The new era

Table Of Contents

CHAPTER L

History of Workmen's Compensation. — Passage of various foreign acts. — Distinction between Code Napoleon and Common Law and rights of employees under each. — Opposition of employers to workmen's compensation. — Arguments for and against. — Social aspect of these laws 15-22

CHAPTER H.

Foreword

A while ago the writer was called upon to consider, in certain of its aspects, the industrial accident compensation legislation in force in this state. It is a remarkable fact that this species of legislation, although of great moment in the economic history of our country, received, until lately, little consideration, due apparently to the fact that its importance was neither contemplated nor appreciated.

There has been a noticeable paucity here of literature relating to the experience of foreign countries in this zone of economic reform, notwithstanding the fact that sound legislation of this character must necessarily be referable to the attitude of Continental Europe in connection with its compensation laws, in the molding of which the greatest economic thought of the world participated.

The observations contained herein are not offered as a historical review nor in the nature of a complete statistical compilation. The purpose is to trace, briefly, legislation relative to this subject which, after trial, has been found sound and beneficial.

Aside entirely from the question of humanitarianism, and solely from the viewpoint of sound economics, we need indulge in no flight of imagination to presume to assert that just legislation along this line not only elevates both economically and morally the lot of the employee, but is advantageous, in the end, to the employer.

We are not unmindful that any suggestion looking towards broadening the scope of compensation laws has

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14 FOREWORD

been viewed with alarm by the industries, being regarded, seemingly, as something that may unfavorably affect them; but we venture to suggest that the history of this class of legislation and the experience of the countries in which it has long been in force, prove that those fears are entirely chimerical. It has been demonstrated that the fashioning of compensation laws so as to give broad, substantial protection to the employee has not only brought happiness and contentment to him, but has invariably resulted in greater success and prosperity for the industry.

Our own state, never backward in its desire to make its people contented and happy, will, we trust, be a leader in this worthy work of fashioning and adopting true, just and economically sound compensation legislation. The start has already been made but there is much yet to be done before the work is jfinished. If this little volume serves to aid in bring about this desired result its object will have been attained. A small portion of this work appeared in two articles by the writer in the Quarterly Bulletin of the State Board of Health and The Rhode Island Medical Journal, respectively.

An appendix summarising the compensation laws of the leading American states has been added to this work for comparative study.

Francis I. McCanna.

Providence, Rhode Island March, 1917.

Chapter I

Until recently the matter of social insurance was little discussed in the United States although for years this subject has been receiving great attention in almost every country in Europe. There has been an awakening to the importance of this branch of economic science with the result that during the last half dozen years industrial accident laws have been placed upon the statute books of most of the American states and territories- Reflecting upon this changed condition, we wonder, not at the new legislation itself, but why it has been delayed so long. Why were we more than a quarter of a century behind the best thought of Europe in such important social legislation as providing accident insurance for the working members of the community who are unable to look after themselves ? This is but one of the many branches of what is properly termed social insurance and is deemed by many the most important. The other divisions of social insurance embrace health, old age, maternity, burial, widow and orphan insurance. Some of these forms of relief are already in force in several of the European countries.

The introduction of the principle of definite and certain compensation in industrial accident cases into this country, while tardy, is nevertheless epochal in our economic history, and is a sign of the progress of the times. It is the recognition of a principle which is bound to grow and expand as its worth becomes known and established. It is interesting to observe how this great right sustained by every consideration of humanitarianism and justice fought its way as a part of the industrial life of the country. Many of the state compensation acts are crudities and give manifest evidence of lack of proper consideration upon the part of the draftsmen. They serve, however, the purpose of placing upon the statute books sound economic legislation and for this, if for nothing else, the f ramers of the acts, as well as those who approved of them, are to be thanked.

While the principle of compulsory compensation received its first recognition by Germany, when the famous compensation act of 1884, sponsored by Bismarck, was enacted, the idea of compensation in its relation to social insurance was in actual practice prior to that time; indeed it has been claimed that it dates back to the early centuries.

By this is meant that coincidental with the rise of the wage earning class there came into being, established by that class, dififerent forms of mutual aid; and it is asserted that these organizations formed substantial ground work for the later state systems of social insurance first promulgated in Germany.

We hear much of the German system in discussions relative to industrial accident legislation. This system typifies the compulsory,state controlled, compensation law. Later acts embracing this idea are referred to as being patterned after the German system, as contrasted with the other schemes of compensation, and usually referred to as embodying the English idea.

The enactment of this character of legislation in Europe came after a bitter struggle which extended through a period of years. For instance, we find that the subject was constantly under discussion in France for a period of over fifteen years before an accident compensation law was placed upon the statute books of that country. In Italy, twenty years of struggle preceded the adoption of the legislation. In Sweden and Norway, from ten to fifteen years of agitation were necessary to secure the adoption of the principle, and in Belgium and Russia compensation acts were presented to the governing bodies years before they were favorably acted upon. The Swiss act, which embodies probably the most advanced form of compensation legislation, was made a law after a long and bitter struggle in the course of which the act as first submitted was rejected by a popular vote. Then the present law was framed and passed. Thus when we are considering the American compensation legislation to which we shall later refer, we must bear in mind that the compensation principle is not an experiment since we have the experience of the various European countries to which we may refer in considering the wisdom of the various enactments.

Prior to the adoption of accident compensation legislation rights and remedies in cases of personal injuries in Continental Europe were for the most part governed by the Code Napoleon. In England and her colonies the English common law prevailed. The right to damages under the Code Napoleon was based upon the idea of fault. If the employer was negligent it was deemed proper that he should be made to pay damages. If the employee was negligent, or if the accident was the result of what is known as ''trade risks" compensation was denied.

Under the common law of England the employer's duty to his employee comprehended the use of reasonable care for the safety of the employee. If the injury to the workman occurred wholly through fault or neglect on the part of the employer, the former might recover such damages as he could show he had sustained by reason of the injury. The common law, however, holds the master liable only when the injury is the direct result of negligence or carelessness in the conduct of the employer toward the employee, recovery by the employee being barred in case the employee be negligent in such a way as to contribute to the injury, or if the injury be brought about by the negligence or fault of a fellow servant or if it be the result of the hazard of the employment assumed by the employee. It will be noted that under this system of jurisprudence the right of an employee to recover damages for personal injuries sustained by him in course of his employment is limited to cases wherein he is able to show that his injuries were sustained through neglect or fault upon part of his employer.

The employer earnestly argued that the safeguarding of his industry required that the employee should be called upon to exercise due care for his own safety, and that to hold the employer liable except in case he be negligent would open the door to a flood of claims against which the employer could not protect himself and spelled ruin for the industry.

As opposed to this attitude it was shown that there was statistical evidence that most accidents were due either to the fault of the employee, or fault upon part of a fellow servant, or were the result of hazards of the employment, with the consequence that in the vast majority of cases of personal injuries the employee was without remedy, and in debatable cases the employee was at a disadvantage in proving liability since he was unequipped to properly prosecute his action. In France it was estimated that in only one case out of ten involving this class of litigation did the litigant succeed in obtaining damages. The rest of the serious accident cases usually resulting in the injured becoming charges upon their friends, or objects of charity to be cared for by the community. The hardships of this situation could not be overlooked and as time went on employers gave way slightly under great pressure, and we find as a step in the way of ameliorating the condition of the workman, many of the European countries enacting laws tending to make easier the lot of the injured litigant. One of the first reforms was to shift the burden of proving negligence from the employee to the employer.

When compensation legislation was first broached in Europe there was a great outburst in opposition to it. It was claimed that such legislation was economically unsound and would shake the industries of Europe to their foundations. Every argument of which the great opposition minds of Europe could conceive was urged against the idea. It was contended that if the principle of fault be eliminated the entire industrial structure would collapse.

In support of this legislation it was pointed out that far from working destruction to the industry the compensation idea when enacted into law would be of benefit to the industry ; that what were termed industrial accidents were not accidents at all but were incidents of production. It was shown that in the various lines of employment the average in the number and kinds of accidents could be ascertained without any trouble and that the financial loss to the workman by reason thereof should be made a charge upon the industry and should be figured in the cost of production, just as depreciation in buildings, machinery, tools and other personal property employed in the process of manufacture.

Moreover, in its social aspect, it was pointed out that in many cases of industrial accidents there was no liability on the part of the employer to respond in damages and the efifect was the pauperization of the workmen and the imposition upon the community of a burden which ought to have been borne by the industry. Moreover, and of vital interest to society, was the fact that this condition resulted in making the workman's family an object of charity, and the presence of want many times affected the morality and standard of life of the members of the household. Furthemore, even in cases where damages were recovered, it appeared that but a small part of the amount reached the workman. It was also shown that the expense to the employer of defending accident suits was large and the cost to the community of sustaining this class of litigation was likewise large and unnecessary. It was finally shown that the employer would be relieved from the necessity of giving attention to law suits and the possibility of large verdicts being obtained against him, thus obviating an immense amount of worry incident to such litigation. An additional argument was that the principle would practically eliminate the antagonism between the employee and employer engendered through accident litigation thus creating a more friendly spirit in the ranks and making for the prosperity and success of the industry. But in spite of all of this it took a long time to bring the European Solons to the adoption of the compensation idea.

Chapter II

In 1881, the workmen's compensation law was introduced into the Reichstag in Germany but failed of adoption. Then came the famous message to the Reichstag by Emperor William I, recommending legislation requiring employers in certain industries to compensate injured workmen without regard to the cause of the injury. In his message the Emperor recommended the enactment of a bill for the insurance of workmen against industrial accidents, industrial sick relief insurance, old age and invalidity insurance. In answer to this message the sickness law was enacted by Germany in

1883, the accident compensation law followed in

1884, and in 1889 old age and invalidity laws were enacted.

In its early days in Europe, the compensation idea was considered in the light of an experiment and was introduced with the thought of trying it out, with a certain timid belief that it would prove beneficial. The provisions of the early acts betray a tendency to limit the scope of the law, but as time went on the great worth of the compensation principle became apparent and the provisions of the earlier laws were quickly extended and broadened, and it may be truly asserted that every country that has adopted the act has by constant amendments endeavored to broaden its provisions that the law might be made more efficacious and beneficial. No country to the writer's knowledge has attempted to modify its compensation legislation so as to curtail in anyway any of the benefits to be derived under it.

Having noted the developments of European compensation legislation we will briefly refer to compensation laws in vogue in the principal European countries.

The German law provides for compulsory insurance by the employer. He pays a premium based upon the annual payroll, to the insurance fund, out of which the employee is paid for his injuries and sickness. The fund is managed by a mutual asso-. ciation under the direct supervision of the German Government. Compensation is allowed for accidental injuries received in course of the employment, for disability extending for more than three days unless caused intentionally. Medical and surgical treatment is provided for ninety-one days, and from the third to the ninety-first day benefits are paid out of the sick fund to which the employers contribute one-third, and the employees two-thirds; from the 28th day to the 91st day payments are increased one-third, and the expense to the employer after the ninety-first day, and in case of death from the injury, is borne by the employers' association. In case of disability free medical and surgical treatment is provided for the first thirteen weeks from the sick benefit fund and after that period by the employers' association. The allowance for temporary or permanent disability ranges from 50 per cent, of the daily wages which is paid during the first few weeks, to 66 2-3 per cent, of the average earnings which is paid after the thirteenth week, and in certain cases, for example, total disability, necessitating the services of an attendant, the payments may be increased to 100 per cent, of the yearly wages of the injured workman. Disputes are settled by a board of arbitrators composed of one government official, two representatives of the workman and two representatives of the employer.

In France, compensation is allowed to all workmen who sustain injuries arising out of the employment where the incapacity continues more than four days unless the injuries were intentionally produced by the employee. The employer bears the entire expense of compensation. The injured employee is allowed medical and surgical attendance and has the right to select his own physician. In case of permanent disability the workman is allowed 66 2-3 per cent, of his annual wages and in case of partial disability one-half the loss of earnings. In case of temporary disability the workman receives 50 per cent, of his daily wages beginning with the third day unless the disability lasts more than ten days in which case the payment becomes due from the first day.

In case of the decease of the injured workman pensions are allowed his dependent heirs not exceeding 60 per cent, of the annual wages of the deceased as follows : Widows 20 per cent, until death or remarriage, with a provision for a lump sum payment in the latter case. Children under sixteen years of age, if no parent survives, 15 per cent, if there is but one child, 25 per cent, if there are two children, 35 per cent, if there are three children, 40 per cent, if there are four or more children. Each child under sixteen years of age, if neither parent survives, 20 per cent. Each ascendant and each descendant under sixteen years of age dependent upon deceased, if no widow or children survive 10 per cent., the aggregate not to exceed thirty per cent.

For temporary disability, fifty per cent, of the daily wages beginning with the fourth day; but if the disability lasts more than ten days payments become due from the first day.

In England the compensation act covers all employments and the entire expense of compensation is borne by the employer. Where total or partial incapacity results from the injury a weekly payment during the disability period not exceeding 50 per cent, of the average weekly earnings during the previous year is allowed. If the incapacity lasts less than two weeks the employer need not compensate for the first week.

In Holland, all injuries causing disability for over two days are compensated unless brought on intentionally. All classes of employees are com^ pensated and the entire expense is borne by the employer. Medical and surgical treatment, so long as same may be required, is allowed the workman at the expense of the employer and the workman may select his own physician. Compensation equal to 70 per cent, of the workman's daily earnings is allowed him for the first forty-three days of the injury, and after that time a pension in the same amount is allowed him for total disability and a smaller pension regulated by the loss of earning power for partial disability.

The Holland act also provides for compensation for all injuries caused by any accident occuring in course of the employment if disability therefrom extends over two days, unless brought on intentionally. If the injury was the result of intoxication one-half the regular compensation is allowed but if death results in such case no compensation is paid. The compensation in all cases is borne by the employer. In case of death an amount equal to 60 per cent, of the earnings of the deceased is distributed as follows:

To the widow 30 per cent, of said earnings until death or remarriage; to each child under the age of sixteen years 15 per cent, if one of the parents be living and 20 per cent, if both be dead.

Provision is made in certain contingencies for dependent parents, grandparents, orphan grandchildren, and dependent parents-in-law. Free medical and surgical treatment is provided and the employee has the right to nominate the physician. The compensation allowance is 70 per cent, of the daily earnings during total disability and the allowance for partial disability is proportional to the loss of earning power. A state insurance fund is established to guarantee payment of the compensation.

The Norwegian law compensates all injuries disabling the employee for more than four weeks, and covers practically all lines of industry. Free medical and surgical treatment is allowed after the fourth week. In case of total disability an allowance equal to 60 per cent, of the wages of the injured person is made.

No one can say with certainty at just what period of time the compensation idea became a matter of individual thought in the economic life of our country but we do know that this great principle of social justice having proved its worth in foreign climes pressed onward to our shores and demanded and gained recognition. Its adoption was as inevitable as the seasons of the year, as well try to stop the mighty waves of the ocean as to retard its progress.

A principle is not necessarily a right one, that is to say, sound, because a body of individuals or a great majority of the people may decree it so. We can recall numerous instances where something was adopted as being the right thing at the time, only to be discarded later because it did not work well. But that thing or principle is right which through its own merit forces recognition as a valuable factor in the life of the times.

The Federal Constitution declares that our government was founded to establish justice, insure domestic tranquillity and promote the general welfare of our people. A paramount idea in the minds of the founders of our government and embodied by them in that immortal document was the right of every man to live and live happily.

Good government means that system which truly promotes justice and establishes tranquillity among its people. It is that system which protects the weak against the strong, and which recognizes that there are limits to the ''survival of the fittest'' doctrine. By this reference to the weak, we do not mean that person who through frailty has to be cared for by others; that one is a proper object for charity. We refer to the condition brought about when competition is free and every man may engage in an economic fight unfettered by any rules of conduct, that condition where everyone striving for the promotion of his own interests wholly disregards the welfare of his fellowmen, as well as that of the state ; in other words, we use the words sound and unsound in an economic sense.

It is the duty of the commonwealth to be strong because a state can live only so long as its government is strong; when it becomes weak it decays and vanishes just as did ancient Rome. When the conduct of any part of the inhabitants of the state is thought to be detrimental to the state, it is then time for the government to step in and regulate such conduct. When any class of society in the pursuit of its own interests disregards the economic rights of the other classes in the community, the government is bound to announce that the worth of a man to the community shall be estimated not in proportion to the wealth he accumulates but in the ratio in which he contributes to the general welfare of the community.

Chapter III

If the state finds that a great part of its population is struggling under economic burdens too heavy for it to bear, it must ascertain wherein the defect lies that it may be remedied. It must require every individual to so conduct himself as to make for economic soundness in the life of the state. If the strong are oppressing the weak it must bid the former hold themselves in check; if on the other hand a portion of the citizenship is losing its grip upon itself the state must come to its aid and give it assistance. It must regulate any conduct upon the part of the individual which in anyway tends to weaken the structure of the state for only by so doing can a government survive.

The perpetuity of the state bespeaks social justice and if we love our republic and would have it survive, we should harken to the words of a noted writer who in speaking of the lessons of history says: *'First, it is a voice forever sounding across the centuries the laws of right and wrong. Opinions alter, manners change, creeds rise and fall but the moral law is written on the tablets of eternity. For every false word or unrighteous deed, for cruelty and oppression, for lust or vanity, the price has to be paid at last, not always by the chief offender but paid by someone. Justice and truth alone endure and live. Injustice and falsehood may be long lived, but doomsday comes at last to them in French revolutions and other terrible ways.''

That our republic has not heretofore played its part in extending to the industrial classes the protection and care to which their condition in life entitled them in cases of industrial accidents becomes very evident when we consider the situation of those classes prior to the enactment of the compensation law.

Under the rules of the common law which we inherited from England, the obligation of the employer to respond to the workman for damages where personal injuries are sustained by the latter is based upon negligence or fault upon the part of the employer unaccompanied by any negligence upon the part of the workman. The employer is not held to be an insurer and is only required to exercise such ordinary and reasonable care and caution for the safety of his employees as the nature and dangers of the business permit and require; but the negligence of the employer must be the proximate cause of the injury. For example, it is the positive duty of the employer to furnish the employee with a safe place in which to work and with proper tools with which to perform the work. In accepting an employment, however, the employee is held, under the common law, to have assumed all the ordinary and usual risks and perils incident to the employment, whether it be dangerous or not, and also all risks of which he knows or of which he might know by the exercise of reasonable care upon his part, unless there be some agreement to the contrary. The effect of this doctrine, more than anything else, gave rise to the later compensation laws. The rule of assumption of risk was a most harsh one. It proceeded upon the theory that the workman was a free agent to accept or reject a position at his pleasure, that if he accepted a job which he knew was dangerous he tacitly agreed to assume the risks of injury, otherwise he should have refused the position.

Moreover if, after he engaged in the work and the place developed dangers, he is assumed to have accepted the dangers because of retaining his position. In this line of reasoning the fact is lost sight of that the average workman is far from being a free agent, that often-times he is forced by keen competition in his field of labor and at other times by the stress of circumstances to accept hazardous work, when if he were free to choose he would reject it. To say that such a man must be held to have voluntarily agreed to have assumed the risks and injuries incidental to the employment is unjust ; it is in truth taking advantage of the laborer's helplessness.

In some jurisdictions it is held that even though the employee contributes to the injury he may recover for the injury provided the negligence of his employer be gross. This doctrine of comparative negligence does not, however, apply when a risk has been voluntarily assumed by the servant.

Furthermore, under the common law the employer is not liable for injuries to the servant caused by the negligence of a fellow servant engaged in the same general business when the master has furnished proper means for carrying on the work and has used due care in his selection of servants. The leading case establishing this doctrine was decided in England in 1837. ' This ruling was followed by the supreme court of South Carolina in a case decided four years later. ' Then came the famous decision written by Chief Justice Shaw of the supreme court of Massachusetts affirming the doctrine of the two earlier cases. ' As Chief Justice Shaw was, perhaps, one of the greatest jurists America has ever produced the fellow servant rule was soon adopted as sound legal doctrine by practically all the courts throughout our country.

In giving his reasons for this doctrine, the Chief Justice says :

"We are not aware of any principle which should except the perils arising from the carelessness and negligence of those who are in the same employment. These are perils which the servant is as likely to know,

' Feltham vs. England L. R. 2 Q. B. 33.

■Murray vs. So. Carolina R. R. Co. 1 McMull (S. C.) 38S.

•Farwell vs. Boston & Maine R. Corporation 4 Mete. (Mass.) 49.

and against which he can as effectually guard, as the master. They are perils incident to the service, and which can be as distinctly foreseen and provided for in the rate of compensation as any others. ♦ * * Where several persons are employed in the conduct of one common enterprise or undertaking, and the safety of each depends much on the care and skill with which each one shall perform his appropriate duty, each is an observer of the conduct of the others, can give notice of any misconduct, incapacity or neglect of duty, and leave the service, if the common employer will not take such precautions, and employ such agents as the safety of the whole party may require. By these means, safety of each will be much more effectually secured, than could be done by a resort to the common employer for indemnity in case of loss by the negligence of each other. Regarding it in this light, it is the ordinary case of one sustaining an injury in the course of his own employment, in which he must bear the loss himself, or seek his remedy, if he have any, against the actual wrong-doer."