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to the questions on the attitude of the employer on this question, as a concrete example. Of course, you are familiar with the attitude of the Carnegie Steel Corporation. They put into operation at their plant recently a voluntary plan; also the fact that the Youngstown Sheet & Tube Co. has recently put a voluntary compensation plan in operation; they are not insuring with an insurance company but handling the insurance themselves, being a large company, and so on. We do not mind carrying the insurance ourselves, but under the present laws of Ohio, we might carry that insurance and still be liable in addition. For that reason we must carry-you see our company employs 150 men in a furnace business, which is dangerous insurance, and we must carry our compensation plan in an insurance company. Now, one point that impresses me in regard to a compensation law is this: That you should endeavor to frame such a law as will cover all cases of accident in such a way that the man injured will not have to go to court. In my mind, the ideal law is the automatic law and the ruling out of the courts entirely, and one thing in addition to my opinion, which confirms me is this, from the investigation of the State of Minnesota, Bureau of Labor and Commerce, there is a very significant statement in that investigation, giving the results in New York:

"An attorney in New York, who has handled six thousand cases in damage suits, states that the master and servant cases * * * average compensation in these cases either in settlements or indemnities awarded, amounted to three hundred dollars. That makes a total of $1,800,000 which was paid, half of which went to the workingman, the other going to the lawyers. In other words, in these 6,000 cases, there was an expenditure of about $900,000 which went to the workingman. Now, what did it cost the State of New York in the way of expense, if not New York City? This same lawyer gives it as his estimate that the courrts in New York State and the judicial system in Greater New York, cost $6,000,000 a year, and that 60 per cent of the work of that system is represented by accident and liability cases. In other words, the State of New York paid out $3,600,000 as expense of procedure assessed upon the public as taxes in order to get into the workingman's hand, $900,000 worth of compensation."

Now, if it be true, as stated on page 45,, that $300 is the average compensation of those who do receive for all these other expenses, six times that, or $1,800, might be the average amount received, and it is for that reason I believe that the work of this Commission should be directed along the lines of working out an automatic compensation system as will, if possible, entirely if not entirely, approach it as nearly as you can-to entirely eliminate the legal expense and the adjudication in the adjustment of these suits.

One word further: To my mind the principle of the system which I advocate in general, is held in the European countries, having been in operation in various forms for a number of years. Now, we have another system here. Under this system the amount given in a small percentage of the cases, is very much in excess of the amount given under a compensation system which you might plan. Now, it seems to me, that if we are to pay to a general compensation plan to those who are injured, both because of their negligence and because of the risks of the trade, then we certainly must give up the opportunity of taking something away above the average, a very large judgment, and accept the medium compensation. In other words, that compensation which will mean the greatest good to the greatest number of workmen of this country. I repeat, that such a compensation - it seems to me that in enacting a compensation law that would be just and equitable—not a large judgment to eight per cent of the injured, but the greatest good to the greatest number.

MR. WINANS: Do I understand you to say that this insurance as carried by this firm costs $4.62 on the payroll of the employes on the $100?

MR. WILKINSON: Yes, sir.

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MR. WINANS: Is that paid by the company?

MR. WILKINSON: Yes, sir; paid entirely by the company.

MR. WINANS: What does the employe receive?

MR. WILKINSON: I cannot answer that question now, but if you wish a

copy of the policy, I will send it to you,

MR. WINANS: What do the employes get in case of permanent disability?
MR. WILKINSON: Half pay for three years.

MR. WINANS: In case of death?

MR. WILKINSON: One-half wages for three years. I do not maintain that this is an ideal plan, but it is the best that we could arrive at under existing law.

MR. WINANS: I think you are getting the worst of it by the insurance

company.

MR. WILKINSON: Let me state further. This $4.62, per $100, a little less than 25 per cent of it goes to the insurance company to take care of our liability, to insure us against suits, but more than 75 per cent of the $1.62 per $100 on the payroll is for the compensation, where last year we paid only one per cent for liability. It shows that the insurance company realizes if it can pay a just compensation, the liability risk is almost eliminated. That is what it shows to the insurance company.

MR. WINANS: You do not need to answer this question unless you want to. Do you believe your company would be willing to pay four and one-half per cent on the $100 into a State fund, the same as you are doing in this company, to take care of your employes?

MR. WILKINSON: The best answer I can give to that, is what we are doing.
MR. WINANS: Would you be willing to pay it into a State fund?

MR. WILKINSON: I believe that they would, if the insurance was automatic, and there was no question of the cases being carried further, and having no further legal expense in the way of litigation.

MR. WINANS: It is our desire to adopt a plan of compensating the employe to the extent that he will accept it rather than to sue, but I do not believe we ought, until we have an ideal system, well tried out, interfere with the common law or statutory doctrine of our State.

MR. WILKINSON: The gravamen of my remark is, unless you can arrive at such a plan, you are going to increase the cost to the employer and you are not going to help or benefit the laboring man very much.

MR. ROHR: Mr. Wilkinson, are you of the opinion that if all the employers of labor of the State were paying into a common fund, controlled by the State, or in other words, it might perhaps go to the State Bureau of Labor Statistics -all the employers contributing to that fund, would it not have a tendency to reduce the cost to the employers who today are trying to be fair?

MR. WILKINSON: In my judgment, it would, very decidedly.

A MEMBER OF THE AUDIENCE: Mr. Chairman, I think any further discussion on this matter is practically useless at the present time. Mr. Raisse has voiced my sentiments entirely. That is the understanding that we have come to about the answers to the questions, although if it were not so late, there are a few things I would have liked to have discussed, but I believe we have had a fair discussion of the matter, and the only thing I can say, that I am entirely in accord with Mr. Raisse's statement and agree with him entirely.

MR. PERKS: Mr. Raisse said that it was his idea to charge the burden of industrial accidents to the industry. Have you any scheme by which that should be done?

MR. GRANFY: In my opinion, the industry ought to pay its share of it.

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MR. PERKS: Mr. Raisse said it ought to be all charged to the employer. MR. GRANEY: I mean that the small industry should not pay as much as the larger industry, but I believe that the industries generally should pay it.

MR. RAISSE: When I stated that the industry that is being taxed for this fund, I mean that the industry is entirely at fault for all injuries, whether they were due to contributory negligence or criminal negligence on the part of the employe. The very fact that the injury took place in any industry, makes those people to blame. All these dividends are paid by the selling price of the goods, all the insurance that must be paid, all overhead charges, everything, is gauged by the selling price. Therefore, the consumer eventually pays. While the industry pays, yet the society at large must meet it, but it should be paid by the industry.

MR. PERKS: You realize, do you, that that might work a hardship on a manufacturer in Ohio, provided he had to pay this amount that you speak of, I while his competitor in Indiana would not have to do it, because of the difference in laws?

MR. GRANEY: I believe that point is well taken.

MR. SMITH: Mr. Rainey, do you believe that when a man enters into any certain line of business or into any certain factory, that he belongs to the industry when he is seeking to earn his living in that industry?

MR. GRANEY: To a certain extent he may be.

MR. SMITH: Do you believe that he derives his profit the same as a man who owns the industry?

MR. RAINEY: I would like to hear that again.

MR. SMITH: Do you believe that the man who works in a certain plant or derives his living from that plant the same as the man who owns the plant? MR. GRANEY: No, not by any means.

MR. SMITH: Not in proportion?

MR. GRANEY: You cannot place it that way. He is practically paid for his labor, and that is as far as his interests are concerned.

MR. SMITH: Is he a part of the industry while he is working there?
MR. GRANEY: No, in my opinion he is not a part of the industry.

CLEVELAND, OHIO.

OCTOBER 31 and NOVEMBER 1-2, 1910.

The Commission was called to order by Jas. Harrington Boyd, chairman, in the Chamber of Commerce, at 2 o'clock p. m., and delivered the following address:

GENTLEMEN OF CLEVELAND: We take great pleasure in saying that we are delighted to have so many business men and laboring men to appear at this hearing.

The Employers' Liability Commission of Ohio was appointed by the Governor on or about July 1, 1910, "to inquire into the question of employers' liability and other matters."

The Commission organized, August 5, 1910. The individual members of the Commission from August 5 to September 2d and 3d spent their time in investigating the history and operation of the acts for the compensation of employes injured in industrial accidents, which have been in operation in European countries from three to twenty-seven years. We have investigated also the results of the investigation of the Employers' Liability Commissions of other states, to-wit: New York, Massachusetts, Wisconsin, Minnesota and Illinois. We have also investigated the results of the Pittsburg Survey, made through the Russell Sage Foundation Fund, of all the industrial accidents of Allegheny County, Pa., from June 30, 1907, to July 1, 1908.

We have also reviewed the history of industrial insurance by professional scholars and economists. These investigations were reported by individual members of the Commission at our meeting in Columbus, on September 3, 1910, and plans were then made for putting into operation a scheme for our investigation at our next meeting at Columbus on September 22-23, 1910. This plan for securing information and the holding of public meetings is now being carried out.

Now, what follows, is the most important part of this system: These investigations show, for example, that the liability insurance companies doing business in New York State collected in premiums during 1906-7-8, $25,523,585; and they paid out in settlement of suits, $8,560,000.

From these figures it follows that on an average only 36.34 per cent of what employers pay in premiums for liability insurance, is paid in the settlement of claims and suits. In other words, for every $100 which the employers pay out for protection against liability to their injured workmen, less than $37 is paid to these workmen; $63 goes to pay the salaries of attorneys and claim agents, to the cost of soliciting business, the court costs and to the costs of administration and profit.

It is further shown that the injured workmen must on the average, pay out of this 36.34 per cent which he gets, 26.3 per cent to his attorney. And this, too, where recoveries are quite large. The following statement is a most important one: The best evidence shows that only at most, less than 25 per cent of what the employers pay out on account of the liability of claims of workmen injured in industrial accidents, ever reaches the hands of the injured workmen. During the year 1887, under the operation of the German Insurance Law, there were 106,101 accidents, among 3,861,560 workmen; 15,970 of these injured persons were incapacitated for work for more than thirteen weeks. The next is the fundamental point: 16.78 per cent of these 15,970 injured persons, or 3,156, were due to the fault of the employer; 25.51 per cent of these 15,970, or 4,094 injured 120

workmen, were due to the fault of the injured employes; 54.60 per cent, or 8,720 were due to the inherent dangers of the industry. The Austrian tables, on the average, attributes 70 per cent of all the industrial accidents due to nobody's negligence but to the trade risks. The tables of Wisconsin and Minnesota Labor Departments, go to show that 40 to 50 per cent of ali industrial accidents, on the average, are due to nobody's negligence, but to trade risks.

During the years 1906-7-8, nine liability insurance companies doing business in New York State, insuring employes against accident, received notice of 414,684 accidents and made payments in 52,427 cases of injured employes. That is, there was one payment for every eight accidents.

1st. That only a small per cent of workmen injured by accidents of employment receive substantial compensation, and therefore, as a rule, they and those dependent upon them, are forced to a lower standard of living and are often compelled to depend for support upon public and private charity.

2nd. That the present system is wasteful, being costly both to the State and the employers, the compensation to the victims of accidents being inadequately small.

3rd. That the present system is slow in operation and necessarily causes great delay in the litigation and sttlement of claims.

4th. That the operation of the present laws fosters antagonism and strife between employes and employers.

Now, in looking towards remedies. The German plan of insurance against sickness, accidents and invalidism and old age in industrial accidents, has paid out during the last twenty years, ending in 1905, $802,000,000. Of this total sum; $555,750,000 was paid on account of sick insurance; $232,750,000 was paid on account of accidents, and $13,500,000 paid on account of invalidism and old age. To the fund necessary to make these payments, the employer contributed $424,500,000. The employes contributed $377,000,000 and the Imperial Government paid the entire cost of administration and a small portion of the funds necessary to take care of invalidism and old age.

The general rules are in respect to the raising of the insurance fund, that the employed shall pay two-thirds of the fund necessary to take care of sick insurance which lasts for thirteen weeks, and the employers pay one-third. In the case of accident insurance the employers pay it all. In the case of invalidism and old age insurance, the Imperial Government pays $12.50 for each person injured and the remainder of the fund is paid half and half by the employers and employes.

While all other European countries, except Turkey and England, have a modified form of the insurance plan, England has an entirely different plan, which, very briefly, is the following:

The German plan in 1907, had 27,172,000 workmen insured against sickness, accidents and old age, out of a population of 60,000,000 people.

Now, briefly, the English plan which has 13,000,000 workmen insured is the following: In case of death, the compensation paid is at most, three years' wages at £300, or $1,460 with a minimum payment of three years' wages at £150, or $730.

In case of disability which lasts longer than one week, the compensation paid is one-half week's average wage, not to exceed $4.87, as long as the disability lasts. Responsibility for the payment of the compensation rests solely on the employers and they are not required to insure. In both the German and English plan, the rules of contributory negligence, assumption of risk, and the fellow servant rules are abolished, and the only kind of negligence recognized is that of malicious negligence on the part of the employer or the employe.

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