Part 12

Taking up the details, however, we were very much impressed by the aspect of the case that Mr. Lowell spoke of a few minutes ago; that is, the uncertainty as to what it would cost and the opposition that developed against the measure because of that uncertainty. For that reason we felt that we ought to make the probable cost as definite as we could, and that meant requiring lump sum payments rather than continuous payments, limiting the period during which the continuous payments should be made in case of disability, and in other points making the measure precise and definite, when, from the point of view of the social interests of the community, it ought to be more vague and indefinite, that it might be adapted to the requirements of each special case. It was on those grounds of expediency, remembering all the time that this was the first step, that if the Legislature of New York passed these bills it would be the first State in this country to go in for any kind of workmen's compensation, and that every country which has adopted this policy has found it necessary to amend and modify as the result of experience, that the schedule which we finally agreed upon took the form that it did; that is, limiting the compensation in case of disability to not more than $10 a week, and to continue in case of a permanent disability for not more than eight years. In death cases not more in the aggregate than four years' wages, and not to exceed in any case $3000. That schedule has the advantage of being definite and of being one which enables the insurance actuary without much difficulty to name a rate, and, needless to say, we got such rates from the insurance company's representatives before we finally decided on that schedule.

As to the administrative features of our bills, our difficulty was to devise a plan which would do away with litigation and at the same time be constitutional. We all of us recognized the merits of some scheme of arbitration as preferable to court procedure, and yet the more we looked into it, and the more we studied the complexities of our system in New York, the more we were impressed with the necessity of creating an entirely new system of jurisprudence, if we were going to have in that State a scheme of arbitration comparable to the English scheme of arbitration. For that reason we left that to future amendment of the bill, and left the judicial procedure very much as it is under the employers' liability law, believing that under a law requiring definite compensation, both employer and employe, for their own interests, would keep away from litigation, and would enter into voluntary arrangements for arbitration that would not require a resort to the courts. Resort to the courts may be taken by either side under these bills as before, but it is our confident belief that it will not be taken, and that this plan will very greatly reduce the litigation, and at the same time greatly increase the number of reasons these bills took the form which they have taken.

MR. HARPER (Illinois): Do you provide that in case any question arises under the compensation plan, suit may be brought and the merits tried in an action at law?

PROF. SEAGER: Yes.

MR. HARPER: And you also provide, I believe, that no jury trial shall be permitted?

PROF. SEAGER: No; such a provision was in the original bill, but was stricken out of the act. I am sorry that I am not a lawyer, and, therefore, cannot explain the point definitely, but the other provision was simply to make it possible to bring suit and recover a lump sum in case there was any default in the periodic payments required in cases of disability. That is, in case of default in the payments under this provision the employe or the dependent entitled to payment can immediately bring suit and collect a lump sum in damages.

SENATOR SANBORN (Wisconsin): We have appreciated in Wisconsin all these troubles and oppositions you have been discussing here, and have been trying to find some way that we can put a law into operation in Wisconsin so that we can have some basis for improvement hereafter, realizing at the outset we were going to meet the opposition of the manufacturers if they did not know exactly what it would cost. If we were going to get their hearty support the rates would have to be so low that they would know it was not going to cost them any more than at the present time. On the other hand, we realized that the laboring man does not want to give up anything he has got, but wants more. That he is entitled to more than he is receiving under the law everybody, I think, will concede. The question was, how were we going to accomplish that and get for the laboring man all that he would get under the law.

We realized that practically 60 per cent. of every dollar that was paid out by the employers for industrial accidents under the present system was wasted and did not go to the laboring man, and if we could bring about a system which would prevent anywhere near that great amount of waste, and turn that money over to the laboring man who was injured, we felt that we would be taking one great step in advance, and we are trying now to get a system by which that can be done. In fact, we want to do away entirely with court proceedings, if possible.

The first step we propose to take in this regard is to change the law generally in our State, so that the manufacturer will feel that he must have relief. In order to reach that result we are going to make them all liable for the negligence of the fellow-servants and strike out the assumption of risk. We have practically agreed on that, and that leaves the only defense remaining for the employer, that of contributory negligence. That will reach a great many cases, and leave it so that the manufacturer will feel that he must have some relief.

Our whole plan is optional. No employer and no employe is obliged to come under it, but if a manufacturer or an employer of labor wants to come under it, all he has to do is to file a declaration with the commissioner of labor, and he is under it. He is not under it definitely, because he can get out at the end of any year by serving notice sixty days in advance of his desire so to do.

Then, as far as the laborer is concerned, the plan is that as a part of his contract of employment he waives his right to anything else except the compensation, and this law will fix his compensation. Then we follow that up by arbitration to settle all the disputes that may arise. The only question that can arise for the court to pass on is whether the arbitrators have exceeded their jurisdiction under the law, but all questions of fact are to be settled by the Board of Arbitration. If we had some criterion to follow, something that we could point to definitely as to just what would be the result to the employer and the laboring man, we would feel differently. But we feel that we can put this system into operation, and we feel further that the manufacturers and the laboring men in their present spirit will operate under it until we can arrive at something definite. We are endeavoring to make our schedule just as large as it can be made. Our schedule is indefinite and will undoubtedly be increased over what it is in the bill. In other words, we propose to do just as the railroads have always done, to put onto the traffic for the benefit of the laboring man every dollar it will bear, and get that money to the man who is injured with as little expense as is possible. That is what we are aiming to do, and we know of no other way to do it except by putting it under a voluntary system, so as to get away from the constitutional conditions that you meet everywhere. Under a compulsory system you cannot do that, but under an elective system you can.

As to the expediency, we feel that our people will try it, and if it does not work it will not take any act of the Legislature to annul it. We can accomplish some results, and the time will come when we can have some figures perhaps to give conferences like this in their effort to ascertain what is best as the policy to be followed. We started out first with an insurance scheme connected with it, but we abandoned that and made up our minds to make it just as simple as we could, and to let the employer of labor have the widest possible scope to protect himself. If he does it through mutual insurance companies, well and good; if he does it through the other insurance companies, well and good; the idea being to hamper him as little as possible in that respect. All we want is to make it absolutely sure that when a man is injured he will receive his pay. That has been one of the troublesome questions; we have tried to make a provision, which is still tentative, by which the employe's claim shall be an absolute lien upon all the property of the employer.

PROF. SEAGER: We have not previously provided for the expenses of this Conference or for the expenses of the next Conference we may hold. With that thought in view, I would like to move that the members of the Commissions and committees represented at this Conference be requested to use their best efforts to secure an appropriation from the funds of such Commissions and committees of $50 from each Commission and committee toward the expenses of our Conference.

CHAIRMAN MERCER: Without any formal motion that will be taken as the sense of the meeting.

MR. DAWSON: I move that when we adjourn, we adjourn to meet in St. Louis, and that the time be fixed between Christmas and New Year. The reason I make this suggestion is that there are to be other meetings at that time in St. Louis--the American Economic Association and the American Association for Labor Legislation, and also because by that time all the bills of these various Commissions will be ready, and we can have a final interchange of views before they go to their various Legislatures. I will add to that motion also that the Executive Committee be given power to change the date and place of the meeting if they deem it advisable.

(The motion being seconded was adopted by a _vivâ voce_ vote.)

DR. ALLPORT: It appears in the matter of making provisions of the kind we have been discussing that their constitutionality would depend on two aspects: First, that we take the view as suggested by Mr. Mercer, that it lies within the police power of the State to regulate this matter and so constitute all these employments as dangerous employments, or whether we shall put into the law something which looks like a joker. The particular point I have reference to is this: The specifications in Sections 1, 2, 3 and 4 of the Wisconsin tentative bill relative to waiver of the matters we have been discussing; that is, assumed risk and contributory negligence, fellow-servants, etc. The second bill recommended makes this provision: "The provisions of this act shall apply to any person, firm or corporation transacting business in this State who shall have elected to accept and operate under such provisions."

That implies an election to accept the provisions of the act. In Section 4, however, is this provision: "Every person, firm or corporation engaged in business in this State that has an employe in his or its service shall be presumed to have accepted the provisions of this act. Every employe, as a part of his contract of hiring, shall be deemed to have accepted the provisions of this act unless at the time of such hiring he contracts in writing to the contrary, in which case the employer shall not be liable under the provisions of this act. Every employe whose contract of hiring is in force at the time his employer elects to provide compensation under this act, shall be deemed to have accepted the provisions thereof unless he files a notice in writing to the contrary with his employer within thirty days thereafter."

I am not a lawyer myself, and I do not know what that means, but I would like to know from somebody who is posted in constitutional law as to whether that method of circumventing the usual provisions of the law is strictly in accordance with the rulings under our constitution. That is, whether a law can specify that we shall have the right of election under the law, making the provisions of the law specific, and then in the following section specify that unless they shall elect to the contrary they shall be supposed to be acting under the provisions of this law. That is the way in which Wisconsin has gone behind the constitutional part of the law.

SENATOR SANBORN: The Legislature can always say what the fact is presumed to be, and the presumption is that every manufacturer will elect to accept this law. Whether they have or not is a presumption of fact, and we do not have to prove that. In other words, as a matter of course, we presume that every man has elected, but we do not have to say that he has elected.

CHAIRMAN MERCER: It seems to me, gentlemen, in the course of these proceedings, that the first thing to be done is to prevent accidents. The second proposition is to compensate the injured for those accidents which you do not prevent. You cannot prevent by penal legislation; you cannot prevent by the assumption of damages of an uncertain quantity, because those things have already been tried and have failed. You can prevent accidents better, I think, by placing a certain, simple and rapid liability upon the industry which both sides shall partially bear, and which will compel both sides to understand that there is a financial risk upon them that will increase their cost absolutely if any accidents occur. I do not think any large proportion of that should be placed upon the laboring man, perhaps not over 15 or 20 per cent.

The laboring man, however, is in a better position to determine whether or not a man is faking; he has his own channels of reaching him. He is in a better position to see that the machinery is protected, and to see that the rules are enforced in the factory, and he is the man who is in a position to see that a fair settlement is made if he has a financial interest in it, and not to say in an off-hand way, "Oh, well, the man has been hurt, give him $50." Besides that, when he has such a proposition as that and feels that it is not a subject of charity, but a business proposition, and a matter in which he has a right to help in the administration of it, he wants to administer it quickly and rapidly. It appears that the European countries which have adopted some such scheme as this have found it to be the most satisfactory. No man will believe that he will be injured in an accident. The moment a man starts in on the proposition of whether he himself is going to be injured, he becomes an unfit subject to ask for employment. He is not in a position to go to the employer and say, "You must guard that wheel," or "protect this machine." But if a situation is devised where one man can go to the other and say: "You are the employer and you must stand five-sixths of the cost of an accident, and we one-sixth, and you must protect these men; here is a man over here that will not live up to the rules, fire him. Here is a man that does not know his business. Do not let him work in this place. We have an interest in this matter. It is costing us money if he injures somebody, and we want these men protected." You can see what a different situation arises.

The employer must take the word of the laboring man for that, because the laboring man is where he can see and know, and the employer is not in a similar position. The result of that is to increase the confidence in the laboring man, to increase the precautions taken to prevent accidents, and to increase the mutual respect and good feeling between the two men, if you place them both where they have a mutual and certain liability.

As to what is a dangerous employment, as to whether or not you should cover some or all, I have no doubt that there is not a man in this country, a farmer, a mechanic, a laboring man, a doctor, a lawyer or any other professional man, but what is perfectly willing to have and desires to have a fair compensation law if he can know just what it is going to cost him, and just what his insurance will cost him, in order to avoid the present uncertainties and evils that flow from existing conditions. The case of domestic servants has been mentioned here. One of our judges in the federal court in our State had a servant break her leg on his back porch last year. He took her to the hospital and took care of her, but would not he rather have been paying three dollars a year for insurance for all the risks that might come to her in that industry? Would not you rather do that yourself? And besides that, from the humane standpoint, would not you rather that the poor girl should be placed in a position where she certainly will receive compensation in case of an accident which perhaps she or any one else could not have avoided, than to have her go on and lose her wages or else you pay them to her?

Then you say you must not go to the farmer. I say to you that I believe that the farmers in this country would welcome such a proposition if they understood it. There is not a man, an employer or a laboring man, who, when you place the proposition before him in any such form as we are discussing it here, would sanction it off-hand. But there is not a man in this country that I have ever seen who has studied this question for any length of time, intelligently and carefully, but what believes that the more nearly you can get every industry into one certain, definite and simple liability the better off you are.

Look at it as a business proposition--and it is a business proposition--it is an insurance risk and it ought to be left in such a way that the liability is direct. The first thing the business man undertakes to consider on this proposition is what will it cost me; can I afford it? Every time you put on a double liability, every time you leave a thing uncertain, you increase the risks to him and the cost to him in his business, and he so understands it, and that is something which you should give consideration. I do not believe there is a labor representative here, I do not believe there is a laborer in this country, who entirely understands the matter, who is mature in his judgment upon it and who has studied it and understands the whole situation, but who would be willing that you should repeal all of the statutory provisions now existing, repeal all of the common law, if you give him something which he knows is not a gold brick. If you simply say you must have this liability, it is not a question of contract, because that still leaves an uncertainty; but if you say, "You will be paid in accordance with a certain percentage of your wages if you have an accident in your business," everybody will then know just exactly where they stand on the proposition, because it is only a question of actuarial calculation to determine what the compensation is, and I think everybody would be willing to accept a law drafted in that form. It will cost the business men more, but the laborer is going to get more out of it, and it is good business for the business men. You cannot tell me, gentlemen, that all of the large financial institutions and corporations of this country that have voluntarily adopted this scheme in the last three years would have done so, if they had not come deliberately to the conclusion that, taking into consideration the humanitarian features of the case, and the mutual relations that exist between the employer and employe, that this is a step which naturally and logically will be profitably adopted in this country, and one of the most hopeful signs in the present economic situation is that labor and capital are dealing together on matters of that sort, and doing away with the strife and friction that has heretofore prevailed between them.

With respect to the theory that should be followed in this legislation, we must understand that both employer and employe must be willing to stand some restrictions. Neither has more interest in its remote consequences than has the State. We cannot keep up the old system and add a new without leaving all the uncertainties and adding the burdens of certainty. We would leave the burdens of cost, the weight of a large part of the injustice, a considerable amount of the delay and most of the prejudicial feelings that now prevail with respect to the worst accidents and their final determination. There is no doubt but that it would be the worst cases where the remedy through the courts would be used in the present system.

Penalties as such, criminal or civil in nature, ought not to be considered in this legislation where it does not rest upon the basis of fault; penalties never tend to good mutual feelings as between the parties. It is no time to stir up strife when both parties are willing to negotiate fairly upon this question. It is no time to heap unusual obligations when the employer and the State are willing to make a fair compulsory system. Neither is it any time to deprive the laborer of fair compensation; but it is the time to place a liability on a fair basis, comparable to the risk and the situation in other countries, and allow a simple, safe, quick remedy that is absolutely certain.

To be certain, we must remove any idea of recovery as a penalty; we must prohibit the bar of recovery by any fault of the employe. Cases in which the employe would directly and voluntarily be at fault are so few that they would cost the employer and the public much less than the defense of the trials if we should undertake to introduce an element of fault as a defense. The theory of workers' compensation is to get away from fault, and it ought to be barred upon that side as well as the other.

The bill under consideration in this program was meant to be a bill that would accomplish the purposes when more elaborately worked out that we all feel should be had. The title is made broader than an ordinary legislative act, so as to allow a system of law that would repeal all other laws on the question, and substitute this remedy for those which exist and add it where there is none. We, therefore use the term "code" in order to cover a system of law. See Johnson _vs._ Harrison, 47 Minn., 575; Central of Georgia Railway Company _vs._ State, 104 Ga., 31, Section 1.

We have defined dangerous employment in this act with a view of covering every occupation which has accidents. This will give every person the opportunity to guard against the obligations that arise from injuries occurring in and growing out of the conduct of a business.

It is for the Legislature first to determine whether or not this is a proper classification, and if there be reasonable basis for declaring the employment to be dangerous, the courts will follow the judgment of the Legislature, even though their own judgment might not accord with that of the Legislature. See Lochner _vs._ N. Y., 198 U. S., 45; Holden _vs._ Hardy, 169 U. S., 365.

This definition of dangerous employment is studiously meant to be a broad one. It is not dependent upon classification of industries on the basis of manufacture, mining, railroading or other segregated employment. Its purpose is to so define dangerous employment that every employment which is, in fact, dangerous will be so defined exactly in proportion to the dangers that actually occur. Being a dangerous employment for each accident which it has, and not dangerous unless it has those accidents, the definition is especially equitable in two aspects. It induces those operating the same sort of employment to keep their accidents down; it makes those who have accidents liable exactly in proportion to the accidents which they have in fact.