James Harrington Boyd.

Workmen's compensation, or insurance against loss of wages arising out of industrial accidents online

. (page 1 of 5)
Online LibraryJames Harrington BoydWorkmen's compensation, or insurance against loss of wages arising out of industrial accidents → online text (page 1 of 5)
Font size
QR-code for this ebook



B 3 Oflfl MTfl

^^'l-'f^ '

Workmen's Compensation, or Insur-
ance Against Loss of Wages
Arising Out of Industrial




President Ohio Employers" Liabilit}' Commission



Columbus, Ohio, November 17, 1910

With Prefatory Note and Appendices

4 ~> i 4 > a

Published by


J. F. McGrew John McSvveeney

Frank N. Svveitzer

Columbus, Ohio :

The F. J. Heer, Printing Co.



• • •• •

C 9 c • • •


The increasing interest in legislation to secure vvorkingmen against
loss arising from industrial accidents was attested in the appointment last
winter of employers' liability commissions by the states of Connecticut,
Illinois, Massachusetts, Minnesota, Montana, New Jersey, New York,
Ohio, and Wisconsin, to investigate workingmen's compensation and
insurance with a view to remedial legislation. These commissions re-
cently met in Chicago to exchange views and to plan, so far as prac-
ticable, uniformity of action. The report of their proceedings, which
is now passing through the press, will be the latest, and from the
American viewpoint, probably the most important contribution to the

The Illinois commission has hnished its work anJ its report has been
published. In speaking of this tiie secretary of tlie commission de-
clares, "For the first time in the history of Illinois, if not in the United
States, we liave a text-book on the subject of employers' liability.
More than 5,000 individual accidents were investigated and recorded, to-
gether with comparative figures and analyses." Reports ;of other
state commissions, embracing as some of them will the testimony of
experts who have investigated conditions in this country and the ex-
perience of European nations, will constitute a most valuable addition to
the literature on this subject.

The Ohio commission at this time has not completed its work, and
no attempt will be made to anticipate its report. It has had ninuerous
and well attended public hearings in which employers, employes and
other interested parties have spoken freely on almost every phase of
compensation for accident. Indeed the discussions have taken a much
wider range and have included sickness, invalidity and old age insur-
ance. The systems and experiences of European nations, especially
those of Germany and Great liritain, have been presented by experts
who recently returned from abroad, \vhere they had made exten led and
systematic investigation.

In general it may be said that manufacturers have favored a single
compensation or accident insurance, similar to that of Germany. There
have, however, been a few dissenting opinions. One manufacturer de-
clared, among other things, that "it is just as impossible to enact a
compulsory compensation act that would be constitutional as it would
be to pass a valid compulsory arbitration law." "Both," he insisted,
"are palpably unconstitutional. A compulsory compensation act would
interfere with the right of contract. The only alternative, then, is a


law that would make optional the acceptance by the employer or em-
ploye, and drawn so that it would naturally appeal to both."

Labor organizations seem to be generally opposed to the employes"
bearing any part of the financial burden incident to an accident com-
pensation law. The fund should be maintained, they claim, by the em-
ployer, who would provide for it by a slight increase in the price of
the manufactured product. This does not differ widely from the Ger-
man theory of compensation for accidents, although this theory is some-
what modified by the fact that incapacity for work, resulting from a
non-fatal accident, for the first thirteen weeks, is considered sickness
and is paid from the sick insurance fund to which employes contribute.

There is much literature on employers' liability and workingmen's
insurance. Two bibliographies, containing extended lists of references
to books and documents on each of these subjects, have been published
by the Library of Congress. They may be had from the Superintendent
of Documents, Washington, D. C, for ten cents each. Supplemental
lists in manuscript form, with references to magazine articles, may be
consulted in the Ohio State Library. We note here only a select few
of the works published on the subject under consideration. "Com-
pulsory Insurance in Germany," fourth special report of the U. S.
Bureau of Labor, 1892, is a most important document as it contains
a practically complete translation of the German law, with many eluci-
dating comments and valuable statistical tables. "Workingmen's in-
surance," by W. F. Willoughby, a valuable contribution to the sub-
ject, was published in 1898. Perhaps the best work available, as well
for its intrinsic merit as for its timely appearance, is "Workingmen's
Insurance in Europe," by Lee K. Frankel and Miles M. Dawson, is-
sued by the Charities Publication Committee, New York, 1910. It is a
volume of 477 pages, an illuminating and impartial treatment of the
subject to date, with numerous statistical tables, a biblography, and a
conspectus presenting in parallel summary the operations and results
of workingmen's insiu'ance in Europe.

The address on the following pages was delivered by Hon. James
Harrington Boyd, chairman of the Ohio Employers' Liability Commis-
sion, at the recent meeting of the Ohio State Board of Commerce. To
this address are appended the workmen's liability laws and the recently
adopted workmen's compensation act of the State of New York, with a
decision sustaining the act, the law providing "accident and total dis-
ability insurance for coal miners" of Montana, and extracts, from the
work described in the preceding paragraph, on workingmen's insurance
in Germany. It is hoped that this publication may be helpful to mem-
bers of the General Assembly of Ohio and that it may not be without
interest to other citizens of the state. — C. B. G.




By James Harrington Boyd.


James J. Hill, on September 20, 1906, published his famous memoir
on the conservation of coal, iron, and minerals and the soil. James Gar-
field, Theodore Roosevelt and Mr. Pinchot have been advocating the
conservation of the national resources. I stand here today the advocate
of the conservation of the human being, the conservation of the laboring
man, who is the corner-stone of the state.

The object of this address is to formulate from an historical,
economic and statistical point of view the problem which the Legislature
of Ohio has propounded to the Employers' Liability Commission for a
solution or for helps to a solution.

Employers' liability to and the compensation of employes for in-
juries received in industrial accidents is an old problem. It has its
roots embedded in a hundred years of political, philosophical, econom-
ical and legal discussion. The great philosophers, economists and states-
men under whose guidance the German Empire was erected, gave
their solution of this problem to the world more than twenty years ago.
All the nations of Europe (except Turkey), Australia, New Zealand,
and British Columbia, for some years have had their plans for handling
this problem in operation. They have one and all abrogated the rules
of common law defences excepting malicious negligence.

We approach this problem under changed and changing condi-
tions. The world has grown more in the industrial relations during
the last fifty years than it did in the two thousand years preceding.
As James J. Hill pointed out, in the short span of forty years from to-
day, the United States will have a population of at least 250,000,000^.

Already, in fact we may say since 1900, our public domain has
substantially passed into the hands of private ownership. Prior to this
time a farm could be had by the courageous for the asking. Under these
changed economic conditions, the real struggle for existence in the
United States has begim. It is intensified by the addition of a mil-
lion strangers to our numbers every year.

'James J. Hill. Address, St. Paul, Sept. 20, 1910.



Let US not forget that in 1870, 70 per cent of our population lived
on the land and only 30 per cent in towns and cities-. But today more
than 65 per cent live in towns and cities and only 35 per cent live on
the land.

Under these conditions have our remedies for personal injuries
been operating. It is now asked, What plan for compensation of em-
ployes for injuries received in industrial accidents will you recommend
for the immediate and near future when we shall have from 150,000,000
to 250,000,000 inhabitants in the United States?

Census Report. 1870.

workmen's compensation, etc.

Under our common law procedure and that of England an employe
injured in an industrial accident, without fault and able to prove that his
employer was negligent, can recover damages for his injuries.

The plaintiff cannot recover if the defendant can prove:

(a) That the plaintiff's negligence contributed to the cause of the
accident; or

(b) That the negligence of a fellow servant contributed to the
cause of the accident ; or

(c) That the plaintiff assumed the risk, even though the defendant
was negligent.

With what efficiency do the common law remedies operate in com-
pensating persons injured in industrial accidents?

We give the i-esult of five investigations of wide scope, towit:

I. The report of the Employers' Liability Commission of New
York State.

II. The Pittsburg Survey, six volumes, The Russell Sage Founda-
tion, 1910.

III. Wisconsin Bureau of Labor and Industrial Statistics. Report
for 1909.

IV. The report of the Employers' Liability Commission of Illinois,

V. European experience, that of Germany in particular.


During the years of 1906-7-8 ten insurance companies which keep
Employers' Liability records, doing business in New York, received in
premiums from

Employers $23,524,000

They paid to injured employes 8,560,000

Waste $14,964,000'

Nothing could more strikingly set forth the waste of the present
system. Only 36.34 per cent of what employers pay in premiums for
liability insurance is paid in settlement of claims and suits. Thus, for
every $100 paid out by employers for protection against liability to
their injured workmen, less than $37 is paid to those workmen; $63
goes to pay the salaries of attorneys and claim agents whose business


First report of the Employers' Liability Commission of New York, p. 31.


it is to defeat the claims of the injured, to the cost of soliciting busi-
ness, to the cost of administration, to court costs, and to profit.

Out of this 36.34 per cent the injured employe must pay his at-
torney. The same report shows that the attorney gets 26.13 per cent of
what is paid to the injured employe. This investigation covers forty-
six cases where the recovery was above $1500 each. In small recov-
eries the attorney fees take a larger proportion. This report shows that
not more than somewhere between 20 and 25 per cent of the money
paid by the employing class goes actually into the pockets of injured
workmen for their dependent families in death cases*.


The investigation recently conducted in Allegheny County, Pa.,
under the direction of the "Pittsburgh Survey," showed that out of 355
cases of men killed in industrial accidents, all of whom were contri-
buting to the support of others and two-thirds of whom were married,
eighty-nine of the families left received not a dollar of compensation
from the employer, 113 families received not more than $100.00, and
sixty-one families received something more than this $100.00. In other
words 57 per cent of these families were left by their employers to
bear the entire burden of income loss ; and granting that all unknown
amounts zvould be decided for the plaintiffs, only 26 per cent received,
in compensation for the death of a regular income provider, more than
$500.00, a sum which would approximate one year's income of the
lowest paid of the workers killed.

The proportion of the loss borne by employers in injury cases does
not differ greatly from that in death cases.

Thus, out of 288 injury cases, of the married men alone, 56 per
cent received no compensation; of single men contributing to the sup-
port of others, 69 per cent received no compensation ; of single men
without dependents, 80 per cent received no compensation.

The great financial losses borne by the workingmen are set forth by
the Wisconsin Bureau of Labor and Statistics in the following report
of 306 non-fatal cases of injuries :

Received nothing from employer

Received amomit of doctor bill only

Received amount of part of doctor bill only

Received something in addition to doctor bills...
Received something but not doctor bills

306 100.00


Per cent.











* First report of the Employers' Liability Commission of New^ York, p. 31.
"Work accidents and their costs, by Crystal Eastman, Charities and Com-
mons, Mar.. 1909.


In Other words, we may say that in two-thirds of the cases part or
all of the doctor bills were paid, but in less than one-third was anything
more paid, and in about one-fourth of the cases nothing whatever was

Of 131 non-fatal cases in Wisconsin, concerning which reports were
secured by factory inspectors, the following disposition was made :

Cases. Per cent.

Received nothing from employer 28 21.37

Received doctor bills only 56 42.75

Received something — doctor bills 10 7.63

Received something but not doctor bills 34 25.96

Not settled 3 2.29

Total 131 100.00


The Employers' Liability Commission of the State of Illinois has
recently made a report of its investigation of industrial accidents and
employers' liability at a cost of $10,000. I give you a condensed state-
ment of the results of the investigation of the Illinois Commission in
the language of Edwin R. Wright, Secretary of the Commission.

"So much has been said and written regarding the work of the Em-
ployers' Liability Commission that I wish to go into the matter at some
length — setting forth the whole story in as few words as possible.

I'^or the first time in the history of Illinois, if not in the United
States, we have a text-book on the subject of Employers' Liability.
]\forc th."n 5.000 individual accidents were investigated and recorded,
together with comparative figures and analyses. A few words as to
what the report shows may be of value :

Six hundred and fourteen fatal accidents are recorded.

The families of two hundred and fourteen of these w'orkers re-
ceived nothing in return for the loss of the breadwinner.

One hundred and eleven damage suits are pending in court.

Twenty-four cases have been settled through court proceedings.

Two hundred and eighty-one families settled direct with the em-

Skilled railroad employes, in settlement for death claims,

averaged about $1 ,000

Steel workers 874

Railroad laborers 617

Skilled building tradesmen 348

Skilled electric railway employes ■ 310

Unclassified workmen 311

Miscellaneous trades •. 292

Packing house employes 234


General laborers 154

Mine workers 155

Electric railway laborers 75

Teamsters 000

Building laborers 000

These figures were not gathered indiscriminately. They are au-
thentic and have been carefully verified. No attempt was made to
"stack the cards." As secretary of 'the Commission I knew that condi-
tions were so bad that any attempt at exaggeration would be folly.

A further summary may be offered : Of every loo industrial ac-
cidents, fifteen go to court, seven are lost and eight won. Ninety-two
injuries out of every one hundred receive no compensation. (This in-
cludes both fatal and non-fatal accidents.)

Another interesting feature is this : A search through the record
reveals fifty-three fatal cases of recent date. In fatal cases, the usual
defenses of the employer — the fellow-servant doctrine, assumption of
risk, etc. — did not apply or there would not have been a recovery at all.

For these — the very pick of industrial cases — the average recov-
ery for death was only $1,877.36. Of this an average amount of $750.95
was paid to attorneys or expended in court fees, etc.. leaving an actual
payment of $1,126.41 to the family of the dead worker. Thirty-four
widows were compelled to seek employment and sixty-five children left
school to help keep the wolf from the door.

Nor is this the only complaint of labor. Another section of the
report shows where one injured workman is re-employed, two do not
return to their former employer. The average age of workmen meet- .
ing with accidents is thirty-two years. Most of them are married.
What becomes of the injured workman and his family God only knows.

The above is only the faintest outline of the work of the Commis-
sion. The report is valuable enough for every delegate to take home
and study. It means a direct financial return to every citizen of Il-
linois, if the text is understood. It means civilization and progress and
good citizenship. It means fewer hospitals and poorhouses. It means
food and clot lies and education for little children.

Issues are raised and pages are printed and speeches are made on a
hundred subjects which becloud the issue. Workers have been gulled
into following false prophets into the wilderness of specious reasoning.
We are often robbed of just dues for our labor, our liberties are restrict-
ed, and our sensibilities degraded, but until we crystallize the attention of
our unions upon a proper valuation of human life, all else seems futile.
The State Federation of Labor should demand the conservation of
human life, surrounding our membership with every known safeguard.
This will reduce the number of injuries to a minimum. Then throw

workmen's compensation, etc. 11

the burden upon the industry. While we may not reaHze ideal condi-
tions at once, we can at least place our state in the forefront of progres-
sive legislation."


In 1887 there were insured in Germany 3,861,560 workingmen
among 319.453 establishments, and the number of notices of accidents
was 1 06, 10 r.

Tlie German analysis of the 15,970 accidents which incapacitated
workmen for more than thirteen weeks, shows :

That 19.76 per cent of the 15,970, or 3,156 injuries, were attribut-
able to the fault of the employers.

That 25.64 per cent of the 15.970, or 4.094 injuries, were attri-
butable to the fault of the injured.

That 54.60 per cent of the 15,970, or 8,720 injuries, were attri-
butable to the fault of the injured and employer and inevitable risk when
at work*^'.

Thus 80.24 P<?i' ^'^"t of 15.970 of 12,834 injuries were attributable
to the fault of the employe and the inherent dangers of the industry.
Now 18.51 per cent of these 12,834 were killed, 2,375.
18.70 per cent of these 12,834 were totally disabled, 2,272.
50.88 per cent of these 12,834 were partly disabled, 6,590.

"Fourth special Report of the Commissioner of Labor, 1893, p. 83.

Cause attributable to :

Fault of the employer: Per cent. Number.

Insufficient apparatus for protection 10.64 1,700

Defective arrangement for carrying on business 7.03 1,122

Lack of directions or improper ones 2.09 334

Total 19.76 3,156

Fault of the injured :

Awkwardness or inattention 16.49 2,634

Disobedience to orders 5. 17 825

Heedlessness 1.98 316

Failure to make use of protective ap])aratus 1.76 281

Unsuitable cl -thing- .24 38

T.ital 25.64 4.09}

Fault of the employed and injured 4.45 711

Fault of third i)erson. particularly a co-laborer 3.28 524

No fault which can be assigned 3 .47 554

Inevitable risk when at work .' 43. -10 6,931


12.91 per cent of these 12,834 were incapacitated for a time longer
than thirteen weeks, 1,657'.

It follows therefore that out of 15,970 employes whose injuries
lasted more than thirteen weeks, the common law remedies would give
3,156 employes such compensation as a jury would assess after a trial
and all appeals were settled.®

But the common law does not pretend to compensate dependents
of the 2,375 killed in these accidents where the cause of death could
not be attributed wholly to the fault of the employer. Nor does the
common law pretend to compensate the 2,272 injured workmen who
were disabled for life, the fault not being attributable to the employer.

Nor does the common law offer any remedy for compensating the
6,590 injured workingmen who were partially disabled, the fault there-
of not being traceable to the employer.

The state of Ohio now says that when 10,459 helpless and crippled
persons and the dependents of 2,375 workmen deceased have become
paupers it will house them.

It is, therefore, the duty of the state to provide by industrial in-
surance or compensation act, the means whereby 80 per cent of all
workingmen who are now unable to do so may protect themselves
against the inevitable calamities of industrial activity. It is the duty
of the state, to conserve the self-respect of the family which is the unit
of the state.

The bulletin for the Bureau of Labor for January,- 1908, gives on
page 120 the statistics of 46,000 industrial accidents collected by the
German imperial insurance office.

The classification of the causes of the accidents is as follows :

Per cent.

1. Due to negligence or fault of employer 16.81

2. Due to joint negligence of the employer and injured employee 4.66

3. Due to negligence of co-employes (fellow servants) 5.28

4. Due to "Acts of God" 2.31

5. Due to fault or negligence of employee 28.89

6. Due to inevitable accidents connected with the employment 42.05

Total 100.00

'The result to the injured in the 15,970 cases are as follows:


Result caused. Per cent. Number.

Death 18.51 2,956

Lasting incapacity for work.

Entire 17.70 2,827

Partial 50.88 8,126

Total 68.58 10,953

Incapacit}' for a time longer than thirteen weeks 12.91 2,061

«Schonberg, Handbuch XXII, pp. 737-748.

workmen's compensation, etc. 13

These figures grouped to correspond to those for one year, 1887,

1. Cause of accident attributable to employer 16.81

2. Cause of accidents attributable to employee 28.89

3. Due to the inherent risks of the business 64.30

Total 100.00

The agricultural laborers were admitted to insurance after 1887,
and the act was made to cover a large additional class of less intel-
ligent laborers.

The 19,000,000 workingmen who earn on an average less than $500
per annum, with their families, represent a population of 60,000,000

They do most of the work of the nation. They represent the pre-
ponderance of its political power, they are the state, they cannot pro-
tect themselves against 80 per cent of the injuries received in industrial
accidents and against the consequent poverty.

The state must provide a new remedy to correct the evils for which
up to date, the laws of the state furnish no remedy.

"He that taketh away his neighbor's living slayeth him ; and he that
defraudeth the laborer of his hire is a blood-shedder."

Every civilized nation has decided that the product of labor of a
given generation must support all diu'ing that time^.

Looked at from a purely commercial standpoint, that of the rearing
of men and women for the purpose of productive laborers, the elements
of cost and waste have been studied with accurate results.

There is the rearing of children to the age of self-support, with
the result that 13 per cent die during that period; during the assumed
productive life of wage-earners, it is estimated that the loss from death
is 25 per cent in the United States^". The loss through sickness is 6
percent^^. Then you must add cost, in money and time, of accidents
and the support of the aged.

Under these conditions it is claimed that the contract of labor,
through some inadvertence is made as though sickness, accident, in-

1 3 4 5

Online LibraryJames Harrington BoydWorkmen's compensation, or insurance against loss of wages arising out of industrial accidents → online text (page 1 of 5)