Oak street Jllfv.ef I|| T ihrat-xf JNCLASSIFIED • •51 V < I/-: \ \ . Report of Atlantic City Conference on Workmen's Compensation Acts. July - - 1909 Copies may be had from the Secretary, H. V. Mercer, at fifty cents each. Minneapolis, Minn. Univ.Gf in. Library 51 Report of Atlantic City Conference on Workmen’s Compensation Acts Held at Atlantic City, N. J. July 29-31, 1909 Prefatory Note The enclosed proceedings were the result of a conference held at Atlantic City, N. J., called on the initiative of the'Minnesota Employees’ Compensation Commission, and to which the Commissioners of various states interested in the same problem, as well as certain government officials and others, including the Russell Sage Foundation, and many insurance companies, employers and labor officials were asked to be present in response to the following invitation: To You are invited to be present at The Marlborough-Blen- heim, at Atlantic City, July 29-31 and take part in a conference with the various State and Government officials and others, interested in legislation changing the basis of recovery for in- juries received in the course of employment from that of negli- gence or fault of the employer, to that of risk of the industry or insurance; at which conference the persons whose names appear under the several subjects will be asked to lead the discussions along the respective lines appearing in the program herein. You are requested to extend this invitation to such persons as can contribute knowledge on the subject.. Yours truly, H. V. Mercer, Chairman Minnesota Employees’ Compensation Commission, Minneapolis ■ PROGRAM WORKMEN’S COMPENSATION ACTS CONFERENCE, ATLANTIC CITY, JULY 29-31, 1909. 1. DESIRABILITY Prof. John R. Commons, Madison, Wis. Hon. Chas. P. Neill, Washington, D. C. Hon. Geo. W. Smith, Buffalo, N. Y. GENERAL DISCUSSION II. POSSIBILITY Hon. P. T. Sherman, New York City, N. Y. Hon. A. W. Sanborn, Ashland, Wis. GENERAL DISCUSSION 111. PRACTICABILITY Hon. E. E. Clarke, Dr. Lee K. Frankel, Hon. John Mitchell, Hon. W. E. McEwen Hon. W. B. Dickson, Hon. Miles M. Dawson, Washington, D, C. New York City, N. Y. New York City, N. Y. St. Paul, Minn. New York City, N. Y. New York City, N. Y. GENERAL DISCUSSION I ^he results of the meeting were very gratifying to those, who promot- ed the conference and all seemed well pleased with the results. An executive committee was appointed with power to act with respect to a future meeting. The Minnesota Commissioners desire to express their appreciation of the valuable assistance and counsel of all who were present, and especially "to those who SO 9bly assisted in the discussions. Secretary’s Report of Proceedings Pursuant to invitation of the ^linnesota Employees’ Compensation Commission, a conference was held at tlie Marlboroug’li-Plenlieim, Atlantic City, New Jersey, July 29-30, 1909, the following named persons being in attend- ance : Elaine, John J., Boscohcl, Wis. ‘ Member of Wisconsin Committee on Thdustrial Insurance. Lawyer. Chaney, Lucian IV., Washington, D. C. Eureau of Labor. . COHLETT, AV. A\\, New York, N. Y. Dawson, AFiles .M., New York, N. Y. Actuary. Faxan, AA'alteu C., Hartford Conn. A"ice-President Aetna Life Insurance Co., Accident and Liability Department. Fkankel, Lee K., New York City. Gillette, George AI. A1 ember Alinnesota Employees’ Compensation Commission. Ingalls, Wallace, Racine, Wis. Alember AAusconsin Committee on Industrial In- surance. Lawj^er. Lyman, T. U., Hartford, Conn. Travelers’ Insurance Co. AIcEwen, AV. E., St. Paul, Minn. Commissioner of Labor. Alember Alinnesota Em- ployees’ Compensation Commission. Mekcek^, H. V., Minneapolis, Minn. Member ^linuesota Employees’ Compensation Commission. Lawyer. MolonY;, J. K., Hartford, Conn. Aetna Life Insurance Co., Accident and Liability Department. Moore^ Franklin J., Philadelphia , Pa. U. kS. Manager The General Accident Assurance Corporation, Limited, of rertb, Scotland. Neill^ Charles F., Washinyton , D. C. United States Commissioner of Labor. Parsons, A. AV., Heio York Ciiif. Fidelity and Casualty Co. Petr ASCI I, Carl S., Hew York Cliy, United States Casualty Co. Lawyer. Reid, A. Duncan, Heio York, N. Y. Ocean Accident and GuaranU^ Co. of London, England. Rorertson,- W. Spencer, New York City, 30 Church St. Rowe, J. Scofield, Hartford, Conn. Secretary Aetna Life Insurance Co., Accident and Liability Department. SeaCtEr, Henry R., New York, N.-Y. Member New York State Commission. Professor Columbia University. Smith, George, Buffalo, N. Y. Member New York State Commission. Lacka- wanna Steel Co. Stone, John T., Baltimore, Md. President Maryland Casualty Co 3 Waller^ J. T., Atlanta^ Ga. Liability Insurance. Watrous, Paul J., Milioaulvee^ Wis. Secretary Wisconsin Committee on Industrial In- surance. iMr. Mercer: Gentlemen, the time has come when we slionld open our meeting, I suppose. As the object of it is stated on tlie program, you are all more or less familiar v/itli it, and I think it is unnecessary to make any pre- liminary statement. You will need a chairman for the meeting, and I suggest that nominations are now in order. Mr. Daicson: I nominate Mr. Neill to be chairman of the conference. Mr. NeiJl : I will ask Mr. Dawson to withdraw my nomi- nation. I may not be able to remain longer than two days. I put in nomination Mr. Mercer; he has organized this plan of work. il/r. Gillette: I trust that Mr. Dawson 'will not insist upon his nomination being withdrawn. Mr. Dawson: I feel that this is possibly only the be- ginning of meetings which must be held, and conferences which must take place, before this matter ps finished. And I feel that if Mr. Neill will act as chairman it would lend dignity and confidence to this undertaking. I hope very much that he will take not only the chairmanship of this meeting but the permanent chairmanship of this confer- ence. Mr. Mercer: Gentlemen, I think I ought to say that Mr. Dawson and I talked this matter over a moment ago, and yve thought it better that Mr. Neill should be chair- man. I hope, under the circumstances, that Mr. Neill will act, and that the sno'gestion of my name will be withdravni. 4 Mr. Neil : If you feel that way, Mr. Mercer, after what Mr. Dawson has said I will withdraw what I said. 71/r. Mercer: Thank you. All in favor of Mr. Neill will please make it known by saying aye. It is unanimous, and Mr. Neill is chairman of tlie meeting. Mr. II -V. Mercer of Minneapolis was nominated to be secretary of tlie conference. Tliere were no further nomi- nations, and Mr. ]\[ercer was unanimously elected to act as such secretary. 71/r. Datvson : Mr. Chairman, I would ask that Mr. W. M. Higgins of Minneapolis take tlie notes of our meetings. I can then adopt them in my report. The Chairman : Without objection, it will be so ordered. It is so ordered. Is there anything further connected with the comple- tion of the organization? If not, we can take up the first topic on the program, the desirability of workmen’s com- pensation acts. Have you any news from Prof. Commons? Mr. Mercer: Prof. Commons at first indicated that he could come. But I had a letter from him a day or two before leaving home, saying that on account of certain work that was rushing him, that he was getting out for publishers, it would be absolutely impossible for him to be here. He sent his regrets. He is thoroughly in sym- pathy with the meeting. The Chairman : I see, gentlemen, that my name is sec- ond on the list. Simply for the purpose of opening the discussion, I will say a very few words. It has seemed to me that on the question of desirability of compensation legislation there could not be two sides. I believe that on most questions there are two sides. This is one of the few subjects in the domain of industrial leg- o islation that it seems to me is not open to any discussion as to its desirability. The question is, as to how it can be brought about and what particular plan may be the best. We stand today the only important industrial country in the world that has not adopted tliis principle. In the matter of liability for industrial accidents" we are still fol- lowing a principle in x\nierican law which was English in its origin. It does not represent the intelligence nor the wisdom nor the deliberate conviction of any body of men who had given thought or study to the subject. It repre- sents tlie accidental decision of a single judge, a decision which it is not too much to say — was a parody on logic and a travesty on justice. Tlie original decision fixing the limi- tations on tlie principle of employers’ liability (which is still the basis of most of our American law) was rendereo at a time after the industrial revolution had thoroughly es- tablished itself; when production on a very large scale was already in evidence on every hand. The English judge who made That law for the succeeding seventy-five years, con- fessedly based the decision on the absurd results that would have folloAved from a contrary decision. It Avas purely a question of expediency. EA^erj^ illustration, Avith- out exception, that he made to sIioaa^ the absurdity that Avonld follow from a contrary ruling was based on do- mestic service; a domestic service Avhich Avould probably form one case in fiA^e hundred liable to come up for con- sideration under the decision that he Avas making. The de- velopment of that decision became so absurd that England itself threw it over. And today, as I said in the beginning, the United States is the only chdlized industrial country which places the burden of risk upon the individual em- ploye. It has bee said in regard to the assumption of risk by the employe, that the judge wrote a clause into the 6 supposed labor contract, which neither side up to that time had ever dreamed was there, and Avhich up to tlie pres- ent time neither side lias been able to thoroughly under- stand. The situation in a nutshell seems to be tliis: There are inevitable risks in almost every line of occupation. The employer may exercise every possible precaution — not only ordinary diligence but extraordinary diligence; the work- man may do tlie same; and in spite of that, industry takes its inevitable toll year after year, month after month, day after day, and even hour after hour. I know of a single in- dustry (a. small industry, employing probably at this time less tlian one liundred and fifty thousand men) whose an- nual toll is over seven liundred human lives; and the maimed and injured number several times that, every year, and many of those maimed are maimed for life. Yet, under our system of law, the families of the great majority of these seven hundred men could not collect any form of dam- ages. Here is an inevitable sacrifice of human life in* order that the consumers of that commodity may have what they desire. The entire burden of that loss somebody has to bear; it is borne somewhere. The entire burden is thrown upon those least able to bear it — the families of the vic- tims. Now, I think the title ^^workmen’s compensation” is good, at this point, because it gets away from the phrase ^^em- ployers’ liability.” The term ^^employers’ liability” seems to assume that in some way the employer should be penal- ized for these losses ; should be made himself in some way to bear the cost. That is a mistaken notion. Whatever he may be legally, or whatever he may be morally, the em- ployer, in modern civilization, is simply an agent who stands between the producer (in the sense of the man who does the manual labor) and the ultimate consumer. In ether words, the employer collects from the consumer what it costs to produce the article. He collects from him for every possible expense, except the one cost in human life. It has been argued time and again and very lately I read a decision of a distinguished Court in which the argument was used — that in these dangerous occupations the hazard is taken into account to begin with, and provided for in the wages. There never was a worse economic fallacy ut- tered. As a matter of fact, in some of the most dangerous occupations, I think it would not be too much to say, if you take unskilled employees, where the power of organiza- tion is nil, tliat tlie wages Avill be found to be almost in in- verse ratio to the danger. ' I said that Ave are beliind the civilized Avorld in that respect. And tlie still more discouraging fact is, that Ave must probably ahvays remain so. I think it is not too much to say that on account of the dual nature of our government Ave Avill probably for many many years to come be behind in eA^ery single form of social legislation, if that legislation in any Avay places a burden, or, an added cost, upon in- dustry. That is, in other countries, Avith a different form of goA^ernment, when action is taken tliat puts a burden up- on any producer, that same action puts the same burden upon all producers within that territory. European coun- tries probablv have to consider the fact of whether a neigh- boring country will readilv assume the same burden. Pos- sibly Germany might ask itself the question ^^Will France do this?” and France ask itself the question ^^Will Eng- land do this?” But with us, the subdivision becomes much smaller. When you suggest any legislation 'of this kind, the reply from the manufacturer, and an entirely proper reply, is ^hnust a burden be placed upon that line of in- 8 (Justry in this state and in no other state?” If the com- petition is strong and the margin of profit small, it be- comes a very serious thing to put that burden upon any industry in one state and not in another. And in my judgment, in this present discussion the only legitimate question is. Can we bring about legislation of this kind and avoid a system that will place that burden upon the producer in one state and leave him free from it in an ad- joining state. I think one of the best steps that can be taken in the way of uniform legislation is the one being taken right here this morning; and I have every hope that from the conference begun here, and other conferences, will be developed and ultimately brought about a succession of steps (I tliink probably short steps in the beginning) in which practically all the states of the country can unite. As I said at the beginning, it does not seem to me that on the actual question of the desirability of compensation acts in the United States, there can be two sides. I assume that all understand what is meant by that; that is, acts which shall place upon the consumer, through the medium of the employer, the entire cost of accidents in industry; that is, that the inevitable risk shall be placed upon the employer, by him to be transferred to the consumer, in every line of industry and for every form of accident not due to the Avilful and you might say almost gross carelessness of the employee. ' In the absence of Mr. Smith, the subject will be open for general discussion. I i Mr. Daivson : I think we would all like to hear from Mr. • Gillette. • ! ‘ ilf r. Mercer : Yes, I was going to suggest that Mr. Gil- lette is the first person who suggested a general conference. I would like to hear from him. 9 The Chairman : We should be A'ery glad indeed to have 3'ou open the discussion Mr. Gillette. Mr. Gillette: Gentlemen, I have never gone to a. confer- ence with an easier feeling that I did to this one; because, while I felt that possibly I had been instrumental in stir- ring up the subject, I was not on the program and that my only office would be to come and listen. I do not know that at this stage of the conference I have very much to say. I have been extremely interested in the statements made hy your chairman, which, to my mind, very succintly and very plainly state the problem which today confronts American society. I have during the past six or eight months made quite a number of speeches in regard to this subject; and six months ago I thought I could make a pretty good talk on it. But day by day I begin to appreciate how little I really know about the dif- ficulties confronting one who attempts to change the ex- isting conditions. I do not presume that there Avould be any radical dif- ference of opinion among the gentlemen present represent- ing the various phases of society — the employes, employer, the legal fraternity, or society at large, provided there was some available remedy by which it could be so provided that the victims of industrial undertakings — those who suffer in industrial accidents — should be compensated by their employers in such a manner that the cost should be transferred into the cost of their products, but the 'diffi- culties confronting any commission or any body which at- tempts to frame legislation which will bring about this transformation, are to me very appalling. I ha\ e been very greatly pleased at the sane statement of the purposes of this conference. In vulgar parlance, I am this morning an agnostic from Missouri. I simply 10 don’t know. I came' here to hear from sucli gentlemen as Commissioner Neill, Dr. Frankel, Mr. Dawson, and otliers who have made a study of this subject for years, to see if some plan could be proposed, or at least if we could agree upon some basic principle of action, by which tliat uniformity in state legislation, which to my mind is abso- lutely essential, can be suggested and can be brought about. , I I agree most thoroughly with the remarks made by your chairman, that it is the gravest industrial and social ques- tion that today confronts the American people. As an em- ployer, I have been deemed by employers to have been somewhat radical in this matter. In Minnesota I have been accused of throwing a firebrand onto tlie dry prairie. Possibly I have been wrong. But to my mind it is not only arcomniercial question, but it is a moral question. And, if I am not wrong, the people, not only in Minnesota, but tlie people of the other great Commonweal tlis of this country, will evolve some method of settling it and settling it right. While I am on my feet, there are one or two things which I wish to say, and they are these: In the first place, I do not hesitate to say, and to put myself upon record as say- ing, that I believe the thorough stiidv and investigation of this subject from the standpoint of the employer, from the standpoint of the employe, and from the viewpoint of society as a whole, is most advisable and desirable, and that I believe the ultimate end and aim is most commendable. I hope to see and to hear, in the proceedings of this con- ference, something that may allay the misgivings which I have had, which other employers have had, which those engaged in legitimate enterprise have had — ^that this move- ment means something which is not hostile to industry; which is not hostile in any way to the legitimate business 11 undertakings of the country; but that its only aim and purpose is to bring about a betterment of American condi- tions, more in harmony with the enlightenment of the cen- tury. What the remedy will be, I do not know; but I be- lieve, being in a small way a representative of employing interests, that I am charged with a grave moral responsi- bility. I believe that that same responsibility rests upon those who represent the laboring interests in this confer- ence and in this undertaking. I do not believe that any measure .which may be proposed, or any measure which will be enacted, will be absolutely satisfactory to any one. I believe that it must be approached in a sane, calm, dis- passionate manner, witli the purpose firmly fixed tliat such concessions will be made as may lead to the fairest conclu- sion and solution possible. I see in this room a number of gentlemen who represent employers’ lia1)ility insurance companies. I know that this matter has been viewed from their standpoint Avitli con- siderable alarm and misgiving. In fact, I have been asked in i*(‘gard to my attitude in regard to tliis matter. I can- not but feel, as far as my investigations have gone, that tliere is undue alarm. I cannot but feel that any solution whicli is ultimately proposed will be an insurance propo- sition. What that may lead to in form, I know not. Wheth- er it may mean the transformation of existing methods, I know not. I doubt not, however, that any legislation which is proposed or enacted must necessarily bring about a change in the basis. Whether it means that as the risks are carried in Great Britain ours will in the future be car- ries!, or whether it will be necessary to adjust ourselves to something more nearly akin to that of the German Empire, 'J know not. But whatever it may be, I do not believe that the credit of American industries ^an be impaired by the 12 adoption of any system Avhich Avill be some sort of an in- snrance system. This is not the proper time to discuss the diflficnlties which confront us. I say ^^us” because I am a member of the commission of one of the states. This is not the time to discuss the difficulties that lie in the way of legis- lation. I came here hoping to be one of the beneficiaries of this conference, and hoping that some of the gentlemen who have given ver^- great study to the subject would be able to solve for us some of these most difficult problems. One other thing I wish to say, and that is this : That I hope there will be the utmost freedom of expression in this conference. If there are those here who are opposed to any movement in this direction, I hope they will say so and give us their reasons. If there are gentlemen who have gone so far in their investigations as to have devised a plan, I hope that will be presented. But I hope the whole discussion will be frank, free and candid. The Chairman: Gentlemen, you have heard Mr. Gil- lette’s statements. ' I think everyone of us will say ^^Amen” to his request that we have a perfectly frank and free dis- cussion. I think that is what we are all here for. I en- deavored to strike a keynote of that kind by speaking frankly, and radically you might say, at the outset, so as to bring out, possibly, whatever counter-proposition there might be. Mr. Briggs, will you give us your views on the desir- ability of this form of legislation? ilfr. Briggs: Mr. Chairman and i gentlemen, I came here by invitation, at the last moment, for the purpose of listening and of being educated. I would prefer not to take any part in the discussion at this time. I would prefer to listen to those who have made an exhaustive studj" of this , 13 question, and I understand there are several of them pres- ent. The Chairman: There are a number of representatives of employers present. It seems to me tliat tlie question for or against desirability might well be discussed by tJiem, and then we might ask those who represent tlie insurance interests to speak. Are there any employers present who care to discuss the matter? (There was no response). Dr. Frankel, will' you give us some of your views on the subject?, Ur. Frankel : Mr. Chairman, 1 think I shall prefer to Avait and discuss the otlier phases of the subject. The Chairman: Mr. Dawson? Mr. Dawson: Mr. Chairman, I am on the tail of the program, and am ])erfectly Avilling to wait until my name is reached in the regular order. Dut a few tilings occurred to me during your oavu address, which I have no objection to stating. It seems to me that the question of desirability of this class of legislation may be dealt with from two stand- points, one of them being the siandpoint of the interests of the Avorkingmen themselA^es, and their families; the other one, a general economic stand])oint, Avhich includes the em- ployers’ position. In otlier Avords, I am inclined, for the moment at least, in discussing the subject, to include em- ployers as a part of the general population and interested in it as the rest of us are. The first thing Avhich impressed Dr. Frankel and myself during our last year's trip to Europe for the Russell Sage Foundation to study this subject — the Foundation having been established, as I think almost all of you knoAv, by a gift ' of fl0,000,000 from Mrs. Sage, for the general, broad pur- pose of improving the condition of Avorkingmen in this country, — the first tliino- that we were impressed with in connection with tiiis matter was that to a perfectly mar- velous dej^T^e waste liad been done away with. I am in- clined to discuss tlie desirability of this legislation from that standpoint. Our emploj’ers in the United States, starting as tliey did witli tremendous natural advantages and protected in tlie home markets, at the origin of tlieir work had to pay but very little attention to tlie dii'ect ques- tion of whether there was some waste in production. In recent years there has been an increasing and extremely creditable tendenc}^ all through our business affairs, to eliminate all unneces^sary waste. I recall, as one of tlie first instances, that in banking — a line of business where we Avould not have thought there was any waste at all, — the bankers found that they were performing a number of services, like the collection of checks, for nothing. Then for a while they undertook to make a graft out of it, by cob lecting a. great deal more than it was worth. Finally they established a line of very small charges, but adequate for that purpose. They also found there was a large element of waste in connection with the small balances in the^ banks, because of the fact that they permitted accounts to be really overdrawn, while not nominally so, the checks not actually having been collected at the time the accounts were drawn against. So they set to work to have an ac- curate account kept, to determine what was going on in regard to that, and they discovered a large element of v^aste theie. At the time iliej vrere engaging in all this wastefulness in banking, they were throwing the whole burden upon the borrowers. The banks had to be run, so as to make money, just as all lines of business have to be if they are successful. The labor that they were perform- ir g and the loss of interest that they were suffering on ac- 15 count of tliese things, all had to be made good in the rate of interest charged their borrowers ; and it was a burden upon the business community. Today that has been largely eliminated. The president of any important bank in the United States never dreams of failing to have before him every morning accurate data as to how his bank is being conducted and whether any waste is taking place or not. He is guarding against it. ^ Our manufacturers, I know, are doing the same thing, to a much greater degree. As one instance, things that were tliroAvn away a few }^ears ago, in the coal mines, and in connection with the oil industry and various other in- dustries of the country as pure waste, have been utilized as far as possible for by-products; and this has been done profitably. In connection with this one matter, I am of the impres^ si on that every manufacturer and large employer of labor who has studied the subject in his own experience, feels tliat what has taken place and what is now taking place under our employers’ liability laws, is an enormous waste, a waste which falls upon him and other employers heav- ily. And it does not produce any such results in benefits to the community, as warrants it. In the first- place, there is the occasionally excessive ver- dict. I have in mind an employer in New York — a small contractor in connection with large buildings — who had a $40,000 verdict returned against him, which he so far has not been able to escape from, find very likely will have to pay or ‘^go broke” in trjing to pay it, for an injury to one workingman. That is probably a record-breaker. But there have been other large verdicts. That is waste ; waste o>f a kind that is incalculable. The amount awarded by that jury and sustained by the court so far, in all prob IG ability, is enormously beyond tlie financial value d(\stroycHl. Another kind of waste is tiie ambulance-eliaser, tlie law- yer wlio prosecutes these cases on a contingent fee; a tldng wliich in our jirofession some years ago was regard- ed as cliamperty and was not permitted at all, but wliich has grown out of this situation: The workingmen, and, worse than all, the Avorkingmen’s families, without a dol- lar to their names, have no other means AvhateA^er of re- coA^ering Avhat may be fairly due them, than to throAV them- selA^es into the hands of such men. There is an enormous Avaste there. And then, Ave have this kind of Avaste: We have certain courts in NeAV York City (and Xcav York City is not, like Pittsburgh, for instance, a manufacturing city first, last and all the time, by any means) — AA^e have courts in Yew York City AAdiich are constantly engaged, day after day, hour after hour, in hearing accident cases. They liaA^e practically no other occupation. The judges are all the time at work on those cases. I think some of you Avill per- haps recall that on both sides there have been accusations of the fixing of juries in connection Avith litigation of this type. So we liaA^e an enormous waste there, in the main- tenance of those courts and the keeping of a large number of functionaries in connection Avith them. And, gentlemen, that waste is all in connection with a purely business matter; a matter which, if up between two business men, it would be regarded as absolutely disgi’ace- ful to go to law about at all. They would sit down and trA^ to determine what the right of the matter is, and then make some sort of a settlement and go about their busi- ness. It is not as if this was a necessarily litigious matter. Its 17 litigious nature has grown out of the conditions that Com- missioner Neill has referred to. In recent years I think a great deal has been done in the United States to relieve this waste. Institutions like the big steel works of the country, the oil industry, and others, have organized and systematized (I may say also the railroads) to a very remarkable degree their method of dealing with the subject; and they have themselves ar- rived at a system of dealing with it that is not in accord- ance with the law at all. Occasionally, of course, there are breakdowns, and people bring suits just the same — and they have their troubles as well as the rest. But I think I am within the facts in saying that the settlement *of ac- cident claims against the average railroad, we will say, in this country, when those claims are made by its employees, is in about nine cases out of ten made according to what seems to the department which adjusts it (usually the law department of the company), to be according to the dic- tates of good conscience, reason and fairness, and not at all according to the legal rights of the parties. I know that, as long ago as twenty-five years. Judge Goudy, then attorney for the Northwestern Kail way in Chicago, ex- plained to me with a great deal of care the method by which they were dealing with their employees. It was business-like, and hard, if you choose — certainly there was no sort of pretense of running a charitable institution; but the method of dealing was intended to be and was fair and decent. It involved the continuance of the employee in some work that he could do, if possible; a settlement of all the expenses of medical care and surgical treatment, medicines, appliances, and various things of that sort, in addition to allowances to take care of the workman’s fam- ily during the time that he was disabled. .8 A good deal of waste has been done away with by the large employer which among smaller employers was not possible. I think a great deal of waste, likewise, has been done away with by tlie introduction of employers’ liability" in- surance. I know the impression is to the contrary, and there is some ground for the contrary impression; for, ot course, by the introduction of employers’ liability insur- ance, there was introduced the agent’s solicitation, costing on an average fully one-quarter of the entire premium. But it seems to me that it is demonstrable that an enor- mous waste has been stopped by the introduction of em- ployers’ liability insurance. In the first place, I think 1 am within the truth in saying that those companies which have made a practice of settling their claims instead of liti- gating them, are today the popular companies among em- ployers. Now, that means an enormous saving. A com^ pany which has adjusters, charged with no other business but to go promptly when a workman is injured and give relief at the time it is needed, making a settlement along decent lines, avoiding any refiection on the employer by keeping him constantly in the courts to defend suits, has resulted in a considerable saving. But, notwithstanding all this, the impression still re- mains in my mind, that the most serious indictment of our whole system is that it is wasteful. We spend our mone> on lawyers, we spend our^money on courts ; but we do not spend our money, primarily and for the most part, in re- lieving injuries that have been occasioned by industry. That is the actual situation in this country today; and that is the one thing which, in my judgment, will eventual- ly bring about changes in our law, in the direction of greater simplicity, greater directness, and the application 19 of the money to the purposes for which it is paid, instead of its being wasted in this manner. It is my judgment that this will in the end certainly recommend to the employing classes of this country great changes in our system. Tliere is a system of- caring for injuries, sickness, and permanent invalidity (which means that the benefit is paid so long as the man remains sick) and old age pen- sions, in connection with the electric company that runs all of the electric 'lights and trolleys of Rhode Island; intro- duced- by hard-headed men like Senator Aldrich and Mars- den J. Perry — men who have not been paraded as philan- thropists or altruists. It has been found after several 3'ears’ operation that under the system which tliey have adopted the cost is less than ordinary employers' liability insurance would cost. And, as I have said before, I am satisfied that it was a good deal cheaper than the waste of the old system would have been, and that in point of fact it was an economic advantage to the company to have protection furnished to their employees in this manner. This is only one instance. We found abroad' practically universal testimony on the part of employers in the different countries v.diere systems have been thoroughly established, to the same ef- fect; we found practically not a particle of sentiment in favor of a return to anything like the old system ; and that was from the standpoint of the avoidance of economic waste. Commissioner Xeill (our Chairman), in speaking of the theory (which is a very common one) that the employer pays for this risk in the wages and that he would be called upon to pay for it a second time if some arrangement were made for compensation on account of industrial accidents, addressed himself merely to the question as to whether it 20 ^s’as true that this was covered in the wages/ I am quite of his opinion, that the evidence is to the contrary. I may add, in addition, that it is believed abroad, by those who have studied the question, where this sort of insurance has been in force for twent}^-five years, and where they have studied it thoroughly and statistically, that that is not the case. But let us assume for a moment that it is the case. Now, if all the employees of the United States Steel Com- pany, we will say, are receiving in their wages in the ag- gregate a financial equivalent of all the accidents causing the death of men in that employment and the injuring of others, it means that, in the aggregate wages paid by the company, compensation at least equal to the amount that would be paid under a proper workinmen’s compensation proposition is already being paid by the employer. And it means something else. If this is true, I think you will all agree with me that the following would be a very proper thing to do : First, determine what the wages ought to be without that extra compensation; then wait until the end of the year, calculate what the cost of all industrial acci- dents in that enterprise has been during the year, and send each man his proportionate amount. I wonder how many of you would be willing to see that done? I wonder how many employers throughout the United States would be willing to see the money Ihat should go to widows and orphans on the deaths of husbands and fathers, divided up in that manner, among those who are still living. If that condition should exist, it would be the most monstrous waste in the whole proposition. Now, whether the burden is falling upon the employers, or whether it is actutally borne by the workingmen and they are not receiving any equivalent for i': in their wages, I am not sure. I concede that that is more or less a tech- 21 nical question. But if it is true that in the wages paid the •workingmen there appears something that represents this financial loss, it is likewise true that the same considera- 0 tions that now determine their wages will, when that com- pensation has been properly provided for, result in wages falling to whatever extent this increases wages. In other words, it cannot in the end fall upon the employer the sec- ond time at all. These things have appealel to me for a great many years Our system is genuinely wasteful. We pay the money, in one form or anotheT*. We constantly pay it. But we fail to see to it that it goes to the place where it ought to go and where it would do the most good. That is the trutn about it. If we couhl r^^medy that by the adoption of any plan that has been tried abroad, or by the introduction of modifications which may seem desirable for our country, I think we will have done a very valuable thing. In connection with this, there is one thing that I think may interest you. The German system has certainly not been wasteful; it has been very economically conducted, whatever may be its merits or demerits otherwise. It is very complete in the protection afforded workingmen^ and very acceptable to the employers of Germany. It w*as adopt- ed twenty-five yeai*s ago. It has had a long and thorough trial. During that tw'enty-five years Germany has moved up to the second place in the matter of the wmrld's com- merce. Xow, it did not have any protection against Great Britain in the world's commerce. Until ten years ago Great Britain had a system of employers' liability very similar to w hat w^e now’ have in the United States, in gen- eral. During that time the relative position of Germany utterly changed. German employers and German w’ork- ingmen alike ascribe that change very largely to the sys- 22 tematic uon-wasteful conditions which have been intro- duced in a businesslike manner. On tliat account it seems to me that it is desirable, and possible in the next few years in the United States to develop somethino; as much superior to these tilings which have been done in other countries as most of our institutions are to the institutions of those countries. Mr. Gillette: ]\[av I ask you one oi* two questions, Mr. Dawson? AVe want to get all the information we can. You say from your observation abroad that the compen- sation acts were pretty uniformly acceptable to both em- ployers and employees. AA^ould you differentiate between them? AAliat foreign acts do you consider are working the best? Mr. Dawson: Our inquiries were not sufficiently ex- tended in anj one country, to make absolutely certain re- garding that. r>ut according to our impressions, after in- vestigations had been made in various countries, I think I am safe in saying (Am I not right. Dr. Frankel?) that on the whole the impression seemed to be that in Germany the system was more nearly what the people wanted than in the other countries, — more satisfactory. Dr. Frankel: In Germany, yes. Mr. Dawson: In Great Britain they began in 1897 adopting the principle that workingmen’s compensation for industrial accidents should not be based on the theory that the employer had committed a wrong, but purely on the theory that if he was injured while at work and was not personal^ responsible by his wilful act, compensation should be paid by the employer, in a moderate way, based upon his vrages, and the cost thus be passed over to the consumer. That plan was introduced by Lord Salisbury; by a conservative government, not even by a liberal govern- ment, but by a government representing the employers and 23 the wealthy classes of Great Britain. It has been twice amended, in both cases being extended. The first thing that happened was that the agricultural interests of the country wanted it extended to them; that the maritime in- terests of Great Britain, which are constantly in competi- tion with other countries, wanted it extended to them; and » the opinion of the people of Great Britain was that it should be extended to domestic servants. It has been so extended; every employer of a domestic in Great Britain buys a little insurance policy that he pays twenty-five or thirty cents premium for, by which his domestic is im sured, and if she happens to blow herself up with gasoline in ligliting his fire in the morning, he does not as a matter of mercy and charity send her to a hospital and pay her bills, but, instead, the liability has been covered by that insurance and she is taken care of in a way that is definite- ly provided for under the law. The last extension in Great Britain was to cover occupa- tional diseases also. The administration that is now in power in Great Britain is absolutely pledged to the intro- duction of a system of compulsion and contributory in- validity insurance similar to the German. In France they did not adopt anything along this line until quite a little later than Great Britain did; I think only within the last four or five years. They adopted a system very much like Uiat of Great Britain. The new administration there, as I saw by the paper day before yes- terday, pledges, as one of its programs, the extension of their system to the lines adopted in Germany. In other words, the other two great commercial countries of Eu- rope do not appear to be satisfied with their own s^^stems, but are developing them along the lines pursued in Ger- many. 24 Mr. Gillette: In a machine shop, say, in Great Britain, what is the comparison of rates paid ^ the employer undei the English act as compared with tho;:.e paid in New York? On the same basis of benefits, how would the rates com- pare? Mr. Datoson : I have not made a close comparison of the rates charged in the United States and in Great Britain. But before they adopted their acts, our rates were higher, quite materially. Mr. Gillette: Because our risks were greater? Mr. Daicson: Our risks were greater; we had been more wasteful, a little more crude in our methods, and we Avere not so careful as they were in Great Britain or in Germany. Q. What does it cost to administer the fund in Ger- many? Mr. Daicson: About tweh^e per cent of the money col- lected for insurance premiums on employers’ liability or workmen’s compensation insurance in Germany is ab- sorbed in expenses. Q. And about how much in this country? Mr. Daicson: I think it will aAwage probably forty-five or fifty; maybe a little higher. Mr. Parsons: You are throwing in the commission ac- count. Mr. Da wson : That is a part of the expense. Mr. Parsons: But in Germany there would not be any. Mr. Daicson: Speaking roughly on the subject of em- ployers’ liability, the percentage for taking care of the claims runs the cost a great deal higher here than it would under a Avorkmen's compensation act. Mr. Gillette : Maybe we can get at it by an inverse pro- cess. For instance, in Germany there would be approxi- 25 mately 88 per cent of the amount of money collected which would be paid out to the actual beneficiaries; and in this country I understand the loss ratio in Massachusetts and New York runs from 33 to 35 per cent and in Wisconsin about the same. In Minnesota it has been about 58 X3er cent the last five years. The Chairman: Do you mean the cost of administering the insurance actually taken by the employer? Mr. Gillette: No, I am speaking about getting, inverse- ly, at the amount which actually goes to the beneficiaries. Mr. Parsons: Under what line of policies? Mr. Gillette: Ordinary employers’ liability policies. Mr. Parsons: That is a different matter than ^Ir. Daw- son lias been speaking of. The greatest cost comes from fighting claims. Mr Neill: I think the figures you Avant are in the Wis- consin reports. Mr. Gillette: From your examination of the conditions abroad and the Avorking of the compensation acts, have you reached a conclusion as to Avhether a compensation act could be enacted here, granting practicalh" equivalent ben- efits to those giA^en oA^er there, Avithout materially increas- ing the cost to the employer? I mean, creating an absolute liability so that everybody AAmuld be compensated. il7r. Dawson : My impression is that the cost Avould not be materially increased. I could not say positiA^ely that there would be no increase. The effect would be about this : The waste which Ave liaA^e been referring to in the settlement of claims, would very largely be obviated. The companies would rarely have to fight claims. They found in Great Britain that Avhat they did have to do was to get the law construed. A great deal of litigation was necessary during the first year or two after it went into effect, because there 2G ■ was a question »as to ‘Svhat does this mean” and ‘Svliat does tliat mean’’ under tlie law. Until the courts had passed on those points, they had to have litigation. But after that was over, and even while it was in' progress, the amount of litigation was enormously less than previously, and al- so less expensive. Yon understand this: the amount to which a man would he entitled if totally disabled, or his estate if he was killed, is absolutely settled by the wages he was receiving at the time. The fact of liability is also settled by tlie fact that lie was killed or injured vrhile at work, unless there is evidence that he wilfully brought it about himself. The- questions we litigate in the United States are, chiefly, ^ds the employer liable?” and that in- volves: ^^Has he been negligent, or some of his supervising employees,” and, if they have, ‘‘Has the employee also been contributorily negligent?” or “Has the negligence been by some person ranking as a fellow servant or co-emploj^ee, not occupying the position of controlling the other em- ployees on behalf of the employer?”, or, even if the accident was caused by the negligence of the employer himself, “Was it a risk which the employee fairly assumed when he took the employment?” Those are the different questions that we fight out in the courts as to each individual case, if it comes to trial. Now, all that is wiped out by the workmen’s compensation act. And the amount of the benefit, also, is determined definitely, instead of, as at x>res- ent, by a sharp lawyer bringing all the evidence he can to shovr the net earnings of the man and of what great value he Avas, and evoking a great deal of sympathy on the part of the jury by exhibiting the widow and minor children, aiming to get a large verdict — which some judges will set a{§ide, and others will sustain. Those are the things we fight in the absencg of a AAmrkmen’s compensation act. 27 V Mr. Gillette \ Is there any substantial imiformity in the scale of comjjensation in the foreign countries? Mr. Dawson: Yes, except as to death losses; where there is less uniformity than in the disability claims. In practically, all countries in Europe excepting England the employee when totally disabled is entitled to from sixty to sixty-six and two-thirds per cent of his wages' during its continuance. The Chairman : And in case of death, is not about three years’ wages about the standard they have adopted? il/r. Dawson: That is only true in Great Britain, I think. Tn most other countries, it is a pension to the widoAV during her widowhood and to the minor children during their minority, not exceeding in the aggregate what Avould have been paid to the employee himself, if disabled. Mr. Parsons : Are these acts abroad compulsory or al- ternatiA'e? Can the employee sue at what we call common law here? Can he take his choice? Mr. Daicson : In' France and England he may take his choice. But onh^ a A'ery small fraction of one per cent haA^e sued under the common laAv. Mr. Parsons: In the experience of liability insurance companies a great many years ago, they all wrote what Ave call workmen’s collectiA^e insurance — Avhicli conies very nearly to what you call a workingmen's compensation act, and at the same time they wrote a current liability insur- ance on those same risks. It was supposed, when they did that, that they could reduce rates on the employers’ liabil- ity very largely; everybody thought of taking it for grant- ed. But Avhen the question was looked up and the experi- ence Avas collated, I think our experience (which was very sm'all on Avorkmen’s collective) ran along on the same lines with the rest of the companies, and it Avas found that it did 28 not work for a reduction on the employers’ liability insur- ance at all. None of us could account for it. Mr. Daicsoii: I may say in connection with Mr. Par- sons’ remarks, that the experience in Great liritain since the workmen’s compensation act passed has been that com- paratively few suits have been brought under the old laws. They were not disturbed at all. In Great Britain a work- man could sue his employer under the liability law in tlie usual way, and, if he failed in that suit, the very judge avIio heard the case gave him the amount due him under the workmen’s compensation act — so he didn't stand to lose anything. Now I want to tell you a reason why there were not very many suits. The act provided for a definite compensation to attorneys, and only for an increase of that compensation when there were appeals or other difficult matters to look after, and that increase was to be awarded by the court. Tlie result was that the stirring up of that sort of litigation stopped. Mr. McEtcen : Would there not be a further waste eliminated, in the amount of mon^y paid to agents for so- liciting business? Mr. Dawson: Only in case a compulsory insurance law w^ere passed. It wmuld not be the case at all if you only passed a workmen’s compensation act. • Mr, McEicen : Wouldn’t ^there be a saving as a result of doing a greater amount of busiress? Mr. Dawson : I think that commission w^ould not be very much reduced. Mr. Gillette : I w^ould like to have any gentleman here ask Mr. Daw^son any questions that occur to him. Mr. Petrasch : I wmuld like very much to have Mr. Daw^- son explain to us the systems prevailing in Germany and in England; I w'ould like to know% for instance, whether 29 these compensation acts in German}' and in England apply to all persons who under our law we would call servants; that is, say to all persons where tlie relation of m^ister and servant exists, or only to limited classes; also, what the compensation is, if he can tell us, in those two coun tries, for disability, for maiming, and for fatal accidents; also whether they apply to any accident incurred in the employment, and whether or not they must be accidents incurred in the immediate doing of the work; also whether or not they have been extended to sickness, for example, occurring in the same employment, and so on. I have found it very difficult indeed to get any information on these sub- jects. Mr. Dawson: I could not give you all that information in the time allotted me this morning. The Chairman: I can wire to Washington, and possi-. bly by tomorrow morning have liere a copy of a. bulletin prepared by the Bureau of Labor, in which, in about ten pages, about seven-tenths of the information you have asked for is given. Mr. GiUette: I am particularly anxious to hear from anybody who thinks a movement of this kind is not de- sirable. There may be lots of things that some of us have overlooked. The Chairman : The conference, I think would all agree with Mr. Gillette that we would like particularly to hear from anjmne holding any view that this is not desirable. The discussion ought not to be too one-sided. il/r. Rowe: Mr. Parsons made a suggestion which I think may give a wrong impression, as to the carrying of workmen's collective insurance and its effect upon the liability rates. We have found from actual experience in large individual risks (which -I think is perhaps a better 30 criterion) that the carrying of workmen’s collective insur- ance has reduced at least by one-third the claims formerly arising where liability insurance alone was carried. 1 think the general tendency is to reduce from a quarter to a third the number of claims. That does not mean it would reduce the loss ratio that inuclq but the actual number of claims are reduced at least to that extent. Mr. P(n'soui<: It would reduce the loss ratio about five per cent. Mr. Roioe: The general practice now, I believe, is to discount the employers’ liability rate somewhere about five or ten per cent as an estimated advantage they gain. Mr. GiUette: Mr. Rowe, is it the general experience of liability companies that the number of recoveries is in- creasing, or not? Mr. Fowc: Increasing, decidedly. Mr. Parsons: The law has been liberalized all over. New decisions are always in the way of liberalizing the advantage to the employes. Mr. Mercer: Is the cost under our existing system and under existing conditions tending to increase, or is it de- creasing, or is it remaining stationary? Mr. Roice: Increasing, decidedly, as a result of the tendency to gTeater protection to the employes, placing the cost on the industry and on the product. Mr. Mercer : Then in your judgment it is not a question of letting things stand the way they are now, because they are not ‘^standing” anyway? Mr. Roice: No, sir, they are not. Mr. McEicen : With the tendency of the day, it natural- ly follows that employers’ liability companies may be ob- liged to increase their rates, does it not? Mr. Roice: They are constantly obliged to adjust their 31 rates to meet these conditions in varions states and various trades, by reason of that constant change of conditions; and it is always along the line of increase, unless there are corresponding changes that can be made as an offset. Mr. McEweiv: Your rates in different states are adjust- ed, I suppovse, not only in the relation to the peculiar statu- tory provisions of those states, but also to tlie prevailing sentiment of jurors and courts. Mr. Roioe: The rates are based on experience, and that experience is an index of results obtained.* Sometimes it is hard to explain why we should have worse experience - in one locality than in another. We can theorize on it and point at the sentiment towards employees, nationality, and all those things, but we have to base our opinion on the experience we have in the different localities. Mr. Parsons : I think, Mr. Rowe, that you are correct— that the element of waste that Mr. Dawson speaks of is getting less and less. Don’t you think that all the com- panies are coming, inside their offices, more quickly to a decision as to what a suit is worth, and paying it, and ad- justing, more than they used to? Mr. Rowe: I think the tendency of all companies is to settle; and that itself eliminates waste. Mr. McEiccn: The percentage of settling suits is in- creasing? Mr. Parsons: I think it is. Mr. Dawson: Reduction of waste is taking place in that respect. And casualty companies are today settling claims — scores and hundreds of them — where there is no legal liability at all, and the employer is paying for that in his premiums. In other words, something akin to what we' think should be established as the regular practice oti established principles of law, is being established in this 32 country by the necessities of the business, and is virtually being introduced to a very large extent. Mr. Parsons : I cannot agree with you there — as to our own company at any rate. What made the change with us was that they have i>assed new laws that are comparatively easy to understand, and they will convert whole classes of cases that in the old days would have been debatable, in- to a liability; so it is cheaper to go out and settle. That results in eliminating waste. Mr. Dawson: That is what I mean. Mr. Parsons: I mean it is because of a change in the laws, but not on account of a change of heart on the part of the company. Mr. Daicson: No — a change in the practice caused by business reasons. Mr. Parsons: No, caused by statutes. Mr. Petrascli : I entirely agree with what Mr. DaAVSon first said in that regard. There is no doubt that the tend- ency to settle is very much greater than it was formerly, and it is purely and simply a business proposition. The companies have found that the speedier the settlement the greater it is to their advantage in the long run. Mr. Parsons : I think that has been due to a change in the laws. Mr. Petrascli: They do constantly disregard questions of liability, because undoubtedly the great majority of the cases that the companies settle^ even under the laws exist- ing today, are cases that in their opinion they could win if they fought them to the finish. Mr. Gillette : In the State of Minnesota there has been no change in our statutory provisions for twenty years, so far as the negligence law is concerned. I think I am right, Mr. Mercer? 33 Mr, Mercer: With respect to railroads and some other industries, there have been quite a number of changes. There have been a great many laws passed in Minnesota, I should say, within twenty years, relating to this subject; for instance, laws in the nature of police regulations — requiring elevators to be fenced, dangerous machinery to be covered, and various other features of that kind. But there has been no very revolutionary legislation. Mr. Gillette: I was possibly led into error by having read some speeches of my friend, McEwen, in which he said the laboring people of Minnesota had tried for twenty years to secure some changes and had not been able to do so; and he charged a good deal of the trouble to me. (Laugh^ ter) But I wish to make the added point that practically few changes, if any, have been made. The risk and the consequent cost to the insurance companies has constantly increased. I think the statistics of the last five years show that their loss ratio in Minnesota is about fifty-eight per cent of the premium receipts, as against thirty-five per cent in New York. Mr. Parsons: AVe practically got out of the state. We do only a small business there. Mr. Dawson : Perhaps it would be well to call attention to an additional item of waste, that appeals to me very strongly, and which there is no possibility of the communi- ty as a whole escaping from. I was born and brought up in Wisconsin, a state which at the time I was a boy was largely a lumber manufacturing state. I can easily im- agine some of the leading lumbermen of our state going clear into the air on a proposition like this. A lumberman whom I have in mind, in an occupation that was compara,- tively dangerous, was paying probably more money in dif- ferent ways, or quite as much money, because of this very 34 kind of waste, every year, as would liave been retjuired to handle it in a businesslike way. I do not need to say to all of you that the lumber business was conducted very wasfefully in those years, both from the standpoint of the lumberman, from the standpoint of the Government itself, and everybody. And this method of paying dam- ages to employees was wasteful. Tliat lumberman was probably the only man that was paying a large amount of taxes, in that community; and every workman that he did not compensate out of his own pocket as a matter of mercy or charity, or through a large award paid as a mat- ter of law, had to be taken care of by that community, and he paid for most of that in the taxes. He did not get avray from it at all. It Avas the most Avasteful Avay in the Avorld for hini'to take care of it; because it meant the pauperiza- tion of the family, the throwing of the Avife and children upon the town, and all that sort of thing. This is another tremendous element of waste that we have to confront throughout this country today. Mr. Gillette: From your observations abroad, did the enactment of workmen’s compensation laws accomplish any good results in remoAung causes of friction between the employer and the employee, growing out of litigation over personal injury claims? Mr. Dawson: Yes, so far as litigation vras concerned it accomplished large results. I would not like to say that it accomplished any large results so far as strikes and that sort of thing are concerned. Aside from the meeting of em- ployers and employees in mutual conference in the sick- ness insurance societies, as in Germany, I doubt if it had much effect in that direction. But of course the friction that grew out of suits for damages was almost entirely re- moved. 35 Mr. Parsons : Mr. Dawson made a statement that seems to me accounts for the abatement of friction in lawsuits, and that was that the compensation to the lawyer bring- ing such suits was fixed by the court. It seems to me that the element of leaving the lawyer open to make his own compensation utterly changes the basis of everything. Do yon not think, Mr. Dawson, that it is what the lawyer makes out of it that stirs these cases up? I am only speak- ing from the point of view of one sitting at an insurance company’s desk and seeing what comes in every day. Mr. Gillette: But is it not also true that it is a neces- sary evil connected with our present system? Mr. Mercer: Is it not the fault of the system entirely? Mr. Gillette: Is it not largely the fault of the system? I speak entirely from any employer's standpoint. When a case is taken into a lawyer’s office he can't tell what the jury would do about it, and how could the lawyer afford to take the case unless he had a fairly liberal contingent fee? I have had that matter under careful consideration; in fact I have had one or two bills prepared at times to present to the Minnesota legislature, but I have come to the conclu- sion that there was a measure of doubt as to whether it would be fair to the injured workingman to take away from him the right to make a contract with his attorney, a contract under which it would be provided that the attor- ney, for the risks which he took in bringing the case, for looking up the evidence before the trial, for preparing the case, trying it in court, etc., in a gamble, should in the event of the successful issue of that suit be reasonably compen- sated. There are very grave evils connected with the am- bulance-chaser system. It has troubled me a great deal. But 'I have not been able to see why it is not a necessary adjunct of the present system. 36 Mr. 'Neill : There are probably very few lawyers ]jreseiit, and they, being naturally modest, would not care to say anything for themselves in this matter, so I might ijerhaps be permitted to say a good word in defense of the am- bulance-chaser. I have a friend who did a good deal of that work in the City of New York. He was a man who had otherwise a good practice. I know that he did it large- ly as a matter of sentiment. I talked with him about those cases, at length, on one occasion. He showed me some ac- counts that he had kept. And I doubt very much whether the lawyer who takes that class of business makes a very large return for the amount of time and energy he ex- pends. There is, as Mr. Gillette has said, a very large gamble in it. He showed me one case in which he got a verdict for |6,000. He had taken it on a fifty per cent fee. It cost him |3,200 to fight the case through to the last court. The existence of the ambulance-chaser is simply inevitable under the present system. Dr. Frankel : In Germany the original jury of award is the employer in the so-called trade’s associations; On the other hand, the employee has a right to appeal. Litiga- tion is free. As a result it has always been objectionable to the employee that he has had no voice in the original decision, particularly as to the amount of compensation to be allowed in partial invalidity. If I remember rightly, fifty per cent of those cases are appealed — ^are they not, Mr. Dawson? Mr. Dawson : Fifty per cent of all the cases where tliere is not total disablement; where a party is disabled and they are fixing the degree of disablement. Dr. Frankel: It costs the employee nothing, and he goes ahead and appeals. Mr. Parsons : Could you tell me how many of those ap- 37 peals are reversed? ^ Dr. Frankel : I think a large majority of them are modi- fied. Mr. Gillette: Mr. Chairman, might I make a suggestion before I leave this question of desirability? A thing that has very much influenced my views on this subject is the question of our present laws as relating to negligence, and their effect upon the morals of the community. I believe that there is not a gentleman who has had to do with per- sonal injury matters that will not agree with me when I say that under our existing sj’stem there is no one thing which is a subject of litigation, which so much breeds per- jury, as the laws relating to negligence. The employee tries so to color the evidence as to bring him propertly within the rules so that he can recover. The employer does exactly the same thing. It seems to me, as viewed from a moral standpoint, that if the whole question of negligence could be eliminated it would have a very salutary effect upon the morals of every community. Mr. Parsons : I should like to interrupt and say ^Clmen’^ to that. Mr. Blaine : Mr. Chairman, I have come as a member of the Wisconsin Committee appointed by our legislature, to investigate and prepare a bill along the lines of employ- ers’ liability or Avorkmen’s compensation, so T have come here particularly for information, rather than to engage in the discussion. I Avant you to pardon me for intruding in this discus- sion, because of my lack of knowledge on the subject. AVhat I say may lead to some suggestions or discussion by others, from whom I can gain considerable benefit, and what I say will be said for that purpose. I have some personal views upon the subject, gained 38 from probably a seconcMiand irivesti«atioii, but the best at my disposal. I started out sometime a^o to investigate the subject of employers’ liability aud workingmen's compen- sation. I think I have accnmnlated a library upon that subject which I will never be able to read during my life- time. I have gained some very valuable information from the reports of the labor departments of Massachusetts, Connecticut, New York and Wisconsin, as well as from the' departments at Washington, particularly from a spec- ial report written by John Graham Brooks. I desire, how- ever, at the outset, to offer a defense, or rather a rebuttal, to the charge made against ambulance-chasers. I am an attorney myself, but I have never tried a personal injury suit involving negligence, in any of the industrial lines, so that it is not a personal defense of myself but rather of my professional brethren. It has been my experience that a majority of attorneys who take these negligence cases are men of high standing in their profession and as citi- zens in their respective communities. It is true there are a few who can be rightly dubbed ‘^ambulance-chasers”; but ninety-five per cent of the attorneys who handle negli- gence cases ( in Wisconsin, at least ; I know nothing about them outside of Wisconsin) are men of high standing in their profession. On the other hand, we find that since the introduction of employers’ liability companies there has come what I would term ^^professional corpse attend- ants.” When an accident occurs resulting in death, a lia- bility company of course is notified, and it at once sends one of its expert agents to the scene, and, while the widow is under the greatest distress in the world because of the loss of her husband and the loss of his employment, she is subject to be preyed upon by those agents, and an unfair settlement is induced at that time when it could not have 39 been made if she had had time to consult a reputable at- torney. I think that class is entitled to as much condeim nation as the professional ambulance-chaser. I offer that in rebuttal of what might be charged against the lawyers who take negligence cases. What I have to say is not by way of criticism but by way of suggestion. Sometimes I am somewhat radical up- on these points. I do not discuss them from the stand- point of criticism of individuals, but ratlier as a criticism of a system, entirely. I know that the employers, and I know that tlie liability companies, want to escape all the financial responsibility that they can in negligence cases, particularly in our industrial lines. It is said that we are saving waste, but it is a waste saved to the employer and not to the einployee that has been going on in this country I believe. I have had — not the pleasure but the opportun- ity of visiting Madison Square, Union Square, the Battery, and the wharves, in New York City, for two days — a very short time in which to make any investigations — but as I saw the crippled, the legless, the armless men, I realized one of the reasons for our tramps and hobos of today — men who had come to their decrepit and unfortunate con- dition through accidents happening to them while occupy- ing honorable positions as employees in large industrial institutions. Xow, to that class of men .there has been no saving, and the waste is still going on. The waste contin- ues, in depriving his family of the benefit of his employ- ment, of the little that he made to sustain the wife and the children during their minority, when they should he in school receiving education and social betterment. That is a waste that we are not preventing by reducing the num- ber of lawsuits, or through our employers’ liability com- panies as they exist today; because, where settlements are 40 made, they are made at a very low figure, as is shown by the reports of our Wisooiisin Commissioner — at a figure far below what would compensate a man in case lie lost his arm, or the fainiW in case the husband lost his life. The waste is saved entirely upon the side of tlie employer and not of the employee. In Wisconsin we are trying to liberalize tlie co-employee rule and also the assumption of risk proposition. And, while we should all consider this subject fraiikly, there is one thing that I desire to suggest at this time, and that is the financial responsibility or liability of the employer and of the employers’ insurance companies is going to increase by reason of the liberalizing of our laws on the question of negligence. It cannot help but increase. In Wisconsin we have passed a co-employees’ act relating ^to employees of railroad companies only, which makes changes in the fellow-servant rule entirely, and our Supreme Court, in construing that law, has given it a more liberal construc- tion than the railroads ever anticipated, so that at the present time the financial responsibility of a railway com- pany in reference to its employees where the co-emploj^ee question comes into the case, has been greatly increased. I think that within ten years, if we do not succeed in getting a compensation act (or whatever name you may want to give it) Wisconsin in all the industrial lines will do away entirely with the present fellow-servant rule, be- cause public sentiment is drifting that way very rapidly, and I think it is only a question of time when that will take place in Wisconsin. Farmers, merchants, mechanics, and all other people, are considering this question. It is not a new thing to them. They are talking about it ; they are becoming enlightened upon it; and as soon as public sentiment becomes sufficiently informed upon it they are 41 going to drive the legislatures to the enactment of more liberal laws along these lines. There is one suggestion which it is fair to make to the employer — that he must look ahead to more liberalized laws on the question of the assumption of risk and the co-employee or fellow-servant rule. There is no way to determine at this time just what that increased financial responsibility Avill be; but if they could tell at this time, I think there would be no question in their minds that a compensation act Avould be a great saving of waste to them and their industries. I think that society demands that Ave compensate the la- borer for any accident that results to him in the course of his employment, no matter through who.se fault the acci- dent happens, except his wilful or A^ery gross carelessness, and I would say exceedingly gross carelessness. 'When the suggestion is taken into consideration, if AA^e could esti- mate the cost of the increased liability or responsibility I think we Avould be in a much better position to draft a com- pensation act that Avould be much more acceptable to em- ployers than we can at the present time. The desirability, I think is beyond dispute. It is a si^e- cific act, to which objections Avill be made. The ^hindesir- able” feature will come out Avhen a specific law is drawn and proposed to legislatures. In the broad sense of the word, I believe there is no question of the desirability, at this time, of a compensation or employees' liability act; but Avhen aa^c get down to a specific act that presents the problem directly to the employer and employes, there is where we will have our trouble in getting through a laAV !half way acceptable to either side. I Avish to suggest at this conference that the employers and employees must face this problem with the greatest of rationality, liberality and broad-mindedness, realizing 42 that neitlier side will <»et all it wants at this time. Uiit as we evolute alon<>' these lines I think tln^ time will C )me when both sides will get what is right, or as nearly right as human ingennity can devise. We hope to get at a specific act that will compensate the laboring men in the industrial lines. I do not believe it is desirable at this time to extend it so far as some of the foreign countries have, especially to agricultural lines and the very small industrial ])lants where the workingman is practically on the same basis and working in the same shop with his employer, where they are all recognized as being about in the same position. They are co-workers in ana joint operators of the same plant. Mr. Gillette: Why not there? Mr. Blaine'. For instance, in a factory employing five men, and we will say, making wagons in a very small town, where the employer has himself, his two sons, and two hired men working in the factory, it would be hard to get at what compensation should be given to the employees and not to the two sons and the man who was working as the employer. As I said they are co-workers and joint op- erators, and their relationship such rather than master and servant. Mr. Mercer: Would that not be as hard on the com- munity as if they were not relatives, and oughtn't that to be averaged in some way and on the same basis as though they were not relatives? Mr. Gillette : Why not apply it to the farmer? Mr. Blaine: There are reasons why agricultural pur- suits should not be included at this time. I think these steps must be taken gTadually; first in the large industrial lines, following that up to such an extent as the system would warrant. I believe that in time it should be applied 43 to agricultural as well as industrial lines. Mr. Mercer: I did not quite finish nij question. If the industry is a liazardous one, ouglit not the fellow who works in it be as well protect(?d in a small company as in a large company? Mr. Blaine: I think so. Mr. Mercer: And can that not be so arranged that the risk can h(^ averaged by some form of insurance? Mr. Blahie: As a. matter of exact justice, I tliink that should be true. Just how to work it out is a very grave problem, in those smaller lines. The Chairman : Do I understand your position is, simp- ly, that as a practical proposition it is not well to try to do it all at one bite? il/r. Blaine : Not all at one bite. - The Chairman : I^n other words, your exclusion of the small factory and shop would be a mere matter of expedi- ency? Mr. Blaine: Yes. The same as in Great Britain; they first extended it to the large industrial lines, and then to other lines. Mr. Gillette: Hoav are you going to differentiate con- stitutionally between two concerns in the same class of industrial occupation simply on the basis of the number of men employed? 71/r. Blaine: That is the ^^practical” part, upon which I Avill have something to say when we reach it; but I do not desire to inject it into the discussion of this morning. Now, it is plain that this kind of legislation is required; that is admitted on every hand. When a man goes into a factory and manufactures, for instance, this chair on which I have my hand, that chair represents material, labor, blood and life; those are the essential elements of that chair. 44 God lias given the material, the laboring man has given the labor, and when he lias an arm taken olt’ in the making of that chair, he has put his blood into it, and the man who uses it should help him defray the expense of the loss of his employme-nt. If he loses his life, then he has put his life into that chair, and it is a necessary element of the cost of production. The machines that manufacture that chair, wear out. The employer replaces them, lie does nut re- place them at his own expense, except in the first instance, but the consumer, the user of tlie things that that machine produces, pays for the replacement of that machine. So with the user of this chair which labor produces; he sliould pay, of coui'se, to compensate for the loss of the employee's arm or his life. The consumer is cfoing that today. The consumer is paying for all the litigation that we have. The consumer is paying every dollar that is paid out to liability companies and every dollar that is paid put to the laboring man for an injury or for the loss of a life, be- cause that is added to the cost of the thing produced. To- day they are paying for all that, but their money is going into waste. Co-operatively all the people using a particu- lar article are now paying for the wastefulness thaChas gone into that article; while they should pay it to the man who puts in his life or his arm in a more just and scientific 'way. Now, that is the great argument in favor of the advisability of a compensation act. 'I'he question of whether it shall be ^^compensation” and who shall pay for it, or whether it shall be employers^ liability insurance and how that shall be paid, is a matter of practicability and of detail. Dr. Frankel : Mr. Chairman, I refrained from speaking on this subject when you so kindly asked me to before, for the reason that I feel so strongly on it that I was afraid 45 if I were to make any remai-ks I might become dramatic. Mr. Gillette: Let her go. Dr. Frankel : The remarks that have just been made by Mr. Blaine lead me to speak on this branch of the subject, for the reason that I feel that if we do nothing else this morning we ought to accentuate as strongly as we know how the predominant thought which he brought out. I be- lieve that this is not a question that should be viewed ex- clusively from the standpoint of the employer. If we are to consider it as human beings and as men, I think we ought to look at it equally as well from the standpoint of the workman. That is the side from which I have had to ap- proach it. I have had a number of yeai*s* experience with the poor, and I have formed definite conclusions that there are two things in the history of mankind as represented particularly by Anglo-Saxon civilization, which have set back the development of our Anglo-Saxon communities; one is the conception in the English poor law that a man who becomes impoverished is responsible for his condition; the second is the interpretation of law of which the Chair- man spoke, with reference to the fellow-servant doctrine. I think these two things have been more antagonistic to a rational, sane and ethical development of mankind than anything else I know of in the history of the human race, at least as applied to conditions in Anglo-Saxon countries. The poor are not responsible for their condition. If there is any theory that has been exploded in the la.st ten or fif- teen years in the treatment of those who have become im- poverished, in the relation of charitable organizations to their beneficiaries, — if there is one fact that has been brought out prominently, it is, that the large bulk of those who become recipients of charitable aid are the creatures of their environment, and that they^re not so because of 4G any sliortcomin^r^ carelessiK'ss, oi- otlier inferioi-ity in tlieni- selves. The average man desires to live a. resi)eetal)le, hon- est, npriglit existence, witli sufficient protection accordcxl to liiin to enable liiin to live comfortably, to raise his chil- dren pro])erly, and to liave a roof over his head. Xow, I do not Avant to make any exaggerated statements, but it is true that we have not recognized tliis iirinciple in indus- try. AYe have had an industrial development in the last tAventy-fiA’e years — a very remarkable deA’elopment, a de- velopment which lias grown largely at the expense of tlm individual most vitally concerned in it — the employee. 1 knoAv' of no more fitting Avay of expressing this tlian a story Avhich was told to me a few days ago of a contractor avIio Avas visiting a plant Avhere a large operation Avas going on. He recognized an old man driving his horse; he had been a driver for the concern for many years. The contractor went up to him and said ^Tat, hoAV goes things?” Pat said ^T4ad.” The contractor said ^What is the matter?” Pat said, ^They laid me off a few days ago.” The contractor said, ^^AA^ell, Pat, we can’t help that; occasionally that must be done.” Pat replied ‘‘Yes, but the horse got three meals every day.” Xow, the horse Avas of value; it had a financial value ; but the man had not. The horse was tak- en care of and the man was left to shift for himself. That is the principle which we have established, particularly in industrial accidents. Xow, the point I wanted to make was ^his: The study which has been made, of poverty, brings out pertinently the fact that nearly all of the poverty which we find is not the poverty of shiftlessness. It is not the poverty due to in temperance, nor to weakness. AA^hen they occur, they are secondary causes and not primary causes. The large bulk of pauperism is primarily due to the bad environment of 47 the inclividnal, and is a result in part of onr so-called em- ployers’ liability legislation. Tiie father or the motlier or the brother is killed or injured or becomes incapacitated and the family, which has been self-'sustaining and re- spectable, has to go to the wall perforce, because no pro- vision is at present made by our legislation for its care, niaintenance and support. Not only accident lays the wage earner low, but industrial disease incapacitates him as well. To-day in Germany, England, and other enlight- ened countries, such diseases are considered worthy of com- pensation in precisely the same way as accidents are. AVhen you find bakers Avorking in slio])s 128 liours a week, when’ you find tailors working 70, 80, 00 hours a Aveek, when you you find men Avorking under conditions A\diere there is im- proper sanitation, Avhere there is no ventilation, wliere the hours are long and Avhere the strain is great, you are pro- ducing disease as a direct result of the industry, for Avliich Ave, in our enligtened civilization in the United States, are making absolutely no provision. And Ave haA’e the re- sultant condition that the family goes to pieces, falls by the Avayside, becomes dependent upon the public purse sim- ply because in this horrible crush to get ahead, in this de- sire to make profits, the individual laborer, avIio gives his brain, braAvn and thought, and the best that is in him, suf- fers the loss and bears the entire responsibility. We are not now discussing this question from the stand- point of practicability. J think it can be shoAvn that there are other and better Avay§ than Ave have at the present time, Avhich can be adopted in the United States. For our present purpose Ave ought to realize that AA-e are no longer simply in an industrial age; that Ave have to-day in the United States accepted a social viewpoint; that we have put up to the employer a sense of responsibility to his ein- 48 ployees which does not end when they become incapacitated by accident or by occupational disease. That is the con- ception, and to my mind the fundamental conception, which we should have before us in considering this question of compensation. ' ( The Chairman: I might suggest to the conference two points in regard to the question of waste, which I have had in mind for a couple of years. We have made a beginning, and on a few occasions have collected data, to determine just how much waste there is under the present system. We propose to take a great many cases of accidents and find out exactly >yhat they have cost the employer and the com- munity. We want to find out how much was actually paid on the part of the employer in the form of damages, cash, and fees, and, as far as we can, what the carrying on of that litigation cost the State. Then we are going to try to find out what percentage of that trickled down to the actual recipient, and how long it took it to get there. From what I know of hundreds of cases myself, I think those results are going to be astonishing. I think we are going to find that the vu’etched percentage that dwindles down to the actual recipient is hardly worth considering at all. We will find dozens and dozens of cases where, after great ex- pense on both sides, a verdict is returned in favor of the plaintiff and not one cent reaches him. On the other hand, we will find what in one sense are exorbitant verdicts. Of course, in discussing a topic of this kind, we don’t want it said that any amount could pay for the loss of a human life. I should hate to feel that any amount of money paid to my wife and children would recompense them for my loss. But, on the other hand, we want to get away from the other idea. I think most of us would feel that it would be un- desirable to have that kind of thing taken into account by a Court. 49 Mr. Gillette: Sentimental damages? The Chairman: Yes. I think it would be undesirable from every viewpoint. There are some things that money cannot compensate for. And I think it is an unmoral prop- osition that those who have been bereaved. should attempt to put a financial price on the personal rather than the economic loss. The economic loss is the only loss that should be assessed upon the employer or consumer. In the other case it is not only wasted, Mr. Dawson, but it is horribly and most villianously distributed. Mr. Dawson : That is the worst waste of all. The Chairman : Yes, that is the worst waste of all. We expect to conduct this investigation very shortly on a large scale and shall try to make a showing in the near future so that we may know exactly what it is costing and what the real amount of waste is. . i ' Now, that brings up the suggestion whether the state it- self, in view of the great saving in the waste of litigation, might not contribute something to that sort of a fund. A 0 judge if the Supreme Court of one of the western states told me recently that over half of the time of* some of the state courts is taken up with these personal damage suits. Mr. Parsons: In New York City it is about four-fifths, in the lower courts, isn’t it? ■ A Voice: But part of those personal injury cases are not between employer and employee. Mr. Gillette : About a third, in Minnesota. - The Chairman: There is another form of waste that grows out of this question, and as a result of this confer- ence we might be able to assist in eliminating it. There are quite a number of state commissions and bureaus of labor, as well as private organizations, investigating this subject, and there will probably be a great deal of duplica- ' 50 tion of effort and expense, unless some plan is devised that will prevent it. Mr. Gillette: That is one reason why this conference was called — to try to eliminate that expense. The Chairman : So far as I am personally concerned I would be only too glad, if you could decide upon the infor- mation that is most desired, to have the federal bureau gather for all the bureaus and commissions that are study- ing the question. I do not know of any work that we could do that would be more valuable along this line. Mr. Gillette : May I make a motion at this time? — that a committee of three be appointed by the chair to draft a plan of permanent organization and of work. Mr. Dawson: I second the motion. Mr. Mercer: I would like to ask if it is not the object to let the chairman be one of that committee. He might not appoint himself. Mr. Gillette : That is a very happy suggestion, which is most readily accepted. The Chairman : Mhy I suggest, Mr. Gillette, that it be three and that the chairman may then be, ex-off icio ^ a mem- ber? : Mr. Gillette: Yes. Mr. Stone : I would like to know whether the casualty companies are entitled to vote on this question, or whether we are here merely as spectators. I was invited to be here. The Chairman: I believe this is an open meeting. We have not appointed a committee on credentials. Anyone interested in the topic, no matter what the nature of his in- terest is, we would be very willing and glad to have as a member of this conference. The motion was voted upon, and carried. The Chairman : Such committee will be. appointed im- 51 mediately after adjournment and the members will be no- tified at once. If this conference can reach some agree- ment and as a body request it, I shall be only too glad to direct our work in such a way that we can furnish you at the earliest practical moment definite information on this subject. ; * ' Mr. Gillette : I have particularly in mind the fact that the Wisconsin Commission, and I believe the New York Commission, will be obliged to report before the Minnesota Commission will. I realize the very great effect that ac- tion taken by any one state would have. I believe our ac- tion ought to be uniform as far as possible. If these com- missions themselves cannot agree upon a plan of action, it is pretty nearly useless to try to get the people of a state to agree. ' Upon motion an adjournment was taken until three P. M.' July 29, 1909. The conference met pursuant to adjournment. The Chairman ; The hour of three o’clock having arriv- ed, the meeting will please come to order. Mr. Gillette: Mr. Chairman, I move that the commit- tee which was authorized this morning be increased from • three to five. Mr. Mercer: I second the motion. Mr. Meager: Mr. Chairman, may I ask what committee that is? I was unfortunate enough to not be here. this morning. Mr. Gillette : For the benefit of those who were not here this morning I might say that the motion made this morn- ing provided that a committee of three be appointed (now to consist of five) to report back on permanent organiza- tion and to map out a course of action with the idea of sys- U. Of ilL LIB. tematizing the work so that different commissions might not be obliged to duijlicate it and cover the same ground, and for the further reason that there might be uniformity. The motion was voted upon and carried. The Chairman : The Chair will appoint on that commit- tee Mr. Mercer of the Minnesota State Commission, Mr. Sanborn of the Wisconsin State Commission, Mr. Seager of the New York State Commission, Mr. Dawson, and Mr. John Mitchell. Mr. Mercer has received a letter from Mr. Sanborn say- ing that he is unavoidably detained at Erie and' will not reach here until Friday, and that he has requested Mr. Blaine to take his place on the program. Dr. Franlcel: .1 move that the meeting this afternoon adjourn promptly at five o'clock. The Chairman: Without objection, it will be under- stood that if the meeting should continue until five o’clock it will stand adjourned until ten o’clock tomorrow morn- ing, and that if an adjournment is taken before five it will be until tomorrow morning at ten o’clock. The discussion this afternoon was to be on the possibil- ity of workmen’s compensation acts in the different states. The question was to be discussed by Mr. Sherman of New York, and Mr. Sanborn of Wisconsin, neither of whom are present at this time, I believe, nor Mr. Blaine to speak for Mr. Sanborn. Shall we take up the question of practicability, or shall we have an open discussion on possibility? Mr. Gillette: I think ^e ought to keep the discussion in its regular order, or we won’t know where we are. The Chairman : I quite agree with Mr. Gillette. It might be better to take up this afternoon the question of the possibility. 53 Mr. Gillette: It might not be out of order to say that I promised Mr. Mercer that I would call upon him to' say something upon this. The Chairman: We would be glad to hear from Mr. Mercer if he will discuss the question of possibility for us. Mr. Mercer : , I didn’t know, when I made the plea to Mr. Gillette, that I would get the opportunity so soon. (Laugh- ter). I think if you don’t know him now you will before we get through. I am not going to burden you with the reading of any paper; it is entirely too long. I should like to discuss this feature from my own views, and anything I say upon the question will have to be subject to justification by further study or to modification as further study may develop. ’ t 54 \ LEGAL POSSIBILITY OF WORKMEN’S COMPENSA- TION ACTS. By II. V. Mercer, of Minneapolis. [The argument made at the conference was not as lengthy as this, but an ou.tline of it; and these authorities since provided for the record.] Would a law changing the basis of recovery by an em- ploye from that of negligence or fault of the employer to that of a risk of the industry be constitutional? Can we enact workmen’s compensation acts in the Unit- ed States that will be constitutional? In our opinion, this question must be answered in the affirmative if Courts give to it tlie same breadth of vision as to other questions of equal public importance, but the source of its justifica- tion with the states except as to public works must be the police power. DUAL GOVERNMENT. To answer this question, we must consider that our gov- ernment is built upon a dual system, having a federal con- stitution of granted powers, including limitations, and state constitutions of limitations upon powers. In the Federal Constitution the amendments provide: Article IX. ^‘The enumeration in the constitution, of certain rights, shall not be construed to deny or disparage oth- ers retained by the people. 55 Article X. ^‘The powers not delegated to the United States by the constitution, nor prohibited by it to the states, are reserved to the states, respectively, or to the people.” In McCulloch v. The State of Maryland^ et aly 4 Wheat- on, 406 (L. Ed. 596) the Supreme Court speaking through Chief Justice Marshall said: ‘‘All powers are given to the national government, as the people will. The reservation in the 10th amend- ment to the constitution, of ‘powers not delegated to the United States,’ is not confined to powers not ex- pressly delegated. Such an amendment was indeed proposed; but it was perceived that it would strip the government of some of its most essential powers, and it was rejected. Unless a specific means be expressly prohibited to the general government, it has it with- in the sphere of its specified powers.” In Lane Co. v. Oregon, 7 Wallace, 76 L. Ed. 101, Mr. Chief Justice Chase said: “That people of the United States constitute one na- tion, under one government, and this government, within the scope of the powers with which it is in- vested, is supreme. On the other hand, the people of each State compose a State, having its own govern- ernment, and endowed with all the functions essential to separate and independent existence. The States dis- united might continue to exist. Without the States in union there could be no such political body as the United States. * * * The general condition was well expressed by Mr. Madison in the Federalist, thus : ‘The Federal and State Governments are, in fact, but different agents and trustees of the people, constitut- ed with different powers and designated for different purposes.’ ” i In Buffington v. Bay, 11 Wallace, 113 (L. Ed. 122), it is said: ' , 1 ^ 1 * ■ ' “It is a familiar rule of construction of the Consti- tution of the Union, that the sovereign powers vested 56 in the state governments bv their respective constitu- tions, remained unaltered and unimpaired except so far as they were granted to the Government of the United States. That the intention of the framers of the Constitution in this respect might not be misun- derstood, this rule of interpretation is expressly de- clared in the 10th article of the amendments. * * * ^•The General Government, and the States, although both exist within the same territorial limits, are sepa- rate and distinct sovereignties, acting separately and independently of each other, within their respective spheres. The former, in its appropriate sphere, is su- preme, but the States within the limits of their powers not granted, or, in the language of the 10th Amend- ment ‘reserved,’ are as independent of the General Government as that government within its sphere is independent of the States.’’ In United States ex rel. Turner v. WilliamSy 191 U. S. 296 '(L. Ed. 979-986), Mr. Justice Brewer gives a separate concurring opinion in which, referring to the 10th Amend- ment, we find this language : “The powers the people have given 'to the general government are named in the Constitution, and all not there named, either expressly or by implication, are reserved to the people, and can be exercised only by them, or upon further grant from them.” In Tioming vr Xew Jersey, 211 U. S. 78, it is said: “It must not be forgotten that in a free represen- tative government nothing is more fundamental than the right of the people through their appointed ser- vants to govern themselves in accordance with their own will, except so far as they have restrained them- selves by constitutional limits specifically established ; and that in our peculiar dual form of government nothing is more fundamental than the full power of the state to order its own affairs and govern its own people, except so far as the Federal constitution ex- pressly or by fair implication has withdrawn that pow- er.- The power of the people of the states to make and alter their laws at pleasure, is the greatest security for ' liberty and justice.” 57 Under "this dual form of govern men t we study the Fed- eral Constitution to see if the power to legislate on this subject has been given to the United States government; we also study both that constitution and the constitution of the particular state to see if sncli legislation has been prohibited to the state. This of course, upon the theory that the Federal Government is built upon granted pow- ers, but the state government upon inlierent, though limit- ed powers. QUESTIONS. Under these circumstances we must keep in mind three things; First, Has the power of legislation upon this ques- tion been delegated to Congress by the Federal Constitu- tion? Second, Has the power of such state legislation been proliibited by the Federal constitution? Third, Has it been prohibited by the particular states'? THEORY OF THE DISCUSSION. I. • The public work is not controlled by the constitutional rule as to freedom of contract. II. The relations of the people to the governments of the United States and of the several states are based upon contract to which individual rights are enough subjected to protect the general welfare, at least under the police power. 58 III. Tlie commerce clause of the Federal Constitution grants to Congress the right to control relations of master and servant in so far as needed in isuch commerce, hut does not grant to the Federal Government the right to deprive the state of its police power or to regulate state commerce. (a) The commerce clause was not intended to, and does not, take aAvay the police power of the states' (b) The states execute the police power even with re- spect to interstate icommerce but do so for their self pro- tection and only to such extent as not to amount to regu- lation in the constitutional sense; except Avhere limited they have the poAvers of otlier nations. IV. The police pOAver of the people of the seA^eral states was neA^er delegated by the Federal Constitution, nor prohib- ited by that instrument from reasonable state exercise. (a) The Fourteenth Amendment was not designed to destroy the state’s police power. V. Some of the usual constitutional objections against laws are not applicable to this question for they do not apply to the state if it stays Avithin reasonable, equal, and lawful regulations of dangerous employments. (a) The first ten amendments to the Federal Constitu- tion apply only to the Federal GoA^ernment and do not re- quire the states to giA^e the jury trial but probably would require such trial in the Federal Courts. 59 VI. The Fourteenth Amendment to the Federal Constitu- tion is a prohibition upon the states — not upon the nation- al government. (a) The privileges and immunities secured hj that in- strumtmt are those which belong to citizens of the United States as distinguished from states. (-b) E(pial protection of tlie laws is construed by the Federal Courts as it is by the state courts to permit the reasonable classifications treating those within the class equally. This is no bar to such law. (c) The due process of law provided by the Fifth Amendment applies only to the Federal Government but in the Fourteenth Amendment it is a prohibition upon the states. (d) The Federal Constitution, however, does not control mere form of procedure in or regulate the practice of state courts. All that it requires is that at some point in the controversy there must be a time and place for the court to adjudicate the legal liability. (e) It is not taking private property without due pro- cess of law within the constitutional provisions to require dangerous employments to be liable for the risks of the in- jury without any particular fault in the special transac- tions. (f) The jury trial provided by the state constitutions is the trial of such cases as embrace principles secured by the constitution when it was adopted and not a trial of matters involved only in new laws isiich as this would be. 60 VII. This sort of law would not take private property for public use by reason of two principles : (a) Under our social compact the private owner has . no ownership except that which is subject to reasonable control such as this would be. (b) The private individual has no right to complain of the taking of only so mucli property as is an aid to gov- ernment operation by reason of the last above principle. VIII. The Fourteenth Amendment secures the liberty of con- tract betvreen employer and employe except when limited by the police power; the exercise of the police power rests in the legislative department; the courts interfere to up- •hold the constitution only to prevent arbitrary power from being exercised under cover of the police power. (a) The courts recognize that the employer and' the em- ploye do not stand on an equality in making their con- tracts. (b) The police power is used to regulate insurance of private property and the control of employer and em- ploye. (c) No owner of property has the right to claim that a contract previously in existence has heen changed in its obligations by reason of the exercise of the police power because the implication of the power always went with that contract as a matter of law. (d) The police power can neither be legislated nor con- tracted away. G1 IX. The action of the state iiinst not be arbitrary. (a) The coinnion law was not made to meet the present conditions and is totally inade(]nate to meet the present conditions. (b) The law has not kept apace with industry. (c) The employe carries this risk now. (d) It is a ^reat temptation to perjury. (e) The employer not satisfied. (f) It is unsatisfactory to the public. X. The com pen sat ion in the modern foreign countries along this line. (a) What advantage has been made. (b) The common law has been modified in many re- spects and there seems to be no reason why it should not be arranged, at least after a reasonable remedy is given in its stead. / (c) The Federal Grovernment and many of the states have been working on this change sufficient to show that no party wants arbitrary action but only reasonable regu- lation, yet, there are doubts in the minds of many as to whether we can make the necessary laws. XI. The simplest remedy, already well justified for property insurance, is to fix a definite liability by law for hazard- 62 ous industries on condition that 'the amount of damages be submitted to arbitration — ^repeal the common law. XII. The fallacy in the most of our objections lies in the fact that we fail to understand or appreciate the weight which must be given to tlie power to protect the public interests. The power of general Avelfare must always remain with the states subject only to reasonable and laAvfnl regula- tions. I. PUBLIC WORK fS NOT CONTROLLED BY THE CONSTITUTIONAL RULE AS TO FREEDOM OF CON- TRACT. In Atkin v. State of Kansas^ 191 U. S. 205 (L. Ed. 148), the Supreme Court held that the freedom of contract guar- anteed by the 14th x\mendnient Avas not infringed by the provisions of the Kansas statute, making it a criminal offense for a contractor for public work to permit or re- quire an employe to perform labor upon that work in ex- cess of eight hours per day. That opinion Avas by Mr. Justice Harlan. It Avas stipu- lated that the labor performed Avas healthful, outdoor work, not dangerous, hazardous or in any Avay injurious in the case under consideration. In the course of that opin- ion the court said : ^Tt maj" be that the state, in enacting the statute, intended to give its sanction to the AueAV held by many, that, all things considered, the general welfare of em- ployees, mechanics and Avorkmen, upon Avhom rest a portion of the burdens of gOA^ernnient, Avill be sub- 63 served if labor i^erformed for eight continuous liours was taken to be a full da3^s’ work; that tiie restrictions of a day’s work to tliat number of hours would pro- mote morality, improve the physical and intellectual condition of laborers and workmen, and enable them the better to discharge the duties appertaining to citi- zenship. We have no occasion here to consider these questions or to determine upon which side is the sounder reason ; for whatever inav have been the mo- tives controlling the enactment of the statute in ques- tion, we can imagine no possible ground to dispute the power of the state to declare that no one undertaking work for it or for one of its municipal agencies should permit or require an employee on such work to labor in excess of eight hours each day, and to inflict pun- ishment upon those vv^lio are embraced by such regu- lations and yet disregard them. ' It cannot be deemed a part of the liberty of any contractor that he be al- lowed to do public work in any mode he may choose to adopt, without regard to the wishes of the state, on the contrary it belongs to the state, as the guar- dian and trustee for its people, and having control of its affairs, to prescribe the conditions upon Which it will permit public work to be done on its behalf, or on behalf of its municipalities. No court has author- ity to review its action in that respect. Kegulations on this subject suggest only considerations of public policy. And with such considerations the courts have no concern. ^‘If it be contended to be the right of every one to dispose of his labor upon such terms as he deems best, — as undoubtedly it is, — and that to make it a crimi- nal offense for a contractor for public work to permit or require his employes to perform labor upon that work in excess of eight hours each day is in deroga- tion of the liberty both of employees and employer, it is sufficient to answer that no employee is entitled, of absolute right and as a part of his liberty, to perform labor for the state; and no contractor for public work can excuse a violation of his agreement with the state by doing that which the statute under which he pro- ceeds distinctly and lawfully forbids him to do.” 64 And again at L. Ed., page 158 : ‘‘We are reminded bj counsel that it is the solemn duty of the courts in cases before them to guard the constitutional rights of the citizen against merely ar- bitrary power. That is unquestionably true. But it is equally true — indeed, the public interests impera- tively demand — that legislative enactments should be recognized and enforced by the courts as embodying the will of the people, unless they are jdainly an^ palp- ably, beyond all question, in violation of the founda- mental law of the Constitution. It cannot be affirmed of the statute of Kansas that it is plainly inconsistent with that instrument; indeed, its constitutionality is beyond all question. * ♦ * ‘‘Some stress is laid on the fact stipulated by the parties for the purposes of this case, that the work performed by defendant's employee is not dangerous to life, limb, or health, and that daily labor on it for ten hours would not be injurious to him in any way. In the view we take of this case, such considerations are not controlling. We rest our decision upon the broad ground that the work being of a public char- acter, absolutely under the control of the sdate and its municipal agents acting by its authority, it is for the state to prescribe the conditions under which it will permit work of that kind to be done. Its action touch- ing such a matter is final so long as it does not, by its regulations, infringe the personal rights of others, and that has not been done.’^ Atl'in V. Kansas, 191 U. S. 205 (L. Ed. 148-159). This decision like many of the others recognizes the lib- erty of contract in non dangerous transactions of a private nature but "not as ‘applied to public work. 05 II. THE HELATIOE^E OF THE EEOPLE TO THE GOY- ERYMEYTE OE THE UNITED STATEE AND OF THE EEYERAL ETsVTEE ARE BASED UPON CONTRACT TO AVHICH INDIVIDUsYL RIGHTS ARE ENOUGH SUBJECTED TO PROTECT THE GENERAL Y'EL- FARE, AT LEAST UNDER THE POLICE POWER. The ‘A'ontract thconj” was the basis of the American constitutional ^system. The first writer Avho iiiaintaiuecl the idea on the eastern continent was Johannes Althnsins, in the beginning of the seventeenth century; but the first work in England was Hooker’s Ecclesiastical Polity. See AViUoughby, Nature of State, Ch. IV, p. 62. LowelVs Essays on Government (social compact). Hooker was a clergyman of the Church of England and it is claimed that he originated this theory in 1591, for the purpose of defending the established church against its enemies. Lowell's Essays on Government, (social compact). ^Y^illoughby, Nature of State, Ch. IV, 62. Lowell thinks that the idea that the rules derived their authority from the people was not new, yet the deduction of the lawfulness of laws from the voluntary association of individuals was new. The first and perhaps the most for- mal social compact known to history was made Xov. 11th, 1620, in the cabin of the Mayflower; it was in writing, signed by all the parties, and was clear and explicit. See copy of Loivell's Essays on Government. 66 The theory was taken up bv Hugo Grotiiis in 1625, in his w ork J ure Belli ct Pads:’ He said : ‘‘That the mother of natural law is nature itself and the mother of civil law is that very obligation which arises from consent, which, deriving its force from the law of nature, niav be called, as it Avere, the great grandmother of this law also.’’ Lowell also savs that in ‘-The Tenure of Kings & Magis- trates,’’ Avritten in 1619, Stilton, in justification of Charles I., traces tlie outlines of the same principles afterAvards developed bv Locke. He further says that Hobbes took up the theory in 1651 to support the doctrine of the un- limited poAver of the king and tliat Hobbes founded all justice and laAv upon a mutual transfer of rights by con- tract. This theory enabled the English Convention to retain the croAvn of James II. by the folloAving resolution: “That King James the second, having endeavored to subvert the CQUstitution of the kingdom, by breaking the original con- tract between King and people, and having, by the advice of Jesuits and other wicked persons, violated the funda- mental laAvs, and having Avithdrawn himself out of this Kingdom, has abdicated the government, and that the throne is thereby vacant.’’ About two years later John Locke published his treatise on Government. Lowell says that Locke began Avith the only proposition common to all writers of the theory school — “that in a state of nature all men are equal’’ ; that Locke said a political society was formed “when a num- ber of men agTee to give up to that society their individual rights of punishing offenders, and of exacting by their own force,redress for injuries. In so doing they consent that a majority (unless there is a stipulation for a larger proper- 67 tion), shall have power to make aud execute laws neces- sary to accomplish the purposes for which the society is formed, and shall have authoritj^ to call upon each man to employ his force to carry out the judgment of the society.’’ In his Theory of the 'State, Buntschli says : ^‘That the contract theory is applied quite different- ly by Hobbes, Locke and Rosseau; that according to Hobbes men only pass from a state of nature to the so- cial state by surrendering their rights to a sovereign, one, few or many (Leviathan, Ch. IT) ; that Locke supposes rights, e. g., of liberty and property, to exist in the state of nature by the original compact, and that a form of government is instituted to secure these rights (Treatise on Gov., B. II, C. 6, Sec. 2) ; that ac- cording to Rosseau men pass from the state of nature to the social state by the social contract (as in Hobbes’ theory), but that the sovereign to which each surren- ders his rights is the people, so that each is sovereign as well as subject (Cont. Soc. I., Ch. 6, this sovereign- ty is inalienable, II, C. I; III, C. 16) ; that since the time of Rosseau the contract theory has enjoyed great and widespread popularity.” In the discussion of' vested rights, the court said, in Gothen v. Stonington, 4 Conn., at 225: ^^Should there exist what I know is not only an in- credible supposition, but a most remote improbability, a case of the direct infraction of vested rights, too pal- pable to be questioned and too unjust to admit of vin- dication, I could not avoid considering it as a viola- tion of the social compact, and within the control of the Judiciary.” The constitution of Mass. (1870) says: ^^The body politic is formed by a voluntary associa- tion of individuals; it is a social compact by which the whole people covenants with each citizen and each citizen with the whole people, that all shall be govern- ed by certain laws for the common good.” The constitution of New Hampshire says : ^^All men are born equally free and independent; 68 therefore all goverument of right originates in the peo- * pie, is founded in consent, and instituted for the gen- eral good of all.’’ The constitution of Virginia says : ‘‘That all men are by nature equally free and inde- pendent and have certain inherent rights, of which, wlien they enter into a state of society, they cannot, by anj compact, deprive or divest their posterity, namely, their enjoyment of life and liberty, with the means of acquiring and possessing property, and pur- suing happiness and safety.” The constitution of Maryland says : “All government ,of right originates from the peo- ple, is founded in compact only, and instituted solely for the good of the whole.” Story on the C on st it utiony quoting from Number 43 of “The Federalist,” says: ‘‘The fabric of American Empire ought to rest on a solid basis of the consent of the people. The streams of national power ought to flow immediately from that pure, original fountain of all legitimate authority.” See Note from Coke, 19 Dill. Mun. Corps. It is evident from both the letter and the spirit of the Declaration of Independence that this theory prevailed in the colonies at the time of its adoption. In Calcler v. Bull, 3 Dali., at 394, L. Ed. 651, Chase, J., (IT. S. Sup. Court) said: “It seems to me that the right of property, in its origin could only arise from compact, express or im- plied, and I think it the better opinion, that the right as well as the mode or manner of acquiring property, and of alienation of transferring, inherited or trans- mitting it, is conferred by society; is regulated by civil institution, and is always subject to the rules pre- scribed by positive law.” This general right is applicable here if the public good requires its exercise. 09 In Mium V. lUinois, 94 l\ S. 113, L. Ed. 83-84, tlie (jiies- tion Ava,s whether a grain elevator sliould be sul>jected‘ to (Control hj the state, and wliile tlie discnssion was on tliat question, the language of the court is such as to show the theory upon which the police power rests; ‘^When one becomes a member of society, he neces- sarily parts Avith some rights or privileges which, as an individual, not affected by his relations to others, he might retain. body politic,’ as aptly defined in the preamble of the Constitution of Massachusetts, ds a social compact by Avhich the Avhole people covenants Avith each citizen, and each citizen Avith the Avhole people, that all shall be governed by certain laAVS for the common good.’ This does not confer poAver upon the Avhole people to control rig^its which are purely and exclusively private. Thorpe v. R. R. Co., 27 Yt. 143, but it does authorize the establishment of laws requiring each citizen to so conduct himself and so use his own property as not unnecessarily to in- jure another. This is the yery essence of gOA^ern- ment, and has found expression in the maxim, Sic vtcre tiio vt alicnum non laedas. From this source come the police powers, which as was said by Chief Justice Taney in The License Cases, '5 How. 583j C4re nothing more or less than the powers of gov- ernment inherent in every sovereignty — ^that is to say, — the power to govern men and things.’ Under these povrers the government regulates the conduct of its citizens one towards another, and the manner in which each shall use his own property, when such reg- ulation becomes necessary for the public good.” In Adair v. United States, 208 U. S. 161, the court in re- ferring to the police poAA^ers said: ^^Both property and liberty are held on such rea- sonable conditions as may be imposed by the govern- ing power of the state in the exercise of those powers, and with such conditions the 14th amendment was not designed to interfere. * * *” Under this theory the public — ^the general welfare — is protected and secured. The development of this study will 70 show that the courts recognize these mutual obligations and restrictions as betAveen the states and the indiAuduals on the question of indiyidual rights. Police Power Defined. The right to purchase or to sell labor is part of the liber- ty protected by this (14th) Amendment unless there are circumstances wliich excludes the right. In the Adah' case, 208 U. S. 161, L. Ed. 436, Mr. Justice Harlan said: ' ‘^There are, lioweA^er, certain powers existing in the soA^ereignty of each state in the Union, someAA'hat A^aguely termed ^police poAA^er,’ the exact description and limitation of AA'hich liaA^e not been attempted by the courts. Those poAA'ers, broadly stated, and with- out, at present, any attempt at a more specific limita- tion, relate to the safety, health, morals, and general Avelfare of the public.” In Holden v. Hardy, 169 U. S. 366, (L. Ed. 380) the couid said : ^‘While this power is inherent in all governments, it has doubtless been greatly expanded in its application during the past century, owing to an enormous in- crease in the number of occupations which are danger- ous, or so far detrimental to the health of employees as to demand special precaution for their AA*ell-being and protection, or the safety of adjacent property. * * * ' ^‘This power legitimately exercised can neither be limited by contract nor bartered away by litigation. ^‘While this power is necessarily inherent in every form of gOA^ernment, it was, prior to the adoption of the Constitution, but sparingly used in this country.” Holden v. Hardy, 169 U. S. 366 (L. Ed. 780-93). With respect to the development of the resources of the country the court continues : 71 we were then almost purely an agricultural peo- ple, the occasion for any special protection of a par- ticular class did not exist. Certain protitable employ- ments, such as lotteries and the sale of intoxicating liquors, which were then considered to be legitimate, have since fallen under the ban of public opinion, and are now either altogether prohibited, or made subjecr. to stringent police regulations. The power to do this has been repeatedly affirmed by this court. * * * ‘‘While the business of mining coal and manufac- turing iron began in Pennsylvania as early as 171G, and in Virginia, North Carolina, and Massacliusetts even earlier than this, both mining and manufactur- ing were carried on in such a limited way and by such primitive methods that no special laws Avere consid ered necessary, prior to the adoption of tlie Constitu- tion, for the protection of the operatiA^es, but, in tiie Amst proportions which these industries haA^e since as- sumed, it has been found that they can no longer be carried on with due regard to the safety and health of those engaged in them, without special protection against the dangers necessarily incident to these em- ployments. In consequence of this, laws have been enacted in most of the states designed to meet these exigencies and to secure the safety of persons peculi- arly exposed to those dangers. Within this general catagory are ordinances providing for fire escapes for hotels, theaters, factories, and other large buildings, a municipal inspection of boilers, and appliances de- signed to secure passengers upon railways and steam- boats against the dangers necessarily incident to these methods of transportation. In states where manufac- turning is carried on to a large extent, provision is made for the protection of dangerous machinery against accidental contact, for the cleanliness and ventilation of working rooms, for the guarding of well holes, stairways, elevator shafts, and for the employ- ment of sanitary appliances. In others, where min- ing is the principal industry, special provision is made for the shoring up of dangerous avuIIs, for ventilation shafts, bore holes, escapement shafts, means of sig- nalling the surface, for the supply of fresh air and the elimination, as far as possible, of dangerous gases, for safe means of hoisting and lowering cages, for a 72 limitation upon the number of persons permitted to enter a cage, that cages shall be covered, and that there shall be fences and gates around the top of shafts, besides other similar precautions. * * * “These statutes have been repeatedly enforced by the courts of the several states; their validity assumed, and, so far as we are informed, they have been uni- formly held to be constitutional. * * * ‘‘But if it be within the power of a legislature to adopt such means for the protection of the lives of its citizens, it is difficult to see why precautions may not also be adopted for the protection of their health and morals. It is as much for the interest of the state that the public health should be preserved as that life should be made secure. With this end in view quar- antine laws have been enacted, in most if not all of the states; insane asylums, public hospitals, and institu- tions for the care and education of the blind estab- lished, and special measures taken for the exclusion of infected cattle, rags, and decayed fruit. In other states laws have been enacted limiting the. hours dur- ing ‘which women and children shall be employed in factories; and while their constitutionality, at least as applied to women, has been doubted in some of the states, they have been generally upheld.’^ Holden v. Hardy, 169 U. S. 366 (L. Ed. 780-91). In Hugler v. Kansas, 123 U. S. 623, it is said: “By the settled doctrines of this court the police power extends, at least, to the protection of the lives, the healtli and the property of the community against the injurious exercise, by any citizen of his own rights. State legislation, strictly and legitimately for police purposes, does not in the sense of the Constitution, necessarily intrench upon any authority which has been confided, expressly or by implication, to the Na- tional Government.’’ 73 III. THE COMMERCE CL ACHE OF THE FEDERAL CONSTITUTION CRANTS TO CONGRESS THE RIGHT TO CONTROL RELATIONS OF MASTER AND SERVANT IN SO FAR AS NEEDED IN SUCH COMMERCE, BUT DOES NOT GRANT TO THE FED- ERAL GOVERNMENT THE RIGHT TO DEPRIVE THE STATE OF ITS POLICE POWER OR TO REGU- LATE STATE COMMERCE. • (a) Tlie commerce clause was not iutended to, and does not, take away tlie police power of the states. (b) The states execute the police power even with re- spect to interstate commerce but do so for their self pro- tection and only to such extent as not to amount to regu- lation in the constitutional sense. That clause reads : ^‘The Congress shall haye power ; * * * To regulate commerce with foreign nations, and among the seyeral states, and with the Indian tribes. ^ Const, of U. S., Art. 1, Sec. 8. Since the decision of the Supreme Court in Hoioard v. III. Cent. R. R. Co., 207 U. S. 463 (L. Ed. 297), there is no. longer any doubt but that in so far as the relations of employer and employe are concerned, they are under the control of Congress when a part of the means or adminis- tration of the commerce clause, but are not so yrhen they relate to purely intrastate commerce. With respect to whether or not the act of June 11, 1906, regulated commerce the court said : ^^We think the unsonndness of the contention that, because the act regulates the relation of master and 74 servant, it is unconstitutional, because, under no cir- cumstances, and to no extent, can the regulation of such subject be within the grant of authority to regu- late commerce, is demonstrable. We say this because we fail to perceive any just reason for holding that Congress is without power to regulate the relation of master and servant, to the extent that regulations adopted by Congress on that subject are solely confined to interstate commerce, and therefore are within the grant to regulate that comniercej or within the au- thority given to use all means appropriate to the exer- cise of the powers conferred. * * * ^^It cannot be said that because a regulation adopted by Congress as to such train when so engaged in in- terstate commerce deals with the relation of the mas- ter to - the servants operating such train or the rela- tions of the servants engaged in such operation be- tween themselves, that it is not a regulation of inter- state commerce. This must be, since to admit the au- thority to regulate such train, and yet to say that all regulations which deal witli the relation of master and servants engaged in its operation are invalid for want ' of power, would be but to concede the power and then to deny it ; or, at all events, to recognize the poAver and yet to render it incomplete.” Howard v. lU. Cent. R. Co., 207 U. S. 461 (L. Ed. 297-308). The rule generally api)lied to delegations of Federal pow- er, prevails Avith respect to this question, that the states may act till Congress exercises its powers. Pierce v. Van Dusen, 78 Fed. 693 (6. C. C. A.) (De- cision by Harlan, Taft and Lurton). a. The commerce clause does not take, and was not intended to take, the police power from the states; hut it does give to Congress such poiccrs over the subject as to exclude state action when Congress docs act, except what is neces- sary for state protective measures. » 75 In McLemv v. Denver & R. G. R. R. Co., 203 U. S. 38-47, (L. Ed. 78) it is said : lias been too frequently decided by tlijs court to require the restatement of the decisions, tliat the ex- clusive power to regulate interstate commerce is vest- ed by the Constitution in Congress, and tliat other laws which undertake to regulate such commerce or impose burdens upon it are invalid. This doctrine has been reaffirmed and announced in cases decided as recently as the last term of tliis court. While this is true, it is ecpially Avell settled, that a state or terri- tory, for the same reasons, in the exercise of the po- lice power, may make rules and regulations not con- flicting with the legislation of Congress upon tlie same subject, and not amounting to regulations of inter- state commerce. It will only be necessary to refer to a few of the man}^ cases decided in this court holding valid enactments of lea’islatures having for their ob- ject the protection, welfare and safety of the people, although such laws may have an effect upon inter- state commerce. The principle decided in these cases is that a state or territory has the right to legislate for the safetv and welfare of its people, and that this right is not taken from it because of the exclusive right of Congress to regulate interstate commerce, except in cases where the attempted exercise of authority by the legislature is in conflict with an act of Congress, or is an attempt to regulate interstate commerce.’’ In the Aclwir case, 208 U. iS. 161, (L. Ed. 436) Mr. Jus- tice Harlan said : uThere are, however, certain powers existing in the sovereignty of each state in the Union, somewhat vaguely termed ^police power,’ the exact description and limitation of which have not been attempted by the courts. Those powers, broadly stated, and with- out, at present, any attempt at a more specific limita- tion, relate to the safety, health, morals, and general welfare of the public. Both property and liberty are held on such reasonable conditions as may be imposed by the governing power of the state in the exercise of those powers, and with such conditions the 14th amendment v/as not designed to interfere.” 76 This makes it clear that in the exercise of the police pow- er reasonable regulations may be made even though they may affect interstate commerce; provided they do not con- flict with the action of Congress or attempt to regulate interstate commerce. b. The states execute the police power within the states. The state’s police power can only interfere with inter- state commc7'ce for self protection. In Railway Co. u. Hu4on, 95 U. S. 465, L. Ed. 530-1, in reaching the conclusion that the State of Missouri had un- duly regulated interstate commerce the court stated in ef- fect that while the police power was not granted over such commerce to the federal government the rights were so nearly granted as to compel the courts to guard it with diligence against needless intrusion but admitted the fol- lowing principles : ^^We are tlius brought to the question whether the Missouri Statute is a lawful exercise of the police power of the state. We admit that the deposit in Congress of the poAver to regulate foreign commerce and commerce among the states was not a surrender of that which may properly be denominated police power.” And further: ^^But whatever may be the nature and reach of the police poAver of a State, it cannot be exercised over a subject confided exclusively to Congress by the Fed- eral Constitution. It cannot invade the domain of tJie National GoA^ernment.” And further: ^‘]\IanY acts of a State may, indeed, affect Com- merce, witlioiit amoiintinj^ to a rejiulation (;f it, in tlie constitutional sense of the term. And it is some- times difficult to define tlie distinction betwcH^n tliat wliich merely affects or inffnences, and that wliich reaids Avith some rights or privileges which, as an individual, not affected by his relations to others, he might retain. * * * From this source come the police poAvers, which as was said by Chief Justice Taney in The License Cases, 5 How, 583, Wre nothing more or less than the powers of government inherent in every sovereignty — that is to say, — ^the i>ower to govern men and things.' Under these powers the government reg- ulates the conduct of its citizens one towards another, and the manner in which each shall use his own prop- erty, when such regulation becomes necessary for the public good.-' In Beer Companij i\ Massachusetts. 97 U. S. 25, L. Ed. 989, in a liquor case the court held that all rights are held subject to the police power of the state and that the legisla- ture may provide for the discontinuance of that which is injurious to the health, notwithstanding individuals or cor- porations may thereby suffer inconvenience, saying ; 82 \ I *‘If the public safetj^or the public morals required the discontinuance of any manufacture or traffic the hand of the legislature cannot be stayed from' ijrovid* ing for its discontinuance by any incidental inconven- ience whicli individuals or corporations may suffer. All riglits are held >subject to the judice ]>ower of tlie state.’’ The court repeated in that opinion, what it has laid down in other cases, this caution : ‘Ttf course we do not mean to lay down any rule at variance with Avhat this couiT has decidcnl with regard to the paramount autliority of the Constitution and laws of the United States relating to the regulation of commerce Avith foreign nations and among the sev- eral states or otherwise.” In United Htates v. DeWitt, 9 Wall. 41, L. Ed. 593-4, through an opinion by Chief Justice Chase, the Supreme Court said, in relation to a law making it a misdemeanor to mix certain kinds of oils: ^‘As a xwlice regulation relating exclusively to the internal trade of the states, it can only have effect Avhere the legislative authority of CongTess excludes territorially all state legislation as for examxde in the ' District of Columbia. Within state limits it could have no constitutional operation. This has been so frequently declared by this court; results so obviously from the terms of the constitution, and has been so fully explained and supported on former occasions, that we think it unnecessary to enter again upon the discussion.” This makes it evident that the police power, generally speaking, rests in the state government, except over such territory as Congress has the power to control. In Muf/ler v. Kansas, 123 U. 8^. 623, L. Ed. 205-211-212, it is held first, that laAvful state regulation in the exercise of the police power to prohibit the manufacture and sale of liquors may be enforced against persons aa’Iio at the time 83 happen to own property wlios^ cliief value consists in its fitness for such inanufacturing’ purpose without compen- sating’ them for the diminution in value resultiug from such prohibitory enactments. The constitutionality of this stat- ute was upheld. After discussing the fact that the policy of such laws rests with tiie legislature and not the courts Mr. Justice Harlan said: ^‘Xo one may rightfully do that which the law mak- ing power on reasonable grounds declares to be preju- dicial to the general welfare.’^ The Court re-quoted from Xew Orleans Gas Co. v. Louis- iana Light Co., as follows : ^^Again, in ~New Orleans Gas Light Co. v. Louisiana Light Co., 115 U. S. 650, 672, 29 L. Ed. 516, 521: ‘The constitutional prohibition upon state laws im- pairing the obligation of contracts does not restrict the power of the state to protect the public health, the public morals or the public safety, as the one or the other may be involved in the execution of such con- tracts. Eights and privileges arising from contra^^ts with a State are subject to regulations for the protec- tion of the public health, the public morals, and the public safety, in the same sense, and to the same ex- tent, as are all contracts and all property, whether ovrned by natural persons or corporations.’ “The principle that no person shall be deprived of life, liberty or property without due process of law, was embodied, in substance, in the Constitutions of nearly all, if not all, of the states at the time of the adoption of the Fourteenth Amendment; and it has never been regarded as incompatible with the prin- ciple, — equally vital, because essential to the peace and safety of society, — ^that all property in this coun- try is held under the implied obligation that the own- ers use of it shall not be injurious to the community.” S4 And Then continued the principle: ‘‘Bv the settled doctrines of this court the police -power extends, at least, to the protection of the lives, the health and the property of the community against the injurious exercise, by any citizen of his own rights. State legislation, strictly and legitimately for police purposes, does not in the sense of the Constitution, necessarily intrench upon any authority which has been confided, expressly or by implication, to the Na- tional Government.’’ State police power not delegated to the Federal govern- ment. In the Civil Rights Cases, 109 U. S. 3, L. Ed. S39-S11, it is held that the Civil Rights Act pa.ssed March 1st, 1S75, by the federal government is unconstitutional in two sec- tions as applied to the states, because it is not authorized by either the 13th or 14th amendments to the Constitu- tion, and that the 14th amendment is jirohibitury only upon the states, and the 13th amendment relates only to slavery and involuntary servitude. There were a number of cases decided in that opinion. One from each of the states, Kansas, California, Missouri, New York; some of them certified up by the federal court, and one taken up on T^Tit of error from the federal court, and the constitu- tionality was the question in all of those cases. The first section provided in effect for the full and equal enjoyment of accommodations in public places of entertainment and conveyance by all persons within the jurisdiction of the United States except subject to the conditions and limita- tions established by law and applicable to all conditions irrespective of race, color or previous servitude. The second section provided that any person who should violate the first section should forfeit and pay the sum of five hundred 85 dollars to the person aggrieved tf> be recovered in an sat- tion of debt with full costs and also be deemed guilt}^ of a inisdenieanor and fined not less tlian |500 nor nuire than |1000, or imprisoned not less tlian 30 days or more than one year, with the provision that the person might elect to sue for the penalty or to proceed with his rights at com- mon law or 1 ) 3 ' statute, and that such election would bar other remed.y, outside of the criminal proceedings, and that a judgment for the penalty in favor of the aggrieved party or ux>on an indictment Avould be a bar to either prosecu- tion respectively. The court stated that no one Avould con- tend that the poAver to pass such laAv existed in the consti- tution before the amendments and said: After quoting the 14th amendment and stating that it made void all state legislation against its provisions said : ^‘On the Avhole AA^e are of opinion, that no counte- nance of authority for the passage of the law in ques- tion can be found in either the 13th or 14th Amend- ments of the Constitution.” In Mugler v. Kansas, 123 U. S. 623-667, requoting from a former decision, it is said: ^^That po AVer, belonged to the states when the Fed- eral constitution Avas adopted. They did not surren- der it and the,y all have it now — It rests on the funda- mental princixile that every one shall so use his own as not to wrong and injure another.” This makes it clear that it was not the intention of the people to give the jDolice jDower oA^er to the federal goA^em- ment in matters within the jurisdictions of the states. The court proceeds to hold that OongTess might legislate to counteract state action. The whole opinion rests up- on the theory that Congress had invaded the province of the states in the exercise of their police power and in matters not delegated to Congress by^tlie Constitution. 86 a. The I '/th amendment not designed to destroy the staters police potver. In Barhier v. Connolly ^ 113 U. S. 27, L. Ed. 923, it is clearly lield that the 14th Amendment is not desired to interfere with the police power of the state. In that case a municipal ordinance prohibited washing and ironing in public laundries within territorial limits from ten o’clock at night to six in the morning, and it was held purely a police regulation within the competency of the ordinary municipality to pass, saying: ^^It would be an extraordinary usurpation of the authority of the municipality if a federal tribunal should undertake to supervise such regulations.” And: ^^But neither the Amendment, broad and comprehen- sive as it is, nor any other amendment was designed to interfere with the power of the State, sometimes termed its police power.” V. OF THE USUAL COXSTITUTIONAL OB- JECTIONS AGAINST LAWS ARE NOT APPLICABLE TO THIS QUESTION FOR THEY DO NOT APPLY TO THE STATE IF IT STAYS WITHIN REASONABLE, EQUAL. AND LAWFUL REGULATIONS OF DAN- GEROUS EMPLOYMENTS. (a) The first ten amendments to the Federal Constitu- tion apply only to the Federal Government and do not re- quire the states to give the jury trial but probably would require such trial in the Federal Courts. 87 Usual Constitutional Ohjections that do not Apply to State Action. The objections usually urged against legislation affect- ing changes of the common law in any material i>ortions and particularly this subject are sometimes said to violate the Federal Constitution by reason of the following pro- visions : 1. The 5th Amendment providing tliat no person shall : ‘^Be deprived of life, liberty or property without due process of law; nor shall any private property be tak- en for public use without just compensation.-’ 2. The 7th Amendment provides that; ^Tn suits at common law Avhere the value in contro- versy shall exceed $20.00, the right of trial by jury shall be preserved and no fact tried by a jury shall be otherwise re-examined in any other court of the Unit- ed States than according to the rules of the common law.” All of the provisions contained in the first ten amend- ments of the Federal Constitution may be dismissed, with a few brief authoritative citations from the controversy in so far as they respect states, for it is the uniform doctrine of the Supreme Court to hold those amendments to be ob- ligatory upon the Federal government, and not upon the states. - In Maxwell v. ,Dow, 176 U. S. 581 (L. Ed. 597), the court said: ^‘That a jury composed as at common law, of 12 jurors, was intended by the 6th amendment to the Federal Constitution, there can be no doubt.” And again: ^‘And as the right of trial by jury in certain suits at common law is preserved by the 7th Amendment, ^ 88 such a trial implies that there shall be an unanimous verdict of, 12 jurors in all federal courts where a jury trial is held.” The court then proceeded to say in effect, that it would seem quite clear that the Utah constitution, under consid- eration, providing for 8 instead of 12 jurors, was not suffi- cient, if it be held that the 6th amendment was applicable to prosecutions of citizens of the United States in state courts; but with .respect to that constitutional amendment it repeated the often-decided doctrine, as follows : ^‘They (referring to the first 10 amendments) were intended as restraints and limitations upon the pow- ers of the general government, and were not intended to and did not have any effect upon the powers of the respective states.” Again, in Ughhanlcs v. Armstrong, 208 U. S. 481 (L. Ed. 582), referring to the 6th and 8tli Amendments to the Constitution, the court says : ^The claim rests upon an entire misapprehension of the rights of the plaintiff in error under these amendments. The 6th .and 8th amendments do not limit the powers of the states, as has many times been decided.” The .Supreme Court was asked to hold that the 14th Amendment of its own force applied the first ten to the states, but refused so to hold. Maxwell v. Dow, 176 U. S. 581 (L. Ed. 597). This principle disposes of all of those Federal objections to the administration of laws in the state courts, except un- der the 14th Amendment. 89 V a. J ury Trial Could not he Avoided in Federal Court. Theoretically the Federal Governiiieiit has no coiiiinon law; but, its judges considering a case from a particular state sit with power co-ordin<;ite with the state courts to determine what the common law of that state is as appli- cable to the subject. In Smith v. Alabama^ 124 U. tS. 405 (L. Ed. 508), the court said: ^‘There is no common law of the United States, in the sense of a national customaiy law, distinct from the common law of England as aclopted by the several States each for itself, applied as its local law, and subject to such alteration as may be provided hj its own statutes. Wheaton v. Peters, 33 U. S. 8 Pet. 591 (L. Ed. 1055) . A determination in a given case of what that laAv is may be ditferent in a court of the United States from that which prevails in the judicial tribu- nals of a particular State. This arises from the cir- stance that the Courts of the United States, in cases within their jurisdiction, where they are called upon to administer the law of the State in which they sit or by which the transaction is governed, exercise an inde- pendent though concurrent jurisdiction, and are re- quired to ascertain and declare the law according to their OAvn judgment. This is illustrated by the case of A. Y. Cent. B. R. Co. v. Loclcivood, 84 U.^^S. 17 Wall. 357 (21 L. Ed. 627) where the common law prevailing in the state of New York, in reference to the liability of common carriers for negligence, received a different interpretation from that placed upon it by the judi- cial tribunals of the State, but the law as applied was none the less the law of the State.” And again : ^^There is, however, one clear exception to the state- ment that there is no national common law. The in- terpretation of the Constitution of the United States 90 is necessarily influenced by the fact that its provis- ions are framed in the language of the English com- mon law, and are to he read in the light of its history. The code of constitutional and statutory construction which, therefore, is gradually formed by the judgments of this court, in the application of the Constitution and the laws and treaties made in pursuance thereof, has for its basis so much of the common law as may be implied in the subject, and constitutes a common law resting on national authority. Moore U. S., 91 U. S. 270.’’ Smith r. Alabama, 121 U. B. 165 (L. Ed. 50S-512). 77/c Siatatcs of the State, by Act of Congress, are Buies of Decision for the Federal Law Courts. Sec. 721 of the Revised Statutes of the United States provides : “Sec. 721. (Laws .of the states, rules of decision.) Tlie laws of the several States, except where the Con- stitution, treaties, or statutes of the United States otherwise require or provide, shall be regarded as rules of decision in trials at common law, in tn^ courts of the United States, in cases where they apply.” See Platt i\ Lccocq, 158 Fed. 723 (8 C. C. A.). There is the further rule that any corporation organized under the Federal law depends upon that law for its ex- istence and therefore may litigate its cases in the Federal court. Texas k Pac. By. Co. v. Cox, 115 L^. S. 593, L. Ed. 829. Any remedy provided must take these facts as the settled law under the Constitution. The laws of the state would be administered in the Fed- eral Court as a rule of decision to determine the right to recovery and the amount thereof; but the common law injury in the cases prescribed by the Constitution would be tried by a common law jury. 91 With respect then, to trial by jury, the rijilit exists in the Federal Court, according to the Federal Constitution and Amendments, and cannot be limited by acts of Con- gTess, or of the states. AVitli respect to trial by jury in tlie state courts, that is a matter of state action. This makes it clear that the laws of the state on this question Avill he enforced in the Federal courts as adding to the laws of Congress, provided of course they but po- lice, as distinguished from regulate, interstate commerce. VI. THE FOURTEEXTH AMEXDMEXT TO THE FED- ERAJD COXSTITUTIOX IS A PROHIBITION UPON THE STATES, NOT UPON THE NATIONAL GOV- ERNMENT. The portion of which reads : “Xo state shall make or enforce any law Avhich shall abridge the privileges or immunities of citizens of the United States; nor shall any state deprive any person of life, liberty, or property, without due process of law; nor deny to any person within its jurisdiction the equal protection of the laws.’’ (a) The privileges and immunities secured by that in- strument are those which belong to citizens of the United States as distinguished from states. (b) Equal protection of the la,ws is construed by the Federal Courts as it is by the state courts to permit the reasonable classifications treating those within the class equally. This is no bar to such law. - (c) The due process of law provided by the Fifth Amendment applies only to the Federal Government but 92 in the Fourteenth Amendment it is a prohibition upon the states. (d) The Federal Constitution, however, does not con- trol mere form of procedure in or regulate the practice of state courts. All that it requires is that at some point in the controversy there must be a time and place for the court to adjudicate the legal liability. (e) It is not taking private property without due pro- cess of law within the constitutional provisions to require dangerous employments to be liable for the risks of the in- jury without any particular fault in the special transac- tions. (f) The jury trial provided by the state constitutions is the trial of such cases as embrace principles secured by the constitution Avhen it was adopted and not a trial of matters involved only in new laws such as this would be. This amendment of its own force is a prohibition upon the states — not upon the national government. Taking these clauses up separately, what do they mean? Certainly not to abridge the police powers except as to equal, reasonable, and lawful action. a. Privileges and Immunities. It seems to be the, general rule that the privileges and im- munities of citizens of the United States, guaranteed by the Federal Constitution, are the privileges and immuni- ties given, by that instrument, and not the- privileges and immunities created by state laws. Von Holst ^ also says th^t Cooley, Principles, 247, ex- 93 expresses the indisputable view that tlie adoption of this provision in the Fourteenth Amendnient was superfluous inasmucli as tlie states liad not the ri^lit before, but from the adoption of the provision it is evident tliat tlie jirivi- leges and immunities of the citizens of the United States and of the state do not exactly correspond and calls atten- tion to tlie citations of the Federal Supreme Court in the ^‘Slaughter House Cases/’ IG Wall. 79, and says that: ^^In the same case it deckled, however, that so far as the privileges and immunities of states were concerned, their safety and protection are incumbent on the states, and were not put by the Fourteenth Amend- ment under the special care of the federal govern- ment.” Yon Holst Const. Laio, 248. The amendment gave no new privileges or immunities to the citizens of the states, but only additional guarantees to those then existing. See Bout well on the Const., at end of First Cent. Minor v. Hojiper.sett, 21 Wall. 162, L. Ed. 627. The office of the United States is limited to the enforce- ment of the dut}^ of the states to secure. the equality of im- munities and privileges. V. S. V. CruH shank, 92 U. S. 542, L. Ed. 588. It provides that persons in like circumstances, subject to the same law shall be entitled to the same privileges and that the law shall operate equally upon all persons sub- ject to it ; and the equal right to resort to the appropriate courts for redress cannot be prohibited. Mo. V. Le'ims, 101 U. S. 22-30, L. Ed. 989. Mo. Pac. Ry. Go. v. Mackey, 121 U. S. 205, L.^ Ed. 107. In Minor v. Hopper sett, 21 Wall. 160, L. Ed. 627, the court then said : 94 ^^Other proof of like character might be found, but certainly more cannot be necessary to establish the fact that sex has never been made one of tlie elements of citizenship in the United States. In this respect men liave never had an advantage over Avomen. The same laws precisely apply to botli. The Fourteenth Amendment did not effect the citizenship of Avomen any more than it did of men. In tliis particular, therefore, the riglits of ]\Irs. Elinor do not depend up- on tlie amendment. She liad ahvays l)een a citizen from her birth, and entitled to all the privileges md immunities of citizenship. The amepdment ])r:diib- ited her privileges and immunities as a citizen of the United States; but it did not confer citizenship on her, that she had before its adoption.’’ But see Muller v. Orcffon, 208 U. S. 412. Wherein it is held that the state may regulate hours of labor of Avomeu — even though not for men — under the po- Jice power. The Avhole tenor of the United States Constitution sIioavs that the rights Avhich it guarantees are those Avhich existed at the time of its enactment, or those Avhich AA^re express- ly created by it. This makes it evident that it aa as the understanding of the people when they adopted this provision that certain rights and privileges existed Avhich they desired to ^‘secure” — not ^^grant” — ^to the people of the state. In Maxwell v. Doic^ 176 U. S. 581 (L. Ed. 597), the court discussed the 14th Amendment, and the fact that there is a citizenship of the United States and of the state, ‘^Which Avere distinct from each other, dependent upon different characteristics and circumstances in the individual; that it was only privileges and immuni- ties of the citizen of the United States that AA^ere i:»laced by the amendment under the protection of the Fed- eral Constitution, and that the privileges and im- munities of a citizen of a state, Avhatever they might 95 be, were uot iiiteiuliHl to liave any additional i>rotec- tion by the paragraph in question, but they must rest for tlieir security and jn*otection where they have here- tofore rested." MaxivcJl r. Dow, ITh U. S. 581 (1.. Kd. 597 ). Tlie court calls attention tf» the fact that in the case of M'mor r. //o/>y>(r.vr//(*, 21 \Vallace, 1(»2, 22 L. Kd. (127, it Avas held: ^‘It was held that the right (>f sn If rage was not nec- essarily one of the privileges or iininnnities of citizen- ship l>efore the adoption of the 14th aineudmeut, and although a woman was in one sense a citizen of the United States yet she did not obtain the right of suf- frage by the adoption of that amendment. The right to vote is a most important one in onr farm of govern- ment, yet it is no-t given by the amendment." The court continues to review a nninber of cases on the question, and, quoting from the case of I)i rc KcmmJcr, 136 U. S. 436, L. Ed. 519, said : Protection to life, liberty and property rests pri- marily with the states, and the amendment fnrnishes an additional guaranty against any encroachment by the states upon these fundamental rights wbicli be- long to citizenship and which the state governments were created to secure. The privileges and immuni- ties of citizens of the United States as distinguished from the priAilea'es and immunities of citizens of the states are, indeed, protected by it ; but these are prhi- leges and immunities arising out of the nature and essential character of the national gavernment and granted and secured hy the constitution of the Umt- ed States.’ ” Later the court said : “There is no intimation here that among the priAu- leges or immunities of a citizen- of the United States are the right of trial bv jury in a state court for a state offense, and the right to be exempt from any trial for an infamous crime, unless upon presentment by a grand jury.” 3Iawicell v. Bow, 176 U. S. 581 (L. Ed. 597). 96 It is clear then that the right of trial by a jury in a state court is not a privilege or immunity of the United States, but it probably would be in the United States Cir- cuit Court at common law. In the Maxicell case, supra, it was also decided That the adojjtion of the llth amendment to the Federal Cons cita- tion did not have the effect of making all the provisions contained in the first ten amendments operative in state courts, on the ground that the fundamental rights protect- ed by those amendments are, by virtue of the 14th amend- ment, to be regarded as privileges or immunities of citi- zens of the United States. This being a matter for state action, this question has no practical effect. b. Equal Protection. Taking up equal protection next, we find auother prohi- bition in the above amendmenl:. A thorough study of this important question leaves none in doubt that the equality here meant is equality before the lavr, not in politics; equalitT' to all similarly situated. See Ton Holst Const. Law, 247. The question of equality before the law was the great question between the Plebeians and Patricians in earjy Kome, and it was at the end of a constitutional struggle of 150 years that the Plebeians gained their equality. See.Morey's Outlines of Eoman Law. Art. Enc. Britannica, Tit. Eonie. Wells, Short History of Eome. 97 Maine says that the fumlaiiiental doctrine tliat all men are equal is one of a lar^e number of lej^al maxims which Koman Juris Consulates considered strictly a jiii'idical maxim; and it was founded upon sni)i)osed law natural. ' Maine’s Ancient Law, 92. In the discussion of the ‘^contract theory'’ of the state, Grotius, Milton, Hobbes, Locke, Rousseau and all other followers of that school began with one idea — “that in a state of nature all men are equal.” See Index ^‘Contract Theory” to. Hooker’s Ecclesiastical Policy (1591). Grot is, De Jure Belle et Pacis (1G25) . Milton, Tenure of Kings & Magistrates (1649). Hobbe’s Leviathan, Ch. II of Part III (1651). Locke on Government (1653). Rousseau’s Contract Soc. Willoughby, Nature of State. Lowell's Essays on Government. All men are created equal; they are endowed by their Creator with certain inalienable rights, and among those are life, liberty and the pursuit of happiness. Declaration of Independence. Constitution of Nebraska. Constitution of New Hampshire. Constitution of Vermont. Constitution of Virginia- — see others. All men, when they form a social compact, are equal in rights. Constitution of Connecticut. Constitution of Florida. Constitution of Oregon. Constitution of Texas. 98 All freemen when tliev form a social compact, are equal in rights. Constitution of Alabama. Constitution of Arkansas. Constitution of Kansas. Constitution of ]\Iississippi. The same principle is recognized in those foreign states that have modern constitutions, all of which have been formed after our own system and some of them patterned from its provisions. Constitution uf Switzerland. Constitution of Mexico. Constitution of Prussia. Constitution of Italy, etc. ^^All Swiss shall be equal before the law.’’ Constitution of Switzerland, Art. 4. No person shall be judged by special law or special tri- bunal. Constitution of Mexico. ^^All Prussians shall be equal before the law.-’ Constitution of Prussia, Art. 4. “All the inhabitants of the Kingdom, Avhatever their rank or title, shall enjoy equality before the law. All shall equally enjoy civil and political rights.” Constitution of Italy, Art. 24. The laAV should be the same for all, both in protecting and punishing. This equalitA” is asserted to be a self evi- dent truth Avhich existed independently of anA' human lav; and before it. Ritchie, Natural Rights, Pages 244-5. 99 It uUo seems to he the (jeneral ride that the matter of equal protect toil of the laws is eon si rued hy the Federal Court as it is hy our own state court, to permit reasonahle classifications if all within the class are treated alike. Ill Holden V. Hardy, 109 U. S. 300, L. Ed. 780, it is said: ‘‘Tlie 14tli Aiiieiidiiiont does not profess to secure to all i)ersoiis in the United ^States the benefit of the same laws and the same remedies. Great diversities in these respects may exist in two states separated only by an imaginary line. On one side of this line tliere may he a riglit of trial l)y juiw, and on the other no sucli riglit. Each state prescribes its own modes of judicial pi(i- ceeding. If diversities of laws and judicial proceed- ings may exist in the several states without violating the equality clause in the 14th Amendment, there is no solid reason why tliere may not be such diversities in different parts of the same state. ^‘The same subject was also elaborately discussed by Mr. Justice Matthews in delivering the opinion of tliis court in Hurtado v. California, 110 U. S. 510, 530 (28: 232, 237). ^This flexibility and capacity for gro^^i;b and adaption is the peculiar boast and excellence of tlie common law. * * * xhe Constitution of the United States was ordained, it is true, by descendants of Englishmen, who inherited the traditions of Eng-' lish law and history; but it was made for an unde- fined and expanding future, and for a people gathered and to be gathered from many nations and of many tongues. And while we take just pride in the prin- ciples and institutions of the common law, we are not to forget that in lands where other systems of juris- prudence prevail, the ideas and processes of civil jus- tice are also not unknown. Due process of law, in spite of the absolutism of continental governments, is not alien to that code which survived the Eoman Em- pire as the foundation of modern civilization in Eu- rope, and which has given us that fundamental maxim of distributive justice — sunm cuique trihuere. There is nothing in Magna Charta, rightly construed as a broad charter of public right and law, which ought to exclude the best ideas of all systems and of every age; and as it was the characteristic principle of the 100 common law to draw its inspiration from every foun- tain of justice, we are not to assume that the sources of its supply have been exhausted. On the contrary, we should expect that tlm new and various experience of our own situation and system will mould and shape it into new and not less useful forms.’ We have seen no reason to doubt the soundness of these views.*’ Holden V. Hardy, 169 U. S. 366. Rea^^onaWe Cla.^sifirntion Proper. In Atchison, Topeka^ Si Hanta Fe Rij. Vo. v. Matthews, 174 U. S. 96 (L. Ed. 909), the Suijreme Court held that equal protection of the laws, guaranteed by the 14th Amendment of the Constitution, doc^s not forbid classifi- cation. The fact of inequality produced by cla.ssification does not determine its constitutionality. In that case the Kansas statute provided that in an ac- - tion against a railroad company for damages by fire caused by operating the railroad, the plaintiff need only establish the fact that the fire complained of vras caused by operat- ing the railroad and the loss and his damages, and that such proof should be prima facie evidence of negligence, and al- lowing the plaintiff a reasonable attorney's fee. The court held that that was not invalid as denying equal protection of the law. Upon this the court said: ^^The equal protection of the laws which is guaran- teed by the Fourteenth Amendment does not forbid classification. That has been asserted in the strongest language. Barhier v. Connolly, 113 U. S. 27 (28 L. Ed. 823). * * * ^‘But neither the amendment — broad and compre- hensive as it is — nor any other amendment, was de- signed to interfere with the power of the state, some- times termed its police power, to prescribe regulation to promote the health, peace, morals, education, and good order of the people, and to legislate so as to in- 101 crease the iudustries of the state, develop its resources, and add to its wealth and prosperity. From the very necessities of society, lej^islation of a sjiecial character, havin<>- these objects in view, must oftcm l)e had in cer- tain districts, sncli as for drainin*^ marshes and irri- ^atin^ arid jilains. Sju^cial l)urd(*ns arc* often m*ces- sary fm* ^(*neral benelits — for siijjplyin^i; water, j)re- ventiii”- tires, li‘»litin^- districts, cleaninj^ streets, open- ing' parks, and many otlier objects. Ke.i^nlations for tliese ])iirposes may ])i*ess with more or less wei«;ht upon one tlian iijxm another, but they are desij^ned, not to ini])ose une(pial or unnecessary restrictions uj)- 011 anyone, but to ])romote, witli as little inconvenience as possible, the <>eneral j^ood. Though, in many re- si)ects, necessarily s]i(*cial in their character, they do not furnish just j^round of complaint if they operate alike upon all ])ersons and prr)))erty under the same circumstances and conditions. Class legislation, dis- criminating against soim* and favoring others, is pro- hibited, but legislation which, in carrying out a jjublic purpose, is limited in its application, if within the sphere of its operation it affects alike all persons simi- larly situated, is not within the amendment.’^ And again : ^^It is the essence of a classification that upon the class are cast duties and burdens different from those resting upon the general public. * * * Indeed, the very idea of classification is that of inequality so that it goes without saying that the fact of inequality in no manner determines the matter of constitution ality.” Atchison. Topeka k Santo Fe Rij. Co. v. Matthews^ 174 U. S. 96 (L. Ed. 909-915). So here the responsibilities may press more heavily upon one than another, but this design will be equality. In MaUet v.. North Carolina, 181 U. S. 589 (L. Ed. 1015), the court had under consideration a law of Xorth Caroli- na providing that the state in a criminal case might have the allowance of an appeal from one district and not from 102 another was not a denial of the equal protection of the laws, guaranteed by the Fourteenth Amendment, saying: ‘^In Missouri v. Leicis, 101 U. S. 23, siih nom^ Bow- man V. LewiSj 25 L. Ed. 989, it was held that, by the 14th amendment of the Constitution of the United States, a state is not prohibited from prescribing the jurisdiction of the several courts, either as to tlieir territorial limits, or the subject-matter, amount, or finality of their respective judgments or decrees. * * * ^^Eacli state has tlie riglit to make political subdivis- ions of its territory for municipal purposes, and to reg- ulate tlieir local government. As respects tlie admin- istration of justice, it may establish one system of courts for cities and another for rural districts, one system for one portion of its territory and another sys- tem for another portion.” Mallet V. North Carolina, 181 U. S. 589 (L. Ed. 1015-20). yaliditii of Mining Inspection Law. In Consolidated Coal Co. v. Illinois, 185 U. S. 203, L. Ed. 872, the court had under consideration an act of 1897 in the state of Illinois, with respect to coal mines, which act ex- empted all mines from the operation of the act if they did not have to exceed five employees; it also confided to the inspectors some discretion as to the number of times that each mine should be inspected, and to regulate the charges therefor to be made by the mine owner. It was held that the act was not repugnant to the Four- teenth Amendment, the court saying at page 875 : “The regulation of mines and miners, their hours of labor, and the precautions that shall be taken to in- sure their safety, health, and comfort, are so obviously within the police power of the several states that no citalion of authorities is necessary to vindicate the general principle. * * * It is true that the act of 1897 amended the former law of 1895, by limiting its application to coal mines, ‘where more than five men 103 are employed at any one linn*/ Tliis is a sp(*ci(*s of classilical ion wliicli the l(*;»islatnr(‘ is at lilua-ty to adopt, ])rovided it be not wholly arbitrary or nni-eason- able. * * * 111 the case under consideral inn there is no atteni])t arbitrarily to select one mine foi* inspec- tion, but only to assume tliat mines which are worked upon so small a scale as to i-ecjuire only five o])eratives would not be likel^^ to need the careful insjiection jiro- vided for the lar<>er mines, where tlie workings were carried on upon a larii^er scale or at a <^reater depth from the surface, and wlierea much lar'i^er fnrc(" would be necessary for their successful o])eration. It is quite evident that a mine which is o]>erated by only five men could scarcely have passed the experimental stage, or that ])recautions necessary in the ojieration of coal mines of ordinary magnitude would be required in such cases. There was clearly reasonable foundation for a discrimination here.’’ Again on page SIT : ^Tn enacting a law with regard to the inspection of mines, we see no objection, in case the legislature find it impracticable to classify the mines for the pur- poses of inspection, to commit that power to a body of experts who are not onlv experienced in the opera- tion of mines, but are acquainted with the details nec- essary to be known to make a reasonable classification, although it may affect the amount of fees to be paid by the mine owners.” Con soli da ted Coal Co. et al, v. Illinois, 185 U. S. 203, L. Ed. 873. This is a binding precedent for reasonable classification and inspection. State Police Poicer Allows Classification on Reasonable Basis. But, of course, as all other states, Minnesota has a po- lice power, and it applies to the question of employer and employe in dangerous employments. 104 Our court lias held valid a law requiring Street Itaih ways to make enclosure to secure motormen from weather exposures. In Htate v. Dow IS. ISmith, 58 Minn. 35, in de- ciding this question our court said : ‘^Any one acquainted with the extreme cold of much of the weather in this climate between the 1st of No- vember and the 1st of April, and who knows, as every- body does, -that the motornian on an electric car is obliged to stand in one place, always on the alert, his whole attention given to the means of controlling the motive power and the brake, and to looking out ahead, and unable, with due regard to his duties, to give attention to protecting himself from the cold, must appreciate that, when going at the rate of eight or nine miles an hour, perhaps against a head wind, and with the mercury below zero, the position of the motorman is one not merely of discomfort, but of ac- tual danger to health, and sometimes to life, and the tendency of which is to disable him to some extent to perform his duties in the way that care to safety of his passengers and of travelers on the street requii^s. ‘‘It has never been questioned that the police i)ower of the state extends to regulating the use of dangerous machinery, with a view to protecting, not only others, but tliose who are employed to use it; and if it be conceded, as it must be, that the state may intervene by regulations in such a case, we do not see why it may not in such a case as this. “The act is within the police power. “When a subject is within that power, the extent to which it shall be exercised, and the regulations to effect the desired end, are generally wholly in the dis- cretion of the legislature. The legislature might in this case have required the use of the prescribed en- closure only at such times when the cold reached a certain degree, or when storms prevailed, but it was thought fit to make sure of the result aimed at by cov- ering the time of year when extreme cold and bitter storms may occur at any time; and that was within its exclusive province. “The objection that this is class legislation is based on the fact that the act is confined to street cars pro- pelled by cable, steam, or electricity, and does not in- 105 elude street cars drawu by mules aud horses, (Ji* car- riages or wagons; and it is assumed that here is an attempt at purely arbitrary classilication for the pur- pose of the act. ‘‘The evil sought to be remedied does iK;t exist in case of the slowly-g»)ing mule or liorse car, or carriage • or wagon, to the same degree as in the case of cable, electric, or steam cars. “Itiit, where ar. evil exists in a variety of cases, it is a sullicient ground for classification in legislating, so as to include some and exclude others, that in the former the evil can be remedied, while in the latter it cannot b^^, ‘‘The man in control of the cable, electric, or steam railway car may be boxed in without impairing his power of control in the slightest degree; but to box in the driver of a horse or mule car, or of a stage-coach or carriage or wagon, separating him from his ani- mals, Avhile of course, it could be done, would bring about greater evils than those sought to be remedied. The difference in this respect between cars included in this act and those not included is, such as, to justify difference in legislating.” This power has likewise been extended to protect fish and animals. State v. Mrozinsl'i, 59 Minn. 465; State v. Roe- man, 58 Minn. 393; State v. Tower Lumber Co., 100 Minn. 38, and to the regulation of foods. State v. E organ, 55 Minn. 183, and oil inspection, ^ViJUs v. Standard Oil Co., 50 Minn. 290; State ex rel Citij of Euinea polls v. Great 'Northern Rail wag, 98 Minn. 380-389, State ex rel City of Duluth V. Northern Pacific Railway Company, 98 Minn. 429-432. The opinions in the railway cases above mentioned clear- ly show that the general police powers are exercised under the state system. In Dobbins v. Los Angeles. 195 U. S. 223 (169), the court again, speaking of these various matters, with respect to municipal legislation, requotes from Holden r. Hardy, to 106 show that it is simply a question of whether the statute has been adopted in the exercise of a reasonable discretion, or whether the action is a mere excuse for an unjust discrimi- nation or the oppression or spoliation of a particular class, saying: ^The state has undoubtedly the power, by appropri- ate legislation, to protect the public morals, the pub- lic health, and the public safety; but if, by their neces- sary operation, its regulations looking to either of those ends amount to a denial to persons within its jurisdiction of the equal protection of the laws they must be deemed unconstitutional and void.” Dohhins v. Los Angeles, 195 IT. S. 223 (L. Ed. 169- 175) . Tliis means all within the same conditions and classes. It may be taken then as tlie settled law of the Supreme Court, and, we think, equally so of the states, that a law necessary as a police regulation to protect emploj^es^ may be based on classification of the dangers of the employ- ment, if the classifications’ are based upon reasonable and not arbitrary grounds, and apply equally to all of the same class similarly situated. There is no difficulty about complying with this principle. c. > Due Proeess of Law. The due process of law provided by the Fifth Amendment applies, of course, to the Federal government, but as con- tained in the 14th Amendment it is a prohibition upon the states. This is a matter then that must be understood. The Constitution of Minnesota provides : ^^Every person is entitled to a ^certain remedy in the laws for all injuries or wrongs which he may receive in his person, property or 107 diameter” (Const. Art. I, See. 8). ^Ve must not overlook the faet that this, too, is one of several eonstitutional pro- visions the intention of whieli was to seeni-e eaeli jierson witliin the state from injuries inllieted by otliers, and to grant liiin redress in ease of sneli injuries. In sliort, the liability is enaeted for a prevention, the ndress is given for eompensation. We must alike remember tluit tliis is the only provision, aside from the general selieme of govern- ment, whieh expressly seeures, by sj)eeifie enaetment, per- son, property, or eharaeter througli remedial laws. It is the outgrowtli of many centuries, it liad a well defined meaning atthe time of the adoption of this constitution; it meant to ^Ssecure” — not ^-^grant*' — redress for injuries, as the law then viewed them, and into that law we must look for its interpretation. Von Holst. Const. Laic, 288-9. Submit the question to history and we see the truth. Under the Eoman Law there were three legal maxims; ^‘to live honestly, to hurt no one, to give every one his due.” Sandars Justinian (Hammond), L. I., Title I., Parag. 3, p. 68. Among the delicts was what Komans called injuria. When specifically used this term had reference to an in- jury done to the person or reputation, as in the case of an assault or slander. The Praetorian law softened the rigor of the XII Tables, and allowed the injured person to re- cover such compensation as the nature of the case required. The injured party could bring either a civil or criminal ac- tion against the offender, and not only was the perpetrator of the injury liable, but any person who counselled him was also liable, and the damages might be aggrevated by pecu- liar circumstances. M cKenme ihed, 261-2. 108 In England a portion of Magna Charta was: ‘‘No freeman shall be taken or imprisoned, or dis- seized or out-lawed or banished, or aiwways destroyed, nor will we pass upon him, nor will we send upon him, unless by the lawful judgment of his peers or by the law of the land. We will sell to no man, we will not deny to any man, eitlier justice or right.” Hurd Habeas Corpus, 65-73. Spooner, in his essays on trial, makes an historical and critical examination of the chapter and says that its legal import is : “No freeman shall be arrested, or imprisoned, or de- prived of liis freehold, or his liberties, or free customs. or.be outlawed, or exiled, or in any manner destroyed (harmed), nor will we (the king) proceed against him, nor send any one against him, by force or arms, un- less according to (that is in execution of) the sen- tence of his peers, and (or ‘or’ as the case may re- quire) the common law of England (as it was at the time of Magna Charta, in 1215).” Hurd on Habeas Corpus, 73. Spooner’s Trial bg Jurg, 49. \ In 1660, Pufendorf said : “In the series of absolute duties, or such as obliged men antecedently to any Unman Institution, this seems with justice to challenge the first and noblest place. THAT NO MAN IIUKT ANOTHEK, AND THAT IN CASE OF ANY HURT OR DA:\1AGE DONE BY HIM, HE FAIL NOT TO MAKE REPAR- ATION.” Pufendorf, Laic of Nature & Nations, Bk. Ill, Ch. 1. After specifying that the “judicial power of the United States shall be vested in one Supreme Court,” etc., the Con- stitution of the United States proceeds to say: “The judi- cial poAver shall extend to all cases in law and equity, aris- ing under this constitution, the laws of the United States, 109 and treaties made, or which sliall be made, under this au- thorit}^,” etc. Const, of U. aS'., Art. Ill, Sec. 1 and 2. The Ordinance of 1787 provided that tlie inhabitants of the Northwest Territory should be entitled to ^‘judicial pro- ceedings according to tlie course of the common law.’’ See Ordinance of 1787, Art. II. The various sections of Art. I, of the Constitution of Wis- consin, during the time it included Minnesota, secured the' equality of citizens, liberty of the press, right of redress through the courts for injuries or wrongs committed. The Organic 'Act of Minnesota provided that the inhabitants should be possessed of the same rights as they were given under the Laws of Wisconsin at that time; the schedule of the Minnesota Constitution provided for a continuance of those rights during the period of transformation; the Con- stitution of Minnesota included the same provisions; they are the fundamental law of the state, today. The constitutions of almost all the states have provis- ion for remedies of the law and whether they say ^dn laws,^’ ^^according to law of land,’’ “due course of law,” “all courts shall be open, and every man for an injury done him in his lands, goods, person or reputation, shall have remedy by due course of law,” it matters not ; they mean the same. They are collected in Hough’s American Constitutions y Vol. II. But the Federal Constitution does not control mere forms of procedure in or regulate the practice of state courts. In Maxwell v. Dow, 176 U. S. 581 (L. Ed. 597), it is said : 0 ^ 110 state cannot deprive a person of liis property without due process of law, but this does not neces- sarily , imply that all trials in the state courts, atfect- ing the property of persons, must be by jury. This re- quirement of the constitution is met if the trial is had according to the settled course of judicial proceed- ings. * * * ‘‘Due process of law is process due according to the law of the land. This process in the states is regu- lated by the law of the states. Our power over that law is only to determine whether it is in conflict with the suj)reme law of the land— tliat is to say, witli the constitution and laws of the United States made in pursuance thereof — or with any treaty made under the authority of the United States.’’ Maxicell v. Dow, 170 U. S. 581 (L. Ed. 597). It is thus sure that due process may be had according to the regular state practice without a jury trial. In a recent case, in streaking of procedure, the court said : “It does not follow, however, that a procedure set- tled in English law at the time of the emigTation, and brought to this country and practiced by our ances- tors, is an essential element of due process or la\. If that were so, the procedure of the first half of the 17th century would be fastened upon the American jurisprudence like a straight jacket, only to be un- loosed by constitutional amendment.” Ticining v. New Jersey, 211 U. S. 78. And: “‘That (said Mr. Justice Matthews, in the same case, p. 529) would be to’ deny every quality of the law but its age and to render it incapable of progness or improvement.’ ” Ticininy v. New Jersey, 211 U. S. 78. It then proceeds to call attention to the fact that among the notable decisions are those denying jury trial, both in criminal and civil cases, and then says : Ill '^The cases proceed upon tlie tlieory tliat, a court of justice whicli lias jurisdiction and acts not ar- bitrarily but in conformity with tlie general law ujion evidence and after inquiry made, vitli notice to the parties affected and opportunity to be heard, tlien all the requirements of due process of law, so far as it re- lates to procedure in court and metliods of trial and character and effect of evidence, are complied with.” The opinion then cites the case oi Joica Central r. Iowa, 160 U. S. 393, which says : ^^But it is clear that the 14th amendment in no way undertakes to control the power of tlie state to deter- mine by what process le£?al ri«;lits may be asserted or legal obligations enforced, provided the metbod of procedure adopted gives reasonable notice and affords fair opportunity to be heard before the issues are de- cided.” The opinion then re-quotes from Louisville & Nashville R. R. Co. V. Schmidt, 177 U. S. 230, L. Ed. : , ^Tt is no longer open to contention that the due pro- cess of law clause of the 14th Amendment to the Con- stitution of the United States does not control mere forms of procedure in state courts, or regulate practice therein.” Twining v. N. J.. 211 U. S. 78 (L. Ed. 97). Further on in the opinion it said: ^^Due process requires that the court which assumes to determine the rights of the parties shall have juris- diction and that there shall be notice and opportunity for hearing given the parties. * * * Subject to these two fundamental conditions, which seem to be universally prescribed in all systems of law estab- lished by civilized countries, this court has up to this time sustained all state laws, statutory or judicially declared, regulating procedure, evidence and methods of trial, and held them to be consistent with due pro- cess of law.” 112 The court proceeds to folloAV that view Avith a holding that there must be sufficient caution to guard liim against the arbitrary action of government. It makes quotations from its OAvn opinions in the past to the same effect. The effect then of tliis portion of this amendment is to deny to the state the right of taking aAva}' tlie citizens- property Avithout due process of law and it must give the party reasonable notice and a fair hearing before decision. This, lioAveA^er, relates to process or procedure onh^, as the words Avould indicate; not to the right to take property if a constitutional laAv so provides upon complying Avith such process. The state’s procedure is for the states so long as their acts are not arbitrary. There must be some time and place and a court to ad- judicate the laAV of liability" if desired. e. Fault not Xcccssarihj the Basis of LiahiUtij Here. In Freund's Police Power, Section G31, the author says: ^^If the rule of absolute liabilitA" is held to be un- constitutional, it must be on the ground that justice and equality forbid that a person be required to niake good the loss oi another, unless some fault or culpa- bility can be imputed to him. This is the position taken by the courts of Alabama, Montana, WAmniing and Utah. But Avhile the common laAV does require fault of some kind as a general principle, it has ahvays recognized some exceptions (trespass of cattle, fire, etc.) and it cannot be said that the rules of the com- unon laAv represent the only and final conclusions of justice. The principle that inevitable loss should be borne not by the person on whom it may happen to fall, but by the person Avho profits by the dangerous business to Avliicliffhe loss is incident, embodies a A^ery 113 intelligible idea of justice, and wliicli seenis to lie in accord with modern social sentiment. Moreover, the rule of absolute liability is established in our law in the case of fires caused by locomotives and has been sanc- tioned by the United States Supreme Court ( Kio U. S. 180). It also underlies the rule of respondeat su- perior ^ since the employer cannot relieve himself for liability for acts done by the servant within the scope of his employment, by proof of the greatest possible care in the selection of the servant. Logic and con- sistency, therefore, demand that liability iri'cs]H‘ctive of negligence should not be denounced as unconstitu- tional. The required element of causation mav read- ily be found in the voluntarv employment of danger- ous instruments or agencies.” The case of Chicago Roclc Island & Pacific Railway Com- pany V. Zernecke, 183 U. S. 582, L. Ed. 339, was an action brought by the administratrix of the estate of Zernecke, deceased, to recover damages, under a statute of the State of Nebraska, for the death of Zernecke, caused by the de- railment of the train of defendant upon which Zernecke was a passenger. The statute in question provided as follows : ^^Every railroad company, as aforesaid, shall be lia- ble for all damages inflicted upon the person of pas- sengers, while being transported over its road, except in cases where the injury done arises from the crim- inal negligence of the person injured, or when the in- jury complained of shall be the violation of some ex- press rule or regulation of said road actually brought to his or her notice.” Neb. Comp. Laws, 838. The defendant in its answer denied the plaintiff’s alle- gation of negligence, and alleged that the derailment was caused by some person unknown to the company, and not in its employment or under its control who wilfully, mali- ciously and feloniously removed and displaced from the track certain spikes, nuts, angle-bars, etc., and otherwise 114 tore up and destroyed the track. The defendant upon the trial offered witnesses to sustain the allegations of its an- swer. This testimony upon objection by the plaintiff was rejected. In this case the court said : ^^The specific contention is that tlie company is de- prived of its defense, and not only declared guilty of negligence and wrong doing without a hearing, but adjudged to suffer without wrong doing, indeed even for the crimes of others, which the company could not have forseen or have prevented. ^‘Tlms described the statute seems objectionable. Regarded as extending the rule of liability for injury to persons which the common law makes for the loss of or injiiry to things, the statute seems defensible. And it was upon this ground that the supreme court of the state defended and vindicated the statute. The court said, ^The legislation is justifiable under the po- lice power of the state, m it has been held. It was enacted to make railroad companies insurers of the safe transportation of their passengers, as they were of baggage and freight; and no good reason is sug- gested why a railroad company should be released ' from liability for injuries received by a passenger Avhile being transported over its line, while the corpor- ation must respond for any damages to his baggage or ■ freight.’ ^H3ur jurisprudence affords examples of legal liabil- ity without fault, and the deprivation of property without fault being attributable to its 0 T\Tier. The law of deodands was such an example. ' The personifi- cation of the ship in admiralty law is another. Oth- er examples are afforded in the liability of the hus- band for the torts of the wife — the liability of a mas- ter for the acts of his servants.'” This case has been followed in Chicago , R. I. & P. v. Eaton, 183 U. S. 589, and in Chicago, Burlington & Quincy R. R. v.^ Wolfe, 187 U. S. 638. Judged by the question of actual fault, such law could hardly find favor; but judged as a system of general lia- iir> bility beccanse of general comliiet of business nec(\'rohibit, it must reg- ulate; if regulation does not do, then compensation is next best. i nil c sot a Constitution. The bill of rights is similar in the ditferent states, gener- ally speaking. It is provided by Section 7 of Article 1 of the Constitu- tion of Minnesota that no person shall be ^‘Deprived of life, liberty or property without due process of law.’’ Due Process of Law in the States. In State v. Billings, 55 Minn. 467, the court said: ‘‘The first inquiry is as to what is ‘due process of law.’ In Bardwell v. Collins, 44 Minn. 97, (46 X. W. 315), it was said that no complete or exhaustive defi- nition of the term had ever been attempted by the courts, because it was incapable of nnj such definition. All that could be done was to lay down certain general principles, and apply them to the facts of each case as they arise. Mr. Webster’s exposition of the words, ‘law of the land,’ and ‘due process of law,’ viz: ‘The general law, a law which hears before it condemns; which proceeds upon inquiry, and renders judgment only after trial. * * * But it may be stated gen- erally that due process of law requires that a party shall be properly brought into court, and that he shall have an opportunity, when there, to prove any fact 116 which, according to tlie constitution and the usages of the common law, would be a protection to him or to his property. People v. Board of Bapervisors, TO N. Y. 228. Due process of law requires an orderly" i)ro- ceeding adopted to the nature of the case, in which the citizen has an opportunity to be heard, and to de- fend, enforce, and protect his rights. A liearing, or an opportunity to be heard, is absolutely essential.” In the case of 8tate ex rel Barher Asphalt Paring Company v. District Court of St. Louis County, 90 Minn. 457, the conditions were peculiar. The company had^bcc/i awarded a contract for paving^ a portion of a street in Dulutli. Tlie contract provided for percentage pa^mients as tlie work progressed. The work progressed until practically finished; the company made request of the board of public Avorks to make ah estimate, Avhich it did. It certified the estimate and the council passed a resolu- tion ordering the payment and directing a draft to be drawn on the city treasurer. The company asked the city clerk to give an order on the treasurer and he refused. Duluth had a charter provision allowing appeals to be taken to the court in such cases by the tax payers. The respective quotations will shoAv the vieAvs taken b}* the court, 90 Minn. 461-4 : ^AYe haA^e no doubt that the provision of the char- ter requiring the presentation of all claims to the city council for adjustment and alloAAmnce Avas an appro- priate subject for charter supervision, and from that it would seem to follow logically that it was also prop- er to continue the subject, and provide the manner in which the determination of the city council alloAving or disallowing a claim might be removed to the dis- trict court for judicial inA’-esti oration and determina- tion; and we hold without further remark that it was AAuthin the power of the framers to embody in the char- ter the provisions under consideration. 117 is conteuded that the provisious of the diarter are invalid, because they do not constitute due process of law. The charter provision was taken almost whol- ly from G. S. 1894, 044, providing for similar appeals from the board of county commissioners, whicli has been in force in this state for forty years or more, and tlie validity of which has never been (jnestioiied, so fai as our information extends. On the contrary, the stat- ute has been resorted to on numerous occasions, both by persons having claims against counties and by the county attorney at the instance of taxpayers. Thom- as V. County Commrs. i^cott Co., 15 Minn. 254 (324) ; Kroshus V. County of Houston, 40 .Minn. 102, 48 N. W. 770; Davis v. County of Lc Sucu?', 37 Minn. 491, 35 N. W. 304. The statute is a very servicabte one, and provides an orderly metliod of settling claims and demands against counties without the necessity of the formal commencement of an action in court, and the provision allowing the appeal at tlie instance of tax- payers was intended as a safeguard; and to assist in the protection of the i)ublic funds. Claims against such bodies must be presented to their administrative officers, and by them passcnl upon, from whose decis- ion an appeal to the district court is provided, where, without formality of procedure, the matter is brought to trial and speedy determination.” ‘^Every person is entitled to a certain remedy in the law for the redress of all injuries or wrongs he may receive in his person, property, or character. Cut he is not entitled to any particular remedy. Due process of law means an orderly proceeding adapted to the na- ture of the case, in which the citizen has an opportuni- ty to be lieard to defend, enforce, and protect his rights; and, where such opportunity is granted by the law, the citizen cannot complain of the procedure to which he is required to conform. ^^In a case like that under consideration, where a claim is made against a city or county, the presenta- tion of the claim to the administrative officers for their action is the initiation of proceedings to enforce its payment. By the presentation the claimant adopts that method of enforcing his rights.- He is bound to follow up his claim, and pursue the remedy pointed out by the charter or statutes for its enforcement, and is af- 118 forded aiii])le opportunity for a comi)lete investiga- tion and liearing ni)on tlie merits of liis claim. And^ tliongii no notice of a])ijeal is r(‘(inired to be served upon liim, he is apprised by the law of the manner of taking such a])peals; and, unless he wholly aband- ons his claim after its jillowance by the city, he will have actual knowl(*dg(^ that it has b(*(*n taken. This answers evei*y ])nrj)os(*, and is, ‘dne })i'(,cess of law.' ‘‘Th(^ administrative^ (;t1ic(*]*s, tin* board of county commissioners or the (dty council, in ]iassing n]mn and allowing or disallowing the claims, act r/uaxi judicial- ly. They determim* tin* l(*gal rights of the jiarties, and th(‘r(‘ is no force to tin* sngg(*stion that th(‘ chai't(*r is invalid b(*cans(^ it ]>rovides for an appeal from a non- jndicial to a judicial fribnnal." In speaking of a d(*cision of the V. S. Land 1 )(^])artnient in Lamsou r. Colfiu, 102 .Minn. lOd-oOO, onr court said: ‘‘That was tln^ only tribunal (inalil1(*d or with juris- diction to det( 0 *min(‘ tin* (oxistence^ (d‘ the* facts oseji- tial to th(‘ alleged right, and its comdnsion tlnn-ein ])recltid(‘s further iminiiw by the courts." In Murray t*. Hohokcu, ct<\, Co., 18 How. 280 (L. Ed. 372), the Supreme Court also said : “It is true, also, that even in a suit between pri- vate i)ersons to try a (luestion of private right, the ac- tion of the executive ])ower u])on a matter committed . to its determination l)y the constitution and laws is conclusive.’’ It would seem that the state can require claims ag-ainst it to be presented first to another department than the courts; if a system Avere worked out by Avhich the claims could be assumed by the state this could be done here, prob- ably. We will leave that for further investigation. It is sufficient here and now to say that fault is not nec- essarily the basis of liability in dangerous employments. 119 f. Trial hy Jury. It may be said that the right of trial by jury is abridgcnl. To this there are two answers : 1. The amount being fixed quite definitely by law, and arbitration first required^ tlie riglit of trial by jury could still exist as it does noAV if the agreement Avere not reaclieii. 2. If the right of action thus created sliould be held to be one not in existence at the time of the adoption of the constitutional provision, then that provision would not ap- piy- In Board of County Com. v. Morrison, 22 Minn. 178, the court said: ' ‘^Whether the tax payer is entitled to a jury trial in these proceedings is an important question, as it af- fects both the power of the state to collect its reA^enues by a speedy and conA^enient mode, and the security of the citizen against oppression and illegal acts. It is claimed that because legal rights are involved and are to be determined, it is a proceeding at law, and that in all proceedings at law the right to a trial by jury is guaranteed by the constitution.” Board of County Com. v. Morrison, 22 Minn. 178-9. And after citing many special proceedings such as those in Eminent Domain, Assignment of ProiDerty for High- ways, Appointing Guardians, Summary Convictions for Petty Offences, etc., the court said: ‘‘The general principle upon which these cases were decided was that the several constitutions intended only to preserve the right of trial by jury in those cases where it existed at the adoption of the respective constitutions, and that rights of persons or property coming in question in those controA^ersies in which, be- fore that time, the right was not recognized do not 120 come within the meaning of the constitutional guar- anties.’’ Board of County Com. v. Morrison, 22 Minn. 178- 181. At the time of the adoption of our constitution no such risk as would be here involved — outside of fault — was a legal right. This would not be a common law liability but a statutory one. The common law liabilities for fu- ture may be repealed. Martin v. Pittshiirg, etc. Co., 203 U. S. 284 (L. Ed. 184). This has been partially done every time the liability ha»s been lessened or changed. VII. THIS SORT OF LAW WOULD NOT TAKE PRI- VATE PROPERTY FOR PUBLIC USE BY REASON OF TWO PRINCIPLES. (a) Under our special compact the private owner has no ownership except that which is subject to reasonable control such as this would be. (b) The private individual has no right to complain of the taking of only so much property as is an aid to gov- ernment operation by reason of the last above principle. II 'ouhl this take private property for piihlic use? The prohibition in the Federal Constitution against tak- ing private property for public use, is like the trial by jury not material in the state court for it refers to the Federal government; but the bill of rights of the states generally cover this same point. The constitution of Minnesota 121 Art I, Sec. 12, i)ro\ ides : ‘‘J*rivate ])ro])erty sliall not be taken, destroyed or damaged for ])nl)lic use, witliont just coin})ensation therefor first ])aid or secured.’' a. A.U ProjKi'lif Held Siihjccf lo llic idocUd (Join-iHicf. In M ii(/lcr c. Kansas, 122 U. S. ()22-()(;5, it is said with re- spect to dejirivation of jn-oiierty witliont due process: ‘‘It has never beini r(\iiarded as incoin})atible witli tlie ])rinci])le, ecjnally vital, because ('ssential to the lieace and safety of society, that all ]iroi)erty in this conntry is held under the implied obli<»;ation that the owner's nse of it shall not be injnrions to the coin- ninnity.” See cases nnder Snbd. II, sapra. In Knox r. Lee and Parker r. Doris, 79 U. S. 157 (L. Ed. 307) the supreme court, at p. 307, said: ^^Indeed, the whole history of the Government and of coiiGTessional leiiislation has exhibited the nse of a very wide discretion, even in times of peace, and in the absence of any tryiiiG* emerG-ency, in the selection of the necessary and proper means to carry into effect the great objects for which the government was fram- ed, and this discretion ’has generally been unques- tioned, or if questioned sanctioned by this court. This is true not only when an attempt has been made to execute a single power specifically given, bnt equally true when the means adopted have been appropriate to the execution, not of a single authority, bnt of all the powers created by the constitution.'’ . In AIcCuIlough v. ManjJand, 1 Wheaton, 416, L. Ed. 605, in the holding that Congress had not exceeded its powers in creating the national bank Chief Justice Marshall said : ^^Letthe end be legitimate; let it be within the scope 122 of the Constitution, and all means which are appro- priate, which are plainly adapted to that end, which are not prohibited but consistant with the letter and spirit of’tlie Constitution are constitutional.'’ In the Knox case, the court further said: ‘‘It may be conceded that Congress is not authoriz- ed to enact laws in furtherance even of a legitimate end, nierel}^ because they are useful, or because they make the government stronger. There must be some relation between the means and tlie end; some adapt- edness or approi)riateness of the laws to carry into execution the powers created by the constitution. Hut when a statute has proved effective in the execution of powers confessedly existing, it is not too much to say that it must have had some ap])ropriafeiiess to the execution of those ])owers. The rules of construc- tions heretofore adopted, do not demand tliat the re- lationshi]) between the means and the end shall be di- rect and immediate. Illustrations (d‘ this may be found in several of the cases above cited. The char- ter of a bank of the United states, the priority given to debts due the government (;ver lu'ivate debts, and the exeiu])tion of federal loans from liability to state taxation, are only a few of the many whicli might be given. The case of JianJ: r. Fen no, 8 Wall. 538 (75 U. S. XIX 482) presents a suggestive illustration. There a tax of ten per cent on state bank-notes in circula- tion was held constitutional, not merely because it was a means of raising revenue, but as an instrument to put out of existence such a circulation in competi- tion Avith notes issued by the government. There, this court speaking through the Chief Justice avoAved that it is the constitutional right of Congress to ])ro- vide a currency for the Avhole country; that this might be done by coin or United 8>tates notes, or notes of na- tional banks; and that it cannot be questioned Con- gress may constitutionally secure the benefit of such a currency to the people by appropriate legislation. It Avas said that there can be no question of the power of this government to emit bills of credit, to make them receivable in paAunent of debts to itself; to fit them for use bv those Avho see fit to use them in all the transactions of colnmerce; to make them a currency 123 uuiform in value and description, and convenient and useful for circulation. Here the substantive power to tax was allowed to be einplf)yed for im]u*ovin<^ tlie currency. It is not easy to see why if state bank notes can be taxed out of existence for tlie purposes of indi- rectl^y inakin<^ United States notes more convenient and useful for commercial pur])oses, the same end may not be secured directly by makiii2: tliem a leji^al ten- der.” K}i().r V. Lee and Parker r. Davis, 70 U. S. 457, L. Ed. 307. In United Stales v. Lj/iuih, 188 U. S. 445 (L. Ed. 539) the court said : ^‘Tbere Iiave been many cases in wliicb a distinction has been drawn between tlie taking of iirojierty for public uses and a consequential injury to sucli proper- ty by reason of some public work. In the one class the law implies a contract, a promise to pay for the property taken, which, if the taking was by the general government, will uphold an action in the court of claims; while in the other class there is simply a tor- tious act doing injury over which the court of claims has no jurisdiction. Thus in 'Northern Transporta- tion Company v. Chieago, 99 U. S. 635, 25 L. Ed. 336, the city, duly authorized by statute, constructed a tunnel along the line of La Salle Street, and under the Chicago Eiver. The Company claimed that it was de- prived of access to its premises by and during the construction. This deprivation was not permanent but continued only during the time necessary to complete the tunnel, and it was held that there was no taking of the property but only an injury, and that a tempo- rary injury' thereto. In the course of the opinion, af- ter referring to the Pnmpelly Case, 13 Wall. 166, 20 L. Ed. 557, and Eaton v. Boston, C. & ill. R. Co., 51 N. H. 504, 12 Am. Kep. 147, we said (p. 642, L. Ed., p. 338) : t Hn those cases, it was held that permanent flood- ing of private property may be regarded as a ^Tak- ing.” ’ In those cases there was physical invasion of real estate of the private owner, and a practical ouster of his possession. But in the present case there was 124 no such invasion. No entry was made upon the plain- liff’s lot. All that was done was to render for a time its use more inconvenient.’^ b. lliere is no Vested RUjlit' Contrary to the Social Compact. In the case of Gibson v. United States^ 16G U. S. 269, L. Ed. 995, the Supreme Court said : ^‘The 5th amendment to tlie Constitution of the United States provides that private propert}^ shall ^not be taken for public use without just compensa- tion.’ Here, however, the damage of which ^Irs. Gib- son complained was not the result of the taking of any part of her property whether upland or submerged, or a direct invasion thereof, but the incidental conse- quence of the lawful and proper exercise of a govern- mental power. ^‘The applicable principle is expounded in Northern Transp.- Co. v. Chicago, 99 U. S. 635, L. Ed. 336. In that case plaintiff being an owner of lands situated at the intersection of La Salle Street, in Chicago, with the Chicago Eiver, upon wliich it had valuable ware- house and dock accommodations with a numerous line of steamers accustomed to laud at that dock, was in- terrupted in his use thereof by the building of a tunnel under the Chicago river, by authority of the state leg- islature, in accomplishing which work it was necessary to tear up La Salle Street, which precluded plaintiff from access to his property for a considerable time; also to build a coffer dam in the Chicago river which excluded his vessels from access to his docks; and such • an injury was held to be damnum acsqne injuria. This court said again s peaking through Mr. Justice Strong : ^But acts done in the proper exercise of govem- ment^J powers and not directly encroaching upon pri- vate property, though their consequences may impair its use, are universally held not to be a taking with- in the meaning of the constitutional provision. They do not entitle the ovmer of such property to compen- sation from the state or its agents, or give him any 125 ri«lit of action. Tliis is sn])])ort(Ml ])v an iimiKOise weii>lit of antlioritv. Tliose wlio arc curious to s(*c the decisions will find tliein collectcMl in Cooh'ij'oii Consti- tiLtional Li Hiifations, ]). 512 and not(‘s.” In t]i(‘ case of y(nule}'J}ur- the injnrcMl ])arty to coinj)ensation, exce])t ])erlia])s in cases where an exercise of the ])olice ]>ower is involved.’' In the case of ^tate v. Hoard of Coanfij ('om laissioiicrsy 98 Minn. 89, on pa«e 91, tlie court said: further donbt also arises wliether tlie county or its officers conld be lield res])onsible in daina.i»es for Avork done for the jmblic «’ood in its i>’overnniental ca. pacify nnder tlie police ]ioAA'er or ])OAver of eminent do- main (Lic)i r. Board of Co. Comiars. of Aormau Coun- ty, 80 ]Minn. 58, 82 X. AV. 1091 ) and Avhetlier sncli dam- ages be not merely incidental to an anthorized act.” In Adair r. United States, 208 U. S. 161, it is said: Til is court has said that bn eA^ery Avell ordered so- ciety, charged with the duty of conserving the safety of its members, the rights of the individual in respect of his liberty may, at times, under the pressure of great daugers, be subjected to such restraint, to be en- forced by reasonable regulations, as the safety of the general public may demand.” Adair r. U. S., 208 U. S. 161 (L. Ed. 136). If the police poAver could not make reasonable regula- tions the state could not exist. Indeed it Avould seem that substantially all the direct benefits of organized society are based on this limitation of personal rights that the public may benefit. This seems 126 especially Irue in -a government based as is onrs on tlie compact tlieor 3 \ In Conn, the court said : ^‘The principle of the common law, that for a law- ful, reasonable and careful use of pro])ertv, tlie owner cannot be made liable, is not so wrongiit into the con- stitution or into tlie very idea of jiroiierty tliat it can- not be dejiarted from by tlie legislature wlnn-e protec- tion to persons or to iirojierty may re(|nire it." Grisscll i\ H ousatoiiic /*. h\ Co., 54 Conn. 447. In the case of Johnson r. Cifi/ of St. Louis, 172 FediTal, 40 (8 C. C. A.) the conrt said: ^C\s we understand tlie (f(M*isions of that court ('Missouri) this is their result: The word ‘damaged’ in that Constitution iiiclnd(‘s damage to adjoining property from the establishment or the change of a grade of a street or alley, from the reduction of a street or alley to an e%stablished grade, and from the pollntion of the waters of a creek witl sewage, and for these damages recoveries mav be had therennder, althongh they were lawfully indicted. On the other hand, the word hlamaged’ in that Constitution ex- cludes damage to adjoining ]iroperty by deiireciation of its valne, by obstruction of access to it, by noise, by smoke, by cinders, by the cracking and falling of the walls of bnildings from the removal of lateral sup- port when these injuries are caused either by the open- ing of a stone sidewalk and basement wall and the erection of poles therein, or by the construction and operation of a dre engine house, or by the constrnc- tion and operation by steam of a railroad upon the street jnst in front of a lumber factory, or by the lay- ing of a sewer or a pavement in an alley lower than the foundation of 'the bnildings npon the abutting property whereby their lateral support is weakened and they become cracked and injured. The case at bar falls within the latter class. The plan of the sew- er in question here was not necessarily dangerous to the plaintiff's property. The city had the right to make and nse it. The excavation for it was to be 127 made, and it 'was made wholly within the alley. The plaintiff knew it was to he made and was aware of the danger that his building would settle and crack therefrom in time to have propped and jjrotected it, and according to the decisions of the Sui>reme Court of Missouri his damage was damnum ahs(jue injuria, and he was entitled to no compensation for it under the Constitution of that state.'’ This whole question relates to the use of ])roperty; it may be machinery or the right of contract — each equally property — but it is nevertheless, a limitation upon the use. This limitation is based upon the theory that the use is dangerous and the consequences must follow as a legal duty. Judged by the usual rule of following moral obli- gations with human law this legal duty is a proper one. Judged by the implied condition that law only recognizes the ownership and use of property by virtue of the social compact, the owner is not an absolute one except in the private sense — his rights are always subservient to the necessary public control. When he enters or adopts the social compact he impliedly so agrees. 128 VIII. THE FOURTEENTH AMENDMENT SECURES THE LIBERTY OF CONTRACT BETWEEN EMPLOYER AND EMPLOYE EXCEPT WHEN LIMITED BY THE POLICE POWER; THE EXERCISE OF THE POLICE POWER RESTS IN THE LEGISLATIVE DEPART- MENT; THE COURTS INTERFERE TO UPHOLD THE CONSTITUTION ONLY TO PREVENT ARBI- TRARY POWER FROM BEING EXERCISED UNDER COVER OF THE POLICE POWER, (a) The courts recognize that tlie employer and the em- ploye do not stand on an equality in making their con- tracts. (b) The police poAver is used to regulate insurance of private property and the control of employer and em- ploye. (c) No OAvner of property has the right to claim that a contract previously in existence has been changed in its obligations by reason of the exercise of the police poAs^er because the implication of the poA\^er always Avent with that contract as a matter of law. (d) The police power can neither be legislated nor con- tracted aAvay. This is the great Federal Constitutional question with respect to iWorkmen’s Compensation Acts. Can we say that employer and employee must stand by regulations up- on this question. In my opinion^ Yes. The police power — the public power to protect the in- terests of humanity for public preseiwation is the safety valve here. * ' 12 !) I''rc<‘d(nn of (^oiilrart is Libert i/. Ill Adair r. L. S., 20(S I". S. KJl ( L. Mr. .Jus- tice Ilurlaii r(^-(|;i()t(^s fr in L,:Linr r. \nr )'orh\ IDS \\ S. 45, as follows : “Tlie <>(‘iieral rij'lit to make* a contract iu reflation to liis business is ]mrt of tin* lib(*rlv (,f tin* individ- ual ])rot(‘ct(*d by tin* 141b aiin*ndnn*nt of tin* f(*d(*ral constitution.-’ Later on tin* court says: “ITnd(*r that jirovision no state* can d(*in*iv(* any iH*r- son of life*, libe*rty eir ])ro]H*rty witbont elne* ](i‘oe*e*ss e>f law. Tin* rii*lit to juirediase* e>r to se ll lab a* is part e>f the libe*rty ))rote*e-te*el by t b is aiin*nejiin lit, nnle*ss llie*re are e-ire*nmstane*e*s wbie-b e*\ednele* tbe* riebt.** Adair r. T\ *S., 20S V. S. Ibl t L. Kd. 4.4b). The cenirt held in that e-ase* that tin* e-emstitntion was vieilated in this res]iect by an Ae-t eif roipi»ress iiiterfe*ring with the right te> discharge einjiloyes freiin inembershi]) in a labor union, as there was nei reasonable cemnectioii be- tween that union anel the commerce danse; but the court was not nnanimons. Mr. Justice McKenua and Mr. .Justice Holmes wrote dis- senting opinions, and contended that it would be for the value of all concerned, and within the powers and prin- ciples recognized by that court, to recognize the organiza- tion of the laboring-man with respect to interstate com- merce; Mr. Justice McKenna saying: ^^T\^e are dealing with rights exercised in a quasi- public business, and therefore subject to control in the interest of the public.” Mr. Justice Holmes said: ^^Bnt I could not pronounce it unwarranted if Con- gress should decide that to foster a strong union was for the best interest not only of the men but of the rail- roads and the country at large.” 130 In Gray v. Huild’uKj, Trades CoaiKdl, 01 Minn. 171-182, our court said : ^^Tlie constitution of onr stat(‘ i>nai-anti(‘s lil)crty to (‘V(a'V citizen, and a certain r(‘in(‘dy in the laws for all injuries or wrongs which lu* nuiy receive^ in his ]ier- son, j)roi)erty, or chai‘act(‘r, and th(‘ rights so i*naran- teed are fundainental, and can 1 h» taloni away only by tin* law of tin* land, oi' interfered with, or tin* en- joyment tli(‘r(‘of in(Hlih(Ml, only bv lawful r(‘^nlations ado])t(*d as ii(‘C(‘ssary for tin* i:,(*nei*al jenblic w(*lfarc% * * * A ])(*rsoirs occnjiation or calling-, by which he earns a liv(*lihood and (*nd(*avors to b(*tt(*r his con- dition, and te) ])rovid(* for and sn]>iH rt hiinsHf and those* ele*])e*neb‘nt njuni him, is ];ro]ie*rly within the meanin«»' of 1 he* law. ami e*ntitle*e1 to in-ote*e't ion as sneb ; and as ce)ndne‘teel bv the* me*rohant, by the* eoipital ist, by the e'ontractor e>r labnre*r, is, asiele* from the* i»-oods, e*hatte*ls, mone*y, en* effe*e-ts (*m])le>ye*d and used in e-e)U- needion ther(*with, ])re)])e*rty in e*ve*ry sense e>f the wejrel.'’ Liherty of coairad noi ahsfdatr irhrn apylicd to cm- player and nnployee in danfferons enipl()y)aeats. In Holden r. Hardy, IGO U. S. SGG (L. Ed. 780 ), the 8ii- ])reme re)nrt held that the right e)f ceintiaed may be limited by the state pe)lice ])Ower with respect to the hours of la- bor in unelergronnel mines. After a somewhat extended discussion of wliat is meant- by the pe)lice powers of the state and the decisions resting thereon, and the fact that the changes- under our system must be made to co-operate with the advance of law to meet the changing conditions of society, the court said : ^‘Of course it is inii)ossible to forecast the character or extent of these changes, but in view of the fact that, from the day J/r/r/ae. Chart a was signed to the present moment, amendments to the structure of the law have been made with increasing frequency, it is impossible .to suppose that they will not continue, and the law be 131 forced to adapt itself to new conditions of sf)cietj, and, particularly, to tlie new relations between employers and employees, as they arise. * * * ‘‘This rijjjlit of contract, however, is itself subject to certain limitations which the state ma\^ lawfully im- pose in the exercise of its police powers.’’ . ]JoJd(m V. Hardy, 100 U. S. 300 (L. Ed. 780). /y5--/y<^ In Atchison, etc. Ry. Go. v. Matthews, 174 U. S. 90 (L. Ed. 909), in discussing a statute of Kansas providing that in fire cases it should he sufficient to establish that they were occasioned by the operation of a railroad, the loss and the damage, to make a prima facie case of negligence, the court said : “Eut neither the amendment — broad and compre- hensive as it is — nor any other amendment was de- signed to interfere with the power of the state, some- times termed its police power, to prescribe regulations to promote the health, peace, morals, education and good order of the people, and to legislate so as to in- crease the industries of the state, develop its resourc- es, and add to its wealth and prosperity.” Atchison, etc., Ry. Co. v. Mattheivs, 174 U. S. 96 L. Ed. 909). In the case of Johnson v. SoiUhern Pacific Ry. Co., 196 U. S. 1, it was held that the equipment of cars with auto- matic couplers might be required by congress. The Chief Justice said, at p. 17 (L. Ed. 369) in that opinion : “The primary object of the act was to promote the public welfare by securing the safety of employees and travelers, and it was in that aspect remedial, while for violations a penalty of |100 recoverable in a civil ac- tion, was provided for, and in that respect it was pe- nal. But the design to give relief was more dominant than to inflict punishment, and the act might well be held to fall within the rule applicable to statutes to prevent fraud upon the revenue, and for the collection 132 of customs, — that rule not requiring absolute strict- ' ness of construction.” Johnson V. Southern Pacific Co., 106 U. S. 1 (L. Ed. 369). Interference icith Right of Contract Because of Inequality' of Persons. In Knoxville Iron Co. v. Harhison, 183 U. S. 13 (L. Ed. 55), the court liad under consideration a provision for the redemption of store orders in money under the Ten- nessee Act of March IT, 1889, re(]uiring all persons who issued such orders to employes in payment of wages, to re- deem them in money on any regular pay day, or at any time within thirty days after they were issued; it held tlie act was not unconstitutional as an arbitrary interference with the right of contract, but was a legitimate exercise of the general legislative power, as well as of the police power. The court quotes somewhat from the Tennessee decis- ions, and then says at page 61 : ‘^The supreme court of Tennessee justified its con- clusion bj^ so full and satisfactory a reference to the decisions of this court as to render it unnecessary for us to travel over the same ground. It will be sufficient to briefiy notice two or three of the latest cases. ^Tn Holden v. Hardy, 169 U. S. 366, L. Ed. 780, 18 Sup. Ct. Rep. 383, the validity of an act of the state of Utah, regulating the employment of working- men in underground mines, and fixing the period of employment at eight hours per day, was in question. There, as here, it was contended that the legislation deprived the employers and employees of the right to make contracts in a lawful way and for lawful pur- poses; that it was class legislation, and not equal or uniform in its provisions ; that it deprived the parties a. of tlie (‘(jiial i)i'otoctioii^ of tin* hiws, al)i-id;^(Ml tlic jjriv- and inmmiiit ios of llio (kdVndaiit, as a ciliziMi of the Unil(*d States, and deprived him of his proiandy and ]il)(n*ty witliont dm* ])r()C(*ss (d' law. I>nt it was lield, after full r(*vi(*w of tin* pr(*vinns cases, lliat tlie act in (|n(‘stion was a valid (*x(*i*cis(* (d‘ tla* ])olic(* pow- er of th(* state, and th(* j iid_iLiim‘nl of tin* siijiia'iiK* court of Utah, snstainini»' the lei;islat ion, was atllirni(*d. “>\di(‘T(* a (‘ontract (d‘ in^airama* jii'ovid(*d that tin* in- snranc(* cmiijiany shmild not lu* lijihh* h(*yoml tin* ac- tual cash \ alne of tin* ])ro])(*i*ty at tin* tinn* of its loss, and wln*re a statnt(* of tin* state* of .Missonid provided that, in all suits l»rom:ht upon pirlici(*s of insni*ance ai^ainst loss or dama.ue* hy lire*, the* iiisni*ane-e* e*ompany shonlel met he* ]>e*rmitte*d to ele*nv that the* pro]»e*rty in- sured was woi'th at the* tinn* of i^snim:- the* j»edie-y the full amount e)f the* insnrane-e*, this e-onrt helel that it was com])ete*nt fetr the* le*ass sne'h a law, e*ven tlnmiih it ])lae*e*s a limitation ii])on the* riiiht e)f contract. Orirnl Ins. Co. r. Dtufijs, 172 I". S. r>r>7, L. Ed. 552, 10 Snp. ('t. Ee*p. 281. “In 87. Tjonis, /. J/. ,S: *8. h*. To. r. Paul, 173 U. S. 104, L. Ed. 74(), 10 Sii]). Ut. He*]). 410, a jndijment etf the* sn])re*me e-enirt e>f Arkansas snstainins: tlie valiel- ity of an act etf tin* legislature eif that state, which pro- Yide*d that whenever anv corporation or ]ierson en- ii'aj*ed in operatino’ a railroad should dischai\t»e, with ov without cause, any empleiyee or servant, the unpaid wa^es of any such servant then earned should hecome due and payable on the date of such discharo’e with- out abatement or deduction, was affirmed. It is true that stress was laid in the opinion in that case on the ■fact that, in the Constitution of the state, the power to amend corporation charters was reserved to the state, and it is asserted that no such power exists in the pres- ent case. But it is also true that, inasmuch as the right to contract is not absolute in respect to every matter, but may be snbiected to the restraints demand- ed by the safety and welfare of the state and its inhab- itants, the police power of the state may, within de- lined limitations, extend over corporations outside of and regardless of the power to amend charters. Atch- ison T. k 8. F. F. Co. r. Matthews, 174 IT. S. 96, L. Ed. 909, 19 Snp. Ct. Rep. 609.’’ 134 Knoxville Iron Co. v. Harbison, 183 U. S. 13 (L. Ed. 55-61). This case not only interferes with the right of private contract in a negative way, but affirmatively requires the employers to pay in cash rather than in property, if the cash be demanded. This is quite a strong precedent for the doctrine of affirmative action regulating payment to em- ployes whicli could not be based on any other tlieory than police protection. If the state did not have an interest in saying that proper contracts or obligations were made it had no business in this controversy. In the case of Harbison v. Knoxville Iron Co., 53 S. W. 955, the court said : ‘Tn other words, the effect of the act is to convert into cash obligations sucli unpaid merchandise orders, etc., as may be presented for money payment on a regu- lar pay day, or as much as 30 days after issuance. Un- der the act the present defendant may issue Aveekly orders for coal as formerl}', and may pay them in that commodity, when desired by tlie holder; but, instead of being able, as formerly to compel the holder to ac- cept payment of such orders in coal, tlie holder may, under the act, compel defendant to pay them in money. In this way, and to this extent the defendant’s right of contract is affected. Under the act, as former^, every employe of the defendant may receive the whole or a part of his wages in coal orders, and may collect the orders in coal, or transfer them to some one else for other merchandise or for money. His condition is bettered by the act, in that it naturally enables him to get a better price for his coal orders than formerly, and thereby gives him more for his labor; and yet, al- though the defendant may not, in that transaction, re- alize the expected. profit on the amount of coal called for in the orders, it in no event pays more in dollars and cents for the labor than the contract price. ^The scope and purpose of the act are thus indicat- ed. The legislature evidently deemed the laborer at 135 some disadvantage under existing laws and customs, and by tliis act undertook to ameliorate liis condition in some measure by enabling liiiii, or his bona /ide transferee at his election, and at a jiroper time, to de- mand and receive his unpaid wages in money, rather than in something less valuable. Jts tendency, though slight it may be, is to place the employer and employee u[)on equal ground in the matter of wages, and, s.) far as calculated to- accomplish that end, it deserves com- mendation. * * * “Furthermore, the i)assage of the act was a legiti- mate exercise of police power, and upon this ground also the legislation is well sustained. The first riglit of a state, as of a man, is self-j)rotection, and with the state that, right involves tlie universally acknowl- edged power and dut^^ to enact and enforce all such laws, not in plain conflict with some jjrovisiou of the state or federal constitution, as may rigidly be deemed necessary or expedient for the safety, health, inorals, comfort, and welfare of its people. * * * • “This power is an important and comprehensive one, and its application must be expected and allowed to expand, and take in new subjects from time to time, as trade and business advance, and new condi- tions arise. The scope of its exercise, within the bound already mentioned, is limited only by the requirement that it shall not arbitrarily and unreasonably affect the citizen in his life, liberty and property. * * * “It is readily seen from the analysis already given that the limitation placed upon the right of contract by this act is not arbitrary and oppressive, but entire- ly just and reasonable. While in some sense qualify- ing certain contracts of the employer, it in no sense works a great hardship upon him. It only requires that in certain events he shall pay the wages of his employe in money, rather than in something less de- sirable. The legislature, as it thought, found the em- ploye at a disadvantage in this respect, and by this enactment undertook to place him and the employer more nearly npon an equality. ^This alone commends the act, and entitles it to a place on the statute book as a valid police regulation. * * * . “It is neither prohibitory nor penal ; not special, but general; tending towards equality between em- 13G ployer and employe in tlie matter of wages; intended and well calcnlate^d to promote peace and goad order, and to prevent strife, violence, and bloodshed. Such being the character, pnri)ose, and tendency of the act, we have no liesitation in liolding tliat it is valid, both as general legislation, without reference to the state’s reserved police power, and also as a wholesome regu- lation adopted in the proj)er exercise of that power.” Jf arhinson^v. Knoxville Iron Co., 53 S. AY. 955-59. AVhen the case of Lockner v. N. Y., 198 U. S. 45 (L. Ed. 937), came before the court, it was held that the New York law limiting the hours of employment in bakeries was an arbitrary interference with contract and therefore could not be sustained as a police regulation, because the bakers’ trade was not unhealthy and they were not wards of the state any more than other laborers and could not be limit- ed in their right of contract. The court said : ^‘Of course, the liberty of contract relating to labor includes both parties to it. The one has as niucli right to purchase as the other to sell labor. * * * ^‘AA^e think the limit of the police power has been reached and passed in this case. * * ^ ‘‘The state therefore, has poAver to prevent the in- dividual from making certain kinds of contracts, and in regard to them the Federal Constitution offers no protection. If the contract be one which the state, in the legitimate exercise of its police power, has the right to prohibit, it is not piwented from prohibiting it by the 14th Amendment.* * * “It is manifest to us that the limitation of the hours of labor as provided for in this section of the statute under which the indictment was found, and the plaintiff in error convicted, has no such direct re- lation to, and no such substantial effect upon, the health of the employee, as to justify us in regarding the section as really a health law. It seems to us that the real object and purpose were simply to regulate the hours of labor between the master and his em- ployees (all being men, sui juris), in a private busi- ness, not dangerous in any degTee to morals, or in 137 any real and substantial decree to the health of tlie employees. Under sucli cireuinstances the fi'eedoni of master and em])loyee to contract witli eacli otlier in relation to their employment, and in dehniipi!^ the same, cannot be ])rohibited or interfered with, without violatiiif? the Federal Constitution.” Lockner v. N. Y., 19S U. S. 45 (L. Ed. 037-44). The above quotation clearly leaves room for such legis- lation if dangerous to either health or body. This case, although by a bare majority opinion as to whether that was a dangerous employimmt, nev(‘rtheless treated the question in all res])ects as being the settled doc- trine that the state cannot interfere with the right of pri- vate contract merely because it would desire to regulate employer and em])loye if there were no jirdice power neces- sary. It seems to ns ditticnlt for any person bound as we are with the duty of a neutral investigation of this sub- ject to overlook the Aveighty arguments of the dissents in the aboA^e decision. NotAvithstanding the Lockner decision, the case of Mul- ^ler V. Oregon, 20S U. S. 411 (L. Ed. 551) , held that the Ore- gon statute limiting the hours of labor of women in laun- dries was valid, although if it related to me it might not, by saying: ^^Ea^cu though all restrictions on political, personal, and contractual rights were taken away, and she stood, so far as statutes vrere concerned, upon an absolutely equal plane with him, it would still be true that she is so constituted that she will rest upon and look to him for protection; that her physical structure and a proper discharge of her maternal functions — having in Auew not merely her own health, but the well be- ing of the race — justify legislation to protect her from the greed as well as the passion of men. The limita- tions which this statute places upon her contractual powers, upon her rights to agree with her employer as to the time she shall labor, are not imposed solely for 138 her benefit, but also largely for the benefit of all. Many words cannot make this plainer.” Muller V. Oregon, 208 U. S. 411 (L. Ed. 551-550). With respect to the limitations upon the right of con- tract, the court said : ^‘It is undoubtedly true, as more than once declared by this court, that tlie general right to contract in re- ^lation to one’s business is part of the liberty of the in- dividual, protected by tlie 14th Amendment to the Fed- eral Constitution; yet it is equally well settled that this liberty is not absolute and extending to all con- tracts, and that a state may, without conflicting with - . the provisions of the 14th Amendment, restrict in many respects the individual's power of contract. Without stopping to discuss at length the extent to Avhich a state may act in this respect, we refer to the following cases in which the question has been con- sidered; Allgeyer v. Tjonisifnia, 105 U. S. 578, L. Ed. 832, IT Sup. St.’ Rep. 427; Holden v. Hardy, 109 U. S. 300, L. Ed. 780, 18 Sup. Ct. Rep. 383; Lockner v. New York, supra.” Muller V. Oregon, 208 U. S. 411 (L. Ed. 551-555). b. The Police Poiccr Applied to Contracts for Property In- surance. In the interests of the police power the state may pro- vide that the contract of fire insurance shall be so regulat- ed as to prevent insurance companies from showing that the value of the property destroyed after insurance before the fire occurred. This could only be on broad grounds of public good. It was decided in Insurance Co. v. Dagg, 172 U. S. 55 (L. Ed. 552), where the court said: , ^^In Minneapolis & I^t. L. By. Company v. Beckioith, 129 U. S. 26 (L. Ed. 585) , a law of Iowa making a class of railroad corporations for special legislation was sustained. 139 (3) ‘What it is for a state to de|)ri\'e a pei*son of life, liberty, or property without due process of law^ is uot luuch nearer ^o precise detiiiitioii today than it was said to be by Mr. Justice Miller in Davkhoa v. Ncic Orleans^ 90 U. JS. 97 (L. Kd. 010 j. ‘‘The process ‘of judicial inclusion and exclusion’ has })roceeded, and yet this court, in llohlcn v. Hardy, 109 U. S. 300 (L. Kd. 780), aiL^ain declined si (‘cilic defi- nition. 3Ir. Justice Ilrown, sjieaking for the court, said: ‘This court has never attempted to deline with precision the words ‘due process of law/ nor is it nec- essary in this case. It is sullicient to say that there are certain immutable principles of justice which in- here in the very idea of free government, which no member of the Union may disregard, — as, that no man shall be condemned in his person or property without due notice and an opportunity of being heard in his own defense.’ These princi]de were extended to the right to acquire property and to enter into contracts, with respect to property; but it was said ‘This right of contract, however, is itself subject to certain limi- tations which the' state may lawfull impose in the ex- ercise of its police powers.” ” Insurance Co. r. Dar/gs, 172 U. S. 563 (L. Ed. 552-5). See Sf. Louis Iron Mountain, etc-, By. Co. v. Paul, 173 U. S. 101 (L. Ed. 716). c. All Contracts are Made Sub ject to the Police Power. In Beer Company v. Massachusetts, 97 U. S. 25, in a liquor case the court 'held that all rights are held subject to the police power of the state and that the legislature may provide for the discontinuance of that which is in- jurious to the health, notwithstanding individuals or cor- porations may thereby suffer inconvenience, saying : “If the public safety or the public morals required the discontinuance of any manufacture or traffic the 140 hand of the legislature cannot be stayed from provid- ing for its discontinuance by any incidental inconven- ience which individuals or corporations may suffer. All rights are held subject to the police power of the state.’^ See Mugler v. Kansas^ supra. The court repeated in that opinion, what it has laid down in otlier cases, this caution : ‘^Of course we do not mean to lay down any rule at variance with what this court has decided with regard to tlie paramount authoritj^ of the Constitution and laws of the United States relating to the regulation of commerce Avitli foreign nations and among the sev- eral states or otherwise.’^ L. Ed. 593 4. In Holden v. llardy^ 1G9 U. S. 3GG, in speaking of re- forms likely to come in the law with respect to employer and employe the court said : “That while the cardinal principles of justice are immutable, the methods by which justice is adminis- tered are subject to constant fluctuation, and that the Constitution of the United States which is necessarily to a large extent inflexible and exceedingl,y ditflcult of amendment sliould not be so construed as to de- prive the states of the power to so amend their laws as to make them conform to the wishes of the citizens as they may deem best for the public Avelfare without bringing them into conflict vrith the supreme law of the land.’’ After reciting that it would be impossible to forecast the character and extent of such changes but that they had come from Magna Charta down, said : ^^It is impossible to, suppose that they will not con- tinue and the law be forced to adapt itself to new con- ditions of society and particularly to the new regula- tions between employers and employes as they arise.’’ With respect to the right of contract it said : ^^This right of contract, however, is itself subject to 141 A certain limitations which the states can lawfully im- pose in the exercise of its ])olice |>owei*s. Wliile this power is inherent in all ‘’•overnments it has ast century owim»: to an (Uiorm ons inc)*ease in the number of occupations which are dangerous.** Re-quoting from ConnnomccaUh r. AJ(j( r, 7 rush. 84, to show that every holder of i)roperty under organized society holds it under the implied liability that his use of it may be so regulated as to protect others in the enjoyment of their proi)erty, and in the rights of the community, the re- quotation continues: ^^All property in this commonwealth as well that in the interior as that bordering on tide waters is de- rived directly or indirectly from the government, and held subject to those general regulations Avhich are necessary to the common and general welfare. Rights of projierty like all other si>cial and conventional rights are subject to such reasonable limitations in their en- joyments as will prevent them from being injurious and to such reasonable restraints and regulations es- tablished by law as the legislature under the govern- ing and controlling power vested in them by the Con- stitution may think necessary and exiiedient.'^ Continuing the court said : ‘This power legitimately exercised could never be limited by contract nor bartered away by legislation.’’ The majority opinion in the case of Locliner v. New Yorl', 198 U. S. 45 refers to Holden i\ Hardy as one of the cases wherein the court has treated the police powers with liberal construction, but the Locliner case although holding against the validity of that law admits tbe rule to be that both property and liberty are held on such reasonable con- ditions as may be imposed by the governing power of the state in the exercise of those (police) powers, and with such conditions the Fourteenth Amendment was not de- 142 signed to interfere, and later on in the opinion said: ^^The state, tlierefore, lias power to prevent tlie in- dividual from making certain kinds of contracts, and in regard to them tlie federal Constitution offers no protection.’’ The reasonable control of moral conduct, liealth provis- ions and bodily protection have always been conceded to stand above individual rights of conduct. Organized so- ciety is charged witli general security and ])rotection. It must use good judgment to ascertain the necessities and execute the remedies. The individual just act iu subser- vience to this protection and within tliis judgment, if such it be as distinguished from arbitrary action. The state may provide the remedy. Indeed in Holden v. Hard]/ tlie court said: ‘These em])loyments when too long pursued the leg- islature has judged to be detrimental to the health of the employes, and so long as there are reasonable gTOunds for believing that this is so, its decision upon this subject cannot be reviewed by the federal courts.” At page 57 the court said : “This is not a question of substituting the judg- ment of the court for that of the legislature. If the act be within the power of the state it is valid although the judgment of the court might be totally opposed to the enactment of such a law, but the question would still remain : Is it within the police power of the state, and that question must be answered by the court.” See cases under subdivision — herein, holding that prop- erty is held subject to the resumption of this right. A thief is not immune from restraint by the bill of rights, the sufferer from a contagious disease cannot go unre- strained to pursue his individual happiness or liberty; the murderer cannot go unpunished because his body would 143 be hurt execution, and tliey can only claim due j)rocess of law. It is true that tlie thon^litless employer and em- ployee would dislike to be restrained for llie ‘•eiieral j^ood but he who sutfers from contagious disease is ecpially free from fault, yet ecpially dangerous in action. In the inter- ests of the public he must be restrained or limited in his liberty and individual rights. The rights of his property- are thereby invaded but only to the extent that the state determines necessary in the interests of public health. We might drive men to war for the public good; we might re- strain them from leaving the state or tlie government in times of war; the right of liabeas corpus might be sus- pended in time of war; military systems may be substi- tuted for civil authorities in time of war. All these things are unusual restraints upon individual liberty and civil rights but they are done, they are upheld, and necessarily must be so when proper circumstances arise for the pro- tection of the public good. This must remain so long as the government is able to preserve its own existence. It is upon this theory that the court is able to protect and pre- serve this power, and to hold as it did in MuUcr v. Oregon, 208 U. S. 412, L. Ed. 551, that while the liberty of contract is a property right of the individual ‘A>t it is equally well settled that this liberty is not absolute and extending to all contracts, and that a state may without conflicting with the provisions of the Fourteenth Amendment restrict in many respects the individuars power of contract.’’ With respect to fees it was said in the case of McLean V. Denver k Rio Grande Ry., 203 U. S. 39, L. Ed. 78: ^The exercise of the police power may and should have reference to the peculiar situation and needs of the community.” 144 And again : ‘^The law being otherwise valid, the amount of the inspection fees is not a judicial question; it rests with the legislature to fix the amount and it can only pre- sent a valid objection when it is so unreasonable and disproportionate to the services rendered as to attack the good faith of the law.” In the case of Consolidated Coal Co?v. Illinois, 185 U. S. 202, L. Ed. 872, the court held that where the legislature paid an inspector his own fees q,nd then allowed him to de- termine the number of times he should examine miles on a sliding scale, the money to be turned over by him to the treasurer, the law was not objectionable, saying: ‘^We know of^no reason why the legislature should deprive itself of the best obtainable evidence of the facts it seeks to make determinative of these two ques- tions.” In the case of State v. Smith, 58 !Minn. 35, in requiring the Street Eailway Company to protect its motormen, the court said : ^‘It has never been questioned that tlie police power of the state extends to regulating the use of dangerous machinery, with a view to protecting, not only others, but those who are employed to use it.” d. Police Poieer can 'X either he Legislated nor Contracted Atcaij. There is another line of cases which clearly shows the extent of the police power, and that is the line which viti- ates contracts, made, or which subsequently become con- trary to the police power. There is no vested interest based on such contract safe against it. 145 In ^tone v. Mississippi, 101 U. S. 814, L. Kd. 1070-80-81, in the lottery case where the lej’ islatiire liad granted a char- ter to a company for 25 years in consideration of a certain sum in casli and a subsecinent constitutional ])rovision was adopted declaring tliat tlie legislature should nex'er author- ize any lottery or the sale of lotterj^ tickets, etc., the court said : ^^All agree that the Legislature cannot bargain away the police j)ower of the state. ‘Irrevocable grants of property and franchises may be made if they do not impair the supreme authority to make laws for the right government of the State; but no legislature can curtail the power of its successors to make such laws as they may deem proper in matters of police.’ Metropolitan Board of Ea-cise r. Barrie, 34 N. Y. 657; Boyd V. Alabama, 94 U. S. 645.” And again: “But the power of governing is a trust committed by the People to tlie government, no part of which can be granted away. The People, in their sovereign ca- pacity, have established their agencies for the preser- vation of the public health and the public morals, and the protection of public and private rights. These several agencies can govern according to their discre- tion, if within the scope of their general authority, while in power, but the,y cannot give away nor sell the discretion of those that are to come after them, in respect to matters the government of which, from the very nature of things, must ‘vary with varying cirenm- stances.’ They may create corporations, and give them, so to speak, a limited citizenship; but as citi- zens, limited in their privileges, or otherwise, these creatures of the government creation are subject to isuch rules and regulations as may from time to time be ordained and established for the preservation of health and morality. “The contracts which the Constitution protects, are those that relate to propertv rights, not governmen- tal.” 146 If Ave recognize this principle the supposed constitution- al objections fade away. In N. P. Ry. Co. v. Duluth^ 98 Minn. 429, a street had been laid out after the railway was built; afterwards a via- duct became necessary; the city of Duluth demanded that the Ry. Co. construct and maintain that viaduct; the com- pany denied its liability so to do; a compromise was reached by Avhich tlie Railway Company paid |50,000 to- ward tlie expenses, the city |23,0()0, and tlie city agreed to maintain it forever. The structure got out of repair and the city repudiated its contract and demanded of the Railway Company that it bear the expense. The Supreme Court of ^linnesota sus- tained tlie right of the city so to do. A like case, more elaborated, discussed in the court be- low Avas that of State ex rcl City of Minncapolh v. G. N. Ry. Co.y 98 Minn. 380. In the latter case it Avas said: ^^It involves an exercise of the police poAver, and the inquiry is Avhetlier such a requirement is a proper ex- ercise of that poAver. It is unnecessary to enter into an extended discussion to sIioav the extent to Avhich the legislature may go in tlie exercise of this gOA^erm mental prerogath^e. The property, rights, and liber- ty of the citizen are to be enjoyed in subordination- to the general public AA^elfare, and all reasonable regu- lations for the preseiwation and promotion thereof are uniformly sustained by the courts. ‘Rights of property, like all other social and conventional rights are subject to such reasonable limitations in their en- joyment as shall prevent them from being injurious, and to such reasonable restraint and regulations, es- tablished by law, as the legislature, under the govern- ing and controlling pov/er A^ested in them by the con- stitution, may think necessary and expedient.’ * * * . “The reasonable limits of the exercise of the power are not readily defined, but generally speaking it ex- tends to all matters where the general public welfare. 147 morals, and healtli of the comimiiiily are involved. Bntlcr V. (Jhamhcrs, 30 Minn. 01), 30 N. W. 30S." -State c.v rcl Citij of Minneapolis v. (1. S. By., 98 Minn. 380-389. In requoting from a Wisconsin decision as to the in- creased tendency to require railways to protect their cross- ings, the Minnesota court said: ‘It needs no extension of well settled jiriuciples to reach this conclusion. lUit if it did, the increase of railroad operations, the growth of population and so- cial and business activities, with conse(iuent increas- ing dangers to persons and i)i*o])erty, might reasonably warrant the extension. This tendency of modern de- velopment is in the direction of greater, rather than more restricted, use of police power, and necessarily so in order to meet the new dangers, and increase of old dangers, constantly occurring as natural incidents of advancing civilization.’ ” State ex rcl City of Minneapolis v. G. N. Ry. Co., 98 Minn. 380-92. In the Duluth case the Minnesota court said : “Of course, contracts with municipalities ought to be enforced as contracts between individuals are en- forced, but the authorities are uniform that a munici- pal corporation cannot contract away the right of the public to enforce proper police regulations. All at- tempts to do so have been held void by the courts.” State ex rcl City of Duluth v. N. P. Ry. Co-, 98 Minn. 429-432. These decisions were vigorously fought by the railways and without avail before the Supreme Court of the United States. The case of N. P. v. Duluth, 208 U. S. 583 (L. Ed. 630), was decided the same day as the Muller case, and the Virginia Club case. The court in the N. P. case said : 148 ^‘But tlie exercise of the police power cannot be limited by contract for reasons of public policy; nor can it be destroyed by compromise; and it is imma- terial upon what consideration the contracts rest, as it is beyond the authority of tlie state or the munici- pality to abrogate this power so necessary to the public safety.’’ N. P. Ry. Co. V. ^tate cx rcl City of Duluth, 208 U. S. 581 (L. Ed. G30-7). The Virginia case is reported as Cosmopolitan Club v. Commonivealih of Virginia, 208 U. S. 378 (L. Ed. 53G). In that case the state had granted a charter to the Club. The charter gave tlie Club tlie power to sell liquor. The state subsequently passed a law prohibiting the sale of liquor by clubs and providing that their charters might be revoked therefor. The Club's Charter was revoked by the courts of Virginia under that subsequent law. The Club, of course, claimed it was against its contract rights contained in its charter from the state. The Supreme Court assumed that the charter contained a contract, but said : ^‘Tt would be extraordinary if the legislative depart- ment of a government charged with a duty of enacting such laws as may promote the health, the morals, and the prosperity of the people, might not, when unre- strained by constitutional limitations upon its au- thority, provide, by reasonable regulations, against the misuse of special corporate privileges which it lias granted, and which could not except by its sanction, express or implied, have been exercised at all.” Cosmopolitan Club v. Virginia, 208 U. S. 37G (L. Ed. 53G-39). The^ state has the authority to compel an employer to pay up his employe without delay when a discharge is made. In dangerous employment it can make the employer 149 stand tlie expense of insiieetion ; it can limit tin* Iionrs of labor; it can require safety aj)i)liances ; it can coni])(d the employer to pay tlie wa.2:es in money instead of ^oods at a profit; it can penalize tlie failure to furnish "ood machinery or guard its dangers; it can remove the defense of contrib- utory negligence; it may increase the duties if not arbi- trarily done. AVhy can it not change the theory of duty and recovery when the ]mblic safety and secin-ily demand it, acting reasonably and not arbitrarily? IX. IT /S T/Ii:x IMPLY .1 QUUSTfOK FIRST OF W JIFTIIFR AX ACT IS WITH IX THE POLICE POW- ER OR WHETHER IT IS AX ARPITRARY ACTION; IF THE FORMER, THE COXSTITUTIOX MUST HEXI) TO IT: IF NOT, THEX XOT. It does not seem to be very material whether the require- ments be positive or negative except in the means of en- forcement; if a business becomes so dangerous as to need regulation the state can regulate it by requiring a reason- able compliance to prevent, or a reasonable compensation for the results. X. THE, ACTION OF THE STATE MUST NOT BE AR- BITRARY. (a) The common law was not made to meet the present conditions and is totally inadequate. (b) The law has not kept apace with industry. (c) The employe carries this risk now. ! i 150 (d) It is a great temptation to perjurj^, on both sides. (e) The employer not satisfied. (f) It is unsatisfactory to the public. State action must not he arbitrary hut reasonable. No one can read the foregoing precedents in full without concluding that the question of what is dangerous to the community is first for the legislature, if it acts within all otlier constitutional limits the hinds the courts unless it’ uses tlie police power as a mere cloak for arbitrary action. Holden v. Hardy, 1G9 U. S. 306. Loelcnei' v. New York, 198 U. S. 45. Muller V. Oregon, 208 U. S. 412. Would a icorkmcn’s compensation act changing the pres- ent theory of liability from that of negligence or fault of the employer to that of a risk of the industry or industrial insurance be a reasonable or an arbitrary legislative act? In the opinion of the writer such a change would be rea- sonable. a. The Present System. The theory of recovery, at the present time, at common law, is, generally speaking that the employer has done, or left undone, something for which he is at legal fault. A duty imposed by law in favor of the employe or the gen- eral public including him, a violation of that duty, and an injury as a result without any intervening efficient cause must all concur. The employe, upon the other hand,' must have violated no duty, assumed no risk, committed no neg- 151 ligence contributing to the accident, and the injury must not result from tlie act of a fellow-servant. This last feature has been in a measure modified with respect to certain kinds of industries, such as railroading, by statute; it has in some instances been relieved by judici- al interpretation; and all obstacles to the plaintilf have frequently been enhanced at the hands of courts and more often lessened by the hands of juries. Probably the present justification of the* civil jur^ sys- tem is partially due to its tendency to apply rules of hu- manity rather than those of logic or law; but courts some- times withhold cases of doubtful liability from the jury, that logic and law may counter-balance the ^‘over humanity of jurors.” There is, too, in some courts, at least a tend- ency to recognize a day of more liberal allowances when- ever verdicts are upheld. Assuming that a reasonably safe place to work and com- petent servants are furnished, the employe has no better right to recover for injuries due to the course of employ- ment than has a stranger who is not a trespasser. Indeed the employer may owe a much higher duty to some others, like passengers. He may owe a less duty to the employe where the work is assumed with knowledge of the danger- ous employment or in case of negligence of a fellow ser- vant. Indeed this disadvantage is so great in favor of employes that where a statute was passed in the state of Pennsyl- vania relieving the railroad companies of liability, in cases where employes could not recover, it took a decision of the Supreme Court of the U. S. to uphold that statute. The lines of law are often closely, and not always un- fairly drawn, the results uncertain and expensive to both sides and attendant with much vexations delay. 152 Origin of the System. It is not'to be wondered that the present system is found to be inadequate to the present exigencies. Perhaps more than in any other line of private law the conditions of so- ciety have outgrown the peculiar growth of the common law except as it has been replaced by judicial interpreta- tion and legislative acts covering peculiar elements. It has been the liistory of law, generally speaking, that it has three great epochs: First. The common law of. custom, based upon the ob- servance of certain general rules and customs of conduct so long that ^The mind of man runneth not to the con- trary.” Second. ' The equity of conscience — the theory by which the rigid rules of the common law are blended and ob- structed to respectively meet the peculiar complex condi- tions of a growing society. Betv/een the basis of a common law and the system of equity, there is theoretically no gap. The system of equity begins ahead of the end of the com- mon law; it obstructs its rigid features, blends its harsh rules, adds to its deficiencies, yet theoretically it follows the law and does not pretend to supersede it in theory up- on a subject like this usually left to law remedies. Each of these processes, in the course of government, is largely declared and enforced by judicial decision and interpreta- tion. This is essentially a slow growth, not only unsatis- factory .but inadequate to meet the rapid tendencies of a modernized society. Third. The. science of legislation, with varying import- ance has followed in all the great systems of law, to meet 153 the growing conditions for wliicli the other two ejiochs have proven inadequate. Tliis was the case, evidently, under the I Uiby Ionian and Ass}n*iau laws; it has been the case in China; it was the case in Koine and England, and it is the case in America. The question, therefore, with respect to the form of de- velopment of any line of the law, is simjily to what epoch has it arrived. If the common law and eiinity system lias become inadequate, has it only reached a stage needing slight moditication of the old theory, or is it so unfitted as to need scientific treatment of the old system or an estab- lishment of a new? In this matter the (jiiestion really is: Are the legal remedies insnllicient? The eominon Jaw was not made to meet present condi- tions and is conseqncnthj hniJt on an insufficient theory. Under the Assyrian monarchies, the Babylonian laws, and the other early Asiatic and European governments, the conditions were peculiar. Six centuries before Christ, Xe- buchadnezzar built a canal 400 miles in length, of large size; in fact, practically three times as great as the pres- ent Panama ditch that has so baffled this great country for a generation. But this canal is supposed to have been built by the labor of slaves caught in successful battles in ad- joining monarchies. See Rated insoids Monarchies, pp. 245- 7. He likewise built the Wall of Babylon containing 500,- 000,000 feet of solid matter. Under such a system no compensatory act such as we are now discussing was necessary; hence we find none in the laws of that age — although we do find some matters of negligence treated, such as malpractice of dentists and physicians. With a slave, of course, the loss of his life or the 154 incapacity of his body for service meant economic loss to the owner. The care of the slave fell upon the owner, and it was to his interest to procure the best medical aid and attention obtainable and to shorten the incapacity as much as skill could tlien do. The humanitarian feeling was not even tlien totally wanting. Tliere was tlierefore no necessity for an act permitting the injured to recover damages. eitlier for his medical at- tention or the loss of liis time, and he needed very little money to pay for pain and suffering, as it was not then regarded of such great importance, even if he had had the standing of a man in court. Wlien we come to Rome, we find tliat there are consider- able provisions in its elaborate and highly perfected sys- tem of private law tliat gave to persons injured by certain kinds of torts the right of recovery and that degree of care varied in much the same terms as to the relative obliga- tions as does our own (Sanders Justainian by Hammond, 401-3) ; yet the test of care there started as it does here with the relative duties. The rules and degrees of care as to property, sucli as bailments, etc., were not far different from ours except that, ^Tn each case the standard is the care which the person sought to be made liable takes about his own things” (Ib. 402). as distinguished from our rule of the standard of an or- dinarily prudent man; and domestic relations were built upon the theory of inequality before the law which was characteristic of their institutions. Now slavery in those days was considered a favor to the slave upon the theory that, ^^Generals order their captives to be sold and thus preserve them, and do not put them to death” (Ib. 77). 155 In the coiiiineiils on tlie rights of persons on jmge TO, tlie same author says : ‘‘Each i)erson cai)ahle of having and l>eing siil)ject to riglits was called in Konian T.aw a persona. Thus not only was the individual citizen, when looked at as ' having this_capacity, a persona, hut also corporations and i)ul)lic bodies. Slaves, on the conlrary, were not persona. They had no rights.” Under the Roman law, the paterfa iniUas existed ; and un- . der that the head of the family harhfmed nr)t only his di- rect family but such of the c()llatoral kindred as came un- der his jurisdiction and all of the servants and slaves oi his household. For a considerable time he held the ])ower of life and death over all of them. The loss of service, the expenses of treatment, the reduction in the economic value of his slave, all fell upon him and his decendants. There was then very little nse for a eompensatory act. Besides by Sec. 1, Title VIII (Hammond, p. 90), the Institutes provided : “Slaves are in the power of masters, a power de- rived from the law of nations, for among all nations it may be remarked that masters have the power of life and death over the slaves, and that everything ac- quired by the slave is acquired for the master.” This being then the law of nations the slave had no legal status and with him free labor could neither compete nor from his hardships rise. When the private system of Roman law was measurably transferred into Europe and modified into the English com- mon law and equity systems, the slavery still partially ex- isted and there was added to it the modified element of mili- tary tenure. In the course of the operation of that system the loss, the expense, and in a measure the sympathy of the then lord was relatively selfish, and it was consequently 156 the motive for him to see that the best care and attention should be given to replace the cog in the wheel of his sys- tem. With the fading of those systems the growth of equality before the law has been slow. So we find no law in England, in the early day, of the nature we are here seeking to adopt. The English common law system theoretically was trans- ferred to America as one of England's dependencies; and, aside from a small section which adopted the theory of the Roman Civil Law — like Louisiana — the great body of the private common law of England, including its statutes then in existence, was adopted as the common law of this country; so far as it was not inconsistent with our consti- tutional systems or law. The South had its slavery, attendant with the commer- cial instincts of the owners, which there, as in Europe, in- stigated all necessary attention to the injured when acci- dents did occur. And the South was slow in manufacture; it was an agricultural community; it had few dangerous pieces of machinery — and it needed no such law. Strange as it now seems, the theory that the slave was not a person in law was not confined alone to Europe. In the famous Dred Scott decision. Chief Justice Taney of the Supreme Court of the U. S., speaking for the majority of that great court said : ‘Jt is difficult at this day to realize the state of public opinion in relation to that unfortunate race, which prevailed in the civilized and enlightened por- tions of the world at the time of the Declaration of In- dependence, and when the Constitution of the United States was framed and adopted. But the public his- tory of every European nation displays it, in a manner too plain to be mistaken. ' . ^^They had for more than a century before been re- garded as beings of an inferior order; and altogether' 157 unfit to associate with tlie wliite race, eitlier in sf>cial or political relations; and so far inferior, tliat tliey had no rights which tlie white man was bound to re- spect.’^ Drcd Scott V. Sanford, GO U. S. 393 (L. Ed. G91- 701). This expression evidently intended to fix, and, being seized upon to establish, the want of legal status served as an awakening to the realization of a great fact, whicli a bare majority then decided to, and did, change. It was, of course, the fact in the South as it liad been in Europe that so long as men could be bouglit to work, there were few economic reasons to favor them with com- pensatory laws. Likewise free labor could not well ele- vate itself while competing with actual slavery or its ef- fects. In the New England and the Eastern states, indeed in all of America outside of the slave belt, scientific labor was in a state of slumbering indolence ready to awaken a com- mercial revolution, when the shackles of competing sec- tions should fade away. Until that time men hardly la- bored as a system of scientific specialists in America al- though mu-ch of their arts and crafts are wonders of this age. Equality of politics and equality before the law had greatly impressed itself upon society in all its tendencies. The old neighbor worked for him who proved to be more frugal, making complete articles of commerce, like shoes, or wagons, or furniture. Their families were friends ; their children oftentimes intermarried; the home of each was permanent. An accident to the workmen was infrequent, as there was little machinery and plenty of time. The accident, when it did occur, was an injury to the community, in 158 sympathy, at least, and the old neighbors shared the con- sequences of the resultant needs of the injured and his family — and no such legislation was then necessary. Best Thought of Age Devoted to Government. In the epoch which followed the settlement of America and that which preceded and endured thd* Revolutionary war, patriotism, based upon the compact theory — equality before the law for freemen — was the guiding motive in forming our constitution. The best thouglit of the best minds of this new and am- bitious country was devoted to the essential features of both private and public law, to create a model s^'Stem up- on the theory of a republic; no otlier feeling than the pres- sure of hardsliip could have been the motive to drive men to such deeds of patriotism or such deep lines of thought along governmental lines. They studied all of the then-recorded systems^ of govern- ment. They argued, analyzed and decided the best# prin- ciples for their conditions that thej^ could, from the whole of the several systems. The great arguments of Webster and Wirt, and the al- most superhuman decisions of Marshall, had greatly ex- tended and blended the constitution to meet the several conditions as they had arisen. The spirit of enthusiasm from the building of that great work but partially subsided until the passage of the Civil war — which confirmed the instrument as a system of cen- tralized power. Then came the amendments, with Mr. Justice Miller and his associates to construe the new constitutional epoch, as a basis not alone of defeating slavery but as an added protection to human rights. 159 b. Great Minds Tuva to Industries. From the time that the Civil war ended and the recon- struction was done, the ^reat minds in America turned tlieir attention to previousl.y neglected material things. There was a vj^i^t country, with great natural but undevel- oped resources. The problems of necessity came first; agriculture for food, individual preservation of foods, personal construc- tion of raiment were most necessary. Some of the great inventions, now sucli powerful means, were wholly unknown, otliers, in their infancy. If a per- sonal statement can be excused, my own father, yet alive and in the possession of all his faculties, was five years of age when the first railroad was laid. The modern means of manufacture and tools were not yet at a stage to be greatly valued or seriously dangerous. Th^ commercial inventions have been almost without number. - Machinery has become highly developed and is yet increasing in amount and capacity. The laborer, who had been the old neighbor, making his complete article, had to be replaced by a machine operated by a person per- haps with no more breadth of general vision but with a specialized knowledge of that article, who could make many pieces at a much smaller cost, which, when put with many more pieces, made, too, at a smaller cost, would make the whole article not only more quickly but much more cheaply. The Relations of Employ &r and Employe Change. / And with this necessity the whole gave way to the piece system ; the old neighbor to the specialist. The specialist 160 was frequently, indeed quite often, a foreigner; speaking a different tongue, leading a different life, having different sympathies, and producing a different society. The owner who had worked with the old neighbor could no longer have the social intercourse with all his men; neither could he longer work beside them, but his talents must be put to financiering, to finding the best and cheap- est productions, to making the greatest and least expen- sive sales. To each department he must delegate the duties formerly an incident to his business, to foreman; and over them a vice principal ; perhaps under both a ‘^strawboss’’ ; thus removing from his vision and sympathy, and likewise removing from their vision and sympathy, the elements that had formerl}^ bound the employer and the employe together. The requisite capital to run that business necessitated, first, the partnership ; and after that, the combined wealth and organization of the legal corporate entity. These, too, placed one further step between ‘ffhe company” and ^ffhe man.” Following the substitution of the piece for the whole, system of manufacture, came the substitution of the whole for the piece, system of men. The union of all the men for the convenience and protection of all, and this removed sympathy still one degree further. The deal was then one of good labor at cheap cost against cheap labor at good cost — cold blooded business on each side. We were busy in America getting the balance of trade. We were engaged in building up our cities, opening our new railroads (some very cheap and dangerous), slaugh- tering our forests, devouring our mines, and last but not least, mcreasing our necessities proportionate to our earn- ing capacities. The luxuries of yesterday were the neces- K)1 sities of today. Machinery lias been ruslied to its capa- city, its operators to their endurance, and yet tlie demand has not been met. Tlie rush of manufacturers to meet our demand, lias,, probably enhanced the dangers of various em- ployments. c. Employe Carries Risks of Accidents Now. In the manufacture of j^oods a small percentage is added for labor; another percentage for rent; another for inter- est on the investment; another for insurance to carrj^ the fire risk, and, in recent year^, some additional to carry the risk of negligence of the employer. But the risk of pain and suffering, the risk of incapacity, the risk of family deprivation, the loss of the lahoreEs capital, in so far as traceable to the accidents, in a majority of the cases, as distinguished from the negligence of the employer, has been a risk icliich the laborer himself has borne. He has not been asked in the past to assume the risk of fire insurance; but he has been asked to assume and has assumed the risk of personal injury where it has been caused simply by the nature of the industry without anj one’s fault; according to recent statistics gathered by the state of Wisconsin and published by its labor department the risk of the injury without fault has caused a majority of accidents. The public demands, of course, have made those accidents necessary. It may be that those demands have been stimulated by the shrewd advertising of the manufacturer; but, nevertheless, such has been the case and is a part of our progress. There was a time when a man’s family carried the risk of his death without property. To prevent that hardship. 162 life insurance companies were formed to carry that part cf the risk, for a consideration paid at previous intervals. The question of whether it was gambling was litigated and settled adversely to that contention. It is. now considered gTeatly beneficial to society by the distribution and equali- zation of the financial burden. There was a time when every man of property carried his own risk of fire. His lionie burned, and his neighbor donated clothing, beds and eatables. Charity, not compen- sation, was his lot. To meet this, fire insurance conipen- ies were organized; and, like life insurance, had to fight prejudice and laws. Indeed, there was a time when an in- surance agent in tlie country fared little better than a “lightning-rod agent.’’ The state stepped in; it regulated the business, both life and fire; it passed laws embracing forms of policies, so that the insured could not be promised all in the body with “antidotes’’ in the fine print. Statistics could be obtained to fix the average length of life; they could be gotten to fix quite well the hazards of fire, consequently private enterprise could fix the risk sufiicientH to make satisfactory rates. In the great field of agriculture, exchanges have grown up wherein'traders’ markets are established. The value of those markets rests largely on the fundamental commer- cial necessities; that ready and complete information as to supply and demand is obtainable by the traders and re- flected in the quotations of sale prices; that the traders as- sume the financial risk of controlling and distributing the surplus to meet the demand; that the praducer not only gets much nearer the consumer's price when he does sell, but gets the benefit of the best judgment of the greatest specialists as to the time to sell. The financial risk of the farmer has thus been greatly assumed by the trader. The 1()3 trader insures liis risk l)v nieaiis of a system of lied'^iii;^, coimter-balancin<»: llie cliaiiees in liis i)nrcliases until lie sells; the miller likewise covers his risk. Tlie states have greatly favored tliese institutions with legislation. They have made it possible for members to organize an associa- tion either as a partnership or as an organization in the nature of a voluntary association, which is permitted to prescribe conditions of membership and have given to their boards of arbitrators, rights of common law arbitrators which give speedy and satisfactory results greatly to the relief of tlie courts and public. This greatly simplifies the expenses and very much shortens the delay. Ilesides the member gets his case heard before experts who think and judge as he would do if impartial. In the field of general industry and its commerce some such principles are partially applied in the commercial ex- changes, but with respect to the risk of accidents, the par- ties either settle their respective risks, or apply to the old methods of litigation. It is true there are many systems of insurance which many can get if they are able to pay the cost. Certain fraternal organizations have benefits some may receive, but no greater than are ours outside of labor for benefits other than their peculiar risks. * The uncertainties, the expenses, incident thereto, the great delay, and many other reasons, however, make this risk so uncertain as to create entirely too much waste in cost, time, and feelings as applied to our present system. This fault of waste can probably be said to be based large- ly on the fault of the risk that must now be assumed. At the present time, then, the risk of industrial acci- dents, from the view of the laborer, is borne practically by ' him, except in so far as he shows they were due exclusive- 164 ly to a violation of the employe’s legal duty. Yet the em- ployer is heavily burdened. The laborer, who is a stranger, conies to his employment. The interests and obligations of a master and a slave do not even exist; nor do those of the military system. He works; he is crippled, he leaves. The relation is then end- ed — except for violation of duty or by grace of charity. It matters very little to his family or those dependent upon him whether the loss of his arm or his leg or the family wages upon which they lived was occasioned by some slip of the foot negligently allowed to happen, or a slip of the foot unavoidably happening by reason of the negligence of the employer — the public calamity is the same; the injury is the same; the results are the same; the consequences, to their minds, are not distinguishable, nor are they to ours. d. Present Systems a Temptation to Perjury. A man in the railway service, on a dark, snowy night, knows that there should be a light of a certain color in a certain position. He is blinded by the snow and forgets to look. The light turned a different way is a different color; it means that he should stop but he approaches and is injured. He goes to a lawyer who is honest; and is ad- vised that no fault of the master existed but his fault did exist — he cannot recover. He goes home and tosses back and forth upon his bed during the night, wondering what . can become of himself and family. A neighbor asks if he remembers distinctly which colored light showed. He dis- cusses it back and forth. He has put his life into the ser- vice of that company. He realizes that when his case is put to the court he will be judged by men sitting on light 1G5 and comfortable seats, in a measure unapiireciative of tlie difficulties under which he labored that nij^ht and his case ruled by logic and law as distinguished from justice. The necessities tempt him to go to another lawyer, and, knowing the correct principle, state to him that he did look for the light; that the wrong light was turned his way; that he approached it and was injured through neg- ligei^ce of the company and no fault of his own. lie re- covers. To r?cnver, the jury had to believe his falsehood as against a number of witnesses Avho told the truth. He has a friend injured under circumstance in fact such as he tells to the jury. ^ The friend tells the truth; a witness against him lies; perhaps tempted to prevent a charge against himself of in- competence, possibly by reason of Ifis customar}^ actions — but lies — the jury believes the false witness, and the in- jured gets nothing. The rules of common law are so closely drawn that the ringing, or the failure to ring a bell; the pulling, or the failure to pull a whistle; the swing, or the failure to swing a lamp; may mean success or failure in such suits; its false telling may mean ease or poverty to the injured. It may have meant life or death to the laborer as well as to the passengers. It may win for the defense. Lawyers who take these cases on contingent basis are generally fair, but the temptation to advise as to these slight differences is very great to a poor lawyer with a percentage contract in a bad injury, easily made into a case of liability. We must not, however, say, or even intimate, that the mere trial of damage suits is, per se, objectionable, that all employers are heartless or all insurance agents ras- cals. It would be extremely unfortunate and unfair to so 16G argue it. The system has liad its abuses, but railroads have had some watered stock; bank ollicials have had some em- bezzlers, the bar has had some thieves, and the church has harbored some adulterers — men are human. We do not outlaw all railroads; condemn all bankers; disbar all lawyers, nor excommunicate all churchmen. The great fact is that men of breadth and judgment con- demn only the evils of the system, ^[any men of affairs do little work on this subject except in the aid of the defense of cai)ital and its accomjilisliments, and can easily reach the conclusion, based largely on interest or bias tliat it is more important; but Avhen we face the question from the stand- point of just judgment, rather than the attitude of ad- vocates, things assume a different aspect. The Tmploi/c not Efjiial With the Employer Under the Co)nmo)i Law. We have already shown a rex^ognized inequaliW of con- tract but a few of the "cases will seiwe to illustrate this point also. Under the law as it now stands in America, labor and capital are equal before the law in the constitutional sense, but they are not equal in the law, capital conies with the shrewdness of a well chosen advocate hired at the mini- mum of expense for his worth, and the laborer with whom he can get at the maximum of expense. The litigation is but an event in the life of the capitalist, often not requir- ing his personal attendance at the trial; but it is an epoch in the life of the laborer and his family — they talk it; they live it^ they dread its aAvful uncertainties — :they suffer its great calamities. The lawyer who takes the part of the laborer in dam- 167 age cases, often pays the whole expense; he earns or does not get his own fee, and some support the laborer — we are told — in the interim. For this the lawyer must be paid. The returns being uncertain must be greater when they do come; hut all these things the laborer must stand or he outlawed under our system, if his claim is disputed. In Holden v. Hardy, 169 U. S. 366, L. Ed. 780, the court said, respecting mining : ^‘The legislature has also recognized the fact, which the experience of legislators in many states has corro- borated, that the proprietors of these establishments and their operatives do not stand upon an equality, and that their interests are, to a certain extent, con- flicting. The former naturally desired to obtain as much labor as possible from their employes, while the latter are often induced by the fear of discharge to conform to regulations which their judgment, fairly exercised, would pronounce to be datrimental to their health or strength. In other words, the proprietor^ lay down the rules and the laborers are practically constrained to obey them. In such cases self-interest is often an unsafe guide, and the legislature may promptly interpose its authority. * * * g^t the fact that both parties are of full age and competent to contract does not necessarily deprive the state of the power to interfere where the parties do not stand upon an equality, or where the public health demands that one party to the contract shall be protected against himself. The state still retains an interest in his welfare, however reckless he may be. The whole is no greater than the sum of all the parts, and when the individual health, safety, and welfare are sacri- ficed or neglected, the state must suffer.” We have then the principle announced by two able courts, Harhinson v. Knoxville Water Co., 53 S. W. 993, and the case of Holden v. Hardy, 169 U. S. 397 (L. Ed. 793). But in the case of Adair v. U. S., 208 U. S. 160 (L. Ed. 436-442), the majority said: r ^ 168 “In all such particulars the employer and the em- ployee have equality of right, and any legislation that disturbs that equality is an arbitrary interference Avith the liberty of contract Avhich no government can legally justify in a free land.” Adair v, U. S., 208 U. S. 160 (L. Ed. 436-442). The first two cases Avere where the employment was dan- gerous; the last liad under consideration a different ques- tion — the relation of the labor union to the employment, and cannot be said to limit the others. In the case of Narramore v. Cleveland^ (7., (7. & St. L. Ry., 96 Fed. 298 (6 C. C. A.), Judge (noAV President) Taft said : “The only ground for passing such a statute is found in the inequalit}^ of terms upon Avhich the rail- way company and its serAmnts deal in regard to the dangers of their employment. The manifest legisla- tive purpose was to protect the servant by positive laAv, because he had not previously shown himself cap- able of protecting himself by contract; and it would entirely defeat this purpose thus to permit the servant ^to contract the master ouP .of the statute.” No etfectiA^ely organized effort controls the city coun- cils, or the legislative bodies of either state or nation in the special interests of labor, no aggregation of capital earns for it ; no social influence aspires to it — it is but the means of business and business the means to capital, whose necessities are yet its luxuries. e. The Employer has Dificulties. And these temptations and uncertainties make it all the more difficult for. the employer. Besides, the amount of money which it costs the employer to maintain inviolate his i)roi)erty rights as against sucli accidents is entirelj' too great for tlie amount wliicli tlie injured receives. To keep from being mulcted in damages l)v fraudulent cases, and excessive damages by honest cases, the em[)ln3*er must maintain expensive and extended systems of defence or in- surance. He bears such loss as he cannot settle or pre- vent by lawsuits or anticipated insurance — from the fi- nancial standpoint, negligence and (in the language of the street) ^Then some.’’ If he maintains insurance, he has maiw evile resulting therefrom. lJut this is not all; with the loss of the personal contact that formerly existed between him and (he laborer, has gone the ])ersonal syin pathy. The laborer joins his union, and a strike for greater Avages is made. Had mutual feeling is created. The laborer is injured; the employer carries insurance; the insurance is based on legal liability, this defeats sym- pathy and the injured feels that his treatment has not been just. The great uncertainties of the risk necessitate much lit- igation. Even though insured, the great expense, and many uncertainties, make a great nuisance to the employ- er. The consumer does not yet understand that when buy- ing a product he should pay for the risk of the man as well as the breakage of the machinery. It has been the theory that recovery could only be had for fault of the employer and he should pay for his. own fault. At the same time the employer has been compelled to keep down the damages to compete with others. Much could be said here, hut all admit the present system inadequate for all. 170 \ f. The Piihlic Burdens Great. As an illustration of what our court records show in Minnesota, the writer turned to Vol. 101 Minnesota Re- ports, which covers three months time, and found the fol- lowing result: Total number of pages in whole opinions 531 Number of pages consumed l)v personal injury opinions 136 or 25 ^%. Personal injury cases reported 31 Appeals by defendant in those cases 28 Reversals on same 1 Appeals by plaintiff 3 Reversals on same 1 Total number of verdicts in 31 ca«es, 28 of which were affirmed, amounting to flTl,926.50. Amount of those reversed, |6600. Of the cases appealed, none of Avhich were reversed.^ seven aggregated in amount $111,000. The largest verdict reversed was for $1,000. Only three of the four cases reversed • were cases in which the verdicts had been had. Twenty-one of the cases outside of the seven large ver- dicts produced approximately $7,000. Of the large verdicts two were for $6,000 each; one for $7,000 ; one for $10,000 ; one for $18,000 ; one for $30,000; one for $35,000. ! The case wherein the $35,000 verdict was obtained ' was one where the injured died after the verdict had been procured ; and the court sustained the verdict, when, under the statute, it could only have sustained -171 a verdict for $5,000 if he had died before the verdict was rendered. As it was, lie got no benefit during life, but, by suffering until after the verdict was rendered, contributed an extra $30,000 to his rela- tives. Of the 31 cases tried, 5 were for injuries not received in the course of employment, 26 for injuries receiv- ed in the course of employment. Taking out the seven large verdicts, the 16 that were obtained made but $27,000 — which is not a large amount on an average. This makes the remarkable showing that, approximate- ly 84% of these cases were for injury in the course of em- ployment. Considering that this report covers but three months, and that perhaps in a majority of the cases where no ver- dict was obtained no appeal was taken, it would itself be evidence of the fact that a very large proportion of the cases tried were personad injurv cases. We addressed communications to the Clerk of the Dis- trict Court at Duluth and at Minneapolis, as well as the Clerk of the Supreme Court of Minnesota. The Clerk at Duluth was the only one who gave a definite answer. Three days’ work of one of ihis best deputies produced the fol- lowing result : Number of cases tried during year 369 Number of them personal injury cases 79 Cost of running the court : Jurors’, fees $18,206.82 Sheriff’s salaries 3,087.00 Clerks’ salaries 3,480.00 Judges’ salaries 17,100.00 Printing calendars 424 . 50 Total 142,298.32 This, it will be seen, makes approximately 21 per cent of the cases in number. The clerk adds, in his report : course, you understand that there were prob- ably as many more personal injury cases dismissed or settled, that never came to trial.^’ This probably is a fair observation. It might be added that, in our larger cities at least, cases of this nature averaged much longer than the ordinary jury trials. In our district court in Minneapolis, it costs the state to try one of these cases about as follows : Salary of Judge per annum |5700, esti- mating he is engaged in Court 200 days per year, about | 28.00 Stenographer, basis 200 days 9.00 Clerk, same estimate 6.00 . Sheriff - 6.00 12 jurors 24.00 6 extra jurors for selection 12.00 Sheriff’s fees for serving 18 men once in 12 days 3.00 about $3.00 per day. Bailiff 3.50 1/6 of sheriff’s expenses 10.00 $101.50 This does not include the cost of building, etc., etc. It is safe^ however, to estimate that each day of jury trial in these cases costs in our courts from $100 to $125 and that it:{ from ()ne-(|uartei‘ to ono-lialf of six courts arc tak<*ii iij) during tlie wliolo year. Tliere is no (1onl)t but that a v(‘ry lar^e niiinb(*r of cases of a ])crsonal injury nalnre ai-e settled l>efore suit is e\xm bronj^lit, and many otliers after tlie court lias jirovided for or entered n])on the trial. And if a system conld he evolv- ed Avliicli would jirevent th(‘ ])nhlic exjiense incid(*nt to the trials that are had, it would save a ^^reat deal in that di- rection alone. Wisconsin. The labor report issued in the state of Wisconsin, 1907- 1908, part 1, which covers ^‘Industrial Accidents and Em- ployers’ Liability in Wisconsin” contains one of the most interesting’ and instructive hits of information that we have found in the whole field. Tlie conditions there are so similar to onr own that the information with respect to accidents is extremely valua- ble in a discussion in Minnesota. From page 4 of that report we quote as follows; I “Responsibility in 238 cases investigated by Wisconsin FACTORY INSPECTORS. 1 ' Mdien the standard is “ordinary” care. Responsibility. Number. Per cent. Fault of employer 27 11.35 Fault of workman 56 23.53 Fault of both 17 7.14 Fault of fellow servants . . . 14 5 . 88 Hazard Jof the industry .... 124 52.10 All ascertained 238 100.00 174 Not ascertained 26 Not at work for employer 54 Cases investigated 318-’ This gives ns quite definite information to show that more than lialf of tlie accidents were occasioned by the hazards of tlie industry. That only about 1/^ were occa- sioned by the fault of the employer, and nearly 1/4 by the fault of the workman himself, and about 1/14 by their joint fault, and 1/17 by the fault of fellow servants. The faults of the existing systems are given on page 5 of that report, as follows: ‘"Faults of the existing systems. 1. The attempt to locate negligence so that it will hold in a court of law is exi)ensive and creates hostil- ity between Avorkmen and employers. 2. The laAV of negligence means liability insurance for the employer, and a large part of the money paid to liability insurance companies is Avasted. 3. The concealment of facts regarding accidents hinders the important AAwk of preventing accidents. 4. The existing Ltaa^s do little to encourage Avork- men and employers to enter into mutual insurance schemes, nor do they encourage the workmen to in- sure themselves. Workmen do not have adequate pro- tection.’’ 175 XT. THE COM ri:^^ STATION IN THE MODERN FOR- EIGN COUNTRIE^^ ALONG THIS LINE. (a) Wliat advaiitaj^e has been made. (b) The coiniuon law lias been modified in many re- spects and there seems to be no reason Avhy it should not be arranged, at least after a reasonable remedy is given in its stead. (c) The l^ederal Government and many of the states have been working on this change sufficient to show that no party wants arbitrary action but only reasonable regu- lation, yet, there are doubts in the minds of many as to whether we can make the necessary laws. Compensation in the Modern Foreign Countries. So much of bulletin Xo. 74, of the Bureau of Labor is- sued in January, 1908, by the U. S. Department of Com- merce and Labor as is covered^ on pp. 122-169 is represent- ed in the appendix hereof as being a splendid brief state- ment of the foreign laws on the question. Page 121 com- ments as follows : Summary of Foreign Workmen’s Compensation Acts. ^‘By the term ^workmen’s compensation laws’ are meant enactments which embody the principle that the workman is entitled to compensation for injuries re- ceived in the course of his employment. Such laws have been enacted in twenty-two foreign States. ^^Usually the injuries must cause disablement for a specified number of days or weeks* before compen- sation becomes due. The employer may usually be re- lieved from the payment of compensation if he can prove that the injury was caused intentionally or by 176 willful miscouduct, or in some countries by the gross negligence of the injured person or during the per- formance of an illegal act. “The industries usually covered by the acts are manufacturing, mining and quarrying, transportation, building and engineering work, and other employ- ments involving more or less hazard. In Belgium, France, and Great Britain the laws apply to practi- cally all employments. In Austria, llelgium, Den- mark, Finland, Germany, Italy, Luxemburg, Nether- lands, Norway, Russia, Spain, and Sweden only work- men engaged in actual manual work, and in some cas- es those exposed to the same risks, such as overseers and technical experts, come within the operatif)ns of the law. On the other hand, in France, Great Britain, the British colonies, and Flungary the laws apply to salaried employees and workmen equally. Overseers and technical experts earning more than a prescribed amount are excluded in Belgium, Denmark, Germany, Great Britain, Italy, Luxemburg-, and Russia. Em- ployees of the state, provincial, and local administra- tions usually come within the provisions of the acts. “The entire buraen rests upon the employer in all but four countries, Austria, Germany, Hungary, and Luxemburg, where the employees bear part of the ex- pense. The laws in everv case fix the compensation to be paid. Except in Sweden the compensation is based upon the wages of the injured nerson. It con- sists of medical and surgical treatment bud periodical allowances for temporary disabilitv, and annual pen- sions or lump-sum payments for permanent disability or death.” a. Yieios of Foreign Countries. In the report put out by the Secretary of Commerce and Labor, in December, 1908, in speaking of this question it is said: “In striking contrast with conditions in the United States is the position of the foreign workman who is injured by accident in the course* nf liis eniplnyinent. Practically every fni*eiiiii cmintry of any iiiijiortance industrially has by legislation recognized tlie ])rin- ci]>le tliat the workman is entitled to comjtensation for injuries from accidents r(‘ceived in the course of his em])loyment. Tw(Mity-tw(^ forcM^n states liave en- acted sncli l(\uislation, nam(*ly, Austria, lUdj^inm, Pritisli rolnmbia, ra]U‘ of (iood Hoi)e, Dcmmark, Fin- land, France, Germany, Great liritain, Greece, ITnn- f^ary, Italy, Luxemburg*, Netherlands, New Zealand, Norway, Queensland, Ttnssia. South Australia, S])ain, Sweden, and Western Austral i.i/’ This article proceeds to point out that in most of those countries there must be some detinite j^eriod of disability, such as a certain number of days or weeks; that the em- ployer may usually be relieved if he can jirove the injury intentional or willful, and, in some countries, if caused by gross negligence or during the ])erformance of an il- legal act; but that in none of those countries does ordi- nary negligence on the part of the employee Avork a for- feiture of the right to compensation. “The industries usually covered by the laws are manufacturing, mining and quarrying, transportation^ building and engineering Avork, and other employ- ments involving more or less hazard. In Belgium, France, and Great Britain, the laws apply to lAracti- cally all employments. In a considerable number of countries only workmen engaged in actual manual Avork, and in some cases those exposed to the same risks, such as OA'erseers and technical experts, come Avitliiu the operation of the law. ' These countries are Austria, Belgium, Denmark, Finland, Germany, Italy, Luxemburg, Netherlands, Norway, Bussia, Spain, and Sweden. On the other hand, in France, Great Britain, and the British Colonies, and Hungary, the laws ap- ply to salaried employes and workmen equally. Over- seers and technical experts earning more than a pre- scribed amount are excluded in Belgium, Denmark, Germany, Great Britain, Italy, Luxemburg, and Eus- sia. Employes of the state, provincial and .local ad- 178 ministrations usiiallj^ come within the provisions of the acts. ^^The entire burden rests upon the employer in all but four of tlie countries — Austria, Germany, Hun- gary and Luxemburg — where the employes also bear a part of the expense. The laws in every case fix the compensation to be paid. In all the countries but Sweden the compensation is based upon the wages of the injured person. It consists of medical and sur- gical treatment and of periodical allowances for tem- porary disability, and annual pensions or lump-sum payments for permanent disability or death. ^Gn most countries employers may contract with state or private insurance instil utions for the transfer of the burden of iiayment of compensation. In a num- ber of countries such transfer is obligatory. Provis- ion is usually made for the protection of the bene- ficiaries in case of insolvency of employers. ^^The acts of nearly all of the countries are framed with the view of obviating the necessity for instituting legal proceedings. The laws are so specific vrith re- gard to the compensation allowed and the regulations for its payment that agreements are usually amica- bly made between the employers and the victims of the accidents.” The article proceeds to say that procedure is provided for cases where agreement cannot be had, that the best practice in other countries fixes a definite comiiensation for death or injury, usually based upon the earning capacity, which enables the employer to calculate with some degree of certainty the additional item necessary to be included in the cost of production ; that this becomes as capable of calculation as does fire insurance; that various plans of industrial insurance are in operation in other countries, from which a system can probably be worked out ; but sug- gests that it will be time enough to talk laws when we place the liability upon the industry itself. That report sug- gests that the government law Which went into force Aug- ' ust 1, 1908, with respect to accidents- to the Panama em- 170 plojes should be so amended as to transfer its administra- tion from the Secretary of Commerce and Labor to the Isthmian Canal Commission. b-c. I Policy of Change of Common Law. Substantially all of the states, as well as the Federal Government have made attempts to amend the common law by changing some of the more objectionable elements in the more hazardous employments. Various laws affecting railways and other carriers of persons exercising special privileges based upon govern- mental functions, have been enacted affecting such mat- ters as the fellow-servant doctrine, safety appliances, com- parative negligence, etc. ; other laws have been enacted im- posing duties in the nature of police regulations such as making it the duty to fence elevator shafts, cover danger- ous machinery, limiting the ages of children, the hours of labor for men in hazardous occupations, the requirement of inspection of mines and machinery, etc., etc. l>ut until very recently no serious attempt has been made to change the theory by changing the basis of recovery. Repealing the Common Laio. In Smith v. Alabama^ 124 U. S. 465 (L. Ed. 508), the icour t said : ^^There is no common law of the United States, in the' sense of a national customary law, distinct from the common law of England as adopted by the several States each for itself, applied as its local law, and subject to such alteration as may be provided by its own statutes. Wheatbn v. Peters, 33 U, S. 8 Pet. 591 (L. Ed. 1055).’’ 180 In Martin v. Pittshurgj etc. Co., 203 U. S. 284, L. Ed. 184, the court liad under consideration a statute of Pennsyl- vania limiting the right of certain persons to recover against railroads for damages to the same rights which em- ployes would liave. It was claimed that this law was in- valid and the court said: • ' ‘‘The assertion of the Federal right is disposed of when we determine the question of power.” And: “If it be conceded, as contended, that the plaintiff in error could have recovered but for tlie statute it does not follow that the legislature of. Pennsylvania in pre- venting a recovery took away a vested right nor a riglit of property. As the accident from which the cause of action is asserted to liave arisen occurred long aftqr the passage of the statute, it is difficult to grasp tlie contention that the statute deprives the plaintiff in error oflhe rights just stated. Such a contention in reason must rest upon the proposition that the state of Pennsylvania was without power to legislate on the subject — a proposition which we have adversely dis- posed of.”- There is no constitutional objection to repealing or mod- ifying the common law, at least if a reasonable remedy is left as will be shown by the following cases. Federal Government. Rule in Admiralty. In the case of Steamer Max Morris v. Curry, 137 U. S., page 1 (L. Ed. 586), the Supreme Court held that: “A longshore man, employed to load coal on board a steamship, and injured while so employed, by his fall- ing from the steamer’s bridge to her deck, partly through his own negligence and partly through the negligence of ihe steamer’s officers, is entitled, in a suit 181 in admiralty against tlie vessel for ’daniages for such injuries, to a decree for divided damages.” In a libel in that case the libellant, who in plain lan- guage in another court would be the plain tilt, charged that he fell from the bridge to the deck of the boat through the negligence of those in charge having removed from the bridge the ladder usually leading therefrom to the deck, and in leaving and failing to guard the hole left thereby, and that he Avas not guilty of any negligence and that he was injured by the fall and incapacitated from labor. He claimed |3,000 damages. The answer alleged negligence on the part of the libellant and an absence of negligence on the part of the claimant. The District Court entered a decree in favor of the li- bellant for damages of |150, and $32.33 as one-half of the libellant’s costs, less $47.06 as one-half of the claimant's N costs, making the total award to the libellant $135.27. The District Judge charged to the libellant’s OAvn fault all his pain and suffering and all mere consequental dam- ages, and charged the vessel with his wages at $2 per day, for 75 working days, making $150. An appeal was taken to the circuit court and an opinion rendered therein but no decree. The case came up again before tAvo of the Judges and they certified the question to the Supreme Court which said : ■^^The question discussed in the opinions of Judge BroAvn and Judge Wallace, and presented to us for decision, is whether the libellant was debarred from the recovery of any sum of money, by reason of the fact that his OAvn negligence contributed to the acci- dent although there was negligence also in the officers of the vessel. ^The particular question before us has never been authoritatively passed upon by this court, and is, as stated b}^ the district judge in his opinion, Avhether, 182 in a court of admiralty, in a case like the present, where personal injuries to the libellant arose from his .negligence concurring with that of the vessel, any dam- ages can be awarded, or whether the libel must be dis- missed according to the rule in common-law cases.’’ The court proceeds to say that it had long administered the English law of dividing the damages in admiralty cases, citing a number of 'cases where it had been so done. The court pointed out the distinction of rules for the division of damages to claims to the effect that in the common law court the defendant must pay all tlie charges or none while in the admiralty court the law would allow the di- vision if botli were at fault. After further references the court said : ^‘They show an amelioration of the common law rule, and an extension of the admiralty rule in a di- rection which we think is manifestly just and proper. Contributor}' negligence, in a case like the present, should not wholly bar recovery. There would have been no injury to the libellant but for the fault of the vessel; and while, on the 'one hand, the court ought not to give him full compensation for his injury, where he himself was partly in fault, it ought not, on the other hand to be restrained from saying that the fact of his negligence should not deprive him of all recovery of damages.” When President Taft was sitting as a Circuit Judge, 1897, in the court of appeals, with Mr. Justice Harlan and Circuit Judge Lurton, the case of Pierce n. Van Dusen, 78 Federal Reporter, 693, was before the court. The opinion was written by Circuit Justice Harlan, and is very able, referring at length to the authorities of the United States Supreme Court and others, at page 700 the opinion says: - ^‘Undoubtedly the whole subject of the liability of interstate railroad companies for the negligence of those in their service may be covered by national legis- 183 lation enacted by congress iiinbn* its power to regulate commerce among the states. Hut, as congress lias not dealt with that subject, it was comjjetent for Ohio to declare that an employe of any railroad corporation doing business here, including those engaged in com- merce among the states, shall be deemed in resjiect to his acts within this state, the superior not the fellow servant, of other employes ])laced under his control.'^ See opinion of Judge Taft in Warramore v. Clave- land ^ etc. Ry. Co., 0(> Fed. 298. On June 11th, 1900, Congress passed an act intending to regulate interstate carriers in favor of emplo^^er’s liability, etc. The Supreme Court declared that act unconstitutional upon the theory that it covered intrastate as well as inter- state business. The act established contributory negli- gence and prohibited contracted benefits except pro rata. The opinion is recorded in Uoivard v. Illinois C. R. Co., 207 U. S. 403 (L. ed. 297). That opinion was by Mr. Justice AYhite and with him Mr. Justice Day concurred. Air. Justice Peckam concur- red in a short memorandum but he and the Chief Justice and Air. Justice Brewer were not prepared to agree Avith all that the opinion said upon the power of Congress to legis- late upon the subject of the relations between master and servant. Air. Justice Aloody dissented in a very long and able opinion. Air. Justice Harlan and Air. Justice AIcKenna agreed in a short dissenting opinion and Air. Justice Holmes dissented in still another short opinion; but of these various opinions it would appear to be the rule, very clearly decided by the majority at least, if not by all of the justices, although it may be doubtful whether three of the Justices agree thereto, that Congress has power to legislate on the subject of master and servant with re- 184 spect to matters covering interstate commerce. In the course of his dissenting opinion Mr. Justice Moodv reviews opinions bearing upon different phases of this ques- tion. In the case of ^iiead v. Central of Georgia Ry. Co., 151 Fed. G08, District Judge Spear had delivered a very elab- orate opinion in which he sustained the Act of June 11, 1906. His comments upon the nature of this legislation at page 619 are well worthy of reproduction here: ‘‘Nor is the enactment of such measures as that un- der consideration a novel or unusual power on the part of government. Our own state, it seems, was the pio- neer in a measure of partial relief from that strict rule which was first enunciated in England in 1837, which forbade the recovery by tlie employe for injuries in- flicted by the negligence of a fellow servant. The Geor- gia law upon this subject was enacted in 1856 so far as it related to railroads. In 1862 Iowa abolislied the fellow servant bar as to trainmen and in 1874 Kansas did the same thing. In 1885 the state of Alabama adopted similar legislation, and in 1893 Arkansas qualified the doctrine as to railroad employment. Min- nesota followed in 1887. Florida, Oliio, ^Mississippi, and Texas have modified the doctiine for the benefit of employes. Nortli Carolina, North Dakota, Massa- chusetts, Wisconsin and Minnesota denied its appli- cability to the operation of railroad trains, and in 1901 Colorado abolished the doctrine in toto. Nor have foreign governments been inattentive to this great and unreasonable injustice to that splendid body of citizenship upon whom so much of the pros- perity of the nation must depend. In 1888 England denied its application to those engaged in the opera- tion of railroad trains, and in 1897 made it also inap- plicable to many other hazardous employments. In Germany it does not apply to any of the hazardous occupations. In 1869 Austria passed a law making railroad companies liable for all injuries to their em- ployes save where the iniurv. was due to the victim^s own negligence. The Code Napoleon made the em- 185 ployer answerable fur all injuries received by bis workmen, and this is still of force in France, in Bel- gium and an Holland. Other European countries have from time to time hxed the liability of the mas- ter to his servant for damages caused by the negligent act of a fellow servant. It is, however, unhappily true that many states of the Union, notwithstanding the anachronism of the rule, have maintained and still enforce it. But Congress has at length determined that there shall be an uniform law for the protection of that army of more than a million men engaged in interstate trahic — an army whose courage, decision, patriotism, and intelligence may not be surpassed. ' ‘‘The rule which this legislation abrogates was bas- ed upon the contention that the servant contracts for a wage sufficient to protect him against risks incident to the service that he is in a better position to observe and protect himself against the negligence of his fel- low servant than his employer, and that it will in- sure better service and less injury if the master be not responsible. The briefest consideration will show how archaic is this reasoning when applied to mod- ern, conditions. Take the engineer on the locomotive which drives the lightning express. The complexit}^ of his mighty machinery requires his constant and care- ful attention. Possibly in the darkness of night, 50 or 60 miles an hour his train thunders along the gleaming rails. His is blind obedience to his orders. Through the mistake or negligence of a fellow servant, over whose action he has no control, of whose mistake or misconduct he has no knowledge, in an instant he may be hurled to death or to mutilation indescribable. While this is true, under the law v/hich the act of Con- gress repeals, it has been held that the relation of fel- low servant existed between an engineer acting as conductor and his fireman, between a common day la- borer, building a culvert and the engineer and conduc- tor running a train, between an engineer operating one train and the conductor on another train on the same road, between conductor and brakeman on the same train, between the local telegraph operator and fireman upon the train, and in view of these relations, shadowy and intangible as they are, yet justified by the law as it existed, it has been held that the em- 186 ployer was not liable for the death and suffering Avhich resulted. The law is a progressive science. The rule has long been deemed most unjustifiable. In Lahatt on Master and Servant, Vol. 2, Sec. 751 it is declared : ^It does not rest upon any satisfactory bases, log- ical, social, or economic, and by relegating the in- jured person to his action against a co-employe, who is, as a general rule, financially irresponsible, leaves him in the great jnajority of instances, without any prospect Avhatever of obtaining the adequate indem- nity.’ ^‘Such conditions Avill no longer exist. Said the house committee in its report on this measure: ^Now where the doctrine of fellow servant is in force no one is responsible for the injury or death of the felloAv servant. The co-senmnt Avho is guilty of negligence resulting in the injury may be liable, but as a rule, he is not responsibe. Employes are never held to such strict rules for the safety of his co-em- ployes, because the employer is not bound to pay dam- ages in case of injury. If he Avere held liable for dam- ages for eA^ery injury occasioned by the negligence of his servants, he would enforce the same strict rules for the safety of his employes as he does for the safety of , passengers and strangers, he will make the employ- ment of his seiwant and his retention in the service de- pendent upon the exercise of higher care, and this will be a strong inducement to the employe to act with liigher regard for the safety of his fellow workmen.’ ” ^iiead V. Central of Georgia By. Co., 151 Fed. 608- 619. Presidents Urge Change. As early as the first message of Benjamin Harrison, sent to Congress in 1889, vre find the following expression: Page 51, Vol. 9, ‘Alessages and papers of the Presidents” : ‘5^The attention of the Interstate Commerce Com- mission has been called to the urgent need of Con- gressional legislation for the better protection of the > lives and limbs of those engaged in operating the 1ST great interstate freight lines of the country and es- pecially of the yardmen and brakemen. A petition signed by nearly 10,000 railway brakemen was pre^ sented to the Commission asking that steps be taken' to bring about the use of automatic breaks and coup- lers on freight cars. ‘‘At a meeting of the State railroad commissioners and their accredited representatives held at Washing- ton in March last upon the invitation of tlie Interstate Commerce Commission a resolution was unanimously adopted urging the Commission ‘to consider what can be done to prevent the loss of life and limb in coupling and uncoupling freight- cars and in handling the breaks of such cars.” During tlie year ending June 30, 1888, over 2,000 railroad employes were killed in service and more than 20,000 injuries. It is compe- tent, I think, for Congress to require uniformity in the construction of cars used in interstate commerce ) and the use of improved safety appliances upon such trains. Time will be necessary to make the needed changes, but an earnest and intelligent beginning should be made at once. It is a reproach to our civ- ilization that any class of American workmen should in the pursuit of a necessary and useful vocation be subjected to a peril of life and limb as great as that of a soldier in time of war.” In February, 1903 he sent to Congress the special report of the Commission of Labor relating to injuries of workmen in Germany and other countries. We need not call the attention of this assembly to the fact that President Harrison was an able lawyer as well as a great statesman and probbly knew at the time he wrote that, the exact status of this matter in Europe. , The safety appliance act passed Congress as a result of this agitation and this and other recommendations and a portion of the above quotation from President Harrison is found in the opinion of the Supreme Court in maintaining the act. 188 In his message to congress, in 1908, President Roosevelt said : a man is injured or killed in any line of work, it was hazardous in his case; whether one per cent of those following the given occupation actually suffer injury or death ought not to have any bearing on the question of his receiving compensation.’^ Later on in his message he says ; ^Trobably in no othes respect is our legislation, both^ state and national, so far behind practically the entire civilized world as in the matter of liability compensa- tion in accident or injury.” To meet the decision of the majority in the Hotoard case the act of April 22, 1908, was passed. It seems to be a fix- ed rule of the government that it may require employes of railroad companies, engaged in interstate commerce, to be protected b}^ safety appliances or otherwise but there is no other reason why they should not be greatly extended if the governmental necessities demanded it. We under- stand also that there are some legislative acts that we have not yet examined Avhich cover the rights of government em- ployes. There is not any longer a question but that the government is able to provide regulations for its own em- ployes as indicated under Subdivision *11, supra. The congressional record of May 30, 1908, contains a very able argument giving a synopsis of English laAV as a part of an article contained in a speech printed from Hon. Geo. A. Bartlett of Nevada as an argument in fa^mr of Mr. Bartlett’s proposed bill. A very interesting and ably pre- pared argument is also printed by Congressman Sabbath, (the page do not have) in faA^or of his proposed meas- ure. ' 189 Other States. In 1905 the legislature of the state of Illinois passed a joint resolution reciting, in effect, that owing to the lim^ ited time at its disposal and tlie importance of the ques- tion, a commission should be appointed to investigate the subject of a proper law for industrial insurance, etc. In that resolution it was recited, among other tilings, as a commentary upon the sad conditions existing. ‘This melancholy fact, of which all are conscious, poisons the present and fills the future with fears.’’ The report of that commission published much valuable information in connection with the report. It drafted two bills, one making it lawful for employer and employe to enter into a contract to insure the employe against acci- dents occurring in the course of employment, and that in consideration of such insurance the employer should be re- lieved of the consequences of injuries, under other provis- ions of the law. The report covered not only that bill but a form of contract and bond which the parties might exe- cute. The committee also reported a second bill some- what along the lines of the German bill, which their coun- sel advised was unconstitutional; but they reported it up- on the theory that it loould be valuable as (in educational measure, and that someivhere, sometime,’ some legal talent would rise up that would be able to enact a law that would conform to our constitutions. We call attention to this and the Connecticut report with a view of justifying such elaborate discussions rather than setting our judgment against theirs. The Illinois commission is still in existence, but the bills which it recommended were not adopted, and it is, as we understand, from one of its members, not very active at 190 the present time as a commission, although Prof, Hender- son, one of its members, lias been quite active in the study of the question. Massachusetts had a joint special committee, consist- ing of three members of the senate and eight members of the house of representatives. That committee had sub- mitted to it various bills. It held a great many public sessions, and finally a majority made a report to the effect that absolute liability should not be imposed upon the em- ployer, but recommended a law permitting the employer to submit to the state board of arbitration and concilation a plan based upon the percentage of the earning capacit}^, under the common law or liabilities act, b}^ which he might settle in case of accident. Of course the majority disagreed or there would have been no minority. New York and Wisconsin have commissions also. Connecticut had a commission appointed in 1907, that commission reported, among other tilings: ^‘The committee unanimously agree that very prob- ably the future relations of'employer and employe will - be settled by legislation along this line. ^‘The committee have not been able to agree in the matter of recommending such an act at this time. The representatives of the employer and labor classes would have been willing to recommend a bill which should provide, first for definite and limited compen- sation to employes in certain lines of industry for all injuries incurred in the course of their employment resulting in death or permanent disability; and sec- ond, the opportunity to insure against injuries and sickness. The compensation in the first case to be borne exclusively by the employer and jn the second case the cost of insurance to be borne by employee and employe. The committee, as a whole, however, did not believe the people of this state were ready to take a step so radically different from the present practice. It was also very questionable with the com- mittee whether so small a section of our country 191 should take such a step alone and so possibly place the producers of this state at a disadvantage with those of other states. ^‘The lawyer on the coniniittee thouglit tiiere were possible constitutional objections to an act of this na- ture and questioned seriously its adaptability to pres- ent conditions; and furtiier thought 'it would be un- wise for the state of Connecticut to undertake legis- lation of this character until the public generally had given the matter more consideration tlian up to the present time it has received. ^‘After a serious consideration of the advantages claimed for a Compensation Act and also a considera- tion of the objections raised to the proposal of such an act at this time, the committee decided that it was not wise to recommend a bill of this nature to this General Assembly.” Minnesota. At the annual meeting of the Minnesota State Bar As- sociation held in the city of Duluth August 14-15, 1908, a paper was read, and discussion had upon this question, which resulted in a motion that was finally amended and passed, referring to the Committee on Jurisprudence and Law Reform the duty of investigating the subject and if it thought advisable drawing a bill that would accomplish the results now under discussion. For fear that the com- mittee might put up a radical bill, that association finally so amended its motion as to require the committee to draft the bill, if it could do so, and allow the president to call a special meeting to be held in December, in St. Paul ^to dis- cuss that question. The chairman of that committee was unable to take up the work, as he reported to the presi- dent in the latter part of October, and at his request the president appointed the present chairman of the Minne-' sota commission chairman of that committee. Upon his 192 acceptance, he immediately took up correspondence Avith other members of the committee, with labor leaders, such as Mr. Gompers, Mr. Mitchell Mr. Debs, and the Commis- sioner of Labor of Minnesota and the commissioners of various states and others interested in the matter, with certain capitalists like Mr. Hill and Mr. Carnegie, Avith government officials like the Commissioner at Washington and the Secretary of the Interstate Commerce Commission, with some of the librarians of the best equipped libraries on the subject, and numerous others Avho liad giA^en special attention to the matter. During the course of that correspondence, meetings Avere arranged with the labor unions and the President of the Minnesota Employers’ Association and then with Mr. Mc- Ewen, who was about to become the present Labor Com- missioner, (now both members of the Minnesota EmploA^es’ Compensation Commission) first separately and then joint- ly* The resulting conferences was a petition to the governor of the state to send a special message to the legislature, re- questing the appointment of a commission to investigate the subject, and the passage of a law requiring the data of accidents fo be reported, in order that some definite knowledge might be gained to aid in the drafting of a law. This called forth more or less political discussion, and the matter became one which created considerable contro- versy in the legislature. The result, however, was that three bills were passed; Chapter 286, appointing the com- mission; Chapter 234, requiring insurance companies to report accidents for a certain period to the commission; and Chapter 235, requiring employers to report accidents, with data in connection therewith, to the Labor Commis- sioner. The governor appointed the present commission- 193 ers and they assumed the power or presumed the necessity of hringiny about the Atlantic City Conference. With the question of the desirability of a change tlu^ Minnesota commission lias nothing to do. The legislature of our state has committed itself to the doctrine that the change is necessary. It has directed us to investigate the laws in force in foreign countries; to draft a bill or bills which we think proper to -make the change in Minnesota and present those bills with our report, containing enough data and facts to show the strength and weakness, from a practical standpoint, when considered in the light of our constitutional provisions. The question, then, in Minne- sota., is not whether a change is desirable, but whether or not such a law as the commission may draft shall be a desirable law to effectuate the change which all concede should be made if it can be done fairly to all concerned. The Russel Sage Foundation has sent two vrell equipped gentlemen. Dr. Lee K. Frankel and Mr. Miles M. Dawson, to study the practical workings in foreign countries. Tlie granting of public franchises has not been to labor; the exercise of eminent domain does not fall to its lot; the influences of social and financial standing are not exercised in its favor. Why should not it have thep)rotection which will equalize conditions? Not equalize in the impossible sense of arbitrary destruction of the rights of one in favor of another, but in the sense of equalizing opportunity with respect to a matter where it has not previously existed. The theory has all along been that each human being would select the calling he desired and make sufficient thereby to get his profit above the losses including his own waste and that his health and luck were his capital, his weakness and injuries his misfortunes. If he vrrongfully hurt another he must stand the damages No one doubts 194 that rule when the damage is not one incident to unequal disadvantage or occasioned bj connection with a system for general good which causes injuries. The government has always paid men salaries or wages in war, yet it has recognized that men must be hurt as a part of the system, and for the injuries it has allowed pen- sions. Some of the larger industries are now pensioning their men for business reasons. All stand the element of negligence risk, a few voluntarily assume pure accidents. When the Employes’ Association, tlie workmen, and the lawyers joined in a request for a commission to investigate and draft a law or laAvs on- this subject and otlier laws to get data, our legislature was deluged with bills attempting to get speedy action on the ground of necessity. Anyone of them might have been passed by a majority irrespective of their just application to the subject. That would liave been arbitrary action. Our legislature evidently so felt. But the action which it did take to require the subject to be investigated at home and abroad was the action of that judicial care wliich hears before it condemns and acts upon facts and judgment as distinguished from arbitrary and biased exercise of power. The action iclien tal’en icill not he arhitrary and will he ivithin the police potcer. Tlie government of the United States and a very large proportion, if not all, of the states, will upon admission or implied assumption, agree that the common law has become and is becoming obsolete upon this question, or perhaps it might ratlier be said that the common law has not yet ad- vanced with the times sufficiently to meet the changes and protect against the liazards. In this, instance the movement like the instigations themselves was rather evolutionary tlian revolutionary; but as many of the institutions have 195 been revolutionized there is no reason wliy the theory of recovery should not be revolutionized, if that is necessary to keep apace with the necessities. XII. THE SIMPLEST REMEDY, ALREADY WELL JUS-, TIE LED LOR PROPERTY l^SURAYCE, IS TO FIX A DEITXITE LIABILITY BY LAW FOR HAZARDOUS IXDl SERIES OX COXDITIOX THAT THE AMOUXT OF DAMAGES BE SUBMITTED TO ARBITRATIOX —REPEAL THE COMMOX LAW. Arhitration of insurance problems lil'e this might be re- qnired by the state in furtherance of its police power. This is a risk; it is really an insurance problem and as such must be treated. This does not mean that prevention of accidents, could not be otherwise lessened. But it does mean that as an insurance problem it may be and neces- sarily must be treated as an insurance problem. As such the law would be the same. The field is quite well laid out ; the constitutionality well determined. As insurance it comes within the police power. Under that power the form of contract covering the dangers may be regulated — ^the remedy simplified. In Minnesota we have a standard form of fire insurance policy which requires (Rev. Stat. Minn. 1905, Sec. 1640) : 1640. Standard Policy. — No fire company shall is- sue on property in this state any policy other than the standard form herein set forth, the blanks for which may be filled in print or writing, and no condition, stipulation, or term, other than those therein provid- ed for, whether as to jurisdiction, limitation, magis- trate, certificate, or otherwise, shall be valid if in- 19G serted in any such policy, except as follows: (then fol- lows certain exceptions). In Wild Rice L. Co. v. Royal Ins. Co., 99 Minn. 190-192, the court said: glance at the histor}^ of the standard form of pol- icy makes it very clear that the legislature of this state intended to deprive tire insurance companies of the right to add to or change the terms and conditions of the prescribed form. Th right to make such chang- es and additions is one of the principal distinguish- ing characteristics of the two classes of standard forms. The Massachusetts and Xew York standard policies went into effect about the same time and have formed the models for the legislation in other states. Both states were seeking uniformity of insurance con- tracts, but Massachusetts did not attempt to deprive the parties of the liberty of making their own con- tracts. It merely adopted a model which the parties were at liberty to modify at will. But New York went further and determined the form which all must use with the privilege of adopting certain prescribed claus- es to cover particular conditions. The Minnesota acl of 1889 imposed upon the insurance commissioner the duty of prepareirg a standard form of policy which should be obligatory after that year. The New York form was prepared and went into use but the act was declared unconstitutional because it attempted to dele- gate legislative powers to the insurance commissioner. In 1895 the legislature adopted the Massachusetts form with such modifications as were necessary to avoid conflict with the valued policy law. * * * ^‘The conclusion is inevitable that the legislature in- tended to deprive the parties of the right to make in- surance contracts in any form except as prescribed by the statute. * « * * ^The prescribed form with the changes thus author- ized is the only form of fire insurance contract author- ized by the laws of the state.’’ Wild Rice L. Co. v. Royal Ins. Co., 99 Minn. 190- 93-95. 197 In BtaU V. Beardsley^ 88 Minn. 20-25, it is said: ^^It'lias been licdd that tlie insurance code api>lies to foreign, nintual, unincorporated associations, as well as those properly incorporated, and lliat neitlier can do business in this state without a license. Hcamam V. Christian 1 Mothers Mill (Jo., GG Minn. 205, (>8 N. W. 10G5. In a sister state it lias been lield, under a stat- ute quite similar to our own, that the required certifi- cate must be obtained by individuals or associations doing insurance business, as well as by corporations. mate V. more, 118 Mo. 388, 24 S. w’. 1G4. Sucli a conclusion is inevitable unless we are to permit irre- sponsible persons engaged in a business Avhicli needs supervision by the auiliorities to compete Avith corpor- ations under surveilance. The supervisory provisions of tlie insurance code are a legitimate exercise of the police powers of the state, and there is no discrimina- tion in favor of our OAvn citizens. They apply Avith equal force to all companies and to all persons, the ob- ject of the laAv being to protect the public. All agents acting for individuals, partnerships, associations, or corporations engaged in the insurance business must be licensed by the insurance commissioner before so acting and transacting business, and all are prohib- ited therefrom without this license.’’ State V. Beardsley , 88 Minn. 20-25. Vtlij could not any dangerous employment giving rise to the necessity of exercising police power, be required to make a standard form of contract Avith a similar clause? It is only another kind of insurance. If such contract can be required as a. condition of pen forming that dangerous business and the contract specified by the state, then it could just as well say that the rights exist in every contract of employment and the liabilities fiow therefrom by virtue of the law without contract. The policy also must contain: ^^In case of any loss or damage under this policy, a statement in writing, signed and sworn to by the in- sured, shall be forthwith rendered to the company, set- . 198 ting forth the value of the property insured, except in case of total loss on buildings the value of said build- ings need not be stated, the interest of the insured therein, all other insurance thereon, in detail, the pur- pose for which and the persons by whom the building insured, or containing the property insured, was used, and the time at which and manner in which the fire originated, so far as known to the insured. The company may also examine the books of ac- count and vouchers of the insured, and make extracts from the same. In case of any loss or damage, the company, within sixty days after the insured shall have subiiiitted a statement as provided in the preceding clause, shall either pay the amount for wliicli it shall be liable, which amount, if not agreed upon shall be ascertained by av/ard of referees, as hereinafter provided, or re- place the property Avith other of the same kind and goodness, or it. may, within fifteen days after such statement is submitted notify the insured of its inten- tion to rebuild or repair the premises or any portion thereof separately insured by this policy, and shall thereupon enter upon said premises and proceed t^> rebuild or repair the same with reasonable expedi- tion.’’ Per R. L. Minn. 1905, Section 1640. Arhitratioii as a Condition Precedent to Suit. The Minnesota standard form of fire policy provides : ‘‘In case of loss, except in case of total loss on build- ings, under this policy, and a failure of the parties to* agree as to the amount of loss, it is mutually agreed that the amount of such loss shall be referred to Three disinterested men, the company and the insured each choosing one out of three persons to be named by the other, and the third being selected by the two so chosen. The aAAmrd in Avriting by a majority of the referees shall be conclusive and final upon the parties as to the amount of loss or damage, and such reference,' unless waived by the parties, shall be a condition precedent to any right of action, in law or equity, to recover for such loss ; but no person shall be chosen or 199 act as referee, against the objection of either party, who has acted in a like capacity witliin four iiionths. ^^No suit or action against the conipany for the re- covery of any claim by virtue of this jiolicy sliall be sustained in any court of law or equity in tins siate, unless commenced within two years froin tlie time the loss occurred.” ' R. L. Minn. 1905, Section 1G40. In Sch'uffcr v. Rockford Insurance Co., 77 Minn. 291, it is said : ^‘Most of the authorities cited hy counsel are mere- ly to the effect that an appraisal of tlie amount of the loss, if not waived, is a condition precedent to the right to bring an action to recover for the loss. No- body disputes tliat proposition.” Like total loss by fire, deatli might be so regarded here. The employee could- be relieved of certain things where his loss was total. Provision that others could make his proofs where incapacitated or incompetent could be added. Arbi- tration by a regular state tribunal could be provided as a condition to suit, and the award filed as a basis for a judg- ment. A law leaving the general question of liability to be de- terfnined and s.imply proinding a reasonable method of es- timating and ascertaining the amount of the loss is un- questionably valid. In Viney v. Bignold, L. R. 20 Q. B. D. 172, the court said : *^Tn the present case the insurers have covenanted to insure against loss by fire, subject to the conditions indorsed on the policy. The question turns on the language of the 21st of these conditions, which, after providing for the adjustment by arbitrations of the amount to be paid by the insurers in case of a loss contains this provision, ‘and the party insured shall not be entitled to commence or maintain any action at law or suit in equity upon his policy until the amount of the loss shall have ;been referred and determined as hereinbefore provided, and then only for the amount so awarded.’ The question to be decided is what is the meaning of this provision? I am of the opinion that it means that in case of difference the amount to be paid sliall be determined by arbitration, and until this is done no liability shall arise; in short, the con- dition means what it says; tlie only contract on the part of the defendants which is applicable where, as in the present case, a difference has arisen is that they will pay such amount as shall be awarded by arbitra- tors or their umpire? Speaking of the case of Collins v. Locke, 4 App. Cas. 674, the court said : ‘‘There the parties had agreed to two things: first, that in case of any breach of covenant the party com- mitting the breach should pay 1000-1 as liquidated damages, and, secondly, that all matters in difference should be submitted to arbitrators. The second of these clauses, under tlie particular circumstances of that case, was held not to interfere with the right to sue for breach of covenant. At first sight the lan- guage of the arbitration clause in that case appears similar to the language used here, but there is a dif- ference, for the agreement in that case, after provid- ing in general terms for a reference, contained the fol- lowing clause : ‘And the award of the arbitrators shall be conclusive, and any of the parties shall not be en- titled to commence or maintain any action at law or suit in equity in respect of the matters so submitted as aforesaid, except for the amount or amounts by the said award determined to be paid by any one oi more of the said parties to the other or others of them, or otherwise in accordance with the terms and conditions of the said award, as to the acts or deeds to be made, done, executed and performed.’ ” In the case of 8coU v. Avery, 5 H. L. Cas. 811, on page 847 the Lord Chancellor said : - “There is no doubt that where a right of action has accrued, narties cannot -by contract say that there shall not be jurisdiction to enforce damages in respect 201 of iliat riglit of action. Noav tliis doctrine depends -upon I he <:»’en(Tal j)olicy of tlie law, tliat parties can- not enter into a contract wliicli j>ives rise to a right (d' action for tlie brc^ach of it, and then withdraw such a cas(i from tlie jurisdiction of tlie ordinary tribunals. ]>ut suiady tliere can l)e no princii)le or ])olicy of the law wliicli j)revents parties from entering into such a contract as that no breach shall occur until after a reference has been made to arbitration. It appears to me that in such cases as that, tlie policy of tlie law is left untouched.’’ In Prcs't, etc. 7). & JI. Canal Co. v. Pa. Coal Co., 50 N. Y. 250, it is said : “The distinction between the two classes of cases is marked and well defined. In one class the parties undertake by an independent covenant or agTeement to provide foi* an adjustment and settlement ,of all disputes and differences by arbitrations, to the exclu- sion of the co-urts, and in the other they merely, by the same agTeement Avhich creates the liability and gives the right, qualify the right by providing that before a right of action shall accrue certain facts shall be de- termined or amounts and values ascertained, and this is made a condition precedent either in terms or by necessary implication.” And further: Scott V. A very, (5' H. of Lords Cases, 811) is in principle on all fours Avith the case at bar, and unless we are prepared to overrule or disregard it, is decis- ive. That was an action on policies of insurance, one of the conditions of Avhich was that the sum to be paid for loss should, in the first instance, be ascertained by the committee, but if a difference arose between the insured and the committee, the difference was to be referred to arbitration in a AAmy pointed out by the conditions, with a. proviso that no one who refused to accept the amount settled by the committee, should be entitled to maintain 'an action at law, or suit in equity on his policy until the matter had been decided by arbitration, and then only for such sum as the ar- bitrators should award. It was held that these con- 202 ditions were lawful, and until the award was made no actiou was maintainable. The House of Lords affirm- ed the judgment of the Court of Exchequer Chamber, reversing that of the Court of Exchequer. There, as in this case, in the language of Lord Campbell, the rules and regulations for ascertaining the amount to be paid made part of the contract, and it is not ma- terial that there the contract was express tliat no action should be brought until after the award, while in the contract before us it is implied. It is not nec- essary that it should be put in the technical form of a ^condition precedent,’ and the courts will give effect to the real intention of the parties, as clearly indicated by the agTeement.” In Wolff i\ Liverpool L. k G. Ins. Co., 50 X. J. L. 453, the court said : ‘d)ut the present case, plainly, stands outside of that class, for here the stipulation to refer, instead of being independent of the promise to pay the loss, is attended with the further stiinilaticn, that until such appraisal, such payment shall not be due. Such a provision qualifies, and consequently incorporates it- self with the general promise to pay the loss. It is clear, beyond all possibility of controversy, that the * agreement between the assured and the company was, that if they could not agree on the amount of the loss, the sum recoverable should, if an arbitration were re- quested, be the amount found by the award. Such an agTeement is both legal and reasonable, and it is not perceived that any authority exists, which holds a contrary doctrine.” In Hall V. Xcn'ivalk Fire Ins. Company. 57 Conn. 105, it is said : ^*If parties make an arbitration agTeement which has the effect to oust the courts of jurisdiction, it is held to be invalid, (although more recent decisions questions whether this doctrine is sound in principle,) but it has always been held both by the courts of Eng- land and of the United States, that arbitrations to set- tle particular questions which are auxiliary to the jurisdiction of courts, such as the amount of damages. 203 or liio amount of tlm loss by fire niulor ]Tolieies of m- siiraure, aro binding in la^v, and indeed highly fa- A'ored by eonrts.’- In Real r. Washington Insurance Co., 138 ^lass. 572, the court said : “There is no donbt that an apiiraisal of value, or an award of the amount of damages, can l>e made a condition iirecedent to a right of action. In such a case the agreement is not to refer a cause of action, but that a. cause of actiim shall arise upon the ap- praisal or award, which is ])reliminary to, and in aid and a condition of, the right of action. Hood v. Harfsliorn, 100 [Mass. 117, was a case of that kind. Chief Justice Chainnan said; ‘The ]>resent case comes within the ]U'inciple stated by Coleridge, J., in Avery r. Scoff, 8 Exch. 500, that it is iiot unlawful for par- ties to agree to impose a condition precedent with re- spect to the nuHte of settling the amount of damages, or the time of paying it, or any matters of that kind that do not go to the root of the action.’ The judg- ment of C deridge, J., in the Exchequer Chamber, in Averif V. Scoff, was affirmed in Scoff r. Avery, 5 H. L. Cas. 811, and the question in such cases has been one of the construction of contracts — whether the agree- ment to refer in the particular contract under consid- eration is a condition precedent to a right of action upon the contract, or an agTeement to refer a right arising under the other provisions of the contract.” In Ham iff on- i\ The Liverpool & London k Globe Insiir^ once Co., 13G U. S. 212, 31 L. Ed. 119, it is said : ' “The appraisal, when requested in vunting by either party is distinctly made a condition precedent to the payment of any loss, and to the maintenance of any action. ^‘Such a stipulation, not ousting the jurisdiction of the courts, but leaving th^ general question of liabil- ity to be judicially determined, and simply providing a reasonable method of estimating and ascertaining the amount of the loss, is unquestionablv valid, ac- cording to the uniform current of authority in Eng- land and in this country. Scoff v. Avery, 5 H. L. 204 Cases, 811; Viney v. Bignold, L. R. 20 Q. B. Div. 172; Delauxire & H. Canal Co. v. Pennsylvunia Coal Co., 50 X. Y. 250; Reed v. Washington Fwe & M. Ins. Co., 138 Mass. 572-0; Wolff v. Liverpool & L. & G. Lis. Co., 50 X. J. L. 453; Hall v. Norivalk F. Ins. Co., 57 Conn. 105, 114. This might be done here. The injured AA’onld be entitled to appear before the arbi- trators and submit evidence of his cause. Rediver v. N. Y. Ins. Co.. 92 Minn. 300. The arbitrators would be disinterested. Produce Refrigerator Co. v. Ins. Co.^Dl ^linn. 210. The arbitrators would sit in a bod}’ and be governed by the rules of common law arbitrators making their acts quasi judicial but without so many technicalities as in a law suit. See cases, supra. Christianson v. XoncicJi Union Fire Ins. Co., 84 Minn. 520-530. In the last case it is said : ‘‘The board of referees provided for under the standard policy is a quasi-court subject to the princi- ples governing common law arbitration. Such board should sit in a body, and receive evidence offered by the respective parties, submitting the same to the usual tests of cross examination. While its individu- al members are prohibited from privately collecting evidence from different sources, a reasonable latitude is allowed them in the examination of the premises, remnants of goods, and causes of the fire, for the pur- pose of better understanding and Aveighing the evi- dence on the principal question before them, viz., what is the just damage to the property involved? Jlut, v/hile a certain liberality is permissible in ac- quainting themselves with the circumstances sur- rounding the fire Avithout the medium of witnesses. 205 sm*li board is not soloctod for the purpose of seeking evidence secretly, and deterniininu: the ainonnt of tin* loss by reason of such personal knowledj’e. See au- thorities cited in 2 Am. k Eng. Enc. (Ul-055. This court has practically stated tlie rule in Moi^ncss v. German America)! 7a, Co., 50 ]Minn. 341, 52 X. W. 932. The referees innst constitute a body of disinter- ested men, whose business it is to ]U’oceed in a judicial and impartial manner to ascertain the facts in con- troversy.” Indeed, the last session of the Minnesota legislature (Chap. 167, G. L. 1909) provided for health and accident policies; it also created onr commission to investigate this question. As evidenced by its decisions hereinbefore cited the Su- preme Court of the United States has recognized the right to control insurance problems by limiting and defining the rights of the parties. Indeed the question is no longer open as to fire insurance and if it were a question of in- juries to mules or machines insteal of men there would be no doubt of the right. There is no reason to deny the right to men. XIII. THE FALLACY IX THE MOST OF OFF OBJEC- TIOXS LIES IX THE FACT THAT WE FAIL TO UX- DERSTAXD OR APPRECIATE THE WEIGHT WHICH MUST BE GITEX TO THE POWER TO PRO- TECT THE PUBLIC IXTERESTS. THE POWER OF GEXERAL WELFARE MUST ALWAYS REMAIX WITH THE STATES SUBJECT OXLY TO REASOX- ABLE AXD LAWFUL REGULATIOXS. A review of the origin and history of our constitutional system is suflicient without much reflection to convince the 20G observing mind that our constitutional problems here are more imaginary than real. The difficulty lies not witii the constitution but in the prejudicial awe with wliich we ap- proach it. It was made not to rule, but to serve; to pro”^ tect, not to prohibit ; to secure, not obstruct. It was the result of a revolution in the common law; it intended to prohibit and prevent the evils and hardsliips then known; to reasonably secure the future. The Anglo Saxon was a progressive people. The colonists did intend to protect individual rights, but above all, in their govern- ment, they wanted liberty’ — not license. The state was first, after that individuals. The fallacy in the most of our objections lies in the fact that we fail to understand or appreciate the weight which must be given to tlie power to protect the public interests in all controversies between individuals. This is a power ever present, never lost; it cannot be sold or bartered; all property is held subject to its power of reasonable regula- tion and control. It is a condition precedent to all con- tracts; a safety valve for all action; a supreme factor in all private law. There are other rules with which and to which it must conform but even those rules are blended to protect the public so long as no distinction is made to work unjust and discriminating hardship. The state must be first protected and reasonable latitude is allowed for that protection as based on the equities of the case. We yield to none in our appreciative reverence for the American constitutional system; yet there is a higher and broader patriotism than the one with v.diich that Consti- tution is often approached. It is a fundamental law — or- ganic, yet reasonable; broad, yet blending; restrictive, yet expansive. And the broader view of it is that private in- i 207 dividiials must hold their property and liberty subject to such reasonable laws as the public necessity creates. None can know history and not ax>preciate the exigen- cies which gave birth to the bill of rights; yet none can know jurisprudeijce and not understand that there is a X>ublic right greater and broader than individual rights Avhicli must have greater and broader jiower for its pro- tection and use. Indeed, the very fact that bills of rights are deemed necessary at all is based upon the theory that the state would otherwise have power to disregard them. This being true we look to the form of government to see from whence comes the protection for general welfare. What do we find? That certain powers have been dele- gated to the Federal government, but not the xiolice power within the states. Certain prohibitions are delegated to the Federal government to prevent the states from violat- ing certain bills of rights, but aside from these the power is reserved, and even within them it exists excex>t as lim- ited by the x)rovisions above discussed as to police iDOwer and ill the language of the United States Supreme Court : state has the same undeniable and unlimited jurisdiction over all persons and things, within its territorial limits, as any foreign nation — ^the author- ity of a state is complete, unqualified and exclusive.’’ Equal legal protection can easily be secured in x>olice rights; so can due process of law. Neither confiscation of property nor the destruction of liberty follows from reason- able regulations, for the power is ever present and all rights of property held subject to it. The allegiance granted in consideration for x>rotection implies this regulation. The Constitution is an instru- ment for protection of public welfare as well as"^ private rights. If the government could not x^reserve the general 208 welfare, it would be but an instrument for license as dis- tinguished from liberty. The Constitution was never in- tended to prevent but rather to secure government. It Ava,s not intended to deprive all men of protection, except the one whose rights are particularly called in question, but rather to leave the scheme of public protection without much substantial alteration so long as operated in good faith and equally; and to protect the individual against ar- bitrary, unusual and unreasonable restraint. The power to protect tliis general wCfare is iiilu^reiit in, and remains with, the states, subject only to c(iual and rea- sonable lawful regulation. To secure individual liberty restraints on public rights are necessarj^, but to preserve common liberty, including individual liberty, restrictions on individual riglits are im- perative. Construing the constitutions then, in the light of their creation and objects we find nothing preventing tliis public security, but only that protection necessary for the indi- vidual security co-ordinate with the public Avelfare. Since the first ten Amendments do not apply to state ac- tion, and the Fourteenth Amendment does not interfere with reasonable state action through the police power, wo find but small limitations in this regard. The state has-never given, granted or bartered its police power to any one — it cannot do so. This being true, no person can set up a vested rigiit against the regulation; none can claim injustice on account of it; no constitution^ al provision can be construed to prevent it — else that pro- visiou, if clear, Avould abrogate this power of the state that must ever stand as the bulwark of constitutional security. Since no individual ever acquires this public right; since no property is based upon it, but all held subject to it, the 209 state does not take projierty l)j its exercise. It may be tliat the poAver to exercise has ])een dormant; tliat its exer- cise seems a taking; bnt it is in fact but an assumption of a right always implied and always subject to exercise. It is, therefore, not a damaging to, or taking of, property of tlie individual — it is the assumption of a riglit which for fail- ure to claim the individual may iiave used to his own ad- vantage, but cliarged with the knowledge of its true own- ' ership. The present basis of fault is wrong in principle; insuffi- cient in practice. With the experience of the more important foreign coun- tries committed to the doctrine of the change of basis ; Avith the recognized necessity in a number of states to attempt to make the change; with the present conditions admittedly unsatisfactory; with the Supreme Court of the United States committed to uphold laws, making some changes within the police power; and with two of the most noted presidents officially pointing with humiliation to our ob- solete system, a third having publicly acted upon it ; with all other financial risks of the industries rightfully as- stimed by the employer; with the risk of pain and suffering unavoidably cast upon the employee ; can anyone doubt the necessity of correcting this condition or the propriety of changing the basis of recovery from that of fault to that of risk of the industry — on a fair limit to both parties. With all this, and more history, it is apparent that the movement is based upon reason — not arbitrary action. It would have been exceedingly easy for many states to have passed laws, if arbitrary laws would have done, but the ac- tion of these states as well as the Atlanta City Conference conclude all question of arbitrary action. It is no move- ment having the police power as a mere cloak, and no 210 court can ever say — unless it say arbitrarily — that the inovenient was not without consideration or reasonable basis. It is a notable fact that while we have been boasting of our elaborate system of American constitutional and pri- vate law, some of the foreign countries, a few of which like 'to put it that they are unhampered by constitutional lim- itations, have been seeking to enact laws to right this evil, and many of them think that they have succeeded along the lines above indicated. We were the first in modern times to adopt a successful written constitution in the sense of a fundamental law that should under all circumstances be supreme to all oth- er private laws. But from our constitutional system the or- organic act of Canada, the constitution of Australia, the constitutiouvs of the Central and South American Republics, of Mexico, of Norway and Sweden, of Prussia, of Italy, and many of the other European countries copied niucli ; in sub- stance, if not in form, although some of them are theoreti- cally built upon granted power from the Rulers. It would be surprising, if not humiliating now if we should permit those countries to take from us a very large portion of the best of our constitution and yet reserve to themselves the right to dispose of evils which we cannot overcome by rea- son of our constitutional limitations. If Ave understand the facts correctly, there have been in single years recently as high as an average of one man killed or crippled on every 21 miles of single track railroad in the United States. Counting the family at five, you could hang tAVO members of the family on eA^ery mile post of eA^ery single track railroad for the injuries receWed di- rectly affecting them, in that occupation, in a single year. Indeed, the records of a recent year sIioav approximately 211 51 times as many men killed and injured in the i)eacefni pursuit of railroadinii,' as were killed and injured on the Union side in the dano-erons oeenpation of war, at the bat- tle of Oettysbnri*’. Probably ime half million men are X>artial victims of the industries of this comity annual- ly. It would indeed be a striking and sad commentary'on civilization if we could not, or would not, legislate to right this wrong in some way that can be found. Xow is it an abuse of discretion to say that such legis- lation is necessary in substantially all the countries of Europe? Have all those countries acted arbitrarily upon the question? It has not been the lot of i)easantry to be es- pecially favored, unless there be motive for that favor. Xeither has it been the lot of labor in this country to exer- cise nnnecessary special privileges. When the risk of building a railroad was considered too great for private enterprise the government assumed it. When the state had created a system of railroads too powerful for private negotiations it created a railroad and Avarehonse commission to counter-balance. AVlieu the government found that private citizens and its courts could not promptly handle the interstate commerce problem it created a commission to simplify the process. When the states liaA^e found priAate enterprise unable to hold agricultural shows they have created public funds for general good. When they haxe found private education inadequate to meet public demands they have created great educational systems and institutions; but only recently have they aAvakened to the great fact that provision for mechanics and artisans and protection for their employers is as neces- sary to the j)eople and as just an obligavion of die state as are all these things. 212 aONCLLl^ION. I. Public work is not controlled by the constitutional rule as to freedom of contract. II. The relations of the people to the governments of the United States and of the several states are based upon contract to which individual rights are enough subjected to protect the general welfare, at least under the police power. ' III. The commerce clause of the Federal Constitution grants to Congress the right to control relations of master and servant in so far as needed in such commerce, but does not grant to the Federal Government the right to deprive the state of its police power or to regulate state com- merce. (a) The commerce clause was not intended to, and does not, take away the police power of the states. (b) The states execute the police power even with re- spect to interstate. commerce but do so only for their self protection and only to such extent as not to amount to regulation in the constitutional sense. IV. The police power of the people of the several states was never delegated by the Federal Constitution to the na- tional government, nor prohibited by that instrument to •the states. 213 (a) The Fourteenth Amendment was not designed to destroy the state's police power. V. Some of tlie usual constitutional objections against laws are not applicable to this question for they do not apply to: tlie state if it stays Avithin reasonable, equal, and law- ful regulations of dangerous employments. (a) Tlie first ten amendments to the Federal Constitu- tion apply only to the Federal Government and do not re- quire the states to giA-e the jury trial but probably AAmuld require such trial in the Federal Courts, Avhere they have jurisdiction. VI. The Fourteenth Amendment to the Federal Constitu- tion is a prohibition upon the states — not ujjon the na- tional government. (a) The privileges and immunities secured by that in- strument are those which belong to citizens of the United States as distinguished from citizens of states. (b) Equal protection of the laws is construed by the hVderal 'Courts as it is by the state courts to permit rea- sonable classifications treating those within the class ccjually. This is no bar to such law. ( c ) The due process of law provided by the Fifth Amendment applies only to the Federal Government but in the Fourteenth Amendment it is a prohibition upon the states. (d) The Federal Constitution, however, does not con- trol mere forms of procedure in or regulate the practice c^f state courts. All that it requires is that at some point • 214 in the controversy there must be a time and place for the court to adjudicate the legal liability after fair hearing. (e) It is not taking private property without due pro- cess of law within the constitutional provisions to require dangerous employments to be liable for the risks of the inj ury without any particular fault in the special transac- tions. (f) The jury trial provided by the state constitutions is the trial of such cases as embrace principles secured by the constitution when it was adopted and not a trial of matters involved only in neAV laws such as this would be. VII. This sort of law would not take private property for public use by reason of two principles. (a) Under our social compact the private owner has no ownership except that which is subject to reasonable control such as this would be. (b) The private individual has no right to complain of the taking of only so much property as is an aid to gov- ernment operation by reason of the last above principle. VIII. The Fourteenth Amendment secures the liberty of con- tract between employer and employe except when limited by the police power ; the exercise of the police power rests in the legislative department; the courts interfere to up- hold the constitution only to prevent arbitrary power from being exercised under cover of the police power. (a) The courts recognize that the employer and the employe do not stand on an equality in making their con- tracts. (b) ,The police power is used to regulate insurance of 215 private property and tlie control of employer and em- /ploye. (c) No owner of property has the right to claim that a contract previously in existence has been changed in its obligations by reason of the exercise of the police power because the implication of the power always went with that contract as a matter of law. (d) The police power can neither be legislated nor con- tracted away. IX. . The action of the state must not be arbitrary. (a) The common law was not made to meet the present conditions and is totally inadequate therefor. (b) The law on this question has not kept apace with industry. (c) The employe carries this risk now. (d) It is a great temptation to perjury. (e) The employer not satisfied. (f) It is insufficient to protect the public. X. The compensation in the modern foreign countries is along this line. (a) What advance has been made. (b) The common law has been modified in many re- spects and there seems to be no reason why it should not be repealed, at least after a reasonable remedy is given in its stead. (c) The Federal Government and many of the states have been working in this change sufficient to show that no party wants arbitrary action but only reasonable reg- 216 ulation, yet, there are doubts in the minds of many as to whether we can make the necessary laws. XI. The simplest remedy, already well justified for property insurance, is to fix a definite liability by law for hazardous industries on condition that the amount of damages be submitted to arbitration — repeal the common law. XII. The fallacy in the most of our objections lies in the fact that we fail to understand or appreciate the weight which must be given to the power to protect the public interests. The power of general welfare must always remain with the states subject only to reasonable, equal and lawful regulations. REMEDY. There would seem to be no good reason why the legisla- ture could not make a simple and adequate remedy along the following lines : (a) Fix a definite legal liability instead of the common law in hazardous employment. Either require the em- ployer to pay all, or the greater part, and the employe to pay an equitable proportion, of the carrying charges. (b) Establish a board of awards, arbitration or refer- ence where prescribed forms of procedure could be liber- all}^ interpreted, and simply, quickly and inexpensively tried to fix the amount of damages as a condition prece- dent to recovery and which as to amount would be final. (c) Allow appeal to regular courts only to show want of jurisdiction, fraud in arbitrators or question legal lia- bility.^ 217 The Chairman : The average workman mav feel ihat he has a gamble in this kind of case, just as in a lottery, to £ret a very heavv verdict. If he understood what a small percentage finaly got to the family, if he understood how much discount had to be made, if he understood also the number of cases that failed utterly, and realized that his chance of getting half or less than half the amount of those verdicts was very light, don't you think it would do a gi*eat deal to change his ideas on that matter? Mr. Lyman: There is no question about that. I was simply speaking on the lu’acticability of suggesting a bill. TJtc Chairman : As I said this morning, we are going to take np seme tlionsands of accidents, trace them down and find ont how mucli was paid ao each family and what it cost to get tliat ajnonnt. From what I know of some few hnndred cases that Avere investigated a short time ago, I think the result will be A^ery startling. Mr. Stone referred to a double liability. As far as I have talked Avitli representatiAes of AA^age earners they are strongly opposetl to any legislation that Avould Avipe out the old common law doctrine. It think that there is a cer- tain amount of support for their position. I -don't think a careful employer should be left on precisely the same basis with a negligent employer. I don't think the law should relieve the employer from — you might say — the penalty for his negligence. We start on the assumption that we must hold the employer responsible for his own neglect, and then somewhat illogically say that he is re- sponsible for the negligence of the next man, the next man, and the next man ; AA’e have been carrying the vice principal doctrine to a point Avhere it may become as ridiculous as the old fellow-.servant doctrine. Xow, if a workmen's com- pensation act with a fixed compensation were passed on the 21S one hand, and some of the existing niodifications of the old common law doctrine repealed, and then within narrow limits, where the negligence was true negligence and could be attributed to the employer directl}^ — Mr. Gillette: Or to the employee — his own gross negli- gence? The Chairman: I am speaking of the point of double liability — would it not eliminate much of the bases of liti- gation. If you limit the employee’s right to sue, that is, if you 'even make the employer more responsible than now for his own negligence, but reduce the number of vice prin- cipals, thus bringing the cases for suit down to where there is actual negligence for which the employer should be pen- alized, wouldn’t that difficulty disappear, Mr. Stone? Mr. Stone: The difficulty is to prove the fact. That makes a fight at once. There is your practical difficulty. The Chairman: But the narrower you make the em- ployers’ liability, the less reason there is for litigation. In those states in which the laws are rather drastic and in which the old common law has been largely modified, I am wondering whether such a campaign could not be car- ried on as would induce, as a practical proposition, the representatives of the labor organizations, or the wage earn- ers, to say ^^we are in favor of a workmen’s compensation act; we also want the right to sue, where there has been clear negligence on the part of the employer; but we will make this compromise — we will take a workmen’s compen- sation act, and waive some of the statutory modifications of the common law which extended the liability of the em- ployer.” It seems to me that along that line lies the pos- sibility of getting together and getting some practical sup- port which would secure that kind of legislation. And if you limit the employers’ liability more and more, the 219 cases that could arise under it would be very very few. Xor do I think it desirable in this country to get away from giving a right of action against the employer for exr treme negligence resulting in bodily injury or in the loss of human life. Mr. Parsons: When you spoke of ‘dimiting** the em- ployers’ liability more and more, which way was your mind running? Did you mean to increase his liability or di- minish it? The Chairman: When I spoke of employers’ liability, I meant the present way of holding him liable for his own negligence. In some states the vice principal doctrine has been extended to cover almost everybody. My idea is to limit it more and more, so that it could be traced to a responsible party; to take it back more nearly to the old common law doctrine before it was amended by statutory enactments. Mr. GiUette: Xow we are discussing ‘^possibility.’’ There are only one or two employers here. I am one of them. And I will say, gentlemen, frankly, that I don’t be- lieve there is any possibility of enacting a workmen’s com- pensation law if you proceed upon that theory. I don’t know a thing about New York or Illinois or Wisconsin, but I don’t believe a law can be enacted in the state of Minnesota that is not reasonably satisfactory to the em- ployees and reasonably satisfactory to the employers. I don’t believe, at this stage of my investigation at least, that any compensation act will ever be satisfactory to the em- ployers which leaves them with this double liability — and I don’t believe it ought to be. On the one hand you have to-day, as I understand it, about eleven per cent of recover- ies. You attempt to create an absolute liability now and to compensate the other eighty-nine per cent. In consideration 220 of tliat tlie workmen core to to a, crept the compensa- tion naniecl in the act. To my own mind it would he not only manifestly unfair and unwise hut ahsolutely unjust to subject the industries of any giA^en state to this selfsame double liability. If I thought that that was what this movement meant — ^to maintain something of that kind, I should lose very much ot my lieart in it. I do not believe, Mr. Chairman, tliat tliere is any possibility of a workmen’s compensation act unless it is approaciied both from the standpoint of the employer and the employee, with a spirit of yielding and of compromising and of doing tliat Avhich Avill accomi)lish the greatest good. Inasmuch as over fift}^ per cent of those who are injured to-day in our industrial undertakings Avill tlien Ite provided Avith accident insur- ance, I believe that if there is an excessive cost under that system those Avho are getting that accident insurance ought to contribute toAvard it. I belieA^e that there are many rea- sons Avhy that element ought to be introduced into this prop- osition. And I say that if you approach this subject entire- ly from the standpoint of the student of sociology or from the economic standpoint alone — ^to you gentlemen Avho have not had experience in industrial occupations I say and I say it without misgiving, that you will make a very great mistahe. This conference to-day is charged with a most grave responsibility. It is initiating a movement Avhich may possibly not only be statewide hut country-Avide. And I say that if you do anything that is going to cripple the industries of this country, possibly it were better that the workmen of to-day should continue to suffer the injus- tices Avhich I concede in some respects they do suffer, than that employment be taken from them and that they fly int(^ the hands of ills they knov/ not of. Personally I believe that this question is possible of solution along sane 221 / grounds, but I say that it is only possible of solution pro- vided the gentlemen who are liere to-day charged Avitli this responsibility, approach it Avith regard not only to the rights of one but to the rights of all, and that if you at- tempt any line of action which Avould be unjust to the in- dustries of the country, you cannot, in my opinion, enact it into legislation — and Amu ought not to; any more than you ought to if the attempted line of legislation did not meet Avith the favor of the employed classes. I do not like to see direction given to this meeting Avhich AVOuld seem to indicate that Ave may get into politics and pursue a' line of action Avhich may be expedient but not be right; because I do not believe that this question Avill ever be settled un- til it is settled right, and it cannot be settled right until it is settled Avith equal justice to eAmry interest concerned. Mr. Diiicso)i : Concerning Avhat may be ‘'^possible” in re- lation to the matter immediately under discussion, I AVOuld like, first of all, to present an argument the facts of which do not appeal to me but Avhich might set the minds of Mr. Gillette and other employers at rest on this matter. In Great Britain they have to-day, as they would have in New York if they Avere to adopt a Avorkmen’s compensation act Avithout repealing anything else, three separate methods of recover}^ : One under the old common laAV ; one under • the act of 1880, Avhich is more liberal than any act in the United States at the present time excepting the recent con- gressional act ; and one under the workmen’s compensation act. The Avorkman may take his choice. I talked Avith the manager of the Ocean Accident (a former client of mine) in London, and found that it Avas his opinion — and I liaA^e understood that it aa as the opinion of other men in charge of insurance companies doing business' there (the Ocean I believe doing one of the largest businesses in em- 222 ployers’ liability insurance) that this has not cut much fig- ure. There have been a few cases where there were em- barrassments of annoying litigation, l)ut tliey liave been rare and they iiave not been expensive. I am also informed that comparatively few liave sued under the common law or under the em'ployers’ liability act of 1880 , and tliat in p^oint of fact there has appeared to be no occasion for the repeal of the old laws or for stirring up any trouble over the matter. Now, I have stated tliat these facts do not ap- peal to me. The British law on the whole is the least sat- isfactory in Europe, and, in my judgment, the very things that we are discussing comprise some of the unsatisfactor}^ features of that law. The British law Avas on the basis of going just as short a distance in the direction 'of the adop- tion of the correct principle as possible. They accepted the principle of workmen’s compensation, that is, that a part at least of the financial loss due to industrial acci- dents should fall upon the workingmen; the,y practically fixed the percentage at fifty per cent of his wages, in order that he might only get half the benefit and therefore the employer suffer only half the loss. They fixed the lowest percentage in Europe, and the least satisfactory percent- age. They provided for a lump sum of three years’ wages, to be paid in one lump, Avhere the man died. The present parliament, if they continue with that law, is practically certain to change the basis in regard to that. We spoke of waste this morning. I cannot imagine anything that is more com|)letely AA^asteful than to provide that in case of death a lump sum larger than the family ever had at one time before should be given to them. They retain the old common law and the employers’ liability act of 1880 be- cause of the same idea — ^that there might be larger lump sums collected. They permitted the employee to sue under r 223 ' , that act or under the common law, and in case he did not recover they gave to the judge in that very proceeding the right to give him his benefits under the workmen’s com- pensation act. In other words all he lost by suing was the delay; there was no additional expense. They. did discour- age the bringing of suits under the old laws by two things; one was that the man could get the workmen’s compensa- tion benefit virtually immediately, and, in general, the workmen’s families needed money and they took advantage of that. Another discouragement which was equally prac- tical was that they limited the amount of the fee that at- , torneys could collect in these cases. If a similar limita- tion were made and a similar privilege to receive immedi- ate benefit under a workmen’s compensation act were given in our oAvn state of New York, I am of opinion it would have very much the same effect that it had in Great Britain. I am satisfied that if in New York City the sitting judges were able at any point in a trial to make up their minds that it should be taken from the jury and an award made under a workmen’s compensation act, away the case would go from the jury; and the lawyer would get his little |10 fee — if that Avas the amount fixed by statute. Practically, I don’t think that the question whether we should do away Avith the old employers’ liability acts or Avith the common law liability, is of so much importance as employers seem to attach to it. The Chairman: If a man lost his case and had to ac- cept an award under the compensation act, wouldn’t he have to accept it less the cost of the litigation? Mr. Daioson : Yes. And that is a practical discourage- ment. Mr. Gillette : It occurred to me that if there is to be a double liability, that is, a recoA^ery under a workmen’s com- pensation act and the right to sue at common law, it should 224 be considered in eillier one of two lij>‘lits; tliat eitlier it does cut some figure and adds to tlie cost of insurance wliere in- surance is carried, or that tliere are large recoveries under it, or else it is not any good and ought not to exist. How do you escape from that ])osition? Daicson ; Personally T am on your side of the fence. Both from the standpoint of what legislation we can get, and from the standpoint of what we can maintain in the courts after weihave got it, if it is possible to do away with the old common law theory and the employers’ liability act entirely, I personally think tliat should be done. I am merely saying that I do not think it is so important a mat- ter that if it ])roved to be impossible to do so (either on constitutional grounds or on the severely ]iractical ground of what we can get the employers and the labor unions and laboring men of the country to accept at this time,) that we ought to abandon our efforts to y)ut through legislation. We have the example of Great Britain. They have since amended those laws twice, in Great Britain, and at neither of those times have thew seriously considered doing away with the employers’ liability act or modifying the common law rules. It has been considered there that it is of no practical importance, that stirring it up creates dissension and strife, and that they ought to leave it alone. That is the reason they have left it alone. 4/r. Gillette : I can readily conceive that there might be a very small number of suits brought at common law as compared with the total number of accidents. Still, does it not influence settlements? In other words, are there not a considerable number of settlements made in excess of the compensation made in the law, to avoid litigation, and consequently the cost of the risk materially increased?' Is it not true also that the Ocean and other companies, after 225 N their experience of the first year of the operation of the new law, were obliged tx> increase their rates nearly “forty per cent? Mr. Datvson : They have increased their rates. I do not know the percentage. I>iit the new law covers a long list of occupational diseases. That is the principal reason of that increase. So far as the other part of your question is concerned, to the best of my recollection (and I will ask Dr. Frankel to correct me if his memory is different from mine) the manager of the Ocean informed us that the com- pany did not consider that on the whole that was of any great importance in any way; that it had not cut any great figure at all either in settlements or in suits. The suits had fallen from perhaps 30 or 40 per cent of the cases where accidents occurred, down to a 'fraction of one per cent, so far as the old employers’ liability act was concerned. Mr. Gillette : That does not show tliat it has not influ- enced the cost in settlements. Mr. Datoson::^ I think it lias to some extent, although he didn’t feel that it had cut any great figure, as I under- stood him. Now, my own experience in dealing with private indiv- iduals in making arrangements for the protection of their employees (and I think the insurance men present will bear me out that it accords with their experience with em- ployers). is that where they have insurance, as a class they desire the settlements to be as liberal as possible. It is my impression that if this thing can be worked out in such a manner that complete and full and fair indemnity would be paid in such form that it would be most useful to the workingman and his fahiilyin the event of this kind of dis- tress, the desire Tor even the possibility of large verdicts will practically die. Under the British system of offering 22G only tliree years’ waj^es in the event of the death of the emplo^^ee, payable in one sum, I am not astonished at his suing; but I cannot conceive of the German working-men making any great effort to maintain as an option the right to sue under an employers’ liability act, for the reason that the benefit to a German working man Avho is permanently and totally injured is two-thirds of liis entire wages as long as he lives; and for the further reason that the benefit paid his Avidow is fortj" per cent of his Avages as long as she re- mains his AvidoAV, and that the benefit to his minor chil- dren during their minority is fifteen per cent for each child, Avitli a maximum confined, as I remember it, to two-thirds of the Avages for all of them including the widoAv; that is, the same amount the man himself Avould have received if he had been permanently injured. Now, in point of fact that proAudes for that man's family, in a manner that no lump sum would be certain to provide for them — even the Avhole |40,000 verdict that has been mentioned; and I be- lieve the working men of this country can be induced to see it in that light. And I am frank to say, from the stand- point of those of us who are not working with our hands for wages, that a provision for our families in the event of our respective deaths or our total and permanent disabili- ty, that would take such a form as that and be reasonably adequate, would, as we sit here today, be more satisfactory to us than the possibility of collecting a large lump sum of money. Therefore if this thing could be worked out on some basis that would give reasonable or if possible en- tire assurance to the working people of this country that they would have precisely the kind of benefits that would accomplish the purpose that we desire to accomplish, I be- lieve that on the whole there would not be any great num- ber who would desire to retain any remnent of the old law. 227 I may be wrong, but that is the way I view it. From the practical standpoint, in the little Rhode Island experiment that I. have already adverted to, where the workingmen are not required to accept the benefits at all but have a perfect right if they prefer to sue the employer, they have had one suit, I believe, in eight years. They are disposing of over |25,000 a year in benefits. And in point of fact they have only had about half a dozen compromises based on the idea that they ought to pay more than the ben- efits provided. The reason has been as soon as a man is injured something is done for him; these payments are commenced, and he and his family get the benefit of a pen- sion of so much a week which is paid as long as that dis- ablement continues. Those object lessons are having their influence. ilfr. Mercer: In investigating this matter, one of the Illinois 'Commission who went to Europe wrote me that it was his opinion that one of the chief reasons why the Brit- ish act had not been a success was that it was not compul- sory; that ds, that they were given the option of accepting either one remedy or the other, as they saw fit. I would like to know what 3 "ou think of that. And, in the second place, the suggestion was made by the Chairman, if I un- derstood him, that the liability be made certain and no penalty fixed for negligence in the way of an increased amount. Could jou accomplish the same result by making it a criminal offense not to keep up appliances, or would the increased cost of insurance which the insurance companies wonld eharge a man that did not keep his business in good condition have that effect? Mr. Datoson: As to the British act, I never have met anybody in Great Britain who aeknowledged that it was not successful. They think it is successful. The general / impression tliero is tlmt it should lie extended, and tliey Inive been extendini*’ it; and ])roj)ose mnv to extend it to compulsory insurance a.i^^ainst sickness and to ])rovide for total and permanent disability from any cause; and, in my judij,'ment, they will introduce compulsory insurance as Avell. Personally I also exjiect to see tliis right of an op- tion disappear. I think eventnally it will be wijied out, because the .workmen Avill see no reason for keeping it u]). Mr. GiUcttc: T have understood that there Avas not tlie same incentiA’e oA’er tliere for bringing suits at common Iuaa' that there is oaw here; in other AA'ords, that the excessiA^e A^erdict Avas more rare OA'er there tlian it is here (and the excessiA'^e AT^rdict of course alAA’ays stimulates litigation). Furtlier, that these cases are not submitted to the jmw OA^er there the AA^ay they are here. Isn’t that right? I sim- ply desire information as to the conditions existing there and here and as to whether the same temptations exist there to bring an action at common Ptaa^ that exist here. Mr. Dawson : I think you are correct as to the exces- siA^e Verdict. A A^erdict of |35,000 in faA^or of a working- man or because of the death of a workingman, would prob- ably be unprecedented in Great Britain. But I am not sure that there are not verdicts that appear to them to be similarly excessive and similarly attractive. Mr. GilJcfte : Do they haA^e jury trials? d/?’. Dawson : They do have jury trials, although the right to a trial by jury is not so perfect and complete as it is under our constitutional provisions. Mr. Gillette: And the ambulance-chaser is unknown there? Mr. Dawson : Well, he is now. He was not, prior to the passing of this law. The ambulance-chaser is not a common thing in Great Britain, because the legal profes- r 229 sion is more confined there than it is here, and it has its own ethics and enforces them pretty severely. There was ambulance chasing in Great Britain, there is no doubt about that, until there was an act regulating the fees that these lawyers could charge. Now, as to the second part of your question, Mr. Mercer, I think it is true tliat the certainty of a penalty in the way of a higher rate of premium, for failure to have safety ap- pliances, etc., will do, and always has done, more to cause those safety appliances to be installed than any feeling on the part of the employer that he may possibly have an ac- cident and that there may possibly be a large verdict against liim. The only variance from that situation is just after he has had an accident and has had a large ver- dict against him, perhaps, in consequence. Of course when that happens he has a great many safety appliances intro- duced very promptly. There is no question that a smart increase in his premium over what he would have to pay if he had safety appliances would be a tremendous incentive to the employer to put them in. And the most effective work in favor of safety appliances that is done in any coun- try in the world, is done through the Mutual employers’ liability insurance companies under the German law. MORXIXG SESSION JULY 30, 1909. Mr. Meager: Mr. Chairman, before we begin our dis- cussion, I have two resolutions which I would like to sub- mit : ^‘First, Whereas^ no convenient compilation of the laws of. other countries in regard to workmen's compen- { sation and insurance for industrial accidents is available 1 in English; 2 Resolved, that this conference respectfully request the Commissioner of Labor of the Lmited States to have the f full texts of such laws translated into English at the ear- ^ * i 230 liest possible moment and pnblisli tliem in a bulletin of the I^nrean of Labor. The second resolution is as follows: Whereas, authori- tative information in regard to the comparative cost to the employer of employers’ liability insurance, as under the American sj^stem, and workmen’s compensation and acci- dent insurance, as under the British and German systems, respectively, is not available in the United States; Resolved, that this conference respectfully request the Commissioner of Labor of the United States to have a study of this subject made by a competent investigator, and the results published at the earliest practicable moment, eitlier in a special report or in a bulletin of tlie Bureau of Labor. il/r. Dawson : I move that the resolutions be united and reported on as one. Mr. Gillette: I am in favor of the resolution, but I would like to have those statistics come back to this con- ference and be chewed over before they are published. I think possibly this conference might give valuable informa- tion and suggestions to the department before the bulletin ultimately goes to press for general distribution. Mr. Mercer: Mr. Chairman, if you submitted the ad- vance sheets of that report to the different members on the committee so that they could take it up with their respec- tive states, don’t you think that would answer the purpose? Mr. Gillette : Yes, I think that would answer every pur- pose. ( The motion that the resolutions be united and reported on as one was seconded and carried, and the resolutions adopted as read. The Chairman: Gentlemen, the topic for this session is the practicability of workmen’s compensation acts. Mr. 231 Clarke is not present. The next name on the proiiTaiii is that of Dr. Frankel. We would be very glad to hear Dr. Frankel discuss the question of practicability. Dr. Frankel: Mr. Chairman and gentlemen, a few days ago I was asked to read the manuscript of a forthcoming volume on the subject of employers’ liability. In tliis vol- ume the author says that the United States may x^^rhaps consider herself fortunate in tlie fact that she still has no workmen’s compensation act, for the reason that she now has the experience of all other countries to guide her. As a result, if the states ever adopt a workmen’s compensa- tion scheme it ought to be possible to get the best. It seems to me that the question of practicability is rather well answered by tin's statement, including, as it does, the fact that all countries excepting tlie United States have to-day a workmen’s compensation act in some form or other. Many of these acts have been in force for a comparatively long period of years, and have shown in their administration that they are feasible and that they largely answer the purpose for which they were enacted. We want to be a little careful about our statements this morning and not indulge in exaggeration. I repeat, in the main the laws have protected workmen against accidents by preventing them, and, in addition, have insured com- pensation when accidents occurred. From the standpoint of practicability the testimony is ample that other countries are administering laws in which the workman is protected, not through liability laws such as we have in the United States with a fellow-servant doc- trine and a negligence doctrine. Accidents are admitted to be chargeable to industry. The workman who suffers / accident as a result of his contact with that industry is proportionately compensated. As a ^^priK'ticar' jiroposition, I tliiiik wo consider the subj(‘ct imdor two li(‘ads: (1) wliat is beiii;]!: done in other countries; (2) what can we do in tlie Unit(Ml States based nj)on foreij^n h'.iii slat ion and exjierience? Generally S])eakini 2 :, all coinpeusation laws in Europe are based npoii the i>riinary principle that an indemnity should he paid to an injured workman. Such is tlie coni- ])ensah)ry act in England and in other countries. It has been su])plemented in a few countries by the s(‘Condary ])roiH)sition that the liability which tlie employer is com- ])elled to assume must he iinarante(‘d to the em])loyee under some form of insurance. These are the fimdamentals. Under the former the employer is liable for certain classes of accidents. Under the latter, in addition to assuming this liability the employer must in advance of the accident safeguard the interests of the workman by distributing his risk. The workman in addition to being assured cempen- sation is insured agaiust its possible loss. It is an insur- ance scheme attached to the compensation scheme. The .situation in England probably interests you most of all, because it is most analogous to that in the United States. We discussed England somewhat at length yes- terday, and I do not feel that it is necessary to go into the matter further at present, other than to make a few com- ments. Mr. Dawson stated among other things, in answer (o a question, that he had never heard anyone in England attack the compensation act, and that all to whom he spoke in England were in favor of it. That statement was per- fectly true; but he should have added that he did hear, from Englishmen outside of England, certain statements disparaging to the present operation of that law. These statements must be taken for what they are worth. They are statements, however, that were made to us, and I think iu many iiiistances they are significant. We were told, for example, that the administration of a compensation law in England lias worked hardships. It is claimed that the ac- cident insni'ance companies there in some instances go to extremes in eyading responsibility. I was told, for exam- ple, of one case wliere a. girl who had her leg taken off and who was entitled to receive compensation under the act, was compelled to come, weekly, some miles froih a suburb of London and personally make application for her week- 13^ indemnit^o In other words, the max'hinery of the in- surance sclieme liad not adjnst(‘d itself to meet the condi- tions existing among the working classes. I say it is sig- nificant, furthermore, that at a imHding of the federated British trades nnions, held ni Xottingham last September, a resolution was passinl, and I believe nnanimonsl^', re- (jiiesting the British government — I believe it was worded more stronglv — demanding a compulsory accident insur- ance scheme for British workmen. And representatives of English labor nnions whom we met at the International rongress on Labor Legislation in Lucerne w(*re em])hatic in their statements that fhe compensation plan as at pres- ent in force did not meet the exigencies o-f the situation. I give you those facts, without attempting in any wa^' to express a personal opinion. The English act, in our oixinion, was weak, in that it had not taken into consideration 'existing machinerv in Eng- land ifor its prosecution and administration. I refer in particular to the great Eriendly Societies, which encom- pass millions of members, and nearl.v all of which give not onl,Y sick benefits but also accident benefits. Bepre- sentatives of these associations — of these great big benevo- lent orders, told us in confidence that the societies had reached the zenith of their power, and that between the 234 Avorkiiien’s compensation act and tlie old age pension law which Avas just about to come in force, it was only a (pies- tion of time until the death knell of the Friendly Societies Avould be sounded. The explanation was a simple one. The groupe gave accident benefits. At the same time, un- der the law, the workman Avas entitled to a benefit from his employer. The result aa^us that in man}' instances the compensation AAdiich the workman AA^as obtaining as a re- sult of accident was in excess of his daily AA^age; conse- quently simulation, malingering, ^^soldiering’’ as Ave call it here, Avas on the increase. EepresentatiA^es of one of tlie largest Friendly Societies told us Iioaa' their payments for benefits were increasing because their members were lying .down on them as a result of the peculiar condition of af- fairs. There are similar schemes in many other European coun- tries. I would direct the attention of Commissions study- ing this subject, particularly to the SAA^edish scheme. Mr. DaAA^son is on the program*, and I shall leave the details for him to explain, but it is interesting in this connec- tion. Option is given to the employer under the compensa- tion act of Swedm to carry his own liability, or to insure himself against liability in a private insurance company, or, if he so desires, in a istate department particularly cre- ated for that purpose. There is a very interesting clause in the law, under which the employer is not absolved from liability, by carrying his own risk or by insuring it through a private companv. In particular this has reference to cases ol pe^'iuanent invalidity, where, under the law, a pen- sion is granted to the individual afflicted, and it is required that the capital value of the annuity shall be set aside. Unless this is done through the insurance department, the liability of the employer does not cease. It is very signifi- 235 cant that at first the insurance companies met with popular favor, and were able to give lower rates of premium than the insurance department. At present the department is in the ascendency and the insurance companies are going backwards. I think we are putting it mildly when I make that statement, aren’t we, Mr. Dawson? Mr. Dawson: I think so. Dr. Frankel : As a matter of fact, the insurance com- panies admitted that they could not keep up their exist- ence under the scheme.- Similar schemes you will find in Belgium, France, Italy, and nearly all other European countries with the exception of Germany and Austria. In Germany there is a distinct compulsory insurance propo- sition, .where the employer is required to insure his em- ployees through a trades’ organization. In Austria he is required to do it through district assoeiations. The bul- letin to which Commissioner Neill has called your atten- tion, will detail these schemes, and there is no use of taking- up your time with any description of them at the present moment. We were asked yesterday why we felt so strongly re- garding the workmen’s compensation proposition as it ex- ists in Germany. I do not hold to the view that the trades’ association as there developed is necessarily the best means for carrying out the accident insurance scheme. _ But the development in Germany which is so particularly signifi- cant and which strikes one the moment one sees it, has not only provided insurance against accident, but under the scheme of the mutual trades’ associations prevention of accidents to a' considerable extent has been accomplished. This has not been done in England under the compensation act. It is true that the accident insurance companies re- • quire the introduction of certain safety devices and that 230 the ])reiniiiins of tlie accident coiiqiauies are hi jiroportion. Tliis is ecpiallv true under the coniinilsory sclieine in Ger- many. The individual manufacturer is taxed accordinf^ to a s()-call(Ml danger tariff, based on tlie risks incidental to liis ])cirticnlar trade. Tlie associations liave the ri<»lit un- der the law to comjiel members to live n]) to certain definite rules and re**!! bit ions ])r(‘scrib(‘d by the associations, which, when acce|)t(Ml by the insurance dejmrtment, have the va- lid itv 'of law. Violation of these rnh*s may jilace the immibers in a hi<»iier dan.i>(M* class with correspondingly higher jireminms. For re])eated violatiim he may lie es- tojiped from continning his business. That is the legal side. Fnt if is the (*xtra.-h\gal sid(‘ of the trade associa- tion that has beim particularly valuable. What has ha])- pened is this: These (‘mi>lov(*rs, under the stress of cir- cumstances, (at the beginning unwillingly and raising every objection which they could possibly think of against the plan,) came together in these trades' associations. Where heretofore they had held each other at dagger's length owing to the fierceness of the competition among them when they came together they found that instead of being wolves constantly at each other's throats, they were geiitlemen, each engaged in a decent and respectable occu- pation. They found that they had many things in common. And they found eventually that it was to their distinct busi- ness interests to introduce every form of accident preven- tion existent or which might be devised to 'meet their needs. The result is that today, instead of resisting in any way the introduction of safety devices they accept the principle gladly and are out in the market offering prizes — the trades’ associations themselves — for the best safety devices obtainable. If the statement made hj Mr. Dawson is cor- rect, to the effect that Germany ranks second today in ex- ports with reference to otlier nations, it is larg'eh^ attributa- ble to these trade associations wliicb liave taken np, in ad- % dition to the purely Avorkmen's compensation question, otbei" trade relations and other matters of interest to them as manufacturers. They liaA’^e frequent meetings which are aatII attended, at AAdiich all these questions are consid- ered. It is because they haA^e obAuated AAmste, because they haA^e bronglit cost doAA'ii to a minimum, because they are working hand in liand uniformly, that we feel there is no scheme ot compensation existing in Europe at the present moment that equals tlie trade associations in Germany. In Austria, where the associations are on a 'territorial basis, a difference is noticeable. I do not think Ave need go into this matter any further at present. The details are matters for subsequent study. A AA’ord should he said of the XorAA'egian scheme, AA'hicli is a monopoly. The state department there has absolute con- trol of the AAmrkmen’s compensation insurance, 'and the employer must insure in it. A further Avord should be said of SAAdtzerland — a re])ub- lic A^ery similar to ours in certain forms of its legislation, with a certain .amount of autonomy giA^en to the indiAudual cantons, AAdth certain rights only granted to the Tonfeder- ation. Switzerland aauts practically the first country in Europe to- take up a compensation scheme; in adAmnce of Germany and Austria and the other countries; back in 1877 1 think it AAms. Yet it has taken. Switzerland thirty years to get any further. ^Measure after measure has been introduced, but only in the last session of the Saauss par- Jmment, AAms it possible in the lower house to'pass a com- '^pulsory accident bill which will come up for consideration this fall in the upper house. After mature consideration the Saauss bill adopted -the monopolistic scheme — the Nor- 238 Avegian scheme; with a central state accident department/ This means that the accident companies in Switzerland liave been left out of consideration altogether. T do not express any opinion as to the merits of the bill, I cite it to you, and particularly to tlie members of the commissions to suggest lines along which they may study. The Swiss scheme is significant, because therc^ is no doubt that the SavIss legislators, and tlie governnumt officials liaA^e studied eA^ery other system most carefully. The}^ have been doing so for thirty years. They are experts. Again, the Swiss scheme is novel and of importance in that it Avill use ma- chinery already in existence as the A^ehicle through which to disburse benefits and for other adminlstratiA^e purposes. The bill provides that the State Department shall utilize the so-called sickness clubs. The central department will be the organization to prepare the tables of rates and do all the actuarial work; it will be the recipient of all the funds; but their distribution is to be carried on through the local sickness clubs in the individual cantons. The clubs will arrange that members get medical attendance, physician's services, surgical treatment and appliances, and so on, and will pay benefits; being reimbursed by the in- surance department. Had England taken her Friendly Societies into consideration in a similar fashion, I believe she Avculd have a better plan than at present for the over- lapping and simulation aboA^e referred to would have been largel}^ prevented. I asked the question yesterday whether the Illinois bill was not defeated by reason of the opposition of the labor unions. I think it can safely be said that it was. They opposed it on the ground that they Avere being deprived of their right to sue under the common law. If the consent of the workingmen in the United States is to be obtained 239 to any compensation scheme, it will probably be wisest to get it by making any machinery that they may have, part and parcel of such a .scheme. I know the objections which will be raised to this. You may say that the trades union is a trades union and cannot be considered; that very few trade unions have taken out articles of incorporation. I believe most of them, Mr. Keill, are unchartered organiza- tions, are they not? You will say, likewise, that this ex- cludes the man who does not belong to a trades union. On the other hand, it has been shown in Denmark, where the unemployment insurance is carried on through the trade’s unions, that they have satisfactorily included mem- bers not belonging to trade’s unions. Xow, we have in the United States not only trade’s unions, but fraternal orders, many of which are weak, and are on the point of tottering, for reasons that we do not need to go into now. My own idea is that many of them have gone aside from their original purposes; and have become insurance companies instead of fraternal orders. The original purpose of being useful to their members in time of sickness, and accident has been lost sight of. Here is machinery which might be available for administering a compensation law. I can clearly see the difficulties in the way of such a plan. I mention it only because in Switzer-, land they are going to attempt it and, besides the use of similar organizations, was the basis of the German insur- ance scheme. What can be done by the co-operation of sickness clubs and similar organizations in the prevention of accident is most forcibly shown by the experience of Austria. In Ar- menia the sickness clubs have formed a federation, which looks after the entire medical care of the members of the associated clubs. All that the clubs do to-day is to collect tlio ])r(nniiiiiis and iiav tlie Ixaiofits, tlio iiKHlioal treatiiKMit of tlio inomboi'S o()iniiii> iiiidor tlio o(nitr(d of tli(‘ fodoi*atioii. This oroaiiization koops a oariTul rooord of all casos of . sickness dno to accidont or to had factory conditions, and tahnlatos tlioni nndor the ros])(‘ctivo oniployors. It is to the direct interest of the enqiloyee to report his accident to the federation, heca.nse he knows it is "'oinj^' to liel]i him in the end. The result is that without any tlionf>lit of factory inspection (which is had at its host, insofar as the in- spector can reach a factory only at certain stated intervals and sees it only under the conditions at that monient ai>- Xiarent), under this isclienie tire employer is inTtititnl hy the federation whenever he has had more accidents in his es- tahlishnient within a definite ]ieriod than are normal to his industry. The moral pressure of the federation ami of ])tihlic opinion is hronght to hear upon the employer to rem- edy conditions in his estahlishment, which make for acci- dents. The results have shown distinct improvement in factory conditions and in the introduction of safety devices. The employers realize that there is an extra legal supervis- ion of their industries, and that each employe has become a self 'constituted inspector -and reporter of the vouditions which maintain in his place of employment. The workman contributes towrd kis accident insurance, in Germany, because the first thirteen weeks' benefit are paid not out of the accident fund but out of the sickness fund administered through the ^^Krankenkassen" or sick- ness clubs. This has been done for the reason based on statistics that a limited nnmher of accidents can definitely he proven to he due to the workmen ; a definite nnnibm^ to negligence on the part of the employers, and the gTeat hulk of them to he due to the industry. The employer pays the share of the risk due to the industry, the share due to his 241 negligence, and the workman tlie share due to his negii- gence. ^ In Switzerland the plan contemi)lates tliat the workmen shall he protected not only against industrial accidents but against non-industrial accidents as well. The compen- sation to he given is the iiigliest of any country in Europe, equaling eighty per cent of tlie workman's daily wages dur- ing sickness. Tin's can he done because of the workman's contribution. In addition tlie state is making a direct con- tribution to the premium amounting to one-half per cent of the total Avages. The German .method, as I have said, has been y^ry re- markable along the lines of prevention. It should be re- membered that the German jilan is a continuous ]iroposi- tion. It includes not only accident insurance, but insur- ance against sickness, against invalidity, against old age — and likewise provision in case of death. It is continuous in the sense that the man is not compensated (as Avas men- tioned yesterday) in a lump sum. This ought to be very carefully considered. The earning poAver of the Avorkman has been estimated upon the basis of his expectancy of life, and this in part is assured to his family in case of his death or incapacity through accident. It is interesting to note, ifurthermore, that in the iieAv bill Avliich has just been introduced in the ‘‘Bundesrath’' (the bill Avill be -taken up in the fall, in all likelihood — and is a volume of some 350 or 400 pages, summarizing the experi- ence of Grermany, and the best thought of its insurance de- partment), provision is made for the extension of the so- called orphan's and widow’s pensions to cover not only deaths from accidents but from any cause. It is the Avish of the authorities so far as it is possible to do so through an insurance scheme, to protect the indiAudual Avdrkman 242 and his faiiiily*not only during his life as at ‘present, but to extend the law sO' that when the workman dies from acci- dent or disease his v/idow and children shall not become paupers; that the widow shall be able to maintain herself, and that the children shall be afforded a means of receiv- ing an education until the time they are 16 or 18 years of age. This is a valuablafact to consider. I amy say, for Mr. Gillette’s benefit, that I agree with him thoroughly (and this idea runs through all the for- eign schemes) that the emplo 3 ^er has a responsibility. He is responsible for accidents due to his criminal negligence and for those due to the industr.v in Avhich he is engaged. I think we can probably agree that in any scheme to be adopted in the United States the employer shall be held liable for these. But since the eompensation is to be ex- tended to practically all employees and is to cover the ma- jority of accidents under those conditions the employer should be relieved of the unlimited liability which he has under our negligence law. As in Europe there should be a limited liability so far as the amount of compensation an injured workman ma.v receive, but extended over a larger number of individuals and rovering practically all forms of accident. I should Jsay we would be doing well if. we could agree upon certain of the fundamentals of which I have just spoken, namely, the recognition of the. principle of compen- sation, first of all; second, the recognition of the principle that if the employer assumes additional liability he should in exchange be given certain privileges, particularly a limitation of indemnity; third, that the principle of com- pensation shall not be on the basis of a lump sum payment, but, rather, that it be apportioned to meet the actual loss suffered by a family in the death or disability of a wage 243 earner; furthermore that compensation be so adjusted as to make provision for the incapacitated workman and his family during his lifetime, for the family after his death ^Yhere the children are of working age. I hope that the outcome of this meeting will be some effort toward uniformity in legislation. ' You will notice that I have refrained from expressing any opinion as to whether any of the foreign systems are adaptable to the United States. My own thought is that between the com- pulsory scheme in Germany and the purely compensatory scheme in Englanil Ave shall find some sort of a mean that is adaptable to and that can be practically administered .in the United States. We shall probably find that such a scheme will be adaptable not only to one but to all of our states. Except so far as their geographical situation is concerned, and so far as there may be certain industries in certain localities, there are not sufficient differences be- tween our states to warrant us in having different legisla- tion in each state. If this meeting can do nothing else than to get together on some uniform basis, it would be doing a great deal. I thoroughly believe that if we are ever to obtain such legislation here, it will have to be done by a concurrence of opinion on the part of such commis- sions as are already created, so that each one shall be able to recommend to their respective legislatures a draft of a bill with the statement that this draft has been accepted by the commissions of other states'. The moral force of such a statement in the beginning of new legislation can- not be over-estimated. In conclusion I want to say only one word more. I had hoped that Mr. Glenn, director of the Russell Sage Foun- dation, would be here to attend this meeting. He has evi- dently been detained. But he has authorized me to say 244 to yon tliat if you will liav(‘ a coinmitUM* apiMiiiilcMl i-("])r(^- sontiii'i: your various coumiissious, t h(U*(‘ '^vill 1m* j>lar(*d at your r. FrankcJ: I don’t think tlnw are comi)arable, even, if yon wer(‘ to make one. Mr. (fillcttc: Tliere is mni*(^ in England? ‘ Dr. Frankcl : I shonld not say so, no. The fjnestion of malin<>erin<>- is one that must be a])])roached fr(}m various viewpoints. The rampant mannfactnrer (there are of conrse still a few, yon know, who have not been converted) Avill tell yon' that the scheme is no <»‘ood because tlie em- ployee if he ,i^ets sick or injured to the least extent a])])lies for assistance. There is no donbt that the number of acci- dents in (xermany has materially increased. Wr. GiUctic : The number of claims? Dr. Frankcl: The nnmber- of claims, yes. That is at- tributed to the fact, first of all, that the employee iioav knows his rights, and he makes a claim. On the other hand, it has been definitely shown that the nnmber of fatal accidents, and the nnmber of deaths, luiA’e decreased most materially. Q. Does that apply also. Doctor, to dismemberment ac- cidents? D}\ Frankcl: To serious and fatal accidents, yes; acci- dents involving- permanent incapacity. 246 Q. They have materially diminished? Dr. Franlcel: Yes. I>ut if a man cuts his finger, where formerly he would not Ijave bothered about it and would have kept on witli his work, he now knows he has a right to make a claim and he does so. Q. That is true in Great Britain also? Dr. Franlcel'. I think it is true of malingering every- where. Mr. Gillette: Do you think in Great Britain there have been fewer accidents in the last few years? Dr. Franlcel : I am not able to state as to- England. Mr. Parsons: In Germany do they begin pajdng for the disability at once, or is there some little period for which they do not pay? Dr. Franlcel: The sickness societies take care of them at the beginning. Mr. McEicen : Does not the workmen’s compensation act of England make provision for that? Dr. Franlcel: Yes. If he is disabled for only a week, he is not entitled to compensation. If he is injured for more than a week, then he is entitled to the first week’s compensation — if it lasts longer than two weeks. ‘ Mr. McEioen: Does that have any effect on malinger- ing? Dr. Franlcel : It has an effect on it, because he is not en- titled to make a claim unless he is injured for more than a week. . . It was discovered in Germany that sickness claims in- creased materially. When a man got out of a job he went to a sickness club and wanted relief on the statement that he was ill. Now, we have this not only from the viewpoint of the manufacturer and the viewpoint of the insurance depart- ment (wliicli of course is favorable to the scheme) but we have the direct testimou}^ of the social group ; b^ that I do not mean the Socialist group, but the social democracy — who are largely represented in the administration of the sickness clubs. One leader in particular (who said he could speak for 600,000 workmen in Germany), stated that the general democrats today are firmly of the belief that the insurance legislation is the best thing that could have been given to them.' The thing they ask for is a further extension, giving them further rights and extending insur- ance benefits to other occupations and classes of people. They claim that the so-called malingering is not malinger- ing. Many workmen remain at work even while they are ill, as long as they are employed. The moment they are out -of a job they go to a doctor for treatment. Mr. Mercer: Don’t they examine them when they come for’ sick benefits? Dr. Frankel: Oh, surely. Mr. Gillette: By reason of the contribution of em- ployees to the fund, they are interested themselves in re- ducing the amount that is paid out? Dr. Frankel: To the sickness fund the workmen con- tribute two-thirds. Mr. Gillette : And they are therefore interested in, re- ducing the amount of malingering. Dr. Frankel: Yes. The new German bill reduces the workman’s contribution so that the employer in sickness disability will have to pay one-half. Q. Doctor, did it occur to you that the nationalities in the two countries made any difference in the two systems, that is, that in Germany possibly the government was nearer to the people at large than in England? Dr. Frankel : I think we should have to consider differ- 248 onces in teinporanunit r. FraiiJiCl: Not at first liand, no. Mr. Farsoji.s : Yon said tliey could make no arrange- ment between tlie employers and tlie employees. What did yon ineaii iby that? • Dr. : In the En^lisli law there is a provision permitt ini’’ so-calle(l agreements — “establishment schemes" I believe they are called, whereby an enii)loyer instead of carrying. Ids liability himself or throngh an insurance com- pany may contract with his employees, if he has more tlian a certain nninber, whereby lie can absolve himself from lia- bility by creating- a fund in his own establishment. Wher- ever this has been tried it has gone to jiiecescompletely ; it has not been fonnd possible to carry it on. Mr. (Fillctte: Becanse of the mental characteristics of the people? Di'. Frankcl: Y"es, that was the general expression of opinion. ' » Mr. (iillctte: Assuming that constitutional difficulties can be obviated, Avhat is yoiir conclusion in regard to the advisibility of having a compensation act, at the incep- tion of legislation of that kind, in any given state, com- pulsory or optiontil? D)\ Fimilx'el: Do yon Avant my personal opinion? Mr. Gillette: Y^es, your conclusion so far as yon liaA’e formed one. y Dr. Fraukel : I think the most significant thing that we heard in Europe Avas in last October, at Rome, at the meet- 249 ing of the International Congress on Workingmen’s In- surance. At that time Luzzatti, the former Finance Min- jster of Italy, who had studied the question for 25 years, and representatives of the French Government — Paulet, Millerand and Mabillean, arose and confessed openly in meeting that they were converted to the doctrine of com- pulsory insurance, after 25 years’ experience with it in Germany, but they applied ‘^compulsion” in a different sense. I think we ought to get away from the word “com- pulsion” in anything that we attempt in the United -States. They don’t say “compulsion” in Europe, they call it “ob- ligation.” Now, there is a difference between the two. They consider it the moral responsibility of the employer to see that his workmen are safeguarded. Luzzatti and the -others contended that after this doctrine of “liberty of ob- ligation” was accepted in legislation, the widest latitude should be allowed to the employer as to his method of ad- ministering it. He ought not to be tied down as he is in Germany, to any definite scheme of insurance; let him carry it through an insurance company, or carry it himself if he can prove that he is able to do so. And it is inter- esting to know that Zacher, wdio is the head of the labor statistics bureau in Germany and who was formerly in the insurance department, (Zacher has written a most com- prehensive text book on the subject and I consider him an authority,) in his report to the Eome Congress stated that the “tendenz” in Europe was away from the purely com- pulsory idea and towards the acceptance of the doctrine of responsibility or obligation, with the right on the part of the employer, to carry his liability in any way that he may see fit so long as he does it consistently with protec- tion. Mr. Gillette : That does not quite answer the question 250 I asked, altlioiigli I am j[>lad you liave said wliat you liave. My question is wliether in securing’ legislation in tlie in- ception of tliis movement, you have come to a conclusion as to wliether it would be advisable to impose upon the industries of any state the absolute obligation to come un- der the terms of a compulsory act, or whether it would be better to jiermit contracts to be made as has been pro- posed. Dr. Franl'cl: Itemember, you have got to differentiate now between ^^possibility” and ^^practicability.” We are speaking now of the purely practical ^side. Assuming that it would be a right doctrine, I don’t think we are ready in the United States to assume any such principle. Our whole method of administration is different, and particu- larly our government officials are different. 2Ir. GiUette: Assuming that the Wisconsin or Illinois Commission has to first report, would you advise that they report a bill which will make it absolutely obligatory up- on all industries and emx)loyers to compensate their work- men— Dr. Fi'anl'el: Xo, I would not. Mr. Gillette'. — or would you make it j)ermissible for them to do so under certain limits? Dr. FranFel : The main thing we want to do here now is to make haste slowly. I think if we should make a mis- take, it would set this movement back 25 years. I should say it would be a matter of good public policy to limit this first of all to certain classes of industries' where the risk is great. It is always possible to extend and the tendency would be to extension. Mr. Parsons : You mean ^^great” in the sense of the fre- quency of accidents? Dr. Frankel : Yes. Take for instance the manufacture 251 of gun powder. We know that the risk is much greater than it is in the making of clothing. Mr. Parsons: It is in one sense, and not in another. The accidents might be more seriotis hut not so 'frequent. Dr. Franlcel: But can we not differentiate between certain classes of employment? Take for instance the man- ufacture of white lead. We know that notwithstanding eyer^dhing we can do, lead poisoning results. And there are other employments, similarly, in which occupational diseases occur. Mr. Parsons: Wouldn’t a workmen’s compensation act turn the business on this side of the ocean upside down considering what they are accustomed to pay out to work- men now? And another thing — you spoke of the risk be- ing greater because of the frequency of accidents, not be- cause of the seriousness of them. Just how did you mean to be understood there? Dr. Frankel : The German goyernment has so-called danger tariffs, extending oyer eyery line of industry. I don’t know whether these are based on frequency, but they are based on the final cost. Mr. Parsons : I don’t see how you could haye a tariff based simply on frequency of accidents. The Chairman: If the matter is going to be taken up step by step, as Dr. Frankel .suggests, wouldn’t the natural thing be to start with that line of accidents which im- poses the largest burden on the recipient of the accident? There is no yery great hardship imposed in frequent. acci- dents that lay a man off for a week or two or three weeks ; he can take care of himself for such a length of time. The burden comes when a serious accident happens and disables a man or kills him. Wouldn’t the natural way, Dr. Frankel, be to start in those lines in which the social 0^0 loss is tlie heaviest? Dr. Fraukcl: Fiuaiicially, yes. Mr. Parsons: Then you would run into this proposi- tion, that the minute you would begin to do that, if you could constitutionally, the workman would kick against it because lie woiiM see his possible gains cut down. If yon make it optional with the manufacturer, he will be in favor of it because it will cost him less to administer it than it does under the law as it stands noAV. Dr. Fnnikel: A workmen's compensation scheme of course would not be optional; it would make every manu- facturer liable, assuming Ave had the English law. Mr. Parsons: If you tried to employ that method in work like Mr. Gillette's — steel construction — ^the work- men's repi*esentati.ves Avould all vote against it, because they Avonld get less money that way than they do now. Our practical experience shoAvs that. The Chairman : Do you mean in the aggregate? M r. Pa rson s : Certainly. Mr. Stone: With this qualification: The individual, under the present scheme, if he gets a verdict at all gets more, but fewer individuals get anything. Dr. FranJx'el : Well, isn’t this a question of concession? If the workman knows that he is to be protected in case of practically all accidents excepting those that have been wilfully inflicted by himself (which are, after all, very lim- ited) would he not make a concession to the employer that the latter should be relieved of the liability which he has at present under the common law — where he may be assessed in damages to any amount? That is the crux of the whole subject. For that reason it is a question of good public pol- icy, to get the concensus of opinion of the employer and em- ployee; and you can only do that by concession. 253 t Mr. Blaine: Wliat is the practical method under the English act to protect the employee against the insolvency of the employer? Dr. Frankel : There is none. In France there is. In France the government sets up a special fund which it gets by taxing the employer. This fund is used in case of defalcation or in case of the employer being unable to meet the liability. Mr. Lyman : That puts the government behind it. Dr. Frankel: That puts the government behind it. Mr. Blaine : That is collected from the individual con- cern? Dr. Frankel: From the employer. The employer is taxed for that. Mr. Blaine: Would it be possible under the English act to have a modification along the line of a guaranty, taxing all the industries in certain lines a certain amount to go to a contingent fund in case of insolvency? Dr. Frankel: That is the French method. It is put aside in the shape of a reserve which is applied by the gov- ernment in case of the impossibility on the part of the manufacturer to meet his liability. Mr. Stone: You say that that method has been found by the French people to be unsatisfactory? ) Dr. Frankel: No, not in France. Mr. Stone: I thought you said that they had come to the conclusion that they were on the wrong track? Dr. Frankel: No. I was speaking of sickness insur- ance, not accident insurance. Mr. Gillette: What is the approximate ratio of the amount of what they term their sickness fund in Germany? I believe that is the fund out of which accidents and disa- bilitius under thirteen weeks is paid. 254 Dv. F null'd \ Yes. Mr. GiUvttc'. Wliat is its ratio to tlie other fund — I mean the ai^iirej^ate amount? Dr. Fnuil'cl: 1 do not «et your idea, Mr. Gillette. 'Mr. J)(urson: I think I can answer the question. As I understand (he question, it is, what is the ditrereiice be- tween the a jiji rebate paid in those thirteen weeks and the aggreiiate ot permanent benetits ])aid for that time. Dr. Franl'd: Those tigures are extant, b\it I have not got them. ^h'. Daicson : Isn't this what you are trying to get at — what the aeeidents cost for the tirst thirteen weeks? Mr. (FiUcttc: Yes, and then what the other accidents cost. Mr. IiKjaUs: There is between 89 and 90 per cent loss upon the employei*s for injuries over thirteen weeks. The workman pays somewhere around 11 per cent. J/r. McFicai: That does not take into consideration tJiat the employer also contributes to the sickness insur- ance. Mr. Ihijalls: AVell, that is the answer to his question. Mr. Mcrccr : I understand you are not in favor of a com- pulsory scheme in the sense that you describe it, but I as- sume that your judgment would be that we would have to have our liability definitely fixed. Dr. Fraiil'c] : Yes. J/r. Mcrccr: So that it would be compulsory in the sense of fixing a definite liability. Dr. Franl'cl: Yes. M r. Mcrccr : But that you wouldn't make it definite as to any remedy. Dr. Fraul'cl: I believe that in the United States we should so far as possible administer a compensatory scheme 255 tliroiigli private enterprise. And I believe that when we can once fix liabilit}^ of the employer and the compensation of the employee our accident insurance companies are thoroughly in position to take these matters up as to pre- miums and administration in a manner that would be per- fectly satisfactory. I don’t think we should have to go to the extremes tliat Switzerland has. il/r. fiercer: Tlien, as I understand it, your idea would be to fix the liabilib^ definitely by the law, then fix the remedy wliich we would have under our machinery, and ? then the matter of carrying the risk would be a matter that migiit be liandled by private insurance? Dr. Frankcl : l>y private insurance; defining very carefully, liowever, how it should be done. In nearly every state of tlie Union to-day accident insurance companies come under the provisions of the insurance laws. I don’t think there is anytliing that is so carefully hedged in, so carefully safeguarded, and held so strictly to the require- ments of law to-day, as insurance companies. In their transactions they are an open book. They are compelled to make reports tliat are not demanded of any otlier cor- poration. There is not a detail of the business which is not public property; that is, so far as its being on record in the insurance department is concerned. Mr. Ingalls : Assuming we had power to put in a scheme of compulsory compensation, your idea is that that is not a good scheme? Dr. Frankel : I think that compulsion is opposed to our entire tradition. You must remember that in Grerman^' the people have been hrought up under military rule. The authorities hadn’t the faintest idea, when they introduced the law, what the result would be. When Bismarck first framed his law, he did so for one reason onh^, and that was 256 to overcome wliat lie called tlie machinations of the social democracj, who were forcing his hand. Mr. Gillette: Now, are we all clear on the questions that are being asked in regard to this, and the meaning Dr. Frankel intends to convey? The question tliat I meant to ask was this (I don’t knoAV whether I can make myself understood or not) : Take it in the state of Minnesota, it is a question Avhich has bothered our Commission some as to whether we would propose a scheme which was elec- tive — a sclieme by which in case the employer and the em- ployees of any given establishment should desire to come within the workings of a compensation act they might do so, within the prescribed limits enacted by the legislature, but that if they did not desire to do so that they need not and their common law liability should remain; in other words, as to Avhether a tentative movement should be made along those lines — substantially the Illinois proposition. Dr. Frankel: The Illinois act relieved the employer from liability. ' Mr. Gillette: If he came under the provisions of the compensation act. Why not extend that? Dr. Frankel: Well, it did provide, I ibelieve, that the employer might make a contract with his employees or could insure them through an insurance company. Mr. Gillette: But if he wanted to stay outside and still respond to his common law liability, he could do so. I just simply want to get an expression of opinion as to what would be the advisable thing .to do. I think that is one point that is going to require the most careful considera- tion. Mr. Blaine : The trend of legislation in this country is to break down the defense of contributory negligence, through a comparative negligence law. Isn’t that going 257 to have a tendency to drive the employees and the em- ployers together on this proposition? Mr. Gillette: It is a drastic measure, which in my opin- ion and my experience and my hope will always meet the severest opposition of the employers and will never be enacted. To bring about these drastic measures is simply to take away defenses which the employers now have. You never could accomplish a thing that way. Mr. Blaine: That was not my point. I said that the trend of legislation is along that line, as an actual develop- ment. Dr. FranJcel: Don’t forget what I said — that Switzer- land has had this thing under consideration for 30 years, and it was the first country really to adopt the compen- satory principle. Mr. Parsons : What manufacturing business does Switzerland do? Dr. Frankel: Considerable. Watch making, etc. Mr. Mercer: As I remember, in the case of Adair against the United States (reported in the 208) the Su- preme Court of the United States held by a majority opin- ion — not unanimous — that Congress had no right to recog- nize a labor union as a means of enforcing the rights be- tween employers and employees. Now, if they follow that out in the states as well as the federal government, it seems to me that would probably prevent the utilization of these different societies which you have mentioned. Dr. Frankel : I offered those remarks merely as a sug- gestion. I can see great difficulties in the way of doing anything of the kind. The Chairman : Well, that was not quite the decision, Mr. Mercer. The law made it a penal offense for a rail- road company to dismiss an employee because of member- 258 sliip ill a labor organization. The Supreme Court held that Congress had no right to restrict the reason of dis- oharge. .1/?'. Mcrccr: I remember now. Yon are correct about that. They Avent on to sav that that had no direct rela- tion to commerce. *l/r. Gillette: Doctor, von are opjiosed to lump sum compensation in case of death, as I understand it? ])r. Franlccl : Yes. .1//'. ^eoffer: Wouldn't von sav that the difference in the attitude of the employers in England and Germany is largely due to these tAyo facts: (1) that Englishmen AA^ere not accustomed to compulsory systems, but the Germans ♦ Ayere and Ayere better jirepared for it Ayhen it Ayas adopted? (2) That the English system is neAy and the German sys- tem is considerably older? Ydien I AA^as in Germany tAyelye years ago, my impression as to the attitude of the employers being adyerse to the compulsory insurance scheme AA'as just as strong as your imxiression as to the at- titude of British employers toAAmrds the British compen- sation act. Dr. Franl'eJ: I think-AA^e shall haye to lay yery great stress oirtlie difference in national characteristics and tem- perament, particularly as betAA^een England and Germany. Mr. Gillette \ Well, I guess AA^e AAill haVe to transfer the SAA’edish act to Minnesota and the German act to Wiscon- sin (Laughter). Dr. Frank el: It does seem, though, that betAA^een the yarious schemes that are in existence AA^e ought to get at something practical. Mr. Gillette: What is the aproximate cost of adminis- tering the German accident fund? Dr. Frankel : It yaries from eight to tAA^elye per cent. 259 Wlr. Gillette: In your opinion it would cost more under a scheme either of private insurance or otherwise, to ad- minister that fund in this country? Dr. F7^ankel ; It would under any scheme^ governmen- tal or otherwise. ilfr. Mercer: I would like to have Dr. Frankel and Mr. Dawson give us their opinion on that question — wliether it would cost more in America, proportionately, to admin- ister the funds, than in Germany. Mr. Datrson : I should think it would, on account of the fact that salaries are higher. The expense of administra- ' tion of the accident insurance fund in Germany consists almost wholly of salaries (slightly rents) and as salaries are higher here, I should think the expense would he higher. J/r. ParHresentatives of the state bar assiKoation. The olticers of the ^linnesota State Feileration of Labor (the strongest labiH* organization in that state) and the legislative com- mittees of all of the railroad brotherhoods, joined Avith the ^linnesota Employers' Assixdation and other organiza- tions of employei's; and Ave got into a very happy condi- tion. Subsequent to the passage of the laAv creating the 3[iimesota Commission, the State Federation of Labor met in convention and endorsed everything that had beeu done up to that time. I think that the moA^emeut is developing, so that the Avorkiugnien of ^[innesota are for almost anything That would change the whole fabric of the present system. I think I am the only representative of labor here to-day. I have sat by and heard a lot of things — that I have taken pretty good — but I think that the work- ingmen of Minnesota, and I rather think the workingmen of the country as a whole, Avhen they come to know more about the question of Avorkmen's compensation, will grad- ually l>e Aveaned away from insisting on their old common law rights, if they are given in return something that is really compensatory. There are a lot of things in the old common law that the workingmen do not like, anyway. 1 t V 2G3 I know of one or two tliat I would like to have wi^)ed out by statute in this country. But it seems to me that the difficulty which confronts ns is more society’s problem than one in which the laborer or the employer or the lawyer is more greatly interested, because society in the end must pay the bill, while labor suffers the pain. We have accidents in 3Iinnesota. They are frequent. The greatest iron mines in the country operate there. xVccidents in them are fre- quent; they are serious; and they are of such a nature that many of the insurance conqianies were unable to carry , them, or at least it was cheaper for the mining companies to take the chance and carry their own risk. On onr rail- roads we have had many accidents and are still having ' many. We have not any reliable data as to the number of accidents in the general industries of the state, but the rail- road and warehouse commission for a period of five years has gathered some statistics i*egarding railroads. The law of Minnesota requires that each and every railroad operat- ing in that state must report every casualty, every A^Teck, every accident of any character — whether human life or limb is involved or only equipment destroyed. From those statistics I gather that oh the railroads in Minnesota from 1904 to 1908 (a period of five- years) there were 404 em- ployees killed and 8055 employees injured, or an average of 80.8 killed each year in the operation of railroads and IGll injured." Dr. Frankel: Hoav many were passengers, permanent- ly incapacitated? Mr. McEiven: We have not any figures on that. Re- cently the Minnesota legislature passed a law requiring all employers to report industrial accidents to the Commis- sioner of Labor. The law has been in effect only since the first of June. We sent out over 30,000 blanks to employ- 264 ers of labor in Minnesota, with a circular letter asking them to report all accidents that required loss of time; and they .are coming in in great numbers, particularly from mines and men engaged in logging operations. We have a great problem there. Now, we laborers are usually impatient; Ave are usually radical. I don’t know Avhy I should discuss the practical side of the question, because usually we are agitators and don’t get down to brass tacks. I confess that freely. But when Ave are placed up against the gun, responsibility rather tends to make ns conserA^ative. Now I am not afraid of any paternalistic feature to this scheme. I think we ought to distinguish between that form of pater- nalism AAiiich authorizes a state or a municipality to own its railroads, to run its own street railways, its own gas plant, electric plants, and so forth, and that other kind of paternalism which cares for its maimed and injured in- habitants. We do not have any scruples about taking care of society’s mental wrecks. The» state provides institu- tions for their care; perhaps largely because they may be- come a menace to society, dangerous to its citizens. Why should Ave show any scruples about taking care of the phy- sical A\wecks of society — ^made so by industry’s terrible haz- ards? After we progress along this line for a few years, I don’t think we will haA^e the same fear about the pater- nalistic feature of this matter that seems manifest to-day in many quarters. I believe that industry ought to bear the burden of its own accidents. When we burn coal in our fires at home (you may not need much heat down here, but we do in Minnesota), we sit down at night and enjoy the warmth, and the brilliance of the light, but every item of expense is figured in the cost of producing the fuel: The expense of exploration; the 265 sinking of test-pits here and there; everything, from the time the first dollar was invested; it is possible, too, the money lost where explorations did not pan out very well ; the interest on the investment; often interest on money borrowed for making explorations; the expense of labor. Everything that enters into it you and I must pay for. Now, in the mining of coal, many human lives are annually sacrificed; many women are widowed, many children are made orphans. When we are paying the other cost, why should not we wha enjoy the luxury of a warm coal fire, also pay for the human life it cost? An engineer goes out across the country in a fast-fiying train. His train is vTecked. The railroad company did everything within its power to avoid the wreck. They sent out section men ahead and did everything that it was rea- sonably called upon to do. Yet because of some unfore- seen event the engine is dashed into the ditch. The en- gineer is injured; they take him in an ambulance to the hospital; there he suffers pain, there he pays his own bill, suffers loss of time; but he has no case against the rail- road, because it was not negligent. His family at home is worried, is suffering, and wonders w^hat the future has in store for them. Along comes a wrecking crew of the rail- road company. It lifts the engine onto the track, sends it back to the car-shops; the machinists get to work at it; it is repaired, painted up, and sent out on its journey again — to make profits for the railroad company. Now, I believe that the railroad company and all industry should care for its human wrecks, just as it does for the wreckage of its machinery, equipment, and other things. The thing to do, of course, is to get dovoi to it on a scientific basis. We have heard a great deal in this conference about waste. If this great waste that is evident in the matter of em- 266 ployers’ liability and accidents among working people, was one which tlie employer alone suffered, he would have solved this problem long ago. If it was one in which the laborer alone suffered, it would have been solved long ago. But it is a thing which cannot be solved without taking into consideration every factor. If the employers’ liability companies had not been in business, I think we probably could have discovered some otlier way of bringing about a settlement. But tliey are here, and we have simply got to meet conditions as we find them, and mtike the best of them. I am glad I came to this conference, so as to have the ad- vice of such men as Dr. Frankel and Mr. Dawson. I feel a little more friendly to insurance companies to-day than I did yesterday or the day before. You know, the laboring man has not always had the friendship of employers’ lia- bility companies, for reasons well known to all. In discussing the elimination of waste, we must not lay too much stress upon the ambulance-chasing attorney. 1 would never consent to his fee being regulated or anything being done to discourage him in business, unless the work- ingman was given something stable and substantial in re- turn. A man who is injured has little money, has few friends, and little knowledge of. the law and of the schemes and machinations of the other fellow. The on^y friend he has in time of injury and distress is the ambulance-chasing attorney — who is a friend possibly for a financial consid- eration, but who is nevertheless the only person upon whom be can rely. If the money that he gets is the only kind of waste to be eliminated, then, we cannot expect much. There is a lot of waste in connection with employers’ lia- bility insurance. There is a lot in connection with trials and courts. Mr. Butler, an attorney for the Omaha Railway Company, said, at a conference in Minne- 267 so'ta, that it cost the Omaha Eailway Company $6,000 for expert testimony to head off a $5,000 verdict. There was a lot of waste in connection with that. If this waste could he diverted into one fund, I am rather inclined to the thought that every man injured in industry to-day could he compensated without any material increase in the burden upon industry. If all of the waste could he scientifically diverted into some one channel, there would not he the burden upon industry that there is. I am in- cMned to think, too, that the state ought to help some. It costs $42,000 a year to try personal injury cases in the lit- tle district from which I come. It costs on an average a . hundred dollars a day in the city of Minneapolis to try personal injury cases. If the state can be saved a lot of this money, it ought to he willing to help in some way. We cannot go into this question as thoroughly as we want to, because there are institutions here that must he reckoned with, and we must consider conditions as we find them, and make the best of it. Now, I am here as a representative of the workingman, and I believe others will come to this thought, after a study of the question : I am willing to waive my common law rights to go into court and sue for an injury done to my body in industry, if you give me something safe, some- thing stabe, something certain, in return, to prevent my' family from becoming pauperized and the subject of chai*- ity. If there is something that can be furnished to the in- jured workman that does not sound like alms, something that gives him that spirit of independence that will permit him to raise his family alongside of his neighbor’s family so that they will not be required to hold’ their heads in shame because of a feeling that they have been taking alms, that us the kind of thing we want. ^ 2G8 I am opposed to tlie lump sum sclieme. I was raised near a railroad yard. I know of one case in particular where a well-behaved man, a switchman, lost a leg. He received a verdict of |10,000, and had about |G,000 left after fighting the case through the courts. He had been a good father and a good husband. After he was injured and had this |G,000 in the bank, however, he didn’t have anything to do and had a lot of idle time on his hands. He used to walk leisurely along the street, on a crutch. The only place open to him Avas a saloon, and there he would sit down and play cards for pastime. He hadn’t anything else to do. One day this man awoke to the fact that he was broke. His |G,000 had been dissipated, in a very short time. His family then became a burden upon socie- ty and was cared for hj relief institutions. I may change my opinion as I get into the question further, but I believe that compensation ought to be extended during the whole period of disability. Mr. Dawson expressed my views to a nicety yesterday. I think if a man is injured for life, com- pensation ought to extend during life, and to his family during the period of their dependency. Compensation ought to be made in such a way that the man will receive something in the shape of a weekly wage — ^two-thirds or three-quarters or even one-half of that which he earned. I don’t know really what scheme we can work in Minne- scta. I have got to rely largely upon the judgment of our legal friend (Mr. Mercer) as to how far we can go. But I want to see, first, a compensation act. I want to see the employer made liable. Since I have come here I have come to this conclusion, that we ought not to bite off more than we can chew. In Minnesota (and I presume this would apply to Wisconsin and NW York as well) I think that we ought to first start with mining, railroading, quai*- 269 Tying, steel work, land a dozen of the most hazordous em- .plojments, and give them a trial and fix a certain compen- sation for the -injuries resulting from such employment. That is an actuarial proposition that we will get men like Mr. Dawson to help us out with later. Then, the employ- ers of labor, being made liable, can do business with the in- surance companies, and they will conform themselves to the new idea and the new scheme. If we can get a scheme of that kind, I am willing as a workingman — amd I think most other workmen would be willing — ^to waive my common law right and to take that in lieu of speculating upon a ^arge verdict. After such a law is passed, there will not be the incentive for juries to grant such high verdicts. And then it will only be a year or two before we progress into something more extended. As I said before, I came to this conference with some oth- er ideas, that I am afraid to give expression to uoav. Whai. I have had to say has been extempOy and very much at ran- dom. It is my hope that before we get through we will have something definite to work on that will be as nearly satisfactory as we can make it to the insurance companies, to the employers, and to the workingmen. I cannot come, of course, quite to Mr. Gillette’s idea as yet. . ' . Some expressions were made yesterday by representa- tives of. insurance companies. Now, I think it safe to say that your risks are going to be increased with the extension of the court — made law which is gradually going on. The insurance companies say they cannot do business under present rates and probably will have to increase them. So even if there is to be a little increase under a compensatory act, employers of labor might as well get ready for it. It will only be a question of time when the industries of our 270 state will make up for it, even if they may he somewhat penalized by a compensation act at first. Wisconsin will do the right thing, and as soon as Wisconsin does the right thing Illinois will come into line, and Iowa will do the same, and Indiana, and the efforts of all the states will be to get away from the old idea of negligence and adopt that of compensation based upon the risk of the industry. The only thing we need is moral courage, to get rid of the feai- that industry will be imperiled by a radical course. There has been a marked change in the last two or three years — thirty years, as was said yesterday. We thought only of the profits of our enterprises. Tliere Avas a terrific compe- tition betAveen employers of labor, for business. A great evolution has taken place in the manner of production. A machine Avas installed and another had to take its place in a short time because of a neAv invention. There was an im- mense amount of money going to waste, going into new ma- chinery, and nobod}^ but the workingman gave any thought to the human side of our industrial life. But a sort of moral wave has swept over the country in the last ^-ear or two. I think all elements of society are beginning to recog- nize that the human side of the question is worthy of con- sideration. That is already being shown, by this confer- ence, and in other lines of work. The .Bussell Sage Foun- dation is doing some splendid work, as are also other in- stitutions of that character. So when we begin to give more consideration to the human side of our industrial life, we can approach this question a great deal more intel- ligently than Ave did a few years ago. I am quite certain something good is going to come out of this conference. I regret that I cannot suggest some- thing more practical than I have. I think the only ben- efit that I have derived so far is that it will help to con- 271 serve me rather than to make me more radical than when J came. Mr. Ingalls : Suppose a scheme should be devised here which would include transportation and some of the more hazardous employments on a straight compensation basis; would you think the employee would be inclined to agree to waive his common laAV rights on entering the employ- ment? Mr. McEwen: I think by proper education and proper work, if he had a certain and fixed compensation, he would be apt to. Mr. Ingalls: Is it practical to make such a scheme stand up? Mr. ]\IcEwen: I think so. I have started educational work in our state. I had recognized some of the obstacles that Ave AA'^ould be confronted with,, but I didn’t know there were so many as there are. I see more today than I ever did. But in order to take time by the forelock, I am going to appoint 25 -or more representatives of workingmen, from all over the state of Minnesota, representing as many dif- ferent trades, as a sort of advisory committee to me on this commission. They are going to know everything that takes place, and are going to be advised of the obstacles we meet from time to time, and discuss it. When the time comes for the presentation of an act, they will have as much in- formation on it as I have, and they will be able to carry on the educational work among their assiciates or fellow Avorkmen, and help pave the way for it. I rather think the position of labor unions in Illinois, w^here they opposed a bill introduced by the Illinois Commission, was right. Had I been a citizen of Illinois, I would have done the same thing. There was no particular advantage in it to the workingman. I would rather take my chance on a verdict. t 272 Mr. Ingalls: Would you, if it w^ere shown to you that not one in twenty wlio were injured recovered under pres- ent- -conditions? Mr. McEioen: Well, the fellow Avho is injured and has a chance to show tliat there was negligence on the part of the employer, with the present attitude of the courts, liates to give up a certainty for an uncertainty. The Chairman: When a man is injured, Mr. Ingalls, he knows or thinks he knows that the employer was negli- gent. Now, if before tlie injury happens, when he is in good health and about to enter the employment, you say to him, ^^vould you rather take your chance on a verdict,'^ he might say, ^‘Well, I know a man that got |30,000.” Now, if you can isay to liim, ^Wes, but twenty other men didn’t get anything,” and so forth, he would be much more liable to agree to take a certainty, if he understands the fact that a large number do not get anything. He hears of a large verdict; but he does not hear of the hundreds of cases where the injured party got nothing. It seems to me under those circumstances the average workman, if he is at all like the average human being that you and I know, would take the ceitainty — as Mr. McEwen said in his address, rather than the chance of a large verdict. Mr. Ingalls : In Milwankee and Eacine they seem quite impressed with the idea that they would be willing to take the certainty. Then you make the thing certain all along the line. Mr. McEwen: In our conferences we had men from the railroad service, men who are still employed by railroad companies, one a locomotive engineer, another a locomotive fireman, three others, trainmen ; and they were really more committed to this scheme than were the tradesmen repre- sented. 273 Mr. Gillette: Well, there the situation is different. The fei low-servant rule does not appl}^ to railroad service. Mr. Mercer: Not in Minnesota. Now, it has been sug- gested that if a permissible act were passed the employer would compel the employee to submit to that scheme, and that that would leave the employer in practi- cally the same position as if the laAv Avere not compulsory, and would not leave tlie employee in as good a position. For instance, suppose an employee goes to a railroad shop to get employment. He goes to the foreman and says ^ffhe law requires you to put on a certain safety device; I would like to take the job; now, if you will put that on, I will take the job.” Mr. Gillette: Well, tliis Avould not apply to railroads unless purely intra-state lines. Mr. Mercer: It might, if the federal government acted on it. Mr. Ingalls : The idea I had in mind was that he would be required to waiA^e his common law rights in order to have the benefit of the compensation, and if be did not Avaive them he Avould not get the benefit of the compensation. That would not impair any of his rights. Before the time he enters the employment I mean. Mr. McEiven: I based what I had to say, upon what Mr. Mercer said yesterday. If he didnt say it, I read an opinion that he prepared. His theory was that the state of Minnesota could pass a compensatory law that would take away his common law right to sue. Mr. Mercer: If we made a reasonable substitution for it. Mr. McEivov: I would be willing to take the compen- sation, if it was certain and fixed. Mr. Smith : Mr. Chairman, I think it would be inter- 274 esiting to have Mr. McEwen summarize briefly a few of the things that he said he was ^‘afraid” to state. Mr. McEwen : I have given some thought and study to the question of state insurance. I am not committed to it in any way, but I thought I maght hear more of it dis- cussed than I have. That was the principal thing. I un- derstand Mr. Dawson is to discuss a certain phase of that, this afternoon. Mr. Gillette: Mr. Chairman, I think it is proper at this time and I move that a eommittee of three be appointed to draft a brief resolution w^hich will as far as possible en- compass the conclusions of this conference, to be reported back at this afternoon’s session, so as to see if we can ar- rive at a statement of what we really have agreed upon so far as we have gone. In that way we may avoid threshing over those matters and wasting time on them in the future. Mr. Mercer: I second the motion. Mr. Meager: Before that motion is put, I should like to say a word — ^not exactly in opposition to it, but in explana- tion of the position of the New York Commissioners. Our task is rather different from that of the other state Com- missions represented here. We were not appointed to re- port a workmen’s compensation bill, or any particular bill. We were appointed rather to study the operation of the present employers’ liability law, and, so far as our delib- erations have yet gone, no one can say what our conclu- sions will be. We may even decide that it will be advisable to continue the employers’ liability law in its present form, keyed up at certain points. For this reason I should feel — ^and Mr. Smith will speak for himself on this point — ^that we could not agree to any resolution or any plan except as individuals; and, if we did it merely as individuals, it would not have any particular significance. 275 The four alternative policies that seem to me to lie be- fore us in New York are (1) to improve our employers’ lia- bility law by taking away some of the defenses that the employer now has; (2) to introduce a purely optional workmen’s compensation law, such as has been discussed this morning. This, of course, would meet the objection that our legal representatives on the commission have al- ready made along legal lines.. I might say, parenthetical- ly, that we have not the pleasure of having a Mr. Mercer on our commission, and that so far as I have talked with our legal members they are less optimistic than Mr. Mer- cer as to the possibility of drafting a compensation law that will be constitutional ; not so much, perhaps, from the point of view of the federal courts as from the standpoint of our New York Court of Appeals which must apply cer- tain peculiar provisions of our New York constitution to isuch legislatioto. The ssecond plan (the optional one) would certainly be constitutional. Another plan (3) would be a workmen’s compensation act introduced when we can get neighboring states to agree on the same lav'. I think most of the members of our commission feel ver}' strongly that it will be well nigh impossible to get a law through in New York which will be a satisfactory work- men’s compensation law, if neighboring states in competi- tion with our manufacturers do not adopt similar legisla- tion. The last policy (4) meets this objection, (and this is a policy that I want to bring to your attention as some- thing that it would be desirable to discuss) by limiting the workmen’s compensation law to industries in New York state that are not in competition with industries outside of the state. That proposal has not been brought before us of this conference. It happens that in New York state the most, dangerous industries are of this character. Trans- 27G portation industries, building industries and two or three others, are strictly local, that is, not in competition with industries outside of the state; and employers in these in- dustries could not raise the objection that they would be put under a liandicap in competition with employers in other states. The fourth plan, however, would meet an- other possible constitutional objection — that it would be special legislation. Now, as I say, the New York Commission is not }^et com- mitted to a workmen’s compensation law. It may decide to favor a modification of the present employers’ liability law. And under these circumstances, as representatives of the New York Commission, Mr. Smith and I could not, it seems to me, officially approve of any definite resolution. And personally I should feel that it would be rather a mis- take at this time to formulate even vague conclusions. I think the great value of this conference (and I believe that the value has been very great) is that we have come to- gether and become acquainted, exchanged ideas and learned a great deal. Now, my feeling is that we had better go back and wrestle with this problem during the rest of the summer, and look forward to coming together again in the fall, when we shall have crystalized our views a little in our separate commissions and when we may be ready to agree upon resolutions of a more definite character than we possible 'could agree upon this morning. Mr. Gillette: Mr. Chairman, I will withdraw the reso- lutions most gladly. It bas already served its purpose. 1 did want to know wbat the attitude of the New York Com- missioners was, and that was the only purpose. Mr. Smith : Well, I guess you have smoked both of us out. 277 Mr. Gillette : I have onh^ one other thing to say, and that is this : I believe that the reports of this conference will make quite an interesting contribution to the litera- ture on the subject. I know it will be valnable to me. The V members of the Minnesota Commission took the liberty and. s assumed the responsibility of bringing a reporter here to j make a report of this conference, with the idea that it I ; might be published if deemed advisable and distributed j . among the members of the conference and the various com- I missioners. This has been attended with some expense. I I merely mention the matter at this time, suggesting that the : committee Avhich was appointed yesterday recommend back •' to this meeting some method of — you know what. Mr. Smith: There is no doubt but what that expense V will be divided proportionately among all the Commission. ? Mr. Gillette: I suggest that the committee report back (they are going to report on permanent organization this { afternoon) and tell us how to do that. Mr. S eager: I move that we adjourn, to meet again at three o’clock this afternoon. An adjournment was here taken until three o'clock P. M. July 30. AFTERNOON SESSION JULY 30, 1909. . The Chairman : Gentlemen, the first business. I assume, " will be the report of the committee appointed on what we i might call the plan and scope of the conference. I believe Mr. Dawson has the report of that committee. The con- ference would be glad to receive it. Mr. Dawson : Mr. Dawson is not chairman of the com- mittee but is a member and brings the report because it chances'to be in his handOTiting : ^‘Your committee upon permanent organization begs to 278 report, recommending as follows: 1. That a second conference for permanent organization be held at a later date as hereinafter provided. 2. That until such conference shall have convened and organized, the present cliairman and secretarj^ continue in office. 3. That tlie cliairman appoint a committee of seven, of which he shall be a member, to make the arrangements for such conference, to determine the time and place where the same shall be held, to give notice of the same and to re- port a draft of bj-laws for the consideration of such con- ference. . . 4. That such committee be instructed to ask the Gov- ernor of each state where no commission or committee has already been appointed, to designate some person or per- sons to attend and take part in such conference, and also be empowered to invite representative employers, working men, and other citizens, to be present and to participate in the proceedings as the by-laws may provide. ^ 5. That the committee be empowered to arrange for the affiliation of the* conference with the Permanent Commit- tee of the International Congress of Workingmen’s Insur- ance. 6. That the name ^^National Conference upon Compen- sation for Industrial Accidents” be adopted temporarily and be recommended to the next conference as the name of the permanent organization. 7. That these conferences should be solely for purposes of conference and discussion, that no resolution commit- ting them to any fixed program, policy or principle, shall be in order and that the committee shall include a provis- ion to that effect in the by-laws to be reported to the next conference. 279 8. That the committee be empowered to act as an execu- tive committee, to provide for printing and circulating the proceedings of this conference, to arrange a program for the next conference, to collect material and data for the state committees and commissions and to perform all other acts that may be necessary or advisable* for the 'purposes of the conference.” It was moved and seconded that the report be adopted. Mr. Gillette : I understand that this will give that com- mittee full authority to transact whatever business may be necessary in making arrangements for another meeting, and doing whatever may be necessary in the meantime un- til such conference is held. The Chairman : I should assume it constitutes them an executive committee, practically, to arrange for another conference at a later date. The motion for the adoption of the report was voted up- on and carried. The Chairman: The committee will be announced later on, gentlemen. I believe Mr. Blaine was scheduled to give us his views on the subject this morning, but the time was too short. Mr. Blaine, I am sure the conference would be glad to heaa^ from you. Mr. Blaine: Mr. Chairman and gentlemen, I said yes- terday morning that I came here particularly for the pur- pose of gaining information. I have but very little infor- mation that is of any great benefit to you. However, I may make some suggestions that will furnish food for thought and consideration in the deliberation of this con- ference and for those who may have some doubts upon some particular phases of the question that we are consid- ering. 280 I believe that one of the greatest obstacles that we have to overcome in tlie consideration of this question is the con- stitutional questions that will confront us. I have heard it said (and I' am sometimes inclined to agree with the proposition and sometimes inclined to disagree with it) that our federal ^ind our state constitutions are the great- est barriers to real progress, while, on the other hand, they constitute the greatest bulwarks for our personal and prop- erty rights in the nation and in the respective states. The phases of tliis question are so many that it is im- possible to consider one particular j)hase of the question without considering all of them. As I suggested this morn- ing in making some remarks, the trend of legislation is to liberalize the laws relating to employers’ liability. And what I have to say in reference to this may or may not be my individual opinion about it, but it will possibly lead to new phases of the question. I think the trend of the times and of legislatures in the evolution of industry is to liberalize the laws relating to employers’ liability, making them more liberal towards the einployee. There is a reason for thi^, based upon a funda- mental principle— the natural development of industries. And while this is academic, I merely refer to it by way of explanation. The time was, when the machine was not in existence; man performed all the labor by hand. The great undertakings, of course, were not accomplished that we have accomplished in recent years, and therefore hand labor could do all the work that was necessary in the in- dustrial world; and that hand labor did not involve the hazards that have come about through the use of machines ; so that machines have accelerated the hazards in the indus- trial world that man has had to suffer. This has changed the entire industrial world, so far as the evolution of labor 281 is concerned and the problems affecting labor. That is one of the causes for the present trend of legislation and the present trend of thought. It is not by reason of politi- cal conditions at all, and I don’t suppose it will ever be ^ made a question of politics. It is merely evolution in the industrial world. And the more our advancement, the more improved our machinery becomes in the making of things and in the doing of things, it seems the greater the hazard; because the idea of ‘^speeding up,” that we have to-day, necessarily makes every occupation more hazard- ous than it formerly was. The machine never gets tired; it Avill work a man to his extreme limit, until he by nature becomes more careless, or, rather, less able to be more care- ful. It is the machine that has brought about this change in thought, which is absolutelj^ natural. There is no place where we can go to find its source; it has come about quiet- ly, like a thief in the night. To meet those new conditions, new laws are being enacted. I believe Montana and Colorado have done away entire- ly with the common employment proposition. In Wiscon- sin we have modified the rule of law in reference to co- employees and the responsibilities or liabilities of the em- ployer, on railroads. It is a natura^l tendency, not brought about by reason of any political force or by political par- ties, nor by men, but rather by the concerted mind of the body politic, because of a recognition of the extra-hazard- ous occupation of those men and of the fact that the indus- try should bear the burden of loss, no matter whether the accidents happen through the negligence of the principal or of the employee. The fellow-servant rule has been great- ly modified in many of the states. There are other things that are modifying the law of neg- ligence: For instance, the question of appeal. We all 282 know tliat in tlie past the ^reat amount of cases that were appealed from our inferior courts to our superior or su- preme courts were appealed by the defendant — ^^the em- ployer, of necessity; because, in those cases, the man who sued usually had no money and no friends by which he miglit take an appeal, so that most decisions construing negligence law liave been brouglit about through appeals by the emplo^^er rather than by tlie employee. Tliat condition is being modified in a great respect. At the last session of the Wisconsin legislature there Avas an act passed, not particularly noticed, which will haA^e a won- derful influence on the laAA^ of negligence. That law pro- vides that an apiieal may be taken Avithout filing an under- talking or giving a bond, upon a showing that there is a constitutional (piestion involved — Avhether federal or state, or that there is a question of law of such grave doubt that the Supreme Coiud ought to pass upon it; or, if the party is unable by reason of his stringent financial condition to furnish a bond, then the court before Avhom the case was tried may certify it to the Supreme Court. That is going to giA^e employees in many cases an opportunity to appeal where they had not the opportunity io appeal In the past; and naturally it is going to increase the litigation for em- ployers. In fact, this applies to all cases, but I am noAV speaking of its effect on employers. ^ 'Another modification of our laws is in reference to the question of what shall be considered by the Supreme Court when appeal is taken. The rule that where error has been committed it is pre- sumed to have been prejudicial, has been reversed by a statutory enactment in Wisconsin which changes the rule entirely, so that the rule now is that unless the error af- fects the merits of the case it shall not be presumed preju- dicial, and a reversal shall not be had because there was a mere technical error iit the trial. As I suggested yesterday, comparative negligence laws are already being talked about, and introduced in legisla- tures. All these things that have l>een done and that are proposed to be done will place a greater liability or legal responsibility upon employers and industries than has been placed upon them in the past. All the changes made and which Avill be made will more or less affect litigation in negligence cases because we all know that the human sympathy of juries and their desire to relieve the unfor- tunate is always on the side of' the employee and with the modified imle of law and procedure, reversals will not be easily obtained. This may all l>e far awide of the subject, but it, I believe, points to the possibility of a changed sys- tem, more equitable toward the laborer and more scientific and definite for the employer. It brings ns down to the practical and possible change for an absolute compensa- tion for the laborer. As I said at the opening, the greatest question confront- ing us is the constitutional question or qiie.stions. It was suggested by one of those who is present today that he had no fear of our Supreme Court on this proposition. I en- tertain some fears^ myself. Courts are reluctant to modify or change well established principles. It usually takes a long period of time before they will come to a decision changing the law which has been in existence for a century. So, while our courts may by reason of the natural evolu- tion that is going on in the industrial and social world, come to a decision whereby most any reasonable compen- sation or insurance act would be sustained, it is going to 284 take a long time; because it is a long process from the long- established x>r*inciples to tlie more advanced propositions — • for courts. It is hoped by all tliose who are seriously considering tliis question, that we Avill be able to overcome any coqsti- tutional questions, in the first bill that is enacted into law, so that the movement will not be retarded by adverse court decisions. There are various schemes of industrial insurance or workmen’s compensation acts, and each scheme must stand or fall after tlie constitutional test is applied. In the state of Wisconsin, and, I suppose, in the major- ity of the states (probably in all of them — I am not famil- iar Avith many) the common laAV applies in all cases where xt ha^ not been clianged, modified or altered by legislative enactment. The whole question of negligence, contribu- tory negligence, assumption of risk, the doctrine of co- employees, comparative negligence, and all those questions affecting every phase of negligence has been very definite- ly settled by our Supreme Courts as provided by the com- mon law, or as modified by statutes. There are four methods or systems, broadly speaking, of compensating the workman. An absolute compensation for death or accident, fixed by law, along the line of the English act; compulsory insur- ance under the German scheme; a voluntary insurance plan, and the common law liability plan now in vogue in this country. If we should adopt the voluntary insurance plan, mak- ing it optional, giving the employer and employee the alter- native to accept or reject the liability or benefits, under some system and organization of their own, there could be no question of such a system standing the constitutional 285 tests, leaving the laws on negligence as they now are or as the legislature might think just and proper. Under such a system there could not be any constitutional objection to a state passing a law providing a certain schedule of rates to be paid by the employer, classified according to indus- tries and the hazards of the various industries, creating a department in the state, or taking an existing department, for instances; the labor department in conjunction with the banking/and insurance departments, for the purpose of carrying out the system. That is, you could give the em- ployer the right to pay the amount fixed under the classi- fication in Avhich he might happen to be, into a general fund, for the purpose of paying losses. The employee could accept that, if he so desired. The state then would have complete charge of the funds and its disbursements, but then the law of negligence generally would have to remain with all rights now existing under the law, except as the same might be waived by the emplo.yer and employee. A compulsory insurance law, making it obligatory upon the employer and the employee to accept a certain indem- nity, properly classified according to the hazard of the in- dustry, under the German system or State insurance, I think v/ill meet with the greatest constitutional objections. I believe that such a system would violate every constitu- tional test. There would be the impairment of the right to contract, confiscation of property, a breach of the guar- antee of ‘^equal protection of the laws’’ and ^^due process of law,” and the constitutional right of trial. An absolute compensation act, patterned after the Brit- ish act, would be more in harmony with our institutions, our mode of government, and our entire development, and such a system, in my opinion, will not meet with the objec- tions to which the other systems are subject. Every state 28G has made some change in its laws on negligence modifying the common law, and there seems no reason why we can- not change further the rules of the common law and keep within the constitutional provisions. I (suggest that an ahsolute comi)ensation can be fixed by law for a death or an accident ha])pening in any hay.ardous industry, hazardous industries can be defined and classified, arbitration boards for the settlement of disputes can be established, and if necessary to ]>reserve the right of trial, then permit ap- peals from the award of the board of arbitration and a trial, requiring the party appealing to waive all the rights and remedies of the compensation act and giving the other party such rights or the present remedies and defenses. ■Such a system would permit of a trial but it is to be as- sumed that the compeusation law would be so reasonable to both parties that such right would in a great majority of cases be Avaived, and a trial undesirable. Such legislation AA^ould not Auolate the constitutional guarantees much more than the Wisconsin co-employees act relating to railroads was assumed to violate them. Industries and occupations could be properly classified, at least, the hazardous industries and occupations, and those are the ones most desired to be reached, without vio- lating the constitution, if the same burdens, liabilities and charges are imposed under the same 'circumstances and the same necessities, doing away entirely with the question of negligence in those industries and occupations. Under the broad police power of the states for the public safety and the common good, it seems that a law along the lines indi- cated making it a compensation act, would be less liable to attack on constitutional grounds.* *Kiley v. O. M. & St. P. By. Co., 119 N. W. 309. / 287 . When it comes to the question of insurance along the lines of the German act, the Austrian act,’ the Swiss or the Norwegian acts (explained this morning by Dr. Frankel) we will find the greatest constitutional objections, in .my opinion, I must frankly admit that I am wholly at set at this time as to just how we are going to obviate the difficulties point- ed out. Tlie practical part of an employer’s liability or conipen- -sation act, or whatever form it may take, you will find will meet its greatest difficulty when tested by provisions of our constitutions. It is true, however, that the courts in considering any act, will appreciate the fact that tliere are three parties in- terested in til is question : the employer, the employee, and the public. I have sufficient faith in our courts to be- lieve that they Avill view it in the broader spirit, and that will go far toward sustaining any act. If we should view any one side of it, or take the partisan part of any one side, without due consideration for the other parties considered, I think we would go very far away from the subject, and our deliberations would not result in accomplishing much. In conclusion, let me say by way of suggestion, that our committee is going to undertake a solution of the subject, after careful study, by drafting a tentative bill, or bills, ot members may present bills, or there may be bills presented by others, and then the employers and employees ought to be and will be represented before the committee as far as possible, as well as others, so that the committee .will get a thorough investigation of the whole subject from the standpoint of all parties ; and then we hope to take up the question of the constitutionality of such proposed laws. I do not know as the committee will have the time to search 288 the autliorities and consider the matter to tlie extent of satisfyinjT themselves upon tlie questions, but it has been suggested that we probably will obtain the assistance not only of the attorneys for the employees and employers, but also some man of recognized ability who will take up the question purely from an independent standpoint, and con- sider only the -constitutional questions involved. After that is done, I think our committee will be in fair shape to present a bill to the legislature that will at least be par- tially satisfactory to a part if not all of those interested. Mr. Mcrccr: I would like to hear from ^Ir. Ingalls. Mr. Ingalls: From what little I have investigated this question, I believe it ought not to be approached at all ex- cept with the greatest of caution. This is really a move to revolutionize a system which has existed for over a cen- tury. It proposes really a destruction of the will of the individual, in a sense. It proposes to do away with the question of negligence, entirely; which is a new doctrine. Now, I have every respect in the world for our constitu- tion. I believe it is the greatest document that was ever produced by any people, in any country, at any time; and I believe it is elastic and broad enough to cover this partic- ular question without any change whatever. I believe that the only ground upon which this matter can stand is within the realm or domain of the police pow- er; the general welfare of the people; the good of the coun- try. Now, if it stands upon that gTound, the question must be affected with a public interest. If this is one of those questions, then it will come within the police power of the legislature. And my thought is that along the line of legislation which affects railway companies, it might be carried still further, into the realm of industrial endeavor; that that field is accompanied by such hazard that the leg- 289 islature might take notice of it and might pass a law which would compel a direct compensation. No. law of that kind would stand up, of course, as everybody knows (I say ^^as everybody knows” ; somebody may differ with me on that proposition) unless there was a way of obviating the ques- tion of the common law right of action which every in- dividual has. As I suggested in a question here, if you can by agreement in the beginning, eliminate that question so that the employee may say in the commencement wheth- er or not he will accept this and waive his common law rights, that will stand up, so far as that is concerned; I think our court would sustain a law of that kind, based on the hazardous employments of the country, under tlie po- lice power of the legislatures. Of course it must be done by the legislatures of the states. Congress can have noth- ing to do with it. The only danger will be in running against the federal constitution. The police power is left to the states, entirely, and is not regulated by the national government at all. Now, this is not suggested even as a tentative plan, hut from my investigation of the subject it does seem to me that if there is anything such a law could stand on, it must include a. direct compensation, and you must include that in a preliminary agreement, so that it is definite and certain; then the employer will know what he has agreed to pay, and what the scheme was. If they accept, he knows they are in ; and if they do not accept, he knows they are out. And such a plan would not trans- gress any of the rights of the employee. That scheme may possibly he sustained by the court. Of course there is not data enough in this country to really formulate a plan, be- cause few of the states have compiled any statistics on the question. Wisconsin has attempted to do so, and Minne- sota^and two or three others have attempted it. Of course. 290 the real question is, wliat kind of a law will stand up under tiie constitution. That lies at the foundation of everj- thing. Now, tlie inforniation that we have gained is ex- treniely’valuahle. l>ut tlie real question is, what plan will the court sustain? And of course, all the states ought to enter into the sanie plan. So far as tlie expense is concern- ed of. a, straight coinjiensation plan based upon right figures and right statistics, I doubt very much, wlien you figure the cost of accident insurance to-day, when you figure the cost in the relations between tlie employer and emplo^^ee as affecting disturbances in the industries, when you figure the amount that the employer already pa^^s voluntarily all over this country, — if you add those up I doubt whether it will exceed the actual expense of a straight compensatioii plan. If that is true, it is quite unimportant whether oth- er states adopt it or not. But in Wisconsin I think the disposition of our legislature Avould be to give great con- sideration to a plan of that kind ; and I do not think Wis- consin differs from very many other states on that ques- tion. The present plan is highly unsatisfactory to ever}-- body. It is unsatisfactory to the employer, because when he does get beaten he pays three or four times what he ought to pay. And it is unsatisfactory from the stand- point of the emidoyee, because 90 per cent of the cases are lost. I have had some experience on both sides of this proposition, in Wisconsin. And as long as the plan is un- satisfactory, we of course pass the question of necessity and come to the question of can Ave do anything, and if .so what can we do? Mr. Mercer:' Before you go, Mr. Ingalls, I want to ask you and Mr. Blaine if you do not think, as a practical prop- osition, that your committee is required to report too soon, in view of the Avork we all have ahead of us? Couldn’t you 291 get a little extension, so that we all might have the remain- der of this year and next year to work together with a'view to making a uniform recommendation? Mr, IngaUs: I think so. Don’t you, Senator? Mr. Blaine: I think so. Mr. IngaUs: Haste is not what we want at all. Mr. Mercer: Xo. That would assist our committee, and the next conference, and all those things. Mr. IngaUs: Personally I think tliat may be accom- plished. AYe might consider that. Mr. (iUlette: Have you any suggestion to make as to the wise way to proceed to satisfy the minds of this con- ference an^l these commissioners as to what form of act would be constitutional? Mr. IngaUs: I think you have got to presence the em- ployee's common law rights so tliat he can say that he has had a cliance to exercise them. Tlien, whether your com- pensation sclieme will stand up mider the police power, is a question. The insurance plan has got to rest on the same plan, exactly. If it is obligatory, in order to be valid it must be within that power. Of course, nobody has ever yet defined what the police power is. Mr. Gillette: Xo, but I mean this: Taking your com- mission in Wisconsin and cur commission in Minnesota, what would be a practical method of going at it to satisfy ourselves that we might agree upon a plan which we think is constitutional. Mr. IngaUs: The only Avay to do that would be to get the opinion of the best lawyers you have got in your re- spective states. You will be far enough away from it then. The Chairman : Gentlemen, we have about fifteen min- utes left. Wr. Mercer: Vie haven't heard from Mr. Smith as yet. 292 Tlic Chairman: Mr. Sinitli, I am sure the conference would be to liear anytliirif]^ tliat you care to say to us. Mr. Fimith: I don’t know tliat I liave inucli more to say now than at tin's morning’s session. Like most of the mem- bers of our commission, I have had no time to read np or get posled. I did not until the other day know that I was down to sjieak with these Dreadnoughts that have 'been looking up this question so assiduously. Dut I thought I would quietly sneak down here, in view of tlie fact that there would be such a notable representation from all over the Union, and see if I couldn’t imbibe something that would be of benefit for our future consideration. If I were to speak entirely from employer’s viewpoint ic regard to the question involved, I should pretty nearly re- peat what ]\Ir. Gillette said yesterday on the subject, be- cause we do not want to jump too fast at conclusions if we are to arrive at a plan which will be agreeable to all sides. I think everybody must admit that anything which may cause the public to think there is anything like an unAvar- ranted subversion of existing conditions in the business world threatened would create .a A^ast amount of trouble in this country. It is well to deeply consider how serious AA'ould be the results as to disturbance of business condi- tions if anything should be recommended for incorporation in the proposed legislation that could be regarded as se- verely drastic or revolutionary. The Chairman: Mr. Dawson, you were on the program this morning, and we cut you off by adjourning. Mr. Dawson : I really do not want to give voice to any personal opinions as to what particular method would be most practical at the present time. I have those opinions. I think it is perhaps impossible for any of us, however ju- dicial-minded we try to be, not to form more or less fixed 293 conclusions; and I have the weaknesses of all ordinary men in that respect. But, in any work that I am trying to do for you, I don’t feel that my personal opinion should weigh at all. The thing frames itself in my mind, as a re- sult of the investigations which Dr. Frankel and myself were able to make last 3- ear and as a result of studies I have made of this subject extending over about fifteen or sixteen years, so far as practicability is concerned, in the two fol- lowing forms: (1) what lias proved to be practicable else- wliere? (2) what peculiar national, state or racial reasons are there why what has proved to be practicable elsewhere might not be practicable here? As to the first question, I would like to give you a very rapid but I think reasonably accurate .view of what has been accomplished abroad. In the first place, the princi- ple that workingmen should be compensated for industrial accidents because the employer was at fault, has now been abandoned virtually in every country except ours. If that is all that should be done by us, we would leave open the question of the amount of compensation. No country has done that. I hope I make myself understood. At pres- ent we have a law which leaves open both the question as to whether the employer is liable and if so for how much he is liable. Both of those questions have to be tried, if you go to court. In no countr^^ have they closed one of those ques- tions without closing the other; that is, no country has changed to the workmen’s compensation proposition or what they call the occupation risk proposition, without also at the same time determining in some manner a meth- od of fixing the amount of the liability. In England they have not gone beyond that. In Aus- tralia they have not gone beyond that, nor in New Zealand. In fact, throughout the British possessions with the excep- 294 toioii of C'anada, tlie i*ul(‘ lias Ihhmi a(l(>i)te(l tliat tlie of an oni])loyoe to recover (or of liis family in ca«e of liis deatli) sliall be absolute, without reer cent of bis wages, and, in the event of death, to three times his annual wages. Q. That is true of Ilritish Columbia, is it not? Mr. DaioHon : That is ])ractically time thronghout Great Ilritain; and in llritish Ooliimbia (one province in Can- ada) it is much the same, but not quite. Now, that is all they have done in Great Britain. I said yesterday that there was no feeling in Great Britain that we could dis- cover (we were not there over three weeks, but we Avere spending all oiir time on this subject) that Avhat has been done should be undone. There is a feeling that what has been done is not perfect, is not what it ought to be, and that there should be extensions. That last feeling has express- ed itself already in extending it to household servants, clerks in offices under a certain salary, clerks in stores, the goAmrnmental marine, government employees, and so forth, and agriciiltiiral laborers as well. The last amendment also extended it to occnpational diseases of a certain char- acter. The labor union congresses consider that it should likewise be extended to make the insurance compulsory, and that the insurance should be with the state. They urge two reasons for this: one being that a good many employers do not insure, and some of those employers who do not insure become insolyent and therefore the claims are not paid. The second is, that by insuring in primte companies the workmen are compelled to make settlements with professional adjusters who drive pretty hard bar- k f 295 gains with them. I do not personally wish to pass at all upon the merits of either of those two objections. Twu other objections were made by the fraternal societies; the first being that as a result of the passing of this law they were finding it harder to get niembers, for the reason that a great manj^ workingmen argue that they will never be sick, but tliat if disabled it would be because of accident; and tliey think it will be still harder, now that occu])ational disease are covered. Their second objection was fliat the}' were having a lieavier sickness rate, wliicli they ascribed to the fact that most of their niembers are wage earners and that Avhen they had insurance with them and were also covered under tlie compensation act, their total compensa- tion might be equal to or even- hi^ier than tlieir daily wages. These objections, you will observe, grow out of a want of system under the British laws. They were i>ass- ed with very little regard to existing institutions. They were, while in form not revolutionary, actuall}^ more revo- lutionary than they might liave been, had something in form looked a good deal more radical but which really fitted better into their existing institutions, been adopted. In Great Britain they have no state insurance against employers’ liability. The employer may insure, if he choose, in a stock company, in a mutual company, or in an establishment fund to Avhich his employees contribute as well as liimself, provided the establishment fund is sol- vent and its rates adequate, its benefits are larger than those of the compensation act, and the contribution of the employer is, in the opinion of the registrar of Friendly So- cieties, at least equal to the average amount that he Avould contribute if he were paying under the act. British em- ployers, as a class, as far as we could learn, Avere well pleased with this insurance and the way in which it was conducted, and liad few coinplaints to make. They are not asking for a cliange in tlie insurance system. The govern- ment of Great Britain, liowever, is asking for tlie addi- tion of a contributory sickness insurance, which they in- tend to carry out tlirougii the existing Friendly Societies, the trades’ unions, and the establisliment funds, and, where a man is not a member of any one of those three, through a local society tliat will be created by the government. A bill is now being prepared, which, as nearly as could be learned, will have those features. After it has been pre- pared, it is altogether likely that the burden of taking care of the men during the earlier weeks, will be thrown on those sickness societies, and that the employers will be ask- ed to contribute to the Friendly Society funds. This is in imitation of the German system. In Holland and in Sweden, in Belgium, and in France as well, though it is quiescent in both the last-named coun- tries, a provision has always been made for state insurance in competition with private, the idea being that the private insurance companies will not insure all employers, and that there must be an opportunity given to every employer to be insured. The state department of Holland, and. the state department of Sweden, have no option as to accept- ing every employer who applies for insurance. In both of those countries the state department has a large share of the business; in both, the state department pays commis- sions and employs agents. In Holland, the state depart- ment started out by attempting to charge lower premi- ums than the stock companies, which resulted in their get- ting all the risks which the stock companies would not take; and, not knowing their |business half as well as the stock companies did, they found it necessary to increase their rates. After making their first increase, the stock 297 companies were soon able to decrease theirs, and the re- sult has been that the state department on the whole has suffered. It has some advantages. The law requires a stock compan}^ to make deposits with the state department, to cover the capitalized value of the annuities which it has to pa}\ In Sweden the state department secured as its manager tlie manager of the most important Swedish com- pany. He set out in exactly the opposite direction. He charged higher rates, materially higher, than the stock companies, at the outset. After a little experience he be- gan to reduce the rates, and they, competing among them- selves, found it necessary to increase the rates they at first fixed, and, in consequence of that and of other conditions in Sweden te a much easiei and simpler one than it is. XeAnrtheless, let ns giA^e the devil his due and admit that from the standpoint of the Avage earner avIio is too poor to lay doAvn a good sized re- tainer before a corporation attorney, the damage suit Iuan - \ yer is not alAAvays an unmitigated eAul. If he risks his time, and often more or less money, in an effort to procure sub- stantial damages for his client, it is but fair that he should receive a larger proportionate fee than the laAAwer who takes no such chances. Another thing which those who are conscientiously study- ing this question with open minds should have their atten- tion called to is that most AAU’iters who address themselves to the subject of industrial accidents evince a fondness for citing the .mortality statistics of the ultra-hazardous em- ployments, and the peculiarly harsh conditions of compen- sation which exist in certain notable localities, instead of making their deductions from a broader range of statistics and from more generally prevalent conditions. The City of Pittsburg and its environs is particularly fertile soil in this respect. For example, in a very interesting paper en- 309 titled ^^The Ainericau War of Distributing Industrial Ac- cident Losses/' read by Miss Chrystal Eastman before the American Association of Labor Legislation at Atlantic City last December, some very sweeping conclusions were drawn based apparently upon investigations made solel}' in and about Pittsburg. Among other things, Miss East- man relates that in 242 cases of fatal accident occurring in Allegheny Countj^, Pennsylvania, the dependent families of 88 of tlie.deceased employes received not one dollar of com- pensation, 92 received barely enough to cover funeral ex- penses, Avhile the remaining 62 received each less than $500. I have no reason to doubt the accuracy of these fig- ures, yet it seems manifestly unfair to dub the American system as un-American chiefly on the strength of an extra- ordinary situation in a comniunit}’ which in more respects than one does not typify average American conditions. It has in fact often occurred to me that the present agitation for the introduction of a European system of compensa- tion may have had its inception in Pittsburg. The per- centage of foreign labor there employed is overwhelmingly large and from all accounts it would certainly seem that nowhere else in the United States could the foreigner so justly compare the European and the American methods of compensation for accidents, to the disadvantage of the lat- ter. If, instead of stopping at the Allegheny River, the immigrant would continue to Illinois, Wisconsin or Min- nesota, he would find that the average serious injury has a materially higher commercial value there than in any European country. Not a few -well-meaning people are of the opinion that liabilit}^ insurance i^ contrary to public policy, — ^that it tend.s to. make the employer le^ careful in the safe-guard- 310 ing of Ills inacliinery, etc. To this I would reply tliat lia- bility^ coiiipaiiies, with their eflicieiit inspection bureaus, are today in iny judgment doing more practical good in the direction of bettering the pliysical hazard (if the risks they insure than, witli jiossibly two or three exceptions, is being done by any^ State inspection bureau. Most employers seem to have little fear of the trifling penalties imposed fur the violation of the factory^ laws of the various states, es- pecially as tiiese penalties are rarely enforced. -The man- date of the insurance company, on the other hand, carrying with it an implied and often actual threat of cancellatioii of tlie insurance should the inspector's recommendations not be complied with, is not lightly ignored. As between the latter sy^stem and one under which every employe er will be made equally liable for all accidents, no matter how much or how little care he may have exercised to prevent them, it would seem that opinion could not differ as to where lies the greater incentive to caution. There are other students of the question who hold that because liability insurance companies collect in premiums from their clients an amount in excess of the compensation actually^ paid to disabled employes, there exists a needless ^^waste” which should be eliminated. They overlook the fact that n^ insurance company, whether life, fire or acci- dent, can successfully operate its business without expense, and that neither the State nor Federal G-overnment could administer an efficient compensation law without a very considerable operating cost. Even the dollar which we give to an organized charity of any kind does not in full reach the beneficiary whom we seek to aid. It is necossa- rily subject to some shrinkage in order that it may pay its quota of the operating expenses of such oharity. This much can certainly be said for the liability companies, — 311 that their paid losses the countrjr over today represent a larger proportion of their gross premium incomes than is the case Avith the fire companies, yet Ave hear of no demand that any of our states shall go into the fire insurance busi- ness in order to cheapen the cost of that form of protection to its citizens. In this connection, I Avould point out that much that has recenth^ been said in criticism of Employer's Liability Insurance is based upon inaccurate and mislead- ing data. Most casualty companies do a multiform busi- ness, ranging from plate glass, boiler, burglary and fidelity to liability insurance. Several of the companies, in fact, AA^rite a dozen or more different kinds of insurance, some of Avhich, notably boiler insurance, have necessarily high ex- pense and correspondingly 1 oa\^ loss ratios. A common error on the part of our opponents is to quote the gross in- come and outgo figures of the casualty companies, includ- ing all branches of their business, to proA^e an apparent but not real ^Svaste” in the single item of Employer s Liability. There are today nearly tAA^entj^ companies Avriting the lat- ter form of insurance in this country and if any of our friends Avho believe there is a large profit in the business care to go deeply into the matter, I A\ill venture to say they ■ AAull find that the companies as a body have not derived an underAAunting profit of 5% from their Employer’s Liabil- ity AA^ritings during the past ten years. In the State of Minnesota, for example, the loss ratio has been steadily creeping up until last year it reached approximately TO^o - as against a 45% loss ratio suffered by the fire companies. I am aAAmre that there are many AA^ho favor the adoption of a system of compensation similar to that of Great Brit- ain, AA^hich Avmuld tend to extend rather than restrict the field for liability insurance, but there appear to be others Avho believe A\^e should adopt a plan of State Control pat- 312 terned aifter the German system, under whicli tlie func- tions of liahility 'companies would cease except in those cases of personal injury where the relationship of master and servant does not exist. I will leave for legal minds the prohlem of how to adapt such a system to the requirements of our fundamental law, both Federal and State — a system which at once deprives the employer of property rights and bars the employe from adequate redress for damages neg- ligently caused; instead, I will quote the views of a promi- nent '^English Government official respecting the advisabil- ity of any attempt to administer industrial insurance with- out the aid and co-operation of those especially qualified by training and experienGe for such work. After criticiz- ing at length certain defects in the English system and pointing out what he believed to be proper remedies there- for, the Honorable Lloyd-George, Chancellor of the Eng- lish Exchequer, in a speech presenting his recent budget to the House of Commons, said : - ^^In this country, where benefit and provident socie- ties of all kinds represent the triumph of organization, of patience and of self-government which is unparal- leled in the history of any country, no scheme would be profitable, no scheme would be tolerable which would do the least damage to those highly beneficient organizations. On the contrary, it must be the aim of every well 'Considered plan to encourage and to work through them.’’ If I were asked for a practical suggestion looking to the betterment of the present method of compensation for in- dustrial accidents in this country, one which would give the greatest good to the greatest number and at the same time preserve the admitted usefulness of the institution of liability insurance, I would recommend first the adoption of a uniform liability law by the various states, one which 313 would define with more certainty the grounds on which recovery may be had and which would give the same maxi- mum benefits to all. Such a law would equalize the absurd differences now existing where a human life is worth $5000 in one state while no limit whatever is placed upon it in an adjoining state; where a factory worker on one side of a river is able to secure by legal right a substantial sum for the loss of his leg, while his fellow, sustaining a. similar in- jury under substantially the same circumstances in a fac- tory across the river but in a different state, can recover nothing. Such a- law should not only name a maximum limit for fatal accidents, hut also maximum limits for spe- cific permanent injuries, such as the loss of an arm, leg, hand, foot, eye, etc. My experience and observation would * indicate that not over 10% of all accidents reported come under the above heads and that most of the remaining 90% are of an extremel}^ trivial character where the disability is at most of but a few weeks duration and where no griev- ous financial hardship is inflicted upon the injured or his family. It is the ten important accidents out of each one hundred occurring that seriously affect the injured, his family and society at large; it is these with which social vrorkers and students of economics are chiefly concerned. It would seem that a practicable and equitable method, could be devised for their treatment without so completely overthrowing the present system that the indolent work- man who careless!}" pinches his finger is tempted to loaf two or three weeks for the salie of the partial wage which a sweeping compensation law would compel his employer to pay him. It is the prevalent malingering in connection with ordinary injuries which constitutes one of the chief weaknesses of the European systems and it is contempla- 314 ■; tioii of tlie enormous cost of footiii<»- the bills in these cases, iiulividnally nnimportant but in the agi»Te<^ate most costly than all serious injuries combincHl, which leads so many American employers to hesitate about lending their eii- dorsemeut to a scheme under which they will become in fact the direct insurers of their workmen. Nevertheless, I am hopeful that out of the jaesent agitation some i)lan may be evolved which will contain the best features of the Eu- ropean systems and at the same time not prove radically at variance with onr institutions. ^Manifestly, the German compulsory system in all its features is not adapted to our requirements. That system is the outgTo^^i:h of economic and social conditions under which whole families have for generations been dependent on the same trade and often the same employing concern for their livelihood. It may be, and probably is, a capital system for Germany, but in the judgment of many close thinkers, it is not suited to ex- isting American conditions. The better element of the Bar advocates a change in the present metlu>d of compensation for industrial accidents in order that the congestion in our courts growing out of personal injury litigation may be relieved, but the fact should not be overlooked that under the operation of any Compensation Act questions are bound to continually arise which the courts will be called upon to decide. The his- tory of the English Compensation Act of 1907 shows that many new and novel questions have come up for determina^ tion resulting from differences of opinion as to the inter- pretation of that very carefully framed measure. Even should the various states concurrently enact an identical law on the subject, and one entirely free from ambigaiities, it still follows that under the actual operation thereof many disputed claims will arise and adequate machinery 315 of some sort must be proyiclecl for their proper adjustment. If this Avork is to be taken ont of the hands of the courts, then public or priA’ate arbitration must be resorted to. Tliere will always be questions under auA’ law of this kind as to whether or not the injured was in fact an emploA^e at the moment of the accident, and as to the probable period of his disability, while in the case of fatal accidents ques- tions will frequently arise as to tlie extent to Ayhicli the beneficiaries were dependent upon tlie deceased for sup- port. View tlie subject from any angle we choose, eudeayor conscientiously as we may to keep before ns its humane as- pects, the Avhole ]n\obleni is necessarily an economic one and in its final analysis we must count the cost. That any scheme which proyides compensation for practically all injuries, regardless of their seyerity or the circumstances under Ayhich they occur, tyill cost somebody — ^the employer, his Ayorkmeu, the insurance company or the State — a deal more than the present system, is too patent to require ar- gument. Just how iiincli more expensiye it will be is lai^ge- ly a matter of conjecture, although Aye do know that the changed conditions brought abonf in Great Britain by the Compensation Act of 1907 resulted in increasing the cost of personal injury cases to employers of labor many fold. In the AAmod Ayorking trades the ayerage increase was oyer ten fold ; in the textile trades it was six fold. But in Great Britain the economic difficulties were insignificant com- pared to those Ayhich must be faced here. There the law Ayas national in scope and affected the cost of all produc- tion.alike so that the additional tax was eased off onto the consumer in the shape of a uniform increase in the selling price of commodities. Apparently, we can hope to accom- lish the same results only by simultaneous and identical en- 31G aiCtiiieiit in eacli 'state, for a I^'ederal law seems out of the question. Pending uniform action, it is doubtful if any lu- dividnal state will take the risk of handicapping its indus- tries by legislating independently on the subject. When the subject of workmen’s compensation insurance first came before the recent session of tlie Minnesota Legis- lature, I circularized over one thousand of our leading cns- toiners in this state, with a view to ascertaining what per- centage of reduction in their customary net earnings would result from an increase in the cost of their liability insur- ance amounting to from 200% to 500%. In answer to this letter a considerable amount of very interesting informa- tion was received, and not a few of our clients gave strenu- ous expression to the belief that any system which thus con- templated a material increase in the cost of production would place the industries of this State at a marked disad- vantage when in competition with those of other and especi- ally of adjoining states having no sjostem. .One of our cor- respondents, a large employer of labor in this city, wrote as follows : ‘‘In view nf the fact that we are now competing in Southern states Avhere the average wage is less than fl.OO per day, if anjr additional burden ranging any- where from 1% to 5% on our wage account is to be added, we fear Ave would have to discontinue this line of business. The only protection we have now against this cheap Southern labor is the freight, and that is every year being reduced until it has come to mean only a A^ery small item, but on cheap goods the South- ern manufacturer is able to lay his product down in this locality at a lower price than we can afford to make it. While we have considerable competition ^ from Michigan, Indiana and Wisconsin, our strongest competition on cheap goods comes from points South of the Ohio River Avhere labor is yerj poorly paid.” 317 The writer of the foregoing is now paying for Employ- er’s Liability Insurance a rale of approximately one-half of 1 % on the amount of his annual payroll. His risk is of the kind which liability insurance companies classify un- der the ^ Vood working schednle.” Sliould a compensation law be enacted by this State similar to that of Great Britain and should it result, as it probably would, in a cor- responding increase in the cost of liability insurance, the gentleman referred to would be compelled to pay a rate of more than |5.00 on each flOO of his wage expenditure, as against the 50c which he is now paying. Obviously, unless a similar law were enacted in all the states, this increased item in the cost of production would put him out of busi- ness entirely, — not merely in competition with cheap Southern labor, but also in competition with like manufac- turers in the Northern states. I firmly believe that the systematizing of the Employer’s Liability laws already on the statute books of many of the states, along the lines 1 have indicated, amplifying to some extent the grounds for recovery and limiting the amounts possible to recover, Avould meet the present exigencies of the ease in so far at least as relates to the more serious ac- cidents. And when it comes to the minor cases, a vehicle time-tried and tested is already at hand in the shape of what is known as* Workmen’s Collective Insurance, a form of indemnity written by most casualty companies Avhich runs to the employer practically as a trustee for his work- men. Under it the question of negligence is not involved. It is a sort of blanket accident policy devised for the pur- pose of enabling every employer of labor to provide cer- tain and immediate relief for injured employes. It is pe- culiarly well adapted to take care of the 80% or 90% of comparatively unimportant cases, Avhere the injured is not 318 ])erinaneiitlj clisaibled, yet wlna-e lie lof^es a certain amount of wages in consequence of liis temporary incapacit3^ Tliousauds of employers have for many years availed them- selves of this instrumentality. The cost in some instances is borne entirely by the workmen, being considerably (dieap(‘i* than individual accident insurance. In other in- stances, the employer himself pays the entire premium, while in still others the expense is shared between the em- ])loyer and employe. t^hould we go to the extent of taking over bodily one of the European systems as now administered, or devise one of our OAvn based on the same principle, where are we going to stop? Already there is a feeling that our Government is too paternalistic. The German or Austrian system of accident compensation transplanted to American soil Avould in my judgment be the thin entering wedge which would ultimately lead to sick benefits, bid age pensions and a variety of other Governmental gratuities better suited to pauper conditions than to the encouragement of that stur- dy, self reliant and individualistic spirit which has made America a distinctive country. In conclusion, I would say that while I believe the present methods of compen- sating injured Avorkmen are susceptible of great improve- ment, I as earnestly believe that many of those who are today seeking for a remedy take an exaggerated view of the matter and are misled in many of their conclusions be- cause they are not in possession of accurate statistics and are not fully informed as to the actual workings of the ex- isting arrangement, particularly with regard to the benefi- cient part liability insurance plays therein. If the suggestion be permitted, I should say that the At- lantic City Conference could take no more practical step than to perfect a permanent organization and appoint a 319 standing committee consisting not only of members of the various State Commissions, social v^orkers, students of economics, etc., but also at least two representative liabil- ity insurance men, one of whom should be a trained under- writer and actuary and the other a practical loss adjuster. The Home Office of any of the leading casualty companies can supply such men and their assistance in the practical working out of this problem should be of incalculable value to the investigating body. In the views expressed in this letter, I do not desire to be understood as speaking officially for any Employer’s Lia- bility Company. I liave simply given you my personal opinions based on my own experience in the business, as was suggested. Very truly yours, Fred L. Gray. - utA IXDEX. The index consists of three parts. The first part gives the pages npon which the bnsiness transacted by the con- ference may be found. The second part is a topical index of the speeclies and discussions. The third part gives ci- tations to the remarks made by eacli member of the con- ference. 1. Business Transacted. Call for conference. List of delegates, 1-3. Conference called to order by H. V. ^Mercer, 3. Charles P. Neill chosen chairman, 3-4. H. V. fiercer chosen secretary, 4. Mr. Higgins appointed stenographer, 4. All persons in attendance at conference eligible to vote, 50. On motion of ^Mr. Gillette a committee on permanent or- ganization appointed, 50-51, 279. Names of committee, 302-303. Two resolutions by Mr. Seager on collection of statistics and laws, 229-230. Russel Sage Foundation offered co-o^^eration, 244. Motion by Mr. Gillette that a committee be appointed to draw np resolutions expressing sense of conference, 274, Withdrawn, 276. Suggestion by Mr. Gillette, on publication of proceedings, 277. Accidents : Frankel, 47, 240; McEwen, 263; Neill, 6. Ambulance Chasers : Blaine, 38; Gillette, 35; McEwen, 266; Neill, 36. Bankruptcy, Compensation, after : Frankel, 253; Blaine, 253. - ' • • ■ w - p Benefit Associations: Frankel, 45-G, 233-44. Constitutional Problems : Blaine, 283; Inj^alls, 288; fiercer, 54-270. Compensation, ^letliods: Blaine, 284-5; Dawson, 22-23. Compensation, Foreign : Dawson, 25, 27, 28, 293-300. Compensation, Workmen want it certain: Ingalls, 272. Compensation, a cost of production : McEwen, 264-5; Neill, 6-8. Cost of workmen's compensation : Dawson, 22-24, 33-35, 261 ; Neill, 261. Costs, Administrative: Frankel, 260. Costs of Employers’ Liability : Dawson, 24-25-27 ; Gillette, 24-25. Double Liability : Dawson, 28; Gillette, 219-221-224; Ingalls, 273-291; Mc- Ewen, 262-267 ; Neill, 217-268; Parsons, 27, 252; Rowe, 29; Stone, 253. Employers’ Liability : Frankel, 45-48; Neill, 5, 37-42, 43-44, 283. Economies don’t benefit injured workmen: Blaine, 39. Recent modifications: Blaine, 40, 280-3; Parsons, 32. Recoveries under: Gillette, 32-3; Parsons, 30; Rowe, 30. Wastes : Blaine, 43-4; Dawson, 13-18, 21, 31, 33-4; Gillette, 24, 25; Parsons, 31. Litigation : Dawson, 25-26. Origin of American Laws : Neill, 5. Poverty : Frankel, 48. Moral effects : Gillette, 37. Cost increasing: McEwen, 173; Kowe, 30. Insurance companies, methods : Blaine, 38; Rowe, 30-1. Employers’ Obligation : Neill, 49. Foreign Laws : Dawson, 15-22, 24, 28, 294-6, 301; Frankel, 37, 232-237, 244 ; Gillette, 22, 25, 223-4, 228, 245-248. Hazards of Industry : Neill, 5-6. Industry, Protection fundamental : Gillette, 219; Smith, 292. Investigation : Gillette, 10-11 ; Neill 217. Insurance Companies : Blaine, 38; Gillette, 11-12; McEwen, 30-31; Parsons, 31; Petrasch, 32; Rowe, 30-1. Letter, from ; Fred L. Gray, 304. Litigation : Dawson, 25-26, 28; Gillette, 228. Lump sum Payments : McEwen, 268. Mai ill Jeering: Daw.soii, 254, 2(J1; Frankel, 245-247. State Contributions : Frankel, 241; McEwen, 207; Neill, 49. New York Coniinission : Seagar, 274-0. Wages : Dawson, 19-20; Neill, 7. Wastes of Employers’ Liability: Dawson, 19, 27. AVorkmen’s Compensation : See ‘^Foreign Laws.” Complexity of problem : Gillette, 9-10; Ingalls, 291; Neill, 7. Constitutional Limitations : Ingalls, 291; Sea gar, 270. Cost, 201. Desirability : Blaine, 41; Neill, 4, 8. Economical : Dawson, 15-22; Neill, 217. Education : McEwen, 271. Laws, Limitations in scope: Blaine, 41-3; McEwen, 208-209; Parsons, 252. Laws, types of: Blaine, 284-280.* Lump sum payments : McEwen, 208. Practicable : Dawson, 301-2; Frankel, 231. Principles : Blaine, 43-4; Frankel, 242-3, 247-257. Uniform laws: Gillette, 10; Mercer, 87; Xeill, 8. Blaine^ John B. : Ambulance chasers, 38. Bankruptcy, compensation after, 253. Employers’ Liability, 37-12, 13, 11, 283. Economies don’t ’benefit injured, 39. Recent modifications, 10, 187-89, 280-3. Wastes, 13-11. Liability Insurance, metliods, 38. Workmen’s compensation, 10-12, 281-5. Desirability, 11. Laws slionld be limited in scope, 11-3. Constitutional problems, 283. Four possible types of laws, 281-286. Risk of tlie industry, 13-11. Dawson, Miles ^I. : Compensation, foreign rates, 25, 27, 28, 293-300. Cost, 22-21, 33-35, 261. Compensation of various systems, 22-21. Employers’ liability Avastefnl, 13-18, 21, 31, 33-1. In Germany, 261. Workmen’s compensation economical, 13-22. Double liability, England and France, 28. Employers’ liability, 11-26. Litigation, 25-26. Saves some waste, 18-20. Wastes, 11, 16, 22. Foreign Laws: British, 21-23, 25, 28, 291-6-301. French, 23, 27, 296-298-9. 'Holland, Sweden and Belgium, 296-300. German, 21, 21, 259, 261. Norway, 300. Summary, 298-302. Economical, 15-22. Litigatinii less, 25-26. Rates, 27. Litigation; less under workmen’s compensation, 25-6-28. Principles nnclerl 3 nng workmen’s compensation, 294-301. England, 294-301. Holland, Sweden, Belgium, France, 296-300. Compulsion, 27. Wages; in dangerous occupations, 19-20. TN'astes : Eliminated in Europe, 19. Employers’ liability, 14-26. England, Germany, United States, compared, 24. Less under workmen’s compensation, 27. Workmen's compensation : Economical, 15-22. England, 21-23, 25, 28, 294-301. Lessen’s litigation, 25-28. Most successful in Germany, 21-22. Practicable in United States, 301-2. Promotes industrial peace, 28. Two ways of viewing, 13. ' * Frankel, Lee K. : Accidents, decrease in Germany, 124-26, 139 ; In Austria, 131. Bankruptcy, compensation after, 253. Benefit associations, 45-46, 233-44. Advisability of utilizing, 238. Experience of other countries with, 45-46, 233-244. Cost, administrative, in Germany, 260; United States, 260. Employers’ liability, causes poverty, 45-48. English law, 232-33, 244-6. Dissatisfaction, 233, 245. '' Friendly Societies, 234-238. Foreign Laws : Analyzed, 232. Successful, 118, 232. liussell Sage foundation studies, 243-4. Malingering under, 234, 245-7. Nationality, effect of, 247. ^hSee also English Law,” ^^Gerinan Law,” ^^Norwegian Law,” etc. German Laws, 36-7, 234-7, 241, 247. Analyzed, 234-237. ^letliod of adjudication, 36-7. Proportion of disputes, 36. Popular, 138, 244. Workingmen’s contributions, 240. Malingering, 245-7. Norv/egian Law, 237. Sickness Clubs, 238-9, 239-240, 246-7. State Insurance, 237. State Contributions, 241. Swedish Law, 234. State Insurance department, 234. Swiss Law, 237-8, 241. State Contributions, 241. Workman’s Compensation: Practicability, 231. Principles of, 242-3,^ 247-257. Compulsory or voluntary, 248-250, 255. Limitation in scope, 250-251. 'Protection of employee, 258. Utilization of insurance companies, 151-2, 238-255c Gillette, George M. : Ambulance cliascrs, 35. Double Liability, im])racticable, 219 221-224. Eiu])loyers’ liability : Wastes, 24-25. Recoveries in Minnesota, 32-3. ]Moral effects, 37. Insurance, solution will probably involve, 11-12. Industry, protection fiindainental, 209. Workmen's compensation. Complexity of problem, 9-10. Need of uniform laws, 10. Gravity of i)rnblem, 10. Xeed (vf invest illation, 10-11. Fairness essential, 11. Questions : A. On relative superiority of foreign acts, 22. B. On uniformity of foreign rates of compensation, 24-27. C. On excessive verdicts in Great Britain, 228. D. On use of jury trials in, Great Britain, 228. E. On ratio of amounts paid on account of accidents from German sickness funds to those paid from German accidents fund, 253-4. F. On relative advisability of voluntary and compul- sory compensation laws^ 256. G. On cost of administering the German funds, 258. H. On cost of administering similar funds in the United States, 259. I. On whether a workmen's compensation law would increase the cost of industrial accidents to Min- nesota employers, 260-1. Ingalls : Compensation, workmen want it certain, 272. Double Liability, scheme for, 273-291. Workmen’s Compensation : Constitutional limitations, 291. Complexity of problem, 197, 291. Police Power, 291. Lyman : Workmen's Compensation, question, 217. Insolvenc}^ of employer, 253. McEw€N, W. E. : Accidents. Industry should bear, 263. Ambulance chasers, 266. Double liability. Workingmen's attitude, 176, 178, 262- 267. Increased cost inevitable for employers, 269-270. Limitation in scope of law, 268-9. Lump sum payments, opposed, 268. State contributions, 267. Workmen’s compensation, efforts to educate working- men of Minnesota, 271. Questions : A. On economies of workmen’s compensation, 28. B. On increasing cost of liability insurance, 30. C. On methods by whicli liability premiums are de- termined, 31. Mercer, H. Y. : Constitutionality of Workmen's Compensation Acts. 1. Dual form of government, 51-57. 2. The applications and restrictions of the Constitu- tion, 57. 3. Theory of Discussion, 57-G2. 4. The power of the state and oovernment, unlimited in their public work, G2-G3. 5. The o’OTernments of the United States and of the several states were based on the compact or con- tract theory, G5-G9. G. Tlie states have all ]>owers of independent nations except where limited by the Constitution, 79-80, 85. 7. The commerce clause of the Federal Constitution grants to Congress the right to control the rela- tions of Master and Servant as needed in inter- state commerce but does not deprive the state of its police power in such commerce, 73-74. 8. The commerce clause does not take the police power from the states even in interstate commerce but they still have the necessary power for public pro- tection, 74-7G. , 9. The states execute the police power within the states, interfering with interstate commerce only for public protection, 7G-80. 10. The police power of the , several states never dele- gated to the Federal Constitution nor prohibited by the Federal Constitution from reasonable, equal, state exercise, 80-86. 11. The first ten amendments of the Federal Constitu- tion apply only to Federal as distinguished from State action, 86-89. 12. Jury trial cannot be avoided in Federal Court ex- cept perhaps on the theory of arbitration as a condition precedent to recovery, 89-91, 195-205. 13. The Fourteenth Amendment is a prohibition upon the States, and not upon the National G-overn- nient, 91-92. 14. The privileges and immunities secured by the Fed- ,eral Constitution are those given by that instru- ment and not by state laws, 92-96. 15. The equal protection clause of the Federal Consti- tution does not prevent reasonable classification toward all in the same class alike, 96-106. 16. The due proce.ss of law in the Fifth Amendment ap- plies only to the Federal Court. In the Four- teenth Amendment it is a proliibition upon the ' states, but it is not intended to control mere forms of procedure in, or regulate tlie practice of, state courts, 106-112. IT. The Fourteenth Amendment is not violated by mak- ing the liability in the dangerous 'employment basis upon legislative grounds other than fault, 112-118. IS. The jury trial provided in the State Constitution secures only riglits iu existence when the Consti- tution was adopted. It would not require trial of a compensatory law by jury, 119-120. 19. The common law liability could be repealed as to future accidents, 120, 179-180. 20. The compensation lavr would not take private prop- erty for public use by reason of two principles. (a) Under our compact theory of government all ownership. is subject to reasonable con- trol, 120-124. (b) The private individual has no right to complain of the taking of bnly so much property as is a protection to the public, 124-127, 68-72, 82-84, 125-126, 130-131. ^2l.v All contracts are made subject to the police power which can neither be legislated nor contracted away, 144-149. 22. The legislative departinent first (letc^rmines tlie ne- cessity of sucli legislation (150) and the courts look to that legislation, not to say whether they would think it ])olicy hnt only to diderinine whether there was a reasonable basis so that the legislature had gronnd for exercising jndgnient as clistingnished from arbitrary ])ower, 149-150. 23. There is at ])resent a sufficient basis for such legis- lation in dangerons employments to ])revent its being arbitrary, 150-195. 24. Exce])t in dangerons employments the liberty of contract is secured by the 14th Amendment but under the princi])les above announced that lib- erty mnst be construed as lilu^rty and not license, 129, 145-148. 25. The government interfered because the employer and employe did not stand np.on an equality as to their rights to make contracts in dangerons em- ployments, 130-1. 26. As an insurance problem the police power of the state can require the passage of a law having the effect of an insurance policy, 195-205. 27. This insurance policy may require as a condition precedent to all suits the examination of the ques- tion of injury by a Board of Arbitration, thus us- ing a reasonable niethod of estimating and as- certaining the amount of the loss, leaving the gen- eral question of liability to be determined b}^ the court, 199-203. 28. The fallacy of the constitutional objections lies in the failure to appreciate the weight which must be given to the state to protect the public inter- ests, p. 205-211. 29. Conclusion, 212. 30. Kemedy, 21G. Questions : A. On increasing cost of liability insurance, 30. 1>. On protection of small employers, 42-3. C. On success of British Act, 227. T). On means of compelling accident preventions; 12. Xeill, Chas. P. : Accidents, Causes, 6. Ambitlance chasers, 36. Compensation, Properly a cost of production, 6-8. America’s backwardness, 5. C(vst, under German rates, 261. Double Liability, 217-18. Employers’ Obligations purely economic, 49. Employer's liability, 5. Origin, 5. Ilazards of industry, borne by workers, 5-6. Investigations proposed b^^ the United States, 217. Investigations, duplicate, 49. State contributions, 49. Uniform legislation, 8. Wages, in hazardous occupations, 7. Workingmen’s compensation, 3, 6, 4-8, 49, 217. Desirability, 4-8. Difficulties, 7. Economies, 217. Limitation of scope of law, 147. Parsons, A. W. ; Double liability, 27, 252. Employer's liability. Tendencies in Annn'ica.n I(\i*islal inn, !), »‘>2. \Vastes, 31. Kecnv(‘ries more nnnierons, 30. Insurance. Cninpanies avoid suits, 3i. Workmen’s comi)ensation. Tamitatinns iii scope, 252. Petkascii, Caul S. : Insurance. Iveas(Mis, eom])anies Lvoid suits, 32. Rowe, J. S. : Double liability, 29. Employers’ liability, more expensive, 30; recoveries in creasinjy, 30. Insurance; companies avoid suits, 31. Methods of fixinir nremiums. 30-31. S EAGER : Questions on foreign laws, 258. New York commission, functions of, 2T4-G. Workmen’s compensation, constitutional difficult es, 2TG 8mith : Necessit}^ of protecting industrv. 292. Stone : Double liability, 253. / 29. Conclusion, 212. 30. Reined}^, 216. Questions : A. On increasing cost of liability insurance, 30. B. On protection of small emploj^rs, 42-3. C. On success of British Act, 227. I). On means of compelling accident preventions, 12. Xi:iLL, Chas. P. : Accidents, Causes, 6. Ambulance chasers, 36. Compensation, Properly a cost of production, 6-8. America’s backwardness, 5. Cost, under German rates, 261. Double Liability, 217-18. Employers' Obligations purely economic, 49. Employer’s liability, 5. Origin, 5. Hazards of industry, borne by workers, 5-6. Investigations proposed by the United States, 217. Investigations, duplicate, 49. K^tate contributions, 49. Uniform legislation, 8. Wages, in hazardous -occupations, 7. SIX INDEX Workingmen’s compensation, 3, 6, 4-8, 49, 217. Desirabilitv, 4-8. Difficulties, 7. Economies, 217. Limitation of seope of law, 147. Parsons, A. W. : Double liability, 27, 252. Employer's liability. Tendencies in American l(^<»islati()n, 0, 32. Wastes, 31. Recoveries more nnmerous, 30. Insurance. Companies avoid suits, 31. Workmen’s compensation. Limitations in scope, 252. Petr ASCII, Carl S. : Insurance. Reasons, companies avoid suits, 32. Rowe, J. S. : Double liability, 29. Employers’ liability, more expensive, 30; recoveries in- creasing, 30. Insurance; companies avoid suits, 31. Methods of fixinir oremiums. 30-31. SeaCxER : Questions on foreign laws, 258. New York commission, functions of, 274-6. Workmen’s compensation, constitutional difficulties, 276. Smith : Necessity of protecting industry, 292. Stone : Double liability, 253.