of the Employers' Liability Commission of the state of Illi- nois and also the report of the committee regarding legislation regu- lating the liability of employers of the state of Connecticut, 1909, and the hearing before the Employers' Liability and Workmen's Commission of the U. S. Senate, Vol. 2, being the briefs submitted upon various questions affected, are referred to for the purpose of making them so far as they affect our commonwealth, part of this statement. I believe that on the whole the time is now here when such a law should be en- acted as will protect the community against the uncertainty which has developed in the industries for the protection of the workmen who in fact develop all the strength as well as the wealth of such industry. The words and phrases in such a law should be such as would admit of no double meaning or false construction and should be so defined and clear and complete in every application that it will need but a small amount of work for the courts to determine. In other words, it should be self-explanatory. The vast number of accidents of various degrees of importance which have occurred in the state of Iowa and of which no report has been made, make it quite impossible to cite the number of cases wherein accidents have occurred and no recovery had, and this because of the system now employed. A search of the court records could not give accurately the number of such cases because of their being adjusted and no report made, so that the reference made to the reports of the other commissions may be questioned, especially in view of the fact of that large number of cases have occurred wherein no report has even been made by the injured parties to say nothing ,of the employer. Provision should be made in the law to make it a mis- 224 REPORT OP EMPLOYERS' LIABILITY COMMISSION demeanor for an employer or man to fail to make a report of an injury to employe and fix such time and place and proper person to 'which such report should be made. Without assuming to enlighten the Honorable Commission as to the particular parts of the law contemplated, I desire to reserve an op- portunity to be heard orally or some of the other organizations repre- sented may be given this opportunity. I trust that I have made the necessity apparent to you and that you will work out a law which is fair to all and one which will not in any way hamper the development of the state either by imposing hardships upon industries or by im- posing pauperism upon workmen. Thanking you for the opportunity of your consideration at this hear- ing, I trust that you will consider the interests of all who have taken, part and make the application of the Biblical admonition, "Whatsoever ys would that men should do unto you, do you even so unto them," a, part of your deliberation in framing this very important statute. Finally I wish to state to your Commission that there has been no intention on the part of anyone associated with those I have the honor to represent in this capacity to take part in the tirade of abuses which has been heaped upon the courts regarding their decisions, as I believe that such abuse is unjust in most cases and unfair to those who have presided with honor and ability in the various courts of our e^untry. Persistent nagging at the government or instrumentalities through which the government is administered tends to anarchy and we should all strive to bring about those conditions of life which make it easy to live right and exceedingly hard to live wrong. CHAMBERLAIN MEDICINE COMPANY OF DES MOINES. It is not convenient for me to appear before your Committee but will write you and presume this will do as well. It seems to me that the trouble with all of these laws is that they are made for the benefit of the lawyers more than for the benefit of the person injured. This is well illustrated by a story which appeared in the newspapers some months ago: An Irishman was going by a building in course of construction in Boston. Owing to the carelessness of a workman a brick-bat fell down and hit him on the head. He was seriously injured and was taken home in an ambulance. A few days later when he was somewhat improved an attorney, a friend of his, sent him word that he would like to handle the case for him and he was told to go ahead with it. He had recovered and the matter was almost forgotten when his friend, the lawyer, came to see him and handed him four crisp $100 bills. As he was a poor man he was very much pleased with this, but it occurred to him to inquire: "How much did you get out of them, anyway?" The lawyer's answer was $2,000. This led the Irishman to inquire: "Who was it that was hurt, anyway?" REPORT OF EMPLOYERS' LIABILITY COMMISSION 225 Almost every employer of labor for his own protection takes out acci- dent Insurance and wlien an accident occurs he leaves the whole matter to the insurance company, and they will not pay out a dollar except at the tail end of a law suit, so that the injured man gets little or nothing at the time when he most needs it. After he has recovered and got back to work again and does not really need the money, his attorney may bring him in a small portion of what he has collected. Now it seems to me that this is all wrong and unnecessary. The only proof required of the laborer should be that he was in the employe of the man. As to whether there was any contributory negligence or anything of that sort, should have no bearing on the case. The amount paid should be paid each week or each month just the same as his wages had been previously paid, and should be paid as promptly as his wages. Failure to pay .this should incur a penalty of sufficient amount to insure prompt payment. This will be no great hardship on the employer as he will take out in- surance the same as he does now. The only difference . is the insurance company instead of paying the money at the tail end of a law suit will pay it promptly each week as it should be required by law. Of course the insurance would cost something more. Another thing: It is a serious mistake to have a man get a large amount of money in a lump sum as in that case his attorney is going to get a large share of it, and more than likely he will waste the greater part of the balance. It should be paid each week or each month the same as his wages have been paid. Another point — the law as it now stands gives opportunities for big damages where no big damages have been sustained. You have most likely noticed persons who claimed to have been crippled for life quickly recovered after the damages had been paid. The Chamberlain Medicine Company had a case of that kind except that no damages were collected when they won the case in court, it soon turned out that no serious damage had been sustained. Before that it was claimed by some of the most prominent physicians in Des Moines that the man was crippled for life and that he would before long lose the use of one hand. If they were honest in this claim they were very much mis- taken. The city settled a damage suit by paying $2,0'00 or $3,000 and the in- jured party quickly recovered as soon as settlement was made. Now, if this amount was payable weekly until the injured person recovered, and was not so great an amount as to make it an inducement for them to re- main crippled for life, it would be better and more just for all parties concerned. If the new law to be enacted is to be principally for the benefit of the attorneys, it should be so stated in the law and th* people should so un- derstand it. I do not believe, however, that your committee has any such intentions and trust that you will be able to formulate a law that will be 226 REPORT OF EMPLOYERS' LIABILITY COMMISSION for the benefit of all people concerned, and espcially that injured persons may receive the amount due them without any need of going to law to recover it. ARTHUR E. RAPP OP COUNCIL BLUFFS. Under the present conditions almost all employers purchase insurance to relieve them of any liability which might be incurred in the conduct of their business. Unfortunately the companies writing such insurance seem to think that it is more profitable to resist such claims than to grant the relief intended. The result is that the unfortunate person who meets with an accident receives no relief and our courts are cumbered with much expensive and unsatisfactory litigation. Any. enactment relieving these conditions would be beneficial to the people of the state. In regard to the nature of the system of compensation a study of the laws now in force in other places reveals the complexity of the proposi- tion. However, this much is evident: That an employe sells and re- ceives compensation not only for his time and skill but for the risk in- curred and the ultimate consumer not only purchases and pays for the finished product but also for the risk incurred in Its manufacture or marketing. As these charges for risk are now made by and through the employer it would be but natural that they so continue and that the em- ployer divert the money which he now receives from the consumer for risk incurred toward a fund for the compensation of those unfortunate enough to meet with injury while acting as employes. It seems to us best that the state should assume the office of operating this relief measure as it probably would be best controlled in this man- ner and also avoid any friction which might otherwise arise between em- plyer and employe. By requiring the employe upon accepting employment to fill out a blank stating the nature of his employment an^ the name of his employer and then assessing the employer according to the number of his employes and to the degree of risk peculiar to his business and finally leave the granting of relief to a commission or commissions appointed by the gov- ernor, seems to us the best and simplest method of gaining the desired end. We can see no reason why the employe should be required to contribute to this fund. "What is desired is compensation in case of accident over and above any wages which he now receives and not a form of insurance which he be required to maintain to protect himself. BLUFF CITY TYPOGRAPHICAL UNION OF COUNCIL BLUFFS. Bluff City Typographical Union, No. 203, herewith respectfully submits its members' views on the Liability Laws to be passed by the Iowa legis- lature at the next general assembly. We believe that the intent of the law is to protect the working man from accident as much as possible, and to do this we believe that the em- REPORT OF EMPLOYERS' LIABILITY COMMISSION 227 ployer should pay the losses, and not the employe, as in the latter case, any employe could take out accident insurance with the money he is as- sessed, or stand the loss himself, which would not be different from that which he has been doing before this law was passed, and would therefore practically make the law ineffective in intent. We believe that if the employers have to stand the expense of accidents, they will do all in their power to put in safety devices and otherwise pro- tect their employes, which they would otherwise not do if the employes had to be assessed for a fund with which to pay these losses. We do not believe that any man or employe would wilfully contribute to an accident that may possibly maim him for life, and therefore, we do not think that he should pay for that which is, in the majority of cases, due to contributory negligence on the part of the employer in not putting all possible safeguards around his employes just to save extra expense thereof, which he certainly will do if he believes he may have to pay dam- ages for an accident to one of his employes. Be It Therefore Resolved, That we respectfully request your committee to use all means within your power to have the intent of the law ful- filled by putting the liability on the persons or corporations to which it rightfully belongs and to not cause the employe to have both the expense and distress caused by an accident for which he may not be at all re- sponsible. JAY C. MEAD, I. B. B. W. OF DAVENPORT. I was present at the meeting held in Rock Island, 111., by the Employ- ers' Liability Commission of that State, and spoke with others before that Commission. It was my understanding at that time that that Commission would recommend that a law be passed, placing the employers' liability in the case of the death of an employe at $3,000.00 or in the case of being permanently disabled at a sum equal to 4 year's salary. The existing laws of that state at that time would allow the heirs of the deceased to sue for a sum not to exceed $10,000.00. Very rarely has this sum ever been given in a verdict, and then but half or even less than that has ever reached the deserving widow and children. In fact the aver- age received by the dependent ones is I believe between $500 and $700 after the cost of litigation has been deducted. The employer was a large loser by this system of settlement as he had to pay the full amount of the judgmenj; rendered against him, and for this reason a cash payment of $3,000 paid 'direct to the heirs was considered a good thing for both the employer and the employe, as it cut down the amount the employer had to shell out to satisfy the judgment against him and it raised the amount to the heirs over the amount which has been shown to have been the average received after passing through the courts. The working men of these three cities (which to us are as one city) which appeared before that commission, contended then as I contend now that a life of a man was valued too low at $3,000 and that the liability should have been placed at $5,000 instead of at $3,000, as it finally was when the law went on the records at Springfield, 111. 228 REPORT OF EMPLOYERS' LIABILITY COMMISSION In support of the contention that the liahility in the state of Iowa should be placed at no less than $5,000 I wish to quote to you from a clipping from the Davenport Daily Times of March 5, 1912, which shows how eager the big corporations are in the state of Illinois to accept the liability law there, which only calls for $3,500 and to accept it before it is amended to be something that is too strong for them to stand. The Moline Plow Com- pany of Moline, 111., through its representative at the Illinois Manufac- turers Association accepted the Employers' Liability Law of that state on the ground that it would be a big saving to the manufacturers over the old systsm of recourse to law. CONVENTION OF U. M. W. OP A. Des Moines, Iowa, March 18, 1912. To the Employers' Liability and Workmen's Compensation Commission, Greeting: Whereas, the number of killed and injured workmen in the United States reaches the startling number of 536,000 annually and whereas our present liability laws offer no protection whatever to 70 per cent of the number, therefore be it Resolved, By the fifteenth annual XJ. M. W. of A. convention assembled that we favor a workmen's liability and compensation law that will furnish relief to all and when such law is passed we favor the administration of such relief by the state. Signed, Robert Hill, James Archibald, Lloyd McCarty, W. B. Doods, John Whits. Indorsed unanimously by the fifteenth annual convention. Signed, Frank Cameron, Secretary. THOMAS D. FOSTER OF OTTUMWA. For many years I have been convinced that the working people are carrying more than their share of the risks belonging to the several oc- cupations in which they are engaged; contributory negligence, fellow- workmen's carelessness, non-observance of rules are all applied too severe- ly against them in estimating damages sustained by working people through accidents happening them while engaged in their regular duties, thus making it necessary to provide some relief by legislation that will be at once just to them and the employer. It must be evident to all parties in interest, that such legislation should to commence with, be of a conservative character, seeing that it is in a measure an unexplored field in the United States, growing largely out of the State and National Constitution (conditions unknown in European Countries) thus leaving REPORT OF EMPLOYERS' LIABILITY COMMISSION 229 the way open for progressive legislation based on our own experience, rather than enacting laws so radical that an injustice is. done both parties, and calling lor modifications in the law with its attendant un- friendly spirit. In a general way the Ohio law appeals to me, providing a fund contributed to by both employer and employe, the latter carrying about 15 per cent of the cost. The act should be so drawn as far as pos- sible to give the injured employe the full sum paid out by the employer, as the employe suffers considerable loss under the operation of the pres- ent law on account of employers being compelled to resist claims made by the injured through their attorneys, the employers having good reason to believe, based on experience that in a majority of cases they are being imposed upon. The presentation of , the case made before your Honorable Commission by Mr. G. F. Heindel in Ottumwa, meets my hearty approval, covering as it does so clearly and fairly all points as apparent at this time connected with the movement. The spirit shown by the representatives of both the employed and employers at Ottumwa, was friendly and fair, and if it is continued in the same amicable way, a law can be enacted that will work to the benefit of both sides, and I sincerely trust such may be the case. NATHL. FRENCH OF DAVENPORT ON CONSTITUTIONAL AND LEGAL PHASES. (For Judge French's oral argument see report of hearing at Davenport.) The writer felt honored by the invitation of the Commission to present an argument upon the constitutionality of the statutes designed for the compensation of employes injured by accident in the course of their employment.. He presents the following argument, together with some suggestions which the invitation of the Commission permits him to make. QUESTIONS FOB CONSIDEEATION. Has. the legislature the power to provide for compensation to em- ployes accidentially injured in the course of their employment, irre- spective of negligence on the part of either employer or employe? If so, may it provide this compensation by imposing a direct liability upon each employer in favor of his own employes? May it accomplish this result by using the power of taxation to create a general fund for the compensation of employes generally, excluding all other remedies? To answer these important questions a consideration of the theory of our constitution is proper. THE AMEKICAN CONSTITUTION. The American written constitution is unique in the whole history of government. The ancient concept, as exhibited in Greece, Rome, and other countries, was that the citizen derived his rights from the state. Accordingly so far as the citizen, individually, was concerned, a written constitution for the protection of inalienable, individual rights was 230 REPORT OF EMPLOYERS' LIABILITY COMMISSION not only unnecessary but also inconceivable. When the American con- stitution appeared the idea had become common that the individual, as such, had certain inalienable rights, which should be respected by the state. This idea was put into practical application by the people agreeing upon a written constitution for the conduct of the people individually and collectively, defining in more or less general language the inalienable, individual rights, and likewise defining the powers of the state, and prohibiting their exercise in violation of the individual rights. Inas- much as the constitution provides for the exercise of the powers of the state through executive, legislative, and judicial officers, and in as- much as there may be danger that they may transcend their powers to the impairment or destruction of the individual rights, the power by nec- essary implication, when not directly given, lies in the judicial depart- ment to decide whether this has been done, and to protect, to the extent of its powers, the individual in the enjoyment of his rights. EIGHTS OP INDIVIDUAL. According to Guizot, in his History of Civilization in Europe, 14 Ed., page 61, we owe the conception of personal liberty to the Germanic tribes. This conception was highly developed by the Anglo-Saxons after their conquest of England, and reached fruition in the American con- stitution. It was originally probably more a passionate feeling on the part of freemen than the abstract thought which it finally became. For a long time it did not prevent slavery in England, but as the race grew in culture the feeling became an abstract conception, finally arising in popular opinion to the dignity of a great principle applicable to all, and slavery waned and finally disappeared. Then it was held by the court, when a slave was brought to England, that slavery was contrary to the common law, although no act of Parliament had abolished it. This same idea of individual rights is exhibited by the great charter wrung from John, which placed a restraint upon the arbitrary and unjust acts of the King. It did not, however, succeed in placing a restraint upon Parliament, though at one time the dicta of judges, and the decision of one case by Lord Coke went so far as to hold acts of Parliament invalid when against "common reason and right." Dir. BonUam's cases, 8 Co. Rep., 118a. The decision was not followed in England, and Parliament continues to be the supreme power, however arbitrarily it may over-ride the in- alienable rights of the individual. In our early history a tendency was shown to follow Lord Coke's noted decision. Thayer's Oases on Constitutional Law, Vol I, p. 48. Ham vs. Claws, 1 Bay (S. C), 93. Cam.p vs. Rogers, 44 Conn., 291. In this country in framing our constitutions, we proceed on the theory that these individual rights are inherent and inalienable, and must be observed by the legislative as well as the executive department. Thus REPORT OF EMPLOYERS' LIABILITY COMMISSION 231 the constitution of Iowa, in its first article says: "All men are, by na- ture, free and equal and have certain inalienable rights, among which are those of enjoying and defending life and liberty, acquiring, possess-? ing, and protecting property, persuing and obtaining safety and happiness;" and also, "no person shall be deprived of life, liberty, or property with- out due process of law." A similar provision in regard to due process of law is contained in the fourteenth amendment to the Federal con- stitution and controls action by the states. By our history, by our descent from the Anglo-Saxon race, by our heritage of the common law, including Magna Charta, by the express language of our written constitutions, state and federal, the protection of individual rights is of primary importance. EIGHT OF INDIVIDUAL QUALIFIED BY EIGHTS OF OTHEB. INDIVIDUALS AND SOCIETY. Unrestrained personal liberty is only possible when the individual never comes into contact with any other human being. In all social organizations, however crude, correlative rights and duties exist on the part of the individual, regarding his conduct toward other individuals and the tribe or state. By virtue of the common law and legislative enactments a great variety of such rights and duties existed, together with remedies for their enforcement. These duties of course limit to some extent the personal liberty of the individual and his right to proper- ty. The American constitution recognizes these duties and rights and conferes extensive powers upon the state with respect to them. The con- stitution is not a code of laws, but, expressly or by implication; continues in force the common law as it existed in the state. This continuation of the common law prevailing at the time of the adoption of the consti- tution is not mandatory, and does not prevent the state from making changes in rights, duties, and remedies. If these duties, rights and remedies were preserved inviolate, society would be confined in a straight jacket. Improvement and growth would be impossible except by amend- ment of the constitution. Before pursuing further the power of the state to aid the social evolution, let us take a closer survey of the con- stitution. SURVEY OF CONSTITUTION. The typical American constitution, like that of Iowa, in addition to the provisions already mentioned, relating to the inalienable rights of the individual and their protection, contains many specific provisions, prescribing the structure and machinery of the state, such as the division of Uie government into the executive, judicial, and legislative d/apartments, the officials who are to exercise the functions of these de- partments, the mode of their selection, and the territorial partition of the state into counties, etc. An important specific provision regulates the manner of amending the constitution. Other specific provisions relate to individual rights, such as the prohibition of bills of attainder, ex post facto laws, and the impairment of contracts and affording to persons 232 REPORT OF EMPLOYERS' LIABILITY COMMISSION charged with crime the benefit of counsel and -trial by jury. Still other provisions, more or less general, give to the state those powers necessary ■ to the protection and growth of society as well as those necessary for the support of the stalte government. Thus the state may condemn private property for a public purpose, upon making just compensation. It may tax persons and property for public purposes beneficial to society, as well as for its own support. As has already been indicated it may change old rules of conduct and establish new, providing therefor new remedies.. APPARENT COJS'FLIOT BETWEEN BIGHTS OF INDIVIDUAI, AND OP SOCIETT WHAT MAY AND WHAT MAT NOT BE DONF. BY THE STATE. From the foregoing brief survey of some of the principal provisions of the constitution it will appear that the right of the individual to liberty and property and the right of the state to prescribe his duties to other individuals and to the state apparently overlap each other, producing in their exercise a conflict. If the powers of the state are exercised mod- erately and wisely the apparent conflict will disappear. The burden of the duties imposed on one man towards others will be offset by the benefit he derives from the same duties towards him imposed on the others; and he will really be able to enjoy his liberty and property to a greater degree than would otherwise be possible. In like manner the protection he derives from the state will, as a general rule, offset the taxes he pays for its support. His indirect benefit from public improve- ments may compensate him for the taxes he pays on that account. This fortunate condition is the purpose of the constitution, and it may be preserved if the proper balance between these apparently conflicting rights is maintained. On the legislature is cast the duty, in the first instance, to maintain the balance by the moderate and just exercise of its powers. If by arbitrary and unjust acts it has clearly abused or ex- ceeded Its power it then becomes the duty of the courts, upon proper appli- cation by the injured individual, to declare such acts void, because in con- flict with the constitutional provision which protects him in the en- joyment of life, liberty, and property. This provision, while general in terms and declaratory of a principle of government, by the use of the term "due process of law" necessarily prohibits arbitrary action, unwar- ranted by either justice or reason. The arbitrary injustice may consist in the degree to which the power is used. It may be here objected that if the legislature possesses the power it is the sole judge of the extent to which it shall be exercised. The argument would be forceful if, as be- fore explained, such unlimited exercise of the power would not disturb the balance and bring the act in conflict with that due process of law which must be observed in placing burdens upon individual rights. As was said by Justice Holmes in Ridehout vs. Knox (148 Mass., 372) : "Dif- ference of degree is one of the distinctions by which the right of the legislature to exercise the police power is determined." In short, the de- gree, as well as the manner, of the exercise is a -limitation upon legislative authority. Questions of degree are usually important in the application of any rule and sometimes vital. Drugs like arsenic, strychnine, and REPORT OF EMPLOYERS' LIABILITY COMMISSION 233 opium, which in small doses are curative, become poisonous in large doses. The fixing by the legislature of the rates of common carriers, if moderate and just, is proper, but if carried to the excess of confisca- tion is unauthorized. The legislature may allow an attorney's fee to the successful party in the trial of causes. Thus, If it provided for the al- lowance of ten dollars in a trial before a justice of the peace, it would be clearly within its power, but if the fee should be made ten million dollars, it would be clearly unauthorized. The collection of such a fee would deprive the individual of his property in violation of the purpose and express provisions of the constitution. The difference in degree in this instance becomes substantially a difference in kind. In the arid states of the west the legislature may give to the individual the right, upon making proper compensation, to make a limited use of the land of his neighbor, in order to conduct water across it to his own land. This may be done where the degree of rainfall is inadequate, although it ■ might be unauthorized where the degree of rainfall is ample as in the eastern states. See Clark vs. Nash (198 U. S., 369) The coUeotion of a small tax from each bank for the payment of the depositors of a bank which fails may be authorized owing to the great public benefit derived from maintaining commercial stability, freedom from panics, etc., while the collection of a tax to pay bonds donated by a municipality to a manufacturing company to secure the erection of a factory would be un- authorized. Nodle State Bank vs. Haslcell (219 U. S., 105). Loan Association vs. Topelca (20 Wall, 655). The special assessment of taxes for local improvements may be author- ized, although it may not accurately measure the benefits received, yet when the circumstances of a particular case are such that an assessment by the front foot clearly confiscates the property it is unauthorized. Norwood vs. Balceir, 172 U. S.,' 229. For the protection of its inhabitants a state may impose proper police regulations with reference to articles of interstate commerce, but it cannot push regulations to such a degree as to amount to practical prohibition. Thus it can not require that oleomargarine be colored pink. Collins vs. New Hampshire, 171 U. S., 30. An interesting example of the effect of degree is shown by the .rule of change of title by accession. If a person, believing a chattel to be his own, greatly enhances its value by improvements, he thereby becomes the owner, and the former owner cannot take from him the chattel,, but is entitled only to its original value. Upon the degree of enhancement of value depends the change of title. Leivis vS. Gourtright, 77 Iowa, 190. 'Wether'bee vs. Oreen, 22 Mich., 310. 234 REPORT OF EMPLOYERS' LIABILITY COMMISSION Whether the degree, or manner, of the exercise of a legislative power Is authorized must depend upon conditions existing at the time. The effect of different conditions upon legislative power is well illustrated by the fact that while centuries ago it was proper to fix the price of bread, owing to the great importance of the baker to the community, yet it is doubtful whether under the changed conditions of the present the legislature would have this power. See Cooley's Constitutional Limi- tation, S71, Note 3. The calling of the baker is still subject to regulation but not to the extent of fixing the price of bread. Undoubtedly if con- ditions should so change in the future as to make the baking of bread a practical monopoly in the control of but a few corporations, upon whom the people were substantially dependent for their supply of bread, the calling would again become clothed with a public interest, and ths price of bread could be fixed by the legislature within reasonable limita- tions. The changed conditions of the future may clothe with a public interest occupations not so affected in the past and warrant legislation which would previously have been an abuse of legislative power. It would be erroneous to conclude from the foregoing considerations that the constitution is elastic or that it grows with the changing ideals and conditions of society, and may therefore cease to afford protection to individual rights. These rights are protected by principles which are unchangeable, save by amendment of the constitution, but in their application to widely different conditions different results will follow. As stated before, whenever the individual is deprived of life, liberty, or property by the exercise of the legislative power to a degree, or in a man- ner that is clearly arbitrary and unreasonable, such exercise is without authority and forbidden by the constitution. AHGUMEXT BY A^TALOGY." The demarcation of the line bounding the power of the state must necessarily be left to the gradual process of judicial inclusion and ex- clusion, in the decision of cases as they arise. Inasmuch as the rules of conduct and methods of procedure prevailing in the state at the time of the adoption of the constitution are not abrogated, in the absence of a specific provision for that purpose, these rules and methods, whether based on the common law or on statutes, furnish a persuasive argument by analogy as to new rules and methods which may be established by the legislature. The argument by analogy is not always conclusive how- ever. Many rules at common law owed their origin to reasons which ceased to exist, but they were continued and justified by other reasons. Other rules arose and were modified from time to time in accordance with the moral and mental growth of society. Other rules arose and became obsolete when changed conditions or social growth made them inapplicable or undesirable. Still other rules may have survived the reasons which gave birth to them and may have been in existence at the time of the adoption of the constitution, although they had ceased to be responsive to social needs. The conservatism of human nature sometimes preserves a custom or rule long after it ceases to meet either REPORT OF EMPLOYERS' LIABILITY COMMISSION 235 the needs or approval of the people. In fact, it may offend the moral ideas of the people for a long time before it is abrogated or becomes obsolete. A striking illustration is the common law rule that a cause of action for tort did not survive death. This rule was retained long after it had become useless and repugnant to the moral sense of the people. The argument by analogy from such a rule would be useless. DEVELOPMENT OF LAW IN THIS COUNTRY. Since ithe adoption of the first state constitution there has been a remarkable development of law. Not only has there been a sweepng reform of procedure, but also a great development of substantive law, as well as many radical changes. The modern law of negligence has been evolved, as appears from the article of Chancellor Wigmore on the "History of the Responsibility for Tortious Acts," Select Essays in Anglo-American Legal History, Vol. Ill, page 517. The common law rule, that the doer acts at his peril and is liable for all the consequences of his acts, no matter how careful he may have been, has in many cases been supplanted by the rule of negligence. A new class of causes of action utterly unknown to, and unwarranted by, the common law has been created by making the master liable for torts to a servant by a fellow servant. The rule that a' man acts at his peril has been extended to some cases to which it was not applicable by the common law. New duties of various kinds have been imposed and new remedies given for their enforcement. Causes of aa;io!a based on tort now survive death, and where a tort causes instant death a cause of action is given to the legal representative of the dependents of the person killed. The rule of contributory negligence has fcoen modified or abolished in some cases. These and many other changes have been brought about by judicial decisions or legislative enactments in the different states, and are now in conflict with "due process of law." APPLICATION OF AEGUMEKT BY ANALOOY. Let us now take up the matter before us and see if the rule of analogy warrants imposing a liability on the master for injuries to a servant not caused by the tort of negligence of the master or some other servant. It will be conceded that on ethical grounds a master, like anyone else, should be careful not to injure others, whether they are strangers or his ser- vants. He should also be careful to avoid injury by his servant of any- one else, whether a stranger or fellow servant. On grounds of public policy he has been made absolutely liable for the negligent acts of his servant, in the course of his employment, which injure strangers, no matter how careful he may have been in selecting and instructing his servant. Whether this rule, which imputes to the master the negligence of his servant. Is just or not need not be considered here, as the rule has prevailed for centuries and has not been considered a violation of due process of law. If his moral duty to be careful as respects a stranger may be embodied in a legal rule making him liable for the acts of his 236 REPORT OP EMPLOYERS' LIABILITY COMMISSION servant in respect to a stranger, by analogy the same moral duty, which, requires care on his part as regards his servants, may also be embodied in a legal rule making him liable for the negligent acts o£ one servant which injure another servant. The servant who is induced by the offer of wagas to confide his safety to the care of his master would seem to be as deserving of protection as the stranger. Hence it is impossible to say that the abolition of the fellow servant rule is an arbitrary, un- reasonable act of legislation. The abolition of the fellow servant rule, by imposing a liability on the master for the negligence of a servant which injures another servant, implies of course that in the abs^nce of such negligence no liability exists, and hence the argument by analogy is against creating a liability on the part of the master when the ser- vant was not injured by the negligence of either some fellow servant or the master. Let us next consider the changes which have been made in the rule uf contributory negligence. This rule was evolved as an inherent part of the modern doctrine of negligence, and was in force at the time of the adoption of the Iowa constitution. Through the concurrent negli- gence of two persons one or both may be injured. If both are to blame it may be convenient for the law to say that neither shall be liable. It would, however, have been just and reasonable for the legislature to provide that the damages should be paid by the parties in proportion to their respective negligence. Such a rule has prevailed in some states by judicial decision and in some by legislative enactment. The legisla- ture might also say, without being so arbitrary and unreasonable as to offend the constitution, that, where the negligence of one was slight and the other gross, the entire damage should be paid by the latter. The argument by analogy would forbid the imposition of the entire liability upon the one who was guilty of slight in favor of the one guilty of gross negligence. Neither would this argument permit the imposition of liability on the one guilty of no negligence, even though the other person was only slightly negligent or not negligent at all. FEDEEAL EMPLOYEE'S LIABILITY ACT K"0T ANALOGOUS. The Federal Employer's Liability Act represents the extent to which the law making power can safely go in changing the rules' of liability for negligence. Under this act the master is made liable for the negli- gent acts of one of his servants which injures another servant, as well as lor his own negligence, but is not made liable in the absence of any negligence. Accordingly, under this act, the injured servant must prove negligence other than his own, that is, he must prove he was hurt by the negligence of the master or of some other servant. Contributory negligence is neither a complete nor partial defense if the injury was caused by the neglect of the master to provide the safety appliances required by statute. The same provision is made as to assumption of a risk caused by the' master's negligence. In short, the removal of these defenses is a proper penalty for disobedience of the statute by the master. For other cases of negligence, which do not involve the law REPORT OP EMPLOYERS' LIABILITY COMMISSION 237 regarding safety appliances, the rule of comparative negligence is pre- scribed by the act. In such cases the contributory negligence of the injured servant is only a partial defense. Nothing in this act, which was held constitutional by the supreme court recently (Second Em- ployer's Liability Cases, 223 U. S.), furnishes any analogy for imposing a liability where there is no negligence, personal or imputed, on the master's part, or for abolishing in all cases the effect of contributory negligence as a partial if not complete defense. BULE OF SELF DEFENSE NOT ANALOGOUS. Let us now see if liability, without personal or imputed negligence on the master's part, can be supported by analogy drawn from any of the unusual rules of law, which in some cases authorizes the destruction of the citizen's property and the deprivation of his liberty, without fault on his part. A familiar illustration is the destruction of property in order to stop a fire. This may be done in extreme cases, where the danger of great destruction of other property is imminent, without compensation to the owner. Field vs. Des Moines, 39 Iowa, 575. A man may be quarantined to stop the spread of disease, and have no recourse although the officials m.ade a mistake in confining him, provided they acted in good faith. BeeTcs vs. Dickinson County, 131 Iowa, 224. The rule of self defense justifies the interference with the rights of the individual in the cases above, mentioned, but it clearly bears no analogy to the matter under consideration. U?{USUAL CASES OF LIABILITY ^^'ITHOUT NEGLIGEXCE. A municipality may be made liable for the acts of a mob in order to compel it to maintain law and order. City of Chicago vs. Stiirg&s; 222 U. S., 323. DarTJlngton vs. Mayor of New York, 31 N. Y., 164. A ship is liable for the care of disabled seamen, owing to the extraord- inary conditions of their occupation, and the peculiarities of maritime laws. Scm-ff vs. Metcalf, 107 N. Y., 211. Property, knowingly leased for the sale of liquor, may be made liable for the misconduct of the seller of the liquor and the injuries caused thereby. This is a penalty for aiding a business obnoxious to the policy of the state or forbidden by it. PoUc County vs. Hierb, 37 Iowa, 361. 238 REPORT OF EMPLOYERS' LIABILITY COMMISSION Common carriers and Innkeepers, by reason of their public calling, have duties imposed on them which may result in a liability notwithstanding due care was used. Railroads carrying passengers may be made responsible for all in- juries to them, not caused by their own criminal negligence or disobed- ience of the company's rules. In short, in exercising the public calling of common carriers, they may be made insurers of the safety of pas- sengers as well as of freight. C, R. I. & P. Ry.-^Co. vs. ZerniiCk!^, 183 TJ. S., 582. The argument to be drawn by analogy from the above mentioned cases, if any can be drawn, is too remote to be valuable. RULE OF ACTISG AT PEBIL. There is, however, a well known common law rule, that in some special cases a man acts at his peril, and is liable, irrespective of nesl'- gence, for the injuries of which he is the cause. In a general way it may be said tha* a necessary feature of these special cases is that some person uses, or sets in motion, hazardous agencies, or brings about or maintains hazardous conditions, likely in their nature to injure others. At common law the man who started a fire in his house or on his land was responsible if it spread and did damage to others, no matter how careful he may have been. Wigmore, Supra, p. 511. The modern decisions usually make the liability depend on negligence, but in this state, by statute, a man who sets out a fire on his land be- tween September and the following May, is absolutely liable for the damages it may do. Conn vs. May, 36 Iowa, 241. In like manner a railroad company may be made absolutely liable for all damages caused by fire started from sparks from a locomotive. Rodemacher vs. C, M. & St. P. Ry Co., 41 Iowa, 294. St. Louis & S. F. Ry. Co. vs. Mattheius, 165 U. S., 1. This was also the rule in England in the absence of any statute. Powell vs. Fall, 5. Q. B. D., 601. In this country, in the absence of a statutory regulation, it has been held by the United States supreme court and some other courts that there is no liability in such cases, without negligence. Nitroglycerine Gases, 15 Wall, 538.. If a man chooses to keep a tiger, or other dangerous animal, or a dog which he knows to be ferocious, he does so at his peril. Wigmore, Supra, 513. Holmes on the, Common Law, 154. ^REPORT OP EMPLOYERS' LIABILITY COMMISSION 239 In this state, by statute, the owner of a dog, even If he does not know him to be ferocious, keeps him at his peril, and is liable for all damages he does (except in case of hydrophobia) unless the injured party was doing an unlawful act when hurt. ShuUz vs. ariffith. 103 Iowa, 150, Beckler vs. Merringcr, 131 Iowa, 614. At common law a man must keep his cattle on his own land. If they strayed and trespassed on the land of others, he was liable. Holmes on the Common Law, 22, 116, 156. In this state it was held that the common law rule regarding cattle was not applicable. A man who uses explosives for blasting is held liable in New York for all damages he causes by hurling materials against the persons or property of others, no matter how careful he may have been. Sullivan vs. Dunliayn, 161 N. Y., 290. If a man collects water in a reservoir on his land he does so at his peril, and is liable if it escapes and does damage to others. Fletcher vs. Rylands. L. R. 1, Exch., 282. Wigmore, Supra, 518. Holmes on Gominon Law, 156. In many jurisdictions this rule has not been followed, and the liability has been made to depend on negligence. While there is some conflict of decisions as to liability In some of the instances above mentioned, where there was no statute on the subject, yet there is no substantial conflict as to the power of the state to impose a liability in such cases. In fact, mo'st reasonable men will agree that public policy makes it desirable in some cases that the liability should be absolute, instead of dependent on negligence, and that the imposition of such liability in all of the instances mentioned could not be considered an arbitrary act, devoid of all sense and reason. A close analysis of the above special cases (involving the rule of acting at peril) will show that there was a trespass upon person or property by the agencies used by the person held liable. Thus if the cattle, wild beasts, or ferocious dog committed a trespass it was imputed to the owner, and he was made liable. In the same manner the injury caused by the fire spreading and destroying the property of others appeared in the light of a trespass by the man who started the fire. In like, man- ner the bursting of a reservoir throwing a flood of water on the land of others was deemed a trespass on the part of the man who collected the water in the reservoir. So also the hurling of rocks against the person or property of others as a. result of blasting was deemed a tres- pass, and still remains a trespass in New York state. It made no differ- ence as regards liability, in the early common law, whether the trespass was intentional or not, or negligent or not; or, in fact, whether the tres- 240 REPORT OF EMPLOYERS' LIABILITY COMMISSION passer was insane or not. At one time, if an instrument was used in making the trespass the instrument itself was forfeited. Holmes on the Common Law, 24, 25, 26. Every man acted at his peril in all matters. Failure to act seldom caused a liability. Liability for negligent failure to act, so common in modern days, was beyond the conception of a primitive people. As the people became more intelligent the tendency was to make liability for tort depend upon fault — upon intentional or negligent wrong doing or violation of a statute, and it was this view which was adopted by the United States Supreme Court in the Nitroglycerine Cases. On this sub- ject see — Wigmore, 8u.rira. Holmes Common Law, Chapter 111. Pollook on Torts. 136 to 147. EXILE OF ACTING AT PEEIL XOT ANALOGOUS. Notwithstanding the evolution mentioned, and probably for reasons of public policy, the old rule that a man acted at his peril continued in sonie of the special cases ^bove mentioned, and also in respect to the liability of the master on account of acts of his servant. To change the modern rule, based on fault (willful or negligent), back to acting at peril in all cases, would be reverting to barbarism, and would produce conditions impossible as well as intolerable for a civilized people. Even if the constitution of Iowa would permit the legislature to attempt to restore the barbarous rules of the early common law, it would throw no light on the question before us, which is whether the legislature can m.ake an employer liable for an injury sustained by an employe when the former has committed no trespass and is free from all fault. The common law rule of acting at peril applied only to trespasses, personal or imputed, upon strangers, and not to cases where a servant was acci- dentally injured in the course of his employment. In the latter cases (excluding from consideration the tortious acts of a fellow servant for -which the master may be made liable by statute) there can be nothing remotely resembling what the early common law would call a tres- pass, except in the rare case where the master works with the servant and a.cciden'tally injures him. The stranger who is injured by the water from the reservoir, or the rocks from the blasting, may well say: "Don't throw your water or your rocks on my land; keep them on your own property. You control the entire matter, I have nothing to do with it. Use your own property so as not to trespass on my land or my person, or I will hold you responsible." "ffic utere tuo ut aliemim non laedas." The servant who is voluntarily doing the blasting, or look- ing after the reservoir, is not in position to assume the attitude of the innocent outsider, though he may also be injured by the work he is carrying on for the master. It is not in point to say here, as in the case of making the master liable for the injury resulting from trespass REPORT OP EMPLOYERS' LIABILrlTY COMMISSION 241 3r negligence of one servant to another, that the master owes as much 3uty to his servant as a stranger, because the servant in the case under consideration is not injured by the fellow servant or by the negligence jf the master. The argument by analogy fails completely. ABEOGA/riON OF ASSUMPTION OF BISK JSTOT ANALOGOUS. Is any argument to be drawn, by analogy, from the cases deciding that the legislature may change the rule regarding the assumption of risk.' It is clearly within the power of the state to declare that, where the master's negligence causes the injury, the servant shall not be deemed to have assumed the risk caused by that negligence, even though he knew of it and continued working without complaint. This change in the rule of assumption of risk is something very different from making the master liable in the absence of negligence on his part, either per- sonal or imputed. If the master is to be held liable in the absence of personal or imputed fault, authority must be found in some of the re- cent decisions regarding employers liability acts or in those fundamental principles of reason and justice which should control every free govern- ment in the exercise of its powers. Such a proposition certainly ap- pears unjust and unreasonable, and is directly in conflict with the Nitro- glycerine Cases (supra), in which the court expressly approved the language of a New York judge who said: "No case or principle can be found, or. If found, can be maintained, subjecting an individual to liability for an act done without fault on his part." EECEKT DECISIONS. The writer can find only one case involving- the validity of a statute imposing on the individual employer the liability to compensate his em- ployes for accidental injuries, regardless of whether he was at fault in any way. The statute , in question was enacted in the state of New York, and applies only to certain enumerated extra hazardous occupations. It excuses the employe from any assumption of risk, and from contributory negligence, unless it amounts to serious and willful misconduct, and makes the employer absolutely liable for the accidental injuries inherent in the occupation, although free from personal or imputed negligence. The employer, who has complied with every provision of the law made to prevent accidents, who has gone beyond this and used every con- ceivable caution to protect his employes, may be made to pay for an un- avoidable accident, or one caused by the negligence of the employe and the peril of the work, unless the negligence of the employe amounts to serious and willful misconduct. The burden of the deplorable injury is removed from the shoulders of the unfortunate employe and arbi- trarily placed upon the innocent employer. If these extra hazardous em- ployments were injurious to the public welfare, as selling liquor is thought by many to be, then there would be some reason for the rule. 242 REPORT OF EMPLOYERS' LIABILITY COMMISSION The state might say: "If you choose to go into this obnoxious business you must pay all losses connected with it." These occupations, however, are not obnoxious to the general welfare, but on the contrary are as much conducive to it as those less hazardous, and "great investments have been made in property suitable for carrying on these occupations, the value of which in some cases would be largely lost, if used for other purposes. It is true that many employers have such a large amount of capital that they would probably not be seriously affected by the new liability. On the other hand some employers have so little capital that accidents for which they were in no way to blame might absolutely ruin them. While ruin of the employe through an unfortunate accident should be as much the concern of the state as the ruin of the employer, this does not authorize unjustly shifting on to the employer the burden of the misfortune which has befallen the employe. While it is highly de- sirable from the standpoint of the economic welfare of the state as well as from humane considerations that the misfortune of the employe shall be alleviated or compensated, yet it should be done in a way that does not violate "common reason and right." When this radical statute came before the Court of Appeals of New York state it was held to be unconstitutional. Ives vs. South Buffalo Ry. Co., 94 N. E., 431. In a recent case in Wisconsin, where the compensation act was not compulsory, the court in sustaining it held the New York case in- applicable. Borgnis vs. Fallc Co., 133 N. W., 209. A similar view was taken by the Supreme Court, of Massachusetts. In Re Opinion of Justices, 96 N. E., 308. In Ohio, where the compensation act is not compulsory, and where the employe is compensated out of a general fund to which employers and employes contribute, the act was sustained, but the court dis- approved of the reasoning employed by the New Y'ork court. State vs. Creamer, 97 N. E., 602. The radical difference between the statutes of Ohio and New Y'ork removes any necessary conflict in the decisions. In Montana owners and employes contribute to a general fund for compensating injured miners. The contributions are compulsory. The statute was held unconstitutional, but only because it permitted the employe to retain his common law remedy against his individual em- ployer, who was compelled to make his contributions into the general fund without any reduction for any damages he might be compelled to pay. Cunningham vs. Northwestern Improvement Co., 119 Pac, 554. This case is not in conflict with the New York case, and does not profess to be. REPORT OF EMPLOYERS' LIABILITY COMMISSION 243 In Washington a compulsory compensation statute creates a general fund by taxation of employers for the relief of injured employes. While there is no necessary conflict between the decision sustaining this statute and the New York case, owing to the differences in the statutes, the court in its opinion disapproved of that case. State vs. Clausen, 117 Pac, 1101. It may be thought that although the state cannot impose a direct liability on the employer for the accident to the employe, in the ab- sence of any fault on the former's part, yet the result might be accom- plished by imposing burdens on the employer to compel his consent to such liability. If the burdens are not sufficiently heavy to amount to compulsion they fail of their purpose, and if sufficiently heavy they are forbidden by the constitution. Collins vs. New Hampshire, 171 U. S., 30. The state cannot compel the citizen to give away his constitutional rights. EXPENSE OF BUSINESS THEORY. It is sometimes inaccurately urged that the compensation of the in- jured employe could and should be treated as one of the expenses of the business and passed on to the public by inclusion in the prices charged, thereby removing any unjust burden from the employer. If the whole world constituted a single state there would be force to the argument, as regards most occupations. With many states and a great diversity of laws, the statement is far from true. In the case of acci- dents arising out of domestic service the burden of the compensation could not be shifted. In like manner the farmers of this country could not add anything to the price of wheat and corn, which is fixed by the price at which the surplus can be sold abroad in the markets of the world. Very often our manufacturers would find it impossible to in- crease the price of their products, to^ cover this new expense. If it is reasonable ^nd just to shift this entire burden on the general public why not do it openly by a direct general tax, instead of by trying to do it indirectly by increasing the cost of living? LEGISLATION IN EUKOPE NOT APPLICABLE. In opposition to the rule of the New York decision that the misfortune of the employe can not be transferred to the Innocent employer, it is often said that England and other states of Europe have similar laws, and therefore the New York statute must be valid. This ignores the fact that in the states of Europe there are no written constitutions, and the individual has only such righs as the legislative power concedes to him. BELIEF UNDER POWEB OF TAXATION. Is there then no clearly constitutional method by which the mis- fortune of \he wage earner, who is accidentally injured while performing 244 REPORT OF EMPLOYERS' LIABILITY COMMISSION work useful to society, may be relieved without violating our ideas of right and wrong, and at times unjustly ruining his employer? The answer will be found in a consideration of the powers which the state may exercise to secure the welfare of the people collectively. As has already been stated, though the right of the individual is made a matter of primary importance by the constitution, yet the rights of society are also recognized. The state has extensive powers to secure the general welfare, but must not exercise them to such a degree as to disturb the proper balance between the individual and society and thereby deprive him of life, liberty, or property without due process of law. A most comprehensive power given the state for securing the general welfare is that of taxation. By imposing burdens light in degree upon many people it may .effect results of vast proportion. It may impose these burdens for any public purpose, according to any plan or theory that is not clearly arbitrary and unjust. So comprehensive is this power and so necessary to the public welfare and the very existence of the state that the courts allow more latitude to the legislature in its exercise than in the exercise of the power to establish rules of private conduct and penalties for their breach. Every presumption is raised by the courts in favor of the validity of statutes imposing taxes. A very clear case of arbitrary, unreasonable, and unjust exaction must be establish before the courts will interfere. In the case of Conolly vs. Union Sewer Pipe Co. (184 U. S., 562) the court allowed less latitude to the legislature in a statute regulating in- dividual conduct than had been allowed in a prior case involving a taxing law, and on this account one of the judges dissented. The recent case of NoMe State Bank vs. Haskell (supra) is directly in point here. The court sustained the Oklahoma statute which levies a small tax on all the state banks to create a fund for the payment of the depositors of any bank which may fail. In delivering the opinion of the court, from which there v-^as no dissent. Justice Holmes said; "An ulterior public advantage may justify a comparatively insignificant taking of private property for what, in its immediate purpose,' is a private use." A practical illustration of the wide range of the taxing power is shown in our poor laws. Taxes may be levied to furnish indoor and outdoor relief for the poor. A portion of the property of the rich man is thus taken for the support of his poor neighbors. Yet the sfate could not constitutionally enact a law requiring the rich man to support his poor neighbors, or to give them money, no matter how small the amount. While great latitude is allowable to the legislature in the use of the taxing power there are limitations on this power. It can only be exer- cised for a public purpose, but in determining what is a public purpose the conclusion of the legislature will be sustained by the courts unless clearly arbitrary and unjust. Thus the legislature may levy taxes for schools, libraries, hospitals, parks and play grounds for public use, for pensions for soldiers and public officials for bounties for the de- struction of animals injurious to agriculture, and for numerous other public purposes. In this state, as well as many other states, a railroad REPORT OF EMPLOYERS' LIABILITY COMMISSION 245 or bridge, though owned by a private company, may be built with the aid of taxation. This is on the theory that an enterprise may be public in its nature though carried on by private capital. Pritcharct vs. Magoun, 10'9 Iowa, 364. In this state the allowance of bounties for killing gophers and some other animals has been customary. Taxes have been assessed on the owners of dogs to create a fund to compensate the owners of sheep killed by dogs. McOlone vs. Womack, 129 Ky., 274. Hodges vs. Tama County, 91 Iowa, 578 ; 60' N. "W., 185. People vs. Yarn, Horn, 46 Mich., 183; 9 N. W., 246. On the same theory that a tax must be for a public purpose, an ex- emption from a general tax should also be based upon some public policy or need. The Supreme Court of the United States has held that ex- emptions may be made for the encouragement of agriculture. Am. Sug. Ref. Co. vs. Louisiana, 179 XJ. S., 89. The supply of laborers in a state is a matter of public concern. "The state could properly discriminate in its police and iiscal legislation be- tween occupations, of a similar nature but of dissimilar tendencies; be- tween those which tended to induce the laboring population to leave, and those which tended to induce that population to remain." Williams vs. Fears. 179 XJ. S., 276. The exemption of the workman's tools from taxation is a common provision in tax laws, and indicates the vital importance of his work to society. Other provisions are made for his protection, such as the exempton of his wages from execution, the priority of his wages over other claims in cases of insolvency, the lien given to secure his wages, the establishment of public bureaus of labor, and the many provisions for his health and safety while working in dangerous occupations. C, B. & Q. Ry. vs. McGuire, 131 Iowa, 340. For many years the federal government has collected from the owners ■ of vessels of the United States entering our ports a tax in proportion to the number of seamen on the vessels and has used the money for the relief of sick and disabled seamen. The validity of the statutes im- posing the tax have apparently never been questioned. State vs. Clausen, 117 Pac. Rep., 1106. In like manner statutes taxing fire insurance agents in proportion to the amount of the insurance effected by them, for the benefit of a fund to care for sick and injured firemen, have been upheld in New York and Illinois, and the cases are cited with approval in State vs. Clausen, supra, 1108. In State vs. Gas'sidy (22 Minn., 312), the court sustained an act im- posing a per capita tax on liquor vendors for the benefit of a state asylum for the care and cure of inebriates. 246 REPORT OF EMPLOYERS' LIABILITY COMMISSION Many other instances might be cited of purposes which are considered sufficiently public in their nature to warrant the aid of the taxing power, but those already cited will suffice. If the relief, through taxation, for paupers, inebriates, bank depositors, soldiers, seamen, firemen, or those injured by gophers or dogs, may be sanctioned to accomplish a direct or ulterior public purpose, then certainly the relief of the employe who is accidentally injured while performing work useful to society may be effected by a tax which will impose only a light burden on each tax payer. The late decisions in "Wisconsin, Ohio, Washington, and Montana, pre- viously cited, all sustain the power of the state to afford relief through the power of taxation. OLD REJIEDY INADEQUATE. The old remedies which were satisfactory when there were few em- ployes, when the machinery and tools were simple and comparatively harmless, when the friendly personal relations usually existing between the employer and the few men he employed led him to care for them in times of trouble, are grossly inadequate under the changed conditions of the present. The attempt to stretch these remedies so as to make them cover radically different conditions has been demoralizing in every way. Many lawyers have become "ambulance chasers," ready to use means condemned alike by good morals and the ethics of the profession, in order to win suits which they have taken on shares, and which are without legal foundation and would never have been thought of if juries had not shown they were willing to base their verdicts on sympathy for misfortune instead of on the law and the evidence. Perjury by wit- nesses who allow their sympathy to overcome their integrity has become alarmingly frequent. In some cases even the judges seem to have allowed sympathy, rather than legal rules, to guide their decisions. The litigation has increased the hatred born of class feeling, besides causing enormous expense to the state and the employers, and has yielded but little to the unfortunate victims of accident, notwithstanding the sympathetic effort to twist law, justice, and truth to help them. In many cases the victims or their dependents have become public charges. NEW REMEDY NEEDED — WORKMAN AN ASSET OF THE STATE. The workman, now almost always an employe, is an essential factor of society. An adequate supply of workmen, and the more skillful the better, is of untold economic value to the state. The supply will be most adequate, other things being equal, in the state which protects them so far as may be from accidents, and which compensates them for the injury when the misfortune of an accident befalls them. While much legislation has been and will be enacted to protect them from accident there is great public need of a just and comprehensive law to afford com- pensation for accidental injuries resulting from their employment. It will not satisfy the need or the growing altruistic feeling of the present REPORT OP EMPLOYERS- LIABILITY COMMISSION 247 day to comijensate merely those engaged in the extra hazardous occu- pations. Those employed in agriculture, which probably comes next in frequency of accidents to the extra hazardous occupations, also require compensation; and so do those engaged in our factories, and even those engaged in domestic service. In short, the plan adopted should be broad enough to cover at the start, or by subsequent extension, all em- ployes in all lawful occupations. At the start the state might deem it wise to limit its application somewhat until the administrative features are worked out satisfactorily by actual experience; but the plan itself should be capable of extension to all employments. It should be com- pulsory, and not left to the election of the employer or the employe. Such a broad plan can best be based on an insurance fund raised by the taxing power. The power to collect the taxes, to determine the amounts to be paid to the employes, pursuant to the stat-ute, on account of accidents to them in the course of their employment, should be vested exclusively in administrative officials, without any recourse whatever to courts, except in cases where the offioials act fraudulently or without jurisdiction. This will simplify matters, reduce expenses, and afford speedy relief. Justice long delayed is often as bad as justice denied. Rehearings, reviews, new trials, writs of error, and appeals are devices which can be successfully used to frustrate justice. The common law causes of action and remedies in favor of the employe must be repealed, so far as regards cases covered by the act. Otherwise the act can not accomplish some of the important public purposes which warrant its passage. To leave these causes of action and remedies intact would be a gross injustice, and might make the act itself unconstitutional. Cunningham vs. Northwestern Improvement Co., supra. The plan must not encourage accidents by giving compensation where the serious and willful misconduct of the employe causes his own injury. The employe, whose injury is due to his intoxication, or to his mis- conduct in removing safeguards, supplied by the employer .at the com- mand of the state, is not entitled to relief. To give it is to place a premium on what all reasonable men condemn. To make the statute so broad as to include such cases might render it unconstitutional. REPEAL OF COMMOX LAW EEJIEDY. ffan the state take from the employe his common law right to sue his employer for negligence, and to have the liability passed upon and the damages ascertained by a jury? If this right and remedy should be abrogated without substituting some equivalent the answer should cer- tainly be in the negative. While legislatures may repeal old laws as well as to make new ones, they can not arbitrarily and unjustly abrogate the old laws to such an extent as to leave the citizen no remedy what- ever for invasion of his personal rights. While the liability for negli- gence has been developed since the adoption of the first constitution in this country, it was in force when the Iowa constitution was adopted and cannot be abrogated without furnishing some reasonable substitute. The 248 REPORT OP EMPLOYERS' LIABILITY COMMISSION substitute furnished by a worlcman's compensation law like that of Ohio, Washington, or Montana is more beneficial to the employe than the in- adequate remedy which he loses. The rates of insurance to cover the enlarged class of accidents for which he will be entitled to compensation have been doubled, trebled, and even quadrupled by insurance companies writing policies in those states where the employer must himself pay for the results of such accidents, if he elects to come under the statutory liability. Hence, if such a workman's compensation law is passed the abrogation of th'e common law remedies of the employe will not violate the constitutional provision in regard to due process of law. State vs. Clausen, supra. Cunningham vs. Northwestern Imp. Co., supra. As upholding the right to take away trial by jury, not only are the above cases in point, but also the Wisconsin and Ohio cases. Borgnis vs. Falk County, 133 N. W., 209. State vs. Creamer, 97 N. B., 602. The fact that certain causes of action were triable by jury, when the ■constitution was adopted, does not necessarily deprive the legislature of the power to make them triable by the court alone. Littleton vs. Frite, 65 Iowa, 488. Burt vs. Harrali, 65 Iowa, 643. Blair Toicn Lot Co. vs. Walker, 50 Iowa, 376. In this state where a special remedy is given by statute, the power -to administer it may be conferred upon administrative officials, to the exclusion of courts and juries. Hodges vs. Tama County, 91 Iowa, 578. McKeever vs. JenTcs, 59 Iowa, 300. Even if the foregoing decisions had not been made, and the matter had to be decided on general principles, there is nothing unreasonable in the determination by the legislature of the amount of compensation in case of death, or in the determination of the measure of the com- pensation in case of injury. Determination of such matters has always been within the legislative power. The legislature often fixes the limit of recovery in case of death, and sometimes fixes a minimum as well as a maximum limit. It may determine the elements to be considered in assessing damages or compensation. It may include or exclude at- torneys fees as one of the elements, and may fix the exact amount, or leave the amount to be fixed by the court, or the jury, or officials having jurisdiction in the matter. It may allow punitive damages in an amount to be fixed by the jury, or may fix the amount of the same by directing that double or' treble the actual damages be allowed. At one time in Pennsylvania the statutes placed limits on the damages caused by per- sonal injury, when such injury did not cause death, as well as when it did. This power was taken away in 1874 by the consititutional pro- vision that: "No act of the general assembly shall limit the amount KErORT OF EMPLOYERS' LIABILITY COMMISSION 249 to be recovered for injuries resulting in deatli or for injuries to persons or property." So far as the writer can ascertain no other state has thus limited the legislative power. In early times the Anglo-Saxons fixed specific amounts for the destruction of life, or of a limb, or an eye. In public offenses also the legislature has wide discretion and may fix specific punishments, or may prescribe limits, within which punishments are to be fixed by the court or by the jury. As was well said by the court in State vs. Clausen (supra) in reference to the fixing of damages by juries: "The common law system of making awards has no such inherent merit as to make a change undesirable." APPORTIONMENT OP THE TAX. Upon whom or what property shall the tax be assessed to secure the fund for the .compensation of the injured employes? There are many theories which may be adopted by the legislature in the apportionment of the tax. It is only when the tax is arbitrarily ap- portioned so as to be palpably an unfair discrimination that the courts can interfere. The most common rule is that of probable benefits. The public, the employers, and the employes will be benefitted, and it is very proper that all three should contribute. This is the rule adopted in Germnay. In Ohio and Montana the entire tax is collected from em- ployers and employes. In Washington the employers pay the entire tax. Mr. Louis Brandeis, whose reputation both as a lawyer and a student of social and economic subjects is well known, has favored equal contributions by employers and employes. See "Accident Prenvention and Relief," 55. Inasmuch as the employe is the chief beneficiary of the plan it would appear to be unjust to saddle the entire expense upon the employer. If the employe pays part he will to that extent be interested in preventing accidents. By his contribution he will become associated with the em- ployer in a most laudable work, and to this extent there will be a breaking down of class lines. His self-respect and feeling of independence will be promoted if. he contributes his fair share, instead of throwing it on to others. If the law is to prove a grand success and to remain permanently on our statute books, it must be so just and moderate as to command gen- eral approval. No one can forecast how the burden of the tax will be shifted, or in what proportions it will ultimately be borne by the public, employers, and employes. The most that the legislature can do is to impose it justly in the first instance, The effects of economic laws are beyond legislative control and responsibility. ACCIDE^-T PREVENTION SAFEGUARDS EEQUIBED — ^PENALTY. In the line of prevention of accidents the employer should be penalized for not using the safeguards which the state may from time to time require. Where an accident is due to the failure to comply with the 250 REPORT OF EMPLOYERS' LIABILITY COMMISSION law, it would be wise to require the employer to pay into the fund the amount taken out of it to compensate the injured employe. Employes in a factory would be interested as a matter of self-preservation to make complaint to the state officials, if safeguards required by the state were not used. Whereas, if they were to receive the penalty in addition to the regular compensation, they would be willing to take more chances and would be less likely to complain. If the penalty goes to the fund, other employers as well as all employes will be interested in seeing that it is paid, as it will reduce the contributions which they must make. There will also be a tendency to prevent accidents if the workman Is denied compensation, if he refuses to use the safeguards provided and thereby causes his own injury, TAX BASED OW KISK. The plan pursued by insurance companies of basing the rate of premium on the risk of the occupation, making variations in individual cases if required by the risk, and figuring the rate by a percentage of the pay roll, is just and reasonable. In view of the decisions there could be no constitutional objection to such plan. The state thus practically performs the function of an insurance company, but only to the extent necessary to carry out a public purpose. There can also be no legal objection to compelling the employer to collect the employe's contribution, by de- duction from wages. A similar case is the compulsory payment by banks of the tax on the shareholders. It would extend too much this already long paper to further discuss the details of a compensation act, and accordingly the foregoing is re- spectfully submitted to the Commission. AUG 3 11964 ^ PRINTED IN U. S. A. Cornell University Library HD7816.U7I81 1912 Report of Employers' liability commissio 3 1924 002 403 784 kp t^