The full text on this page is automatically extracted from the file linked above and may contain errors and inconsistencies.
UNITED STATES DEPARTMENT OF LABOR
JAMES J. DAVIS, Secretary
BUREAU OF LABOR STATISTICS
ETHELBERT STEWART, Commissioner
BULLETIN OF THE UNITED STATES\
BUREAU OF LABOR ST A T IS T IC S /
WORKMEN’S
INSURANCE
AND
\T
r i l
* * WO. 3 1 1
COMPENSATION
SERIES
PROCEEDINGS OF THE SIXTEENTH ANNUAL MEETING
OF THE
INTERNATIONAL ASSOCIATION
OF INDUSTRIAL ACCIDENT BOARDS
AND COMMISSIONS
HELD AT BUFFALO, N .T.
OCTOBER M l, 1923
APRIL, 1930
UNITED STATES
GOVERNMENT PRINTING OFFICE
WASHINGTON: 1930
For sal* by the Superintendent of Documents, Washington, D. C.
Prieo 50 cents
ANNUAL MEETINGS AND OFFICERS OF THE INTERNATIONAL ASSOCIATION OF
INDUSTRIAL ACCIDENT BOARDS AND COMMISSIONS
Annual meetings
President
No.
Secretary-treasurer
Date
Apr. 14, 15, 1914.......
Jan. 12, 13, 1915.......
Sept, 30-0ct. 2, 1915.
Apr. 25-28, 1916.......
Aug. 21-25, 1917.......
Sept. 24-27, 1918......
Sept . 23-26, 1919.....
Sept,. 20-24, 1920......
Sept.. 19-23, 1921......
Oct. 9-13, 1922.........
Sept . 24-26, 1923......
Aug. 26-28, 1924.......
Aug. 17-20, 1925.......
Sept . 14-17, 1926......
Sept 27-29, 1927......
Sept.. 11-14, 1928......
Oct. 8-11, 1929..........
1 Special meeting.
II
Lansing, M ich.......... .
Chicago, 111............... .
Seattle, Wash............ .
Columbus, Ohio____ _
Boston, Mass............ .
Madison, Wis.............
Toronto, Ontario.......
San Francisco, Calif..
Chicago, 111.................
Baltimore, M d.......... .
St. Paul, Minn...........
Halifax, Nova Scotia..
Salt Lake City, Utah..
Hartford, Conn......... .
Atlanta, Ga............... .
Paterson, N. J............
Buffalo, N. Y ............ .
John E. Kinnane..
do,.
___do......................... .
Floyd L. Daggett___
Dudley M. Holman ..
F. M. Wilcox............ .
George A. Kingston...
Will J. French______
Charles S. Andrus___
Kobert E. Lee______
F. A. Duxbury.
Fred W. Armstrong .
O. F. McShane......... .
F. M. Williams..........
H. M. Stanley............
Andrew F. McBride.
Frances Perkins........ .
Richard L. Drake.
Do.
Do.
L. A. Tarrell.
Royal Meeker.
Do.
Do.
Charles H. Verrill.
Ethelbert, Stewart.
Do.
Do.
Do.
Do.
Do.
Do.
Do.
Do.
CONTENTS
TUESDAY. OCTOBER 8-M0RN1NC SESSION
Chairman, Mrs. Frances Perkins, president I. A. I. A. B. C.
Page
Address of the president, by Mrs. Frances Perkins______________________
Explanation of Figures of National Council on Workmen’s Compensation
Insurance on Relative Benefits under Different State Laws, by W. F.
Roeber, actuary National Council on Workmen’s Compensation In
surance_____________________________________________________________
Discussion________________________________________________________
Ethelbert Stewart, of Washington, D. C.
A. Z. Skelding, of New York.
W. W. Kennard, of Massachusetts.
Mrs. Frances Perkins, of New York.
Mrs. F. L. Roblin, of Oklahoma.
George A. Kingston, of Ontario.
A. J. Altmeyer, of Wisconsin.
General Review of Workmen’s Compensation Legislation for 1929, by
Charles F. Sharkey, of the United States Bureau of Labor Statistics__ 1
Discussion_______________________________________________ ________
Thomas J. Curtis, of New York.
W. W. Kennard, of Massachusetts.
Mrs. Frances Perkins, of New York.
William M. Knerr, of Utah.
George A. Kingston, of Ontario.
Business meeting:
Appointment of convention committees____________________________
Report of the secretary__________________ _________ _______________
Financial statement of the treasurer_______________________________
Reports of committees:
Report of committee on statistics and compensation insurance cost,
by L. W. Hatch.........................................................................r _______
Report of committee on investigation of results of compensation
awards, by Rowena O. Harrison_________ _______________________
1
10
15
20
23
24
24
30
33
34
TUESDAY, OCTOBER 8—AFTERNOON SESSION
Occupational diseases: Chairman, Charles R. Blunt, Commissioner of Labor of
New Jersey
Occupational Diseases, by Charles R. Blunt, Commissioner of Labor of
New Jersey_______________________'___________________________ ____ _
A Study of Silicosis in Rock Drillers by Dr. A. J. Lanza, assistant medical
director Metropolitan Life Insurance C o______ _______
____________
Discussion________________
___ ____ ________ _______________ - — ~
Charles R. Blunt, of New Jersey.
F. M. Williams, of Connecticut.
A. J. Lanza, of New York.
George A. Kingston, of Ontario.
Mrs. Frances Perkins, of New York.
Ethelbert Stewart, of Washington, D. C.
Thomas J. Curtis, of New York.
10
38
40
43
CONTENTS
IV
Industrial Diseases and Compensation, by Dr. May It. Mayers, of the
New York Department of Labor-------------------------------------------------------Discussion______________________________ _________________________
Ethelbert Stewart, of Washington, D. C.
Charles R. Blunt, of New Jersey.
F. M. Williams, of Connecticut.
L. W. Hatch, New York.
S. S. McDonald, of North Dakota.
Fred M. Wilcox, of Wisconsin.
F. A. Duxbury, of Minnesota.
George A. Kingston, of Ontario.
Thomas J. Curtis, of New York.
William M. Knerr, of Utah.
E. B. Patton, of New York.
W. E. Obetz, of Ohio.
F. W. Armstrong, of Nova Scotia.
W. W. Kennard, of Massachusetts.
Medical Care and Cost, by Fred M. Wilcox, chairman Industrial Commis
sion of Wisconsin___________________________________________________
Discussion________________________________________________________
W. H. Fitzgerald, of Oregon.
Fred M. Wilcox, of Wisconsin.
George A. Kingston, of Ontario.
William M. Knerr, of Utah.
James B. McManus, of Delaware.
Ethelbert Stewart, of Washington, D. C.
Hal M. Stanley, of Georgia.
W. W. Kennard, of Massachusetts.
E. B. Patton, of New York.
L. W. Hatch, of New York.
Mrs. F. L. Roblin, of Oklahoma.
Parke P. Deans, of Virginia.
Walter O. Stack, of Delaware.
,
WEDNESDAY OCTOBER 9—MORNING SESSION
Medical session: Chairman, Verne A. Zimmer, director New York Bureau of
Workmen's Compensation
Clinic (conducted by Dr. Raymond G. Bell, of Buffalo) and discussion____
,
WEDNESDAY OCTOBER 9—AFTERNOON SESSION
Accident prevention: Chairman, R. B. Morley, secretary Industrial Accident
Prevention Association of Ontario
Safety Progress in New York State through Organized State-wide Accident
Prevention Campaigns, by Frank E. Redmond, educational director
Associated Industries of New York State (Inc.)______________________
Discussion________________________________________________________
R. B. Morley, of Ontario.
Ethelbert Stewart, of Washington, D. C.
Frank E. Redmond, of New York.
Safety in Industry, by Senator Robert F. Wagner, of New York________
No-accident Campaigns, by W. E. Yeomans, manager Industrial Bureau
of the Merchants' Association of New York City_____________________
Discussion____________________________________________ ____________
R. B. Morley, of Ontario.
Ethelbert Stewart, of Washington, D. C.
W. E. Yeomans, of New York.
Henry J. 0 . Sullivan, of New York.
Daniel Widdi, of New York.
Philip J. Weidner, of New York.
CONTENTS
V
Page
Accident Prevention Campaigns among State Unions, by Thomas J.
Curtis, general manager Building and Allied Trades Bureau, New
York City__________________________ _____ __________________________
Discussion____ _____________
__ -----------------------------------------------Charles L. Hutson, of New York.
R. B. Morley, of Ontario.
James L. Gernon, of New York.
Henry J. O. Sullivan, of New York.
Joseph McGrane, of New York.
Albert Young, of New York.
Ethelbert Stewart, of Washington, D. C.
Accidents and Health Hazards in the Chemical Industries, by William
J. Burke, chemical engineer of Bureau of Industrial Hygiene of New
Y ork________________________________________________________________
Accidents and Health Hazards in the Chemical Industries, by J. A.
Burckel, vice president Du Pont Viscoloid Co., New York City_______
140
143
148
154
WEDNESDAY. OCTOBER 9-EVENING SESSION
Chairman, Parke P. Deans, of the Industrial Commission of Virginia
Accidents Resulting in No Lost Time, by Walter O. Stack, president
Industrial Accident Board of Delaware_______________________________
Discussion________________________________________________________
Parke P. Deans, of Virginia.
W. O. Stack, of Delaware.
Frank E. Redmond, of New York.
Fred M. Wilcox, of Wisconsin.
F. M. Williams, of Connecticut.
Charles L. Hutson, of New York.
Thomas J. Curtis, of New York.
Lump-sum Settlements— When, if Ever, and How, by L. W. Hatch,
member New York Industrial Board_________________________________
How to Investigate Proposed Lump-sum Settlements, by Rufus Jarnegan,
of the New York State Rehabilitation Bureau, Buffalo, N. Y _________
Discussion________________________________________________________
W. W. Kennard, of Massachusetts.
Rufus Jarnegan, of New York.
William M. Knerr, of Utah.
Ethelbert Stewart, of Washington, D. C.
W. L. Robinson, of Virginia.
L. W. Hatch, of New York.
F. A. Duxbury, of Minnesota.
W. H. Fitzgerald, of Oregon.
Charles D. Smith, of West Virginia.
R. M. Little, of New York.
W. H. Horner, of Pennsylvania,
Fred M. Wilcox, of Wisconsin.
V. A. Zimmer, of New York.
George A. Kingston, of Ontario.
Wellington T. Leonard, of Ohio.
Mrs. F. L. Roblin, of Oklahoma.
Lawrence E. Worstell, of Idaho.
E. B. Patton, of New York.
Thomas J. Curtis, of New York.
161
164
166
171
179
THURSDAY, OCTOBER lO-MORNING SESSION
Problems of Exclusive State Fund Jurisdictions—Section A : Chairman, S. S. McDonald, of
Workmen’s Compensation Bureau of North Dakota
Nova Scotia (Fred W. Armstrong)_____________________________________
Discussion------ -----------------------------------------------------------------------------Wellington T. Leonard, of Ohio.
F. W. Armstrong, of Nova Scotia.
E. I. Evans, of Ohio.
197
198
VI
CONTENTS
Ohio (Wellington T. Leonard)__________________________________________
Discussion_____________________________________________
________
George A. Kingston, of Ontario.
Wellington T. Leonard, of Ohio.
Ontario (George A. Kingston)__________________________________________
Discussion________________________________________________________
Wint Smith, of Kansas.
George A. Kingston, of Ontario.
George L. Eppler, of Maryland.
Charles D. Smith, of West Virginia.
Wellington T. Leonard, of Ohio.
E. I. Evans, of Ohio.
O. T. Fell, of Ohio.
Alfred Gillert, of New York.
F. W. Armstrong, of Nova Scotia.
Russel Kessell, of West Virginia.
W. H. Fitzgerald, of Oregon.
Ethelbert Stewart, of Washington, D. C.
S. S. McDonald, of North Dakota.
Pag«
199
202
203
205
Problems of Competitive State Fund Jurisdictions—Section B: Chairman, Charles G. Smith,
manager New York State Insurance Fund, New York City
Problems of Competitive State Fund States, by Lawrence E. Worstell,
chairman Industrial Accident Board of Idaho____ __________________
Arizona (William E. Hunter)________________________ ____________
Discussion__________________________________
______________
William M. Knerr, of Utah.
William E. Hunter, of Arizona.
California (Lawrence E. Worstell)___ ________________ _____________
Colorado (Lawrence E. Worstell) ______________________ __________
Maryland (Miss R. O. Harrison)__________________________________
Pennsylvania (W. H. Horner)_____________________________________
Utah (William M. Knerr)______________________ _______ ______ ___
Discussion____________________________________________________
Charles G. Smith, of New York.
William M. Knerr, of Utah.
W. H. Horner, of Pennsylvania.
William E. Hunter, of Arizona.
Daniel Widdi, of New York.
A. J. Altmeyer, of Wisconsin.
Lawrence E. Worstell, of Idaho.
Miss R. O. Harrison, of Maryland.
Thomas J. Curtis, of New York.
New York (Charles G. Smith)_____________________________________
Discussion_________________________________________________ ___
W. H. Horner, o f Pennsylvania.
Charles G. Smith, of New York.
William M. Knerr, of Utah.
William E. Hunter, of Arizona.
Thomas J. Curtis, of New York.
Henry J. O. Sullivan, of New York.
224
229
231
232
237
238
239
240
246
251
254
Problems of Private Insurance States—Section C: Chairman* Mrs. F. L. Roblin, member
Oklahoma Industrial Commission
Oklahoma (Mrs. F. L. Roblin)_______________ __________________________
Massachusetts (William W. Kennard)______ ___________________________
Discussion________________________________________________________
Ethelbert Stewart, of Washington, D. C.
William W. Kennard, of Massachusetts.
Delaware (Walter O. Stack)___________________ ______ _________________
Discussion_____________________________________ ___________________
Fred M. Wilcox, of Wisconsin.
William W. Kennard, of Massachusetts.
Ethelbert Stewart, of Washington, D. C. #
W. L. Robinson, of Virginia.
F. A. Duxbury, of Minnesota.
259
259
262
623
266
CONTENTS
Connecticut (F. M. W illiam s).----------- ------------------------------------------------Discussion_________
___ ---------------------------------------------------------Walter 0 . Stack, of Delaware.
F. M. Williams, of Connecticut.
Georgia (H. M. Stanley)________________________________ ________ _____
Discussion_____ ________________________ ____________________ _____
Ethelbert Stewart, of Washington, D. C.
H. M. Stanley, of Georgia.
0 . E. Sharpe, of Quebec.
Kansas (G. Clay Baker)_______________________________________________
Discussion________________________________________________________
Ethelbert Stewart, of Washington, D. C.
G. Clay Baker, of Kansas.
J. Dewey Dorsett, of North Carolina.
Mrs. F. L. Roblin, of Oklahoma.
Earle L. Russell, of Maine.
Minnesota (F. A. D uxbury)..............................................................................
Discussion_____________________________ _________________________
Ethelbert Stewart, of Washington, D. C.
Mrs. F. L. Roblin, of Oklahoma.
William W. Kennard, of Massachusetts.
North Carolina (Matt H. Allen)_______________________________________
Discussion_____________________________________________ _____ _____
Walter O. Stack, of Delaware.
Mrs. F. L. Roblin, of Oklahoma.
Virginia (W. L. Robinson)_____________________________________________
Wisconsin (Fred M. Wilcox)___________________________________________
VII
Page
267
268
268
269
269
270
270
273
274
275
275
276
,
THURSDAY OCTOBER 10—AFTERNOON SESSION
Problems of Private Insurance States—Section G (Continued): Chairman, W. H. Fitzgerald,
of the State Industrial Accident Commission of Oregon
Coal Mining and Workmen’s Compensation, by Parke P. Deans, Industrial
Commission of Virginia-----------------------------------------------------------------279
Discussion________________________________________________________
282
W. H. Fitzgerald, of Oregon.
F. W. Armstrong, of Nova Scotia.
Ethelbert Stewart, of Washington, D. C.
William M. Knerr, of Utah.
E. I. Evans, of Ohio.
Mrs. F. L. Roblin, of Oklahoma.
Parke P. Deans, of Virginia.
Oklahoma (Mrs. F. L. Roblin)_____________________________________
286
Kansas (G. Clay Baker)----------------------------------------------------------------286
288
Pennsylvania (W. H. Horner)_____________________________________
G. Clay Baker, of Kansas.
Utah (W. H. Knerr)______________________________________________
288
West Virginia (Charles D. Smith)--------------------------------------------------290
Discussion_________________________ ___ _______________________
290
Ethelbert Stewart, of Washington, D. C.
Charles D. Smith, of West Virginia.
W. H. Fitzgerald, of Oregon.
S. S. McDonald, of North Dakota.
W. E. Hunter, of Arizona.
The Age Factor in the Computation for Permanent Disability, by Will J.
French, chairman California Industrial Accident Commission_________
291
Is it Desirable that all Applicants be Represented, and if so should Appli
cants who have not Retained Attorneys be Represented by Attorneys
in the Employ of the State, by F. A. Duxbury, Industrial Commission
of Minnesota________________________________________________________
294
Discussion----------------------------------------_------------------------------------------297
V. A. Zimmer, of New York.
F. A. Duxbury, of Minnesota.
William M. Knerr, of Utah.
George A. Kingston, of Ontario.
Ethelbert Stewart, of Washington, D. C.
Second Injuries Fund, by William M. Knerr, chairman Utah Industrial
Commission__________________________________________ ______________
300
VIII
CONTENTS
Paw
Should Hearings be held in all Cases when Disability Extends Beyond One
Week, by V. A. Zimmer, New York Department of Labor-----------------Discussion________________________________________________________
Thomas J. Curtis, of New York.
L. W. Hatch, of New York.
W. H. Fitzgerald, of Oregon.
W. H. Horner, of Pennsylvania.
Ethelbert Stewart, of Washington, D. C.
V. A. Zimmer, of New York.
Should the Compensation Board have in its Employ a Staff Physician or
Physicians, by H. M. Stanley, chairman Industrial Commission of
Georgia____ _______ _____ _________________ _____ — ______ __________
Discussion________________________________________________________
Parke P. Deans, of Virginia.
H. M. Stanley, of Georgia.
W. O. Stack, of Delaware.
Who Should be Considered Compensation Dependents, and What, if any,
Should be the Limitation of Compensation Dependents, by F. A. Duxbury, Industrial Commission of Minnesota____________ _____________
Discussion________________________________________________________
L. W. Hatch, of New York.
F. A. Duxbury, of Minnesota,
Thomas J. Curtis, of New York.
Fred M. Wilcox, of Wisconsin.
Ethelbert Stewart, of Washington, D. C.
George A. Kingston, of Ontario.
303
306
310
313
314
318
FRIDAY, OCTOBER 11-MORNING SESSION
Business meeting: Chairman, L. W. Hatch, New York State Industrial Board
Report of auditing committee__________________________________________
Report of committee on resolutions____________________________________
325
325
APPENDIXES
A . — Officers and members of committees for 1929-30_________
B.— Constitution of the International Association of Industrial
Accident Boards and Commissions___________________________________
A p p e n d i x C.— List of persons who attended the sixteenth annual meeting
of the International Association of Industrial Accident Boards and
Commissions, held at Buffalo, N. Y., October 8-11, 1929_____________
Index to proceedings, International Association of Industrial Accident
Boards and Commissions, 1929______________________________________
A
A
p p e n d ix
327
p p e n d ix
329
331
339
BULLETIN OF THE
U. S. BUREAU OF LABOR STATISTICS
no.
WASHINGTON
s ii
a p r il, 1930
PROCEEDINGS OF THE SIXTEENTH ANNUAL MEETING OF THE
INTERNATIONAL ASSOCIATION OF INDUSTRIAL ACCIDENT
BOARDS AND COMMISSIONS, BUFFALO, N. Y., OCTOBER
8 11 1929
-,
TUESDAY, OCTOBER 8— MORNING SESSION
Chairman, Mrs. Frances Perkins, president I. A. I. A. B. C.
After the first session of the sixteenth annual meeting of the
International Association of Industrial Accident Boards and Com
missions had been called to order by the chairman, a telegram from
Franklin D. Roosevelt, Governor of New York, and a letter from
Frank X. Schwab, mayor of Buffalo, were read. Each expressed
regret that he was unable to bu present and extended a welcome to
the delegates. Walter O. Stack, president of the Industrial Accident
Board of Delaware, responded to the welcome.
The president of the association made the following address:
Address o f the President
By Frances Perkins, Industrial Commissioner of New York
I feel to-day as though all the people who are interested in acci
dent prevention and in sound administration of workmen’s com
pensation laws were expecting me to tell you just what it is that
we want of you and expect of you and hope for as a result of your
meeting here in this State.
Many of you know that for many years in the State of New York
we have had an annual safety congress. Although we have often
invited others to come and participate in it, still it has been a State
enterprise—a State congress—looking toward better accident-prevention work in our local industries and toward a better adminis
tration of our workmen’s compensation law, particularly with refer
ence to the prevention of accidents and the prevention of the mount
ing costs of compensation due to these increasing accidents.
l
2
SIXTEENTH ANNUAL MEETING OP I. A. I. A. B. 0 .
This year we thought that this meeting of the industrial accident
boards and commissions was of such importance that it would be
better for us not to have our annual safety congress but to com
bine with this organization in its meeting. So those persons who
are ordinarily delegated to attend the safety congress will be found
present at this meeting during some of the sessions, contributing
to the discussion and gaining very much, I am sure, from the papers
and discussions of other States that have had similar experiences.
We have brought up here with us a part of an exhibit which
we often show at the New York safety congress. It is an enterprise
which is conducted by the bureau of hygiene of the New York
State Department of Labor and will snow you one of the best
things we have in our department. We have no great amount of
money to spend in getting new material, and it is possible that some
of you who may be interested will suggest means whereby industries
which are centered in your State will be willing to contribute lantern
slides or other material which would greatly enhance the value of
our safety exhibit.
As you know, the program for Wednesday—that is, to-morrow—
was planned with express reference to accident prevention and to
the activities which the New York State Department of Labor has
carried on in its annual safety congress. There will be in attend
ance a large number of representatives from labor unions all over the
State, of representatives of the industries of the State of New York,
and of representatives of the department of labor. We are also
going to have reports of progress from various employer and labor
union committees on safety.
One of the most striking new pieces of work in this State has been
the appointment by the governor of a committee consisting of mem
bers of the New York State Federation of Labor to carry on an ac
tive accident-prevention campaign among its own members and
among working people generally, it being our belief that perhaps
the best teaching of safety can come from those who are directly
related to, or who know the hazards in, our shops and mines and
mills.
As I see this movement to-day, this society—the Association of
Industrial Accident Boards and Commissions—is not only seeking
among its individuals to improve the technique in the administra
tion of workmen’s compensation, but is also looking to greatly im
proved coordination between the work of the various States and to
better cooperation between the States in reference to accident-prevention work and workmen’s compensation administration.
Cooperation between individuals or between States is perhaps one
of the most difficult things for any group of people in our modern
American society to achieve. We in America, I think, are all funda
mentally individualists; and we are a bit proud of it. It is inherent
in our constitution, in all of the activities of our industries, and in
our fundamental, philosophical conception of ourselves, that each
of us is free-born, able to do whatever one wants to do—so that one
finds it difficult to give up one’s own private ideas of what is right
and good and to nt them into a general scheme in which others
also take a part. However, “ cooperation ” is a word which is grow
ing in American psychology, and we are all happier, I think, to be
ADDRESS OF PRESIDENT PERKINS
3
a part of a cooperating movement such as this represented here
to-day.
We, in this association as well as in other associations, find some
difficulty in attaining cooperation as between States in the solution
of our problems. I am strongly reminded of this lack of coopera
tion, inherent even in our compensation laws, in occasional cases
that come up in New York State where the question of whether or
not we have extraterritoriality jurisdiction is to be decided.
I vividly remember the case of a traveling salesman—selling
paint, I think it was—employed by a Pennsylvania firm. All 01
the firm’s factories were located in Pennsylvania. It had no office
in the State of New York; in other words, it had no hazardous
business in the State. This salesman was injured on Long Island,
which is a part of the State of New York, in an automobile accident
while he was about to make a delivery or a call on one of the firm’s
customers. We decided that because the paint company was not
a New York enterprise and had no hazardous business in New York,
the salesman’s claim for compensation which he filed in New York
could not be accepted and that we could not make an award for
compensation to him, so we referred him to the State of Pennsyl
vania. To our astonishment, he came back in a few weeks and said
that he had 110 claim in Pennsylvania because he was injured in
New York, and that the law of Pennsylvania did not cover injuries
outside of the State, without regard to the employment. I could
not believe it. I thought that he was just faking because the rates
were higher in New York than in Pennsylvania and that he wanted
to claim under the New York law.
I wrote to Harrisburg and learned that this man could collect
compensation neither in Pennsylvania nor in New York, because
of the fact that he was so careless as to allow himself to be injured
in the State of New York. Here was a case of lack of cooperation
between the States, not due to any ill will on the part of the officials,
who would have been glad to handle the matter intelligently, but
in the matter of legislation which denied to a citizen of Pennsyl
vania—a citizen of America—who was injured compensation from
any State.
This man feels that he has a real grievance against the Govern
ment. Most of us agree that he has a grievance, and that we who
are in charge of the administration o f the law should take such
steps as we can to iron out these differences between the State laws
which apparently lead to this lack of cooperation.
Having been charged with the adjudication under the compensa
tion law for some years, I have seen certain things that point to
steps that we all know ought to be taken in the interest of better
compensation and accident-prevention work. It seems to me the
first step is that of grading up the benefits of the various State
compensation laws to the standards of the more advanced States.
Last winter there was held in New York State a meeting called
the state-wide economic congress. This meeting was called by manu
facturers and employers in this State and to it were invited others
who had related interests—economists, bankers, merchants’ associa
tions, and government officials—to discuss what they believed were
some of the difficulties which business men had in the State of New
York.
4
SIXTEENTH ANNUAL MEETING OF I. A. I. A. B. C.
They pointed out, in figures as between factories, that there was
a great difference in the costs of compensation in New York State
and in other States, which they believed was one of the causes of
unfair economic competition between the States. Many of these men
who had factories both in New York and in Pennsylvania, in NewT
Jersey and in Michigan, or in a number of other States, and who
carried compensation in these States, proved rather conclusively
that there is a difference in compensation rate costs, that it is a little
more expensive in New York. However, I was struck with the fact
that with one accord they said that, although this difference was a
hardship, they would not think for a moment of suggesting that the
rates in New York be decreased, that it would be a disadvantage.
They regarded it as a wholesome relationship with their employees
that there were good, substantial workmen’s compensation benefits
in the State of New York.
Is it not time that we in this country—recognizing that the general
standard of living throughout the country is the same, and that, with
the great mergers taking place, there is coming about a concentra
tion and centralization of capital—should realize that it is almost
necessary that workmen’s compensation benefits should be the same
throughout the whole country? Has not the time come, in other
words, for a very determined step on the part of those States wrhich
are not in the lead to raise the level of their workmen’s compensation
benefits to the level of the most advanced State, both as to the amount
of the schedule and as to the exact rates of payment of compensation
awards ? It seems to me that that time has come, and that this group,
with its influential members in every State, should take the lead.
I understand that one of your own committees, within the last
year or two, reported to a previous meeting of this convention, recom
mending that this organization go on record, and I believe your asso
ciation is on record, in favor of a grading up of the benefits. To go
on record is one thing and to be active in regard to the proposition is
another. I think the time has come not only for active work in
grading up benefits, but also for equalizing the compensation laws
in the different States, as well as for an elimination of the arbitrary
maximum which still exists in some States.
It is a tragic thing to see a total permanent disability case or a
death case with a widow and many children and realize that there is
a fixed limit of relief which that case can have, and when that com
pensation has been paid, that individual must become a public charge.
In Newr York State and in some of the other States where there is
no arbitrary maximum limit a permanent disability is paid so long
as the injured person is a total permanent disability, and thus there
is assurance that the individual, injured by industry, is not going to
become a public charge toward the end of his life.
In other words, the percentage of relief which compensation gives
ought to remain constant. It ought not to be limited in one State
and unlimited in another; that makes an unfair situation as between
States, I think in the end wre are going to, by some kind of Govern
ment agreement, wipe out those difficulties.
Another matter of great concern to all of us is the continued
existence of noninsured employers even in those States where insur
ance is compulsory under the workmen’s compensation law. We
ADDRESS OF PRESIDENT PERKINS
5
have been shocked at the number of noninsured employers in the
State of New York. Although our law has been in existence for
many years, and although presumably everybody in the State knows
that he ought to be insured, we find an excessive number of nonin
sured employers.
Our inspectors go into only two classes of establishments—fac
tories and mercantile. They do not go into contractors’ places nor
into places of amusement, and they do not go into a lot of places
that are covered by the workmen’s compensation law; but going
their regular rounds and merely asking in a routine way for poli
cies, in the last year they found 11,000 employers in this State who
were not covered by insurance—a very striking number of non
insured employers.
In the same year we made awards of compensation against non
insured employers in some two or three thousand cases, which means
that in these cases the persons who were injured probably never
collected the full amount of their award.
I remember a case of a widow with five children coming up with
a perfectly just claim, a claim about which there was no question
whatsoever, to find the employer noninsured. All noninsured em
ployers are likely to be irresponsible financially, because if they
were responsible they would have complied with the law and had
compensation insurance. This employer had no background, no
money, and no property to speak of, and the best that he was able
to offer her was $500 as compensation for the death of her husband—
she a widow with five children to support.
We have cases of permanent total disability who were employees
of noninsured employers. The other day I had a case of a man
26 years old, totally blind. He was injured in a terrible explosion
which blew out his eyes and blew off the front part of his face—
hideously disfigured and perfectly helpless at 26. It was a case
of a noninsured employer using dynamite. Just imagine!
After considerable enterprise on the part of charitable, civic, and
other organizations and a great deal of political and judicial pres
sure, we had the employer arrested and threatened with a jail
sentence, after which he managed to find, borrow, or beg $3,000,
and we were obliged to take that in settlement. He had no property,
or he was judgment proof; so Fred Haines, without eyes at 26, has
$3,000 to get along on for the rest of his life. A noninsured em
ployer in any community means a hazard.
It seems to me that the time has come for a permanent drive on
these noninsured employers throughout the country. We are doing
the very best we can to stamp them out in New York State. I
believe they deserve no mercy.
In June [1929] we made a drive to round up all of the noninsured
employers that we could find in a 2-week period. It meant taking
factory inspectors off their regular work and having them search
through apartment houses where there are elevators, through con
tractors’ establishments, places of amusement—all such places—to
find the noninsured employers; and in just two weeks of scouting
around nearly 4,500 noninsured employers were found in the 18,000
establishments visited.
6
SIXTEENTH ANNUAL MEETING OF I. A. I. A. B. 0 .
O f course that meant that we served orders on those employers
and we are bringing them into court. The judges and the magis
trates in every industrial community have been asked to cooperate
with us by imposing the extreme penalty of the law on noninsured
employers, even though they have never had an accident in their
lants. You see that is where the difficulty has been—the employer
as gone a number of years without an accident, and he feels that
nothing can happen to him; if he does have an accident and is
prosecuted by the attorney general he is given a small fine and
settles the case in order to escape going to jail. Our workmen’s
compensation law" carries with it a penalty of imprisonment when
the employer is noninsured, even though he has not had an accident
in his plant.
In New York we have another situation which those who are
interested in insurance practice will realize is serious. I do not
know to what extent it may have cropped up in other industrial
centers in the country. It is closely allied to this problem of the
noninsured employer. An employer will take out a policy of com
pensation insurance and have it issued immediately under a binder
and then fail to pay his premium. He thereby acquires insurance
for a considerable period of time—that is, until such time as the
insurance company gets around to dunning him, then investigating
him, and finally giving him a 10-day notice of cancellation of the
policy for nonpayment of premium. He at once takes out a policy
with another insurance company on the same terms, which he carries
as long as he can.
The State fund in this State has found this to be a real problem—
unscrupulous employers who take out policies and allow them to be
canceled for nonpayment of premium. I f any accident happens in
those few months when they are covered by the binder, the insurance
company is liable, but the employers go scot free and never pay the
cost. Other employers should be on the watch to prevent that
practice, because it means unfair competition on the part of those
who save the price of what the compensation policy would cost.
We find this to be more common in New York City and in Buffalo
among what we call “ fly-by-night contractors ”—people engaged in
very hazardous work but having only one or two contracts; that is,
getting the contract when they can and not being in business at any
other time. The great profits to be made in building operations in
New York State have led a large number of irresponsible people to
undertake to be contractors who by making all these unscrupulous
savings on their cost are able to underbid other contractors. We,
in New York State, have undertaken to blot out this practice.
And there is our problem of occupational diseases. Has the time
not come when anyone who is disabled because of any exposure in
his work, whether it be by legal accident or by exposure to poisons
over a long period of time, should be compensated—should be re
lieved by a tax upon the industry? It seems to me that it has,
because with the changes in American industry in the last 10 years
there has been a great increase of the chemical industries and of the
utilization of chemicals in other industries.
There are people to-day in millinery shops exposed to benzol—
an extremely hazardous industrial poison. Most of us do not think
S
ADDRESS OF PRESIDENT PERKINS
7
of milliners as being exposed to any very hazardous condition; but
benzol, as you know, is used as the solvent in the cement into which
are dipped the trimmings which are pasted on ladies’ hats, instead
of being sewed on. It is one of the modern industrial shortcuts,
but it exposes labor to benzol poisoning.
It is the same in the raincoat factories. All these pretty red and
blue raincoats are put together with a cement which is dissolved in
benzol. My next-door neighbor in the country, a beautiful, young
girl, is dying to-day because of benzol poisoning which she acquired
making these pretty little rubber bathing caps, which are pasted
together with cement dissolved in benzol. She first had a curious
sensation of palpitation and nervousness; she lost her appetite; then
she fainted away and was taken to a hospital where the doctor
diagnosed her case as general anemia, and finally she was sent home.
When I found her so ill, my unscrupulous mind, trained in industrial
practices, began to inquire about what she had been doing. I had
competent physicians who knew the symptoms of benzol poisoning
examine her, and learned there was no doubt that she had benzol
poisoning.
This girl had been working in a novelty factory—that is, a
factory where you would not expect to find our great industrial
hazards. I recite that case only to illustrate to you the insidious
effects of the general distribution of chemicals m our industries
and of their use by people who are unaware of the danger. These
people are not (except for a few limited poisons which are men
tioned in our law) covered by the compensation law.
In New York State, although I wish that we might have a gen
eral occupational disease law, I am pretty sure that our method of
progress will be by adding new diseases each year as we come across
them in the work of the industrial board. We report to the legis
lature that we had last year claims for compensation in two or
three or more cases, we will say, of poisoning from methyl
chloride—the substance which is used in refrigerating plants. It
has been the subject of considerable agitation in Chicago, where
adverse results were suffered due to leakage of fumes in some apart
ment houses where these refrigerators were installed. The men who
work in the factory where those refrigerators are made have not,
until this year, been covered under the New York law. As a matter
of fact, that matter was brought to our attention by an employer
engaged in that industry, who reported a great deal of illness among
his men due to exposure to methyl chloride.
I want to discuss very briefly, if I may, our procedure with re
gard to the making of lump-sum awards. I know in some States
there is a general disposition to make a lump-sum award and close
the case as quickly as possible by agreement.
In New York we have had unfortunate experiences with some
of our lump-sum awards, and I want to suggest to you a discussion
of better methods—a discussion of a general cooperative movement
among the States for better methods of determining when and
whether or not there should be lump-sum awards made, for better
supervision of payment of lump-sum awards, and for better super
vision of the spending of lump sums because sometimes the lump
sum award is all that a family has for its future protection, the
8
SIXTEENTH ANNUAL MEETING OP I. A. I. A. B. O.
unwise or improper expenditure of which means the wreckage of
that family and the defeat of the very purposes for which work
men’s compensation laws were instituted.
In New York State we have developed a little informal practice
of permitting lump-sum awards for therapeutic purposes. This is a
lump-sum award which does not come in the classification of a
necessarily permanent settlement, although to all intents and pur
poses it is a permanent settlement. In many of our difficult neurotic
cases the use of a lump sum for about two or three years—all in a
lump sum with no more questions asked—has been found to have a
high therapeutic value in bringing about a readjustment of the indi
vidual to his circumstances in taking his mind off the compensation
claim, and in making him feel that it is settled and he can now take
a little rest and get back to work.
There is another item which should be added to compensation
practice in every State, and that is more attention to the social con
siderations which surround claims for disability.
In some States there have been established (not in the workmen’s
compensation offices) bureaus of young attorneys who occupy some
what the same position as prosecutors occupy in other forms of
government in order to help claimants when they need help in the
preparation, analysis, and presentation of their claims for com
pensation.
In New York State we have a little bureau, called the aftercare
department, which really is a social-service agency. This bureau
has been in existence for 10 years now, and it has done very valuable
work in putting the claimant in contact with all of the other gov
ernment agencies and with societies that can give the service which
tl^ese individuals need over and above their compensation. We have
found this bureau highly useful in making contacts, for instance,
with private charitable agencies, when we had the problem of trans
porting the individual to New York City in order to have a hearing.
We have found this bureau extremely helpful in the determination
of certain facts with reference to the suitability of guardianship of
certain adults for orphan children who are entitled to awards of
compensation benefits because of the death of the father. We have
found it able to take into consideration all those social necessities
which the workmen’s compensation as such can not touch upon, and
its activity and help has been of great value in the administration of
the workmen’s compensation law.
It seems to me that we should give more careful consideration to
all the implications of the problems of human necessity in the admin
istration of workmen’s compensation law, so that it will not be too
hard and too difficult a problem for the injured workers, first, to
get their compensation; second, to spend their compensation; and,
third, to live while the august officials of the government are deter
mining what they ought to have. In other words, it is a human
problem with them—it is a 100 per cent loss to them even though it
is only one more case to us.
And now I wish to express a doubt as to whether or not there is
any sense in the arbitrary schedule of benefits for the partial loss of
the use of members which has been set up in many of the compensa
tion laws. I remember the way in which these schedules were set up
ADDRESS OF PRESIDENT PERKINS
9
in the New York State law. I remember that those who recom
mended the law had a very much higher number of weeks written
after each member than those who were not opposed to the law but
were trying to make the law as cheap as possible, and that the
legislature finally struck a happy medium between the two. From
time to time, because of the experience of the compensation depart
ment, there has been a slight change in the number of weeks in those
schedules which were found to be manifestly unjust.
Although these schedules have been a lot of guesswork, we regard
them as if they were “ the law of the Medes and Persians,” and we
say to a claimant, “ See, that is all you can have—so many weeks
for an arm; and that is all there is to it,” and act as though the
matter were closed.
But is that the answer? Are the number of weeks mentioned in
the various States based on anything but a guess? Is there any
real knowledge in this country, or any country, that a given number
of weeks represents in any way the degree of difficulty and the
degree of loss of earnings which an individual will probably have
because of the loss of a member? I think we all would agree that
it is only a guess. The time has come for every State to carry on
cooperative studies of the social and economic histories of some of
these cases in which schedule awards have been made under exist
ing schedules.
What has a man without his right arm been able to earn in these
United States of America since 1917? Let us know to what extent
it has interfered with his earning power, either as a mechanic or as a
laborer. Let us know just what difficulties have confronted him,
and let us see if we can not have a more rational basis in the next
10 or 20 years for making these awards for scheduled losses of
members.
Another thing I want to suggest is that at the same time we are
studying these schedules let us take into consideration some of the
implications of the French system of making awards. Under the
French system permanent total disability is regarded as 100 per cent,
and all other disabilities of members or of parts of members are
regarded as a certain percentage of total permanent disability.
There has been at least some effort to determine what percentage
the loss of a leg is of total permanent disability.
I think the French system offers many suggestions which would
be extremely valuable in this country in doing justice as between
classes of claims. Think, for instance, of the difference between
the man of 70 who loses his arm and a boy of 17 who loses his arm,
yet each gets the same amount of money under our American law.
Under our New York State law the man of 70 if he dies the next
week has had the award and that award is given to his dependents,
whereas the boy of 17 must go on through all of his life without an
arm. His economic disadvantage is exceedingly greater than that
of the older person who was injured in the same way and has the
same sort of a schedule award.
Under the French law the boy of 17, if he should be given a certain
percentage of permanent disability for the loss of that arm, would,
of course, have his age and his expectancy of life taken into consid94023°—30------ 2
10
SIXTEENTH ANNUAL MEKTi.N-(1 OP I. A. I. A. B. C.
eration in figuring the total permanent disability, and therefore his
amount of money would be very much greater than that of the older
person whose expectancy of life was very much shorter.
I am told by actuaries that the cost, so far as the insurance com
pany would be concerned, would probably be no greater and that the
difficulties of underwriting would be no greater than under our pres
ent law. Therefore, I want to raise the question—I don’t want to
commit myself as being an advocate of that yet, because I am merely
a student of it—but I want to suggest to this association the future
study of that system as well as of our schedule.
1 have taken much of your time this morning in talking of
tilings about which you know quite as much as I do, but my one
hope is that what we learn from one another in the discussions may
be mutually stimulating and that out of this will come good which
will be reflected to the people of this State and to those of other
States who are so unfortunate as to be injured in the course of their
employment.
The C h a i r m a n . Mr. Skelding, the assistant actuary, is reporting
in Mr. Roeber’s absence on the “ Explanation of figures of National
Council on Workmen’s Compensation Insurance on relative benefits
under different State laws.”
Explanation o f Figures o f National Council on W ork
men’s Compensation Insurance on Relative Benefits
Under Different State Laws
By W. F. Roeber, actuary National Council on Workmen's Compensation
Imurance, Neto York City
[Read by Mr. Skelding]
You, as members of industrial accident boards and commissions,
are engaged in the administration of the workmen’s compensation
law of your State. You are interested primarily in the administra
tion of your own State law, but you are also interested in comparing
your law with the laws of other States. For purposes of this com
parison, the provisions of the various and sundry workmen’s com
pensation laws may be grouped under the two general headings of,
first, “ Strictly administrative provisions,” and second, “ Benefit
schedules.5’ I will deal only with the latter group, which lends itself
to mathematical analysis.
The National Council on Compensation Insurance has prepared
a table showing mathematically the benefit provisions of the law
of each State compared with the corresponding provisions of the
law of each of the other States. This table, which is in the form of
a series of index numbers using the New York law as a base, is called
the table of comparative benent costs. The index figures appearing
in the table are called " law differentials.”
At this point you mi^ht well ask: “ Of what particular value or
interest is this to m e?” A general answer would be that you are
concerned with the liberality of the benefit provisions of the law in
your State as compared with the corresponding provisions of the
laws of other States. For example, when the State legislature has
under consideration an amendment to the compensation law, you are
asked for advice and your advice will undoubtedly be influenced by
N A T IO N A L
C O U N C IL O N
C O M P E N S A T IO N
IN S U R A N C E
11
what other States are doing. This table enables you to make a
direct comparison with the laws of other States. You are also in
terested in knowing how, on the average, the awards in your State
compare with the awards in other States. The aggregate awards
over a reasonable period of time in each of two States may show, for
example, that the aggregate cost of fatal cases is 20 per cent higher
in State A than in State B. By referring to the Table of Compara
tive Benefit Costs, you find that the law is only 15 per cent higher
in State A than in State B. The remaining 5 per cent is due, there
fore, to differences not attributable to the law. This residue is made
up of a number of items, included in which and playing an extremely
important part of it is the attitude of the commissions and courts
in settling claims.
I have just mentioned the differences in cost between States not
attributable to the benefit provisions of the laws. These differences
are of importance in compensation-rate making. We, therefore,
use experience differentials rather than law differentials in placing
past experience upon a common level of cost. Experience differen
tials in addition to measuring differences in cost under the various
laws measure all other differences, such as methods of administra
tion, attitude of boards, commissions and courts, medical and hos
pital conditions, wage levels, accident severity, frequency rates, and
all the other related subjects which play a part in determining loss
cost. In other words, the law differentials which are shown in the
table of comparative benefit costs compare the adequacy of the bene
fit provisions of the various laws while the experience differentials
measure not only these provisions but also all other items affecting
cost.
I will now attempt to explain the derivation and limitations of the
law differentials appearing in the table of comparative benefit costs.
For statistical purposes accidents are classified, according to the
kind of disability produced, into the six major divisions of fatal,
permanent total, major permanent partial, minor permanent partial,
temporary, and medical. Permanent total disability is usually de
fined as the loss or complete loss of use of both hands, both arms,
both feet, both legs, both eyes, any two thereof, or any other injury
which in fact permanently and totally prevents a person from pur
suing a gainful occupation. Major permanent partial disability is
disability, not constituting permanent total, which involves the loss
or impairment to the extent of 50 per cent or more, of an arm, hand,
leg, foot, or eye, or any permanent injury which is compensated on
the basis of 25 per cent or more of permanent total disability. With
this explanation the other terms are practically self-explanatory.
The table of comparative benefits is a comparison of the scale of
benefits of workmen’s compensation laws by these six statistical divi
sions. New York is taken as the base, but, as the values are con
sistent, the table can be transformed to one with any other State as
the base by the simple process of division. The values given for
Alabama in the table as of January 1, 1929, are as follows:
Deatli_____________________________________________ _______ 357
Permanent total___________ ___ ___
_ _________________ 252
Major permanent partial------------------------------------------------------ 448
Minor permanent partial____________________________________ 584
Temporary total____________________________________________ 573
Medical-------------------------------------------------------------------------- 821
12
SIXTEENTH ANNUAL MEETING OF I. A. I. A. B. 0 .
Everything else being equal, these figures mean that on the average
tiie cost of a fatal case settled in accordance with the benefit pro
visions of the compensation law of Alabama is 35.7 per cent of the
cost of the same case settled in accordance with the benefit schedule
of the New York compensation law, and similarly, the cost of a
permanent total case under the Alabama law is, on the average,
25.2 per cent of the cost of the same case under the New York law.
The index numbers for different kinds of injury in the same State
have no relation whatever to one another. The relation between the
average cost of a fatal case and the average cost of a permanent total
or any other kind of a case can not be determined from the Table of
Comparative Benefits.
These index numbers are obtained by calculating separately for
each kind of benefit the cost of compensating a standard distribution
of accidents under the compensation law of each of the States and
dividing the cost for each State by the cost for the basic State.
The standard distribution of accidents referred to is known as the
American Accident Table. This table is based upon a countrywide
study of compensation accident statistics. In addition to the major
divisions by kind of disability, each division is further subdvided
as follows: For fatal, a distribution is given according to the kind
of dependents and their average age; in the permanent total disa
bility classification the average age of the injured employee is shown;
in the permanent partial disability divisions the number of cases of
dismemberment or loss of use of each bodily member is given; and
for temporary disability there is shown a distribution by duration
of disability.
In order to obtain comparable figures, it is necessary to calculate,
on the basis of a common wage, the cost of compensating this dis
tribution of accidents under the compensation law of each State.
Here we are confronted with a question as to what wage to use.
For example, in comparing the New York compensation law with the
Alabama compensation law should the calculations be made at the
New York average weekly wage of $33.14, or the Alabama average
weekly wage of $20.41? Offhand it might appear that the same
differential will be obtained regardless of the average wage used.
This is not the case, however, because of the operation of the maxi
mum and minimum limits to weekly compensation.
In New York the limits to weekly compensation for temporary
disability are $8 minimum and $25 maximum. At a compensation
rate of 66% per cent these correspond to effective wages of $12
minimum, and $37.50 maximum—that is, anyone whose average wage
is $12 or less will receive $8 per week if injured, regardless of the
actual average wage, and anyone whose average wage is $37.50 or
greater will be entitled to compensation of only $25 per week. Thus
we see that the weekly limits have the effect of making the actual
percentage rate of compensation greater than the legal percentage
for those cases lying at the lower end of the wage distribution and
less than the legal percentage for those cases lying at the upper
end of the wage distribution. The location of these limits with
respect to the average wage has a marked influence on their effect.
If the average wage comes very close to the lower limit, the increase
clue to the lower limit is likely to more than offset the decrease due
NATIONAL COUNCIL ON COMPENSATION INSURANCE
13
to the upper limit, with the net result that the compensation payable
may amount to more than it would if there were no limits. And,
on the other hand, if the average wage comes very near to the top
limit, the compensation will be greatly reduced below what it would
have been if there were no limits.
In Alabama the limits of weekly compensation are $5 minimum
and $12 to $15 maximum, while the compensation rate is 50 per cent.
You will note that these limits and the rate of compensation are
considerably lower than in New York. But in Alabama the aver
age wage upon which compensation payments are based is, accord
ing to latest available statistics, $20.41, while in New York the cor
responding average wage is $33.14. It is obvious that if we cal
culate the monetary cost of compensating a standard distribution of
accidents using a low set of limits from one State and a high wage
from another State, or vice versa, the results will be distorted. For
example, if we use the New York average wage of $33.14, the Ala
bama cost of temporary disability is 54.1 per cent of the correspond
ing cost in New York, while if we use the Alabama average wage of
$20.41, the corresponding figure is found to be 66.3 per cent. One
solution would be to use the average of the New York and Alabama
wages. However, if we introduce other States into the table on this
basis, it is impossible, because of the various underlying wages, to
compare one State with any State other than New York. We over
come this difficulty by using a national average wage which is a
weighted average of all the State average wages. The cost of com
pensating the accident table is computed under each State’s law at
this national average weekly wage of $26.85.
The values given for medical in the table of comparative benefits
are obtained from a comparison of index numbers assigned to each
State in accordance with the legal limits to duration and monetary
amount of medical aid provided by the compensation law and do
not, therefore, measure actual differences in medical cost as between
States.
The figures given for “All benefits ” are weighted averages of the
6-part factors. National Schedule Z data have been used as weights
for reasons similar to those underlying the use of a national average
wage.
In using this table of comparative benefit costs you must bear in
mind that the figures themselves are subject to many limitations
because of the fact that so many elements, the effect of which we can
only surmise, must enter into the computation. As pointed out in
my previous remarks, the use of an average national wage is but
an approximation to the true condition in any particular State. A
comparison of cost under the “All benefits ” column is correct only
in a general way. The distribution of accidents by type of injury
varies from State to State and will, therefore, be somewhat different
in each case from the national distribution or from any other set
of weights which might be used to obtain the average. Because of
this fact and others previously mentioned, it is essential to keep its
limitations in mind when using this table.
In conclusion, permit me to again point out that the law differ
entials shown in this table are merely an approximate measure of
the adequacy of the benefit provisions of the various State laws
14
SIXTEENTH ANNUAL MEETING OF I. A. I. A. B. C.
and should not be confused with the experience differentials em
ployed in rate making. These latter figures measure, in addition to
differences in law, all other factors affecting the loss cost.
TABLE OF COMPARATIVE BENEFIT COSTS
The attached table of comparative benefit costs measures the theoretical
differences between the benefit schedules of the various workmen’s compensa
tion laws. The index numbers or law differentials appearing in this table
should not be confused with the experience differentials which measure, in
addition to differences in law, all other factors affecting compensation cost.
Law differentials afford a convenient comparison of the benefit scales o f the
several workmen’s compensation laws. Experience differentials, which include
a measure of all items affecting compensation cost, are used in rate making.
The factors shown for each of the major loss divisions o f fatal, permanent
total, major permanent partial, minor permanent partial, and temporary are
determined separately by applying the compensation law of each State to a
standard distribution of accidents called the American Accident Table. The
index numbers for different kinds of injury in the same State have no relation
whatever to one another.
New York is taken as the base. For example, the figure shown in column
( 1 ) for Alabama means that on the average, the cost of a fatal case settled
in accordance with the benefit provisions of the Alabama law is 35.7 per cent
of the cost of the same case settled in accordance with the benefit provisions
ot the New York law. Similarly, the average cost of a permanent total dis
ability in Alabama i s 25%63 0f the average cost of a permanent total dis
ability in Alaska.
The laws have been valued on a national average weekly wage of $26.85.
The figures shown in column (7) are weighted averages of the 6-part fac
tors. National Schedule Z data have been used as weights.
Because there are so many elements, the effect o f which we can only sur
mise, entering into the calculation of these index numbers, they are approxi
mate values only. In using these values, their limitations should be borne in
mind.
Table of comparative 'benefit costs
[Compiled as of Jan. 1,1929]
(1)
State
Fatal
(2)
(3)
(4)
(5)
(6)
(7)
(8)
of latest
Major Minor
Aver Date
Perma perma
law affect
perma Tempo Medical
and age, all ing
nent
benefit
nent
nent
rary hospital
benefits
total partial
schedules
partial
New York.................................. $1,000 $1,000 $1,000 $1,000 $1,000 $1,000 $1,000
821
571
252
Alabama.....................................
584
573
357
448
Alaska___ ___________________
893
955
626
463
735
695
Arizona............ ...... ......... . ........ 1,147
1,220
957
1,031
959
941
848
782
582
667
757
863
1,000
California............ ......................
498
569
507
877
605
560
Colorado.....................................
420
378
Connecticut................................
355
750
776
767
1,000
771
518
Delaware....................................
345
221
509
615
606
790
585
961
1,082
1,069
959
1,000
District of Columbia.................
762
403
772
609
511
683
Georgia.......................................
234
648
383
790
Hawaii........................................
820
806
1,000
447
848
248
687
Idaho..........................................
475
576
487
721
1,000
540
Illinois......... ...............................
763
654
857
751
1,000
482
429
722
877
Indiana.......................................
699
806
721
495
283
560
605
784
603
Iowa............................................
497
292
538
677
833
800
882
746
Kansas........................................
340
498
Kentucky...................................
642
877
575
731
467
303
458
741
Louisiana.....—. . . . . ____ . . . .
456
365
619
675
895
944
822
822
819
784
Maine____________ _________
465
333
1,258
1,014
830
Maryland.............................. ....
595
716
981
284
768
Massachusetts____ __________
539
645
560
906
845
714
278
Michigan...................................
885
957
603
414
611
798
787
935
1,000
905
Minnesota.................................
900
736
948
498
Missouri......... ...........................
963
1,086
1,000
901
649
554
698
554
963
608
Montana____ ________ _______ • 576
482
403
320
792
775
Nebraska......... .........................
1,000
634
755
777
585
Nevada............................... ......
1,014
700
663
760
883
988
916
885
New Hampshire........................
450
295
735
571
376
m
July
Jan.
Aug.
Nov.
July
May
July
Apr.
July
Aug.
Apr.
Mar.
July
May
July
July
June
Aug.
July
June
Aug.
Sept.
Apr.
Jan.
Mar.
July
Mar.
May
1,1928
l, 1920
7,1927
3,1925
29,1927
1,1927
1,1927
29,1927
1,1928
27,1925
27,1927
2,1927
1,1927
16,1927
4,1927
1,1927
16,1926
1,1928
16,1927
1,1927
27,1928
5,1927
25,1927
9,1927
10,1925
24,1927
21,1925
4,1923
15
DISCUSSION
Table of comparative benefit costs— Continued
(l)
state
New Jersey.............................
New Mexico..... .....................
North Dakota.........................
Ohio........ .............................
Oklahoma...............................
Oregon....................................
Pennsylvania.........................
Porto Rico..............................
Rhode Island..........................
South Dakota.........................
Tennessee...............................
Texas.....................................
Utah.......................................
Vermont— ..... ......................
Virginia...................................
Washington............................
West Virginia______________
Wisconsin________________
Wyoming...............................
United States: Longshoremen.
(2)
Perma
Fatal nent
total
$504
370
986
702
449
775
443
396
373
365
536
652
562
289
404
880
687
765
354
762
$923
294
662
869
407
483
331
194
278
174
261
332
679
187
239
557
799
6$9
275
03
(3)
(4)
(5)
(6)
(7)
Major Minor
Date of latest
perma perma Tempo Medical Aver law affect
and age, all ing benefit
nent
rary hospital
nent
benefits
schedules
partial partial
$797
427
865
708
668
501
716
457
494
577
444
600
631
528
493
568
722
1,215
432
1,082
$1,026
391
756
807
785
562
871
352
473
705
561
758
543
494
811
933
297
508
1,139
838
907
944
732
648
729
988
641
884
898
648
550
668
771
955
857
959
5877
677
1,000
802
1,000
877
914
772
710
926
1,000
914
1,000
Jan.
1,1929
July
July
June
May
Jan.
Aug.
Apr.
July
Apr.
June
May
June
June
July
July
Aug.
609 Apr.
961 July
1.1927
14.1925
29,1923
26.1927
1,1028
12.1928
22.1927
1.1927
25.1927
15.1927
12.1925
1.1927
17.1928
1.1927
24.1925
10,1927
1.1927
1.1927
$850
484
957
816
771
765
715
596
613
736
599
765
752
548
609
736
Mur. 14.1927
DISCUSSION
Mr. S t e w a r t . I would like to ask a question. In the first place,
in your paper you say “Alabama as oi January 1, 1929.” In the
table it shows 1920. Which is correct ?
Mr. S k e l d i n g . Both are correct. The latest law in Alabama went
into effect in 1920. This table was drawn up as of January 1, 1929;
so the January 1, 1929, law, as far as Alabama is concerned, is the
same law which went into effect in Alabama in 1920, as in drawing
this table we must draw it as of some particular date.
Mr. S t e w a r t . Y o u have Utah as of 1925. I f you are asking for
experiences, would it not have been better to have taken a recent
date? So far as Utah is concerned, you can get their report up to
the day before yesterday. You can get the report of Utah within
a week of the date you ask for it.
You have Oklahoma, 1923. You can get the record of Oklahoma
within six months, and I think in 3-month periods.
I would just like to know why these old dates were used, and
whether they have any significance. Then I would like to say this:
You have Alabama and Tennessee, States with court administration
laws, and this association doesn’t concede that those States have any
compensation law at all. You get a mere fraction of the accident
cases in Tennessee and Alabama. I should say in Tennessee easily
90 per cent are settled between the employer and the employee on
an agreement, and the employee does not know what it means, except
that he is getting $25 perhaps, which is more money than he ever
saw before, and the court simply O. K.’s those things. Compensa
tion, as we understand it, in those States is simply a farce. I wonder
how much the inclusion of those States has influenced these figures?
Mr. S k e l d i n g . I would like to point out first of all that the actual
experience developed under the State acts does not enter into the
16
SIXTEENTH ANNUAL MEETING OF I. A. I. A. B. C.
calculation of this table at all. As I pointed out in the table, we
have two kinds of so-called differentials: The lower differentials
which are exhibited in the table of comparative benefit costs, and
another type of differential called u experience differential,” which
do take into account the experience which has been developed under
each State act. In other words, this table is merely a theoretical
comparison of the benefit provisions of each of the different State
workmen’s compensation laws. The actual experience which may be
incurred under those compensation acts has nothing whatever to do
with this table, and, as a matter of fact, when the experience actually
is developed, it may be very far off from what we theoretically expect
under the benefit provisions of the workmen’s compensation act.
For instance, in comparing the benefit provisions of the State
laws of two different States, we might expect that the average cost
of a fatal case in one State would be $3,000, and that in another
State the average cost would be $5,000; that is, merely taking into
consideration the benefit provisions of the law. When the actual
experience is developed, that situation may be entirely reversed.
The actual figures may be $1,000 and $6,000; so that this table is
merely a theoretical comparison of the benefit provisions of the
different State workmen’s compensation acts. Experience does not
enter into the figures shown in this table at all.
Now, as to the other question regarding the dates which we have
used, I think that is partially answered by the answer to the first
part of the question: that experience has not entered into the cal
culation of these figures at all. For instance, in Alabama, column
No. 8, we show the date of the latest law affecting the benefit sched
ule, January 1, 1920. That is the same law which is now in effect
in Alabama, so that for the purpose of calculating the table the data
used are brought up to to-day. There is no difference, as far as
benefit provisions of the Alabama law go, between the law of to-day
and that which originally went into effect on January 1, 1920, and
the important point in attempting to use this table is to bear par
ticularly in mind that the table is merely an attempt to measure
theoretically the benefit provisions of the various State laws,, and
that it is not influenced in any degree by experience which has ac
tually developed under the workmen’s compensation laws.
Mr. K e n n a r d . Not for the purpose of being controversial, but in
view of the fact that I take it these figures wnl be made public and
they may be the subject of comment and examination by the public,
I should like to ask the speaker how he arrived at the figures in
Massachusetts. He says he has not taken experience into considera
tion. Our law provides for weekly payments of benefits over an
indeterminate period. Nothing but experience will show what the
benefits under the Massachusetts law are.
Mr. S k e l d i n g . The same thing applies to New York, of course,
because in permanent total disability cases the period is not deter
minable, and the payments in cases of permanent total disability
continue as long as the injured person-----The C h a i r m a n . Your permanent-disability payments in Massa
chusetts are not paid for so many weeks. They are paid for the
actual number of weeks disability exists.
DISCUSSION
17
Mr. K e n n a r d . I have had men who have lost an eye and who
went to work the next day, and I have had men who have lost an eye
and who did not go to work for three years, and the 3-year men
received compensation.
Mr. S k e l d i n g . I can not say just offhand where the figures for the
different. States came from, but-----The C h a i r m a n . I suppose you took the maximum possible under
the computation of averages.
Mr. S k e l d i n g . No ; we did not take the maximum possible, but in
any case if the figures are not accurately determinable, it is neces
sary to use some sort of judgment in arriving at the figures which
have been used, and so many States in this table—as a matter of fact,
I have not seen any of the calculations on this for a year or more,
so that I can not say offhand as to just how the figures were deter
mined. However, if you will write to me I will be very glad to give
you the information you require by correspondence.
Mr. K e n n a r d . My principal interest, as I stated, was because this
table will become a matter of record of the minutes of this meeting,
and because I wanted to know whether the figures given for Massa
chusetts are based upon figures which can be demonstrated, and I
rather get the impression that they can not.
Mr. S k e l d i n g . We must bear in mind that the table has nothing
whatever to do with actual experience. The best we can do is to
make some sort of an estimate. Now, as to the actual basis of that
estimate, I do not know offhand.
The C h a i r m a n . Before including these figures in the records will
you verify or explain them to Mr. Kennard ?
Mr. S k e l d i n g . This table is public. It has been used a number
of years in Massachusetts. The workmen’s compensation authorities
have this table, and it has been public for a number of years. As a
matter of fact, this table is sent out by the National Council on
Compensation Insurance on January 1 of each year. The present
table, I believe, was sent out on January 1, 1929, and a similar table
will be sent out on January 1, 1930, so there is nothing secret
whatever about the table.
Mr. S t e w a r t . I would like to ask that a carbon copy of whatever
correspondence takes place between States and Mr. Skelding on this
matter be sent to me for incorporation in the minutes. It does not
seem to me that we are going to have a very satisfactory idea of this
unless we get all of these explanations.
Mrs. K o b l i n . I wish to inquire if the fatality benefits have been
included in the average for all benefits.
Mr. S k e l d i n g . Yes; the fatal has been included in the total.
Mrs. R o b l i n . Then may I make further inquiry as to how you
arrive at the fatal for Oklahoma, the law of Oklahoma not pro
viding any amount and not limiting even under a common-law
coverage ?
Mr. S k e l d i n g . The Oklahoma law, I believe, does not apply to
fatal cases. However, the Oklahoma rates which are charged for
compensation are predicated on the assumption of coverage of
18
SIXTEENTH ANNUAL MEETING OF I. A. I. A. B. 0.
$5,000 as representing payments in fatal cases; so that this table has
been prepared on the same basis on which the Oklahoma basic manual
rates are computed; namely, on a maximum cost of $5,000 for fatal
cases.
Mr. K i n g s t o n . I regard this as a very valuable paper. It is an ex
ceptional contribution, I think, to the literature on this subject. I
recall seven years ago, at Baltimore, I attempted a comparison. I
went at it in a little different way, and I remember how I trod on the
toes of quite a number of jurisdictions who found themselves in my
comparison comparatively low on the list.
I do not suppose the speaker intends at all that this comparison
is going to work out according to these figures in actual practice,
but as in theory it is undoubtedly an exceptional contribution.
I merely wish, however, to say this: The Canadian situation has
not been incorporated in this paper. There are a number of Prov
inces of Canada that are members of this association. Why they
were not included in this comparison I do not know, but I would
very much appreciate it if, before this paper is printed in the record,
the data necessary to incorporate the provincial laws in this com
parison could be included, so that the record will be complete as
regards all of the jurisdictions that are members of this association.
I f I may do so, I will move that the gentleman who prepared this
paper work the data into this comparison, and I will undertake to
get the necessary information for him.
Mr. S k e l d i n g . I believe we have some sort of a comparison along
those lines at the National Council, at least with respect to some of
the Provinces. I believe we have the figures for Quebec and one or
two of the other Provinces.
Mr. K i n g s t o n . Well, there are three of the Provinces represented
here, and I think three of the other Provinces are members of this
association, and I can easily undertake to get the necessary data to
enable you to incorporate those Provinces in that comparison.
Mr. S k e l d i n g . I f we do make a comparison, I do not think we will
need any data other than a copy of the compensation act of the
different Provinces, and I believe we have copies of those acts.
The C h a i r m a n . Would it be possible and practical for you to
make a comparison within the next few months so that it might
be included in the records of this meeting?
Mr. K i n g s t o n . I have only this to say regarding this: The acts
in the various Provinces do not include lists of the compensation
benefits in the same way that they do in most of the acts in the
United States, and possibly some additional data may be necessary,
which I will undertake to procure for you.
Mr S k e l d i n g . All I can say is that we will be very glad to under
take it if we can find the time. Mr. Leslie, who was previously
general manager of our organization, resigned a few months ago,
and Mr. Roeber, who is now assistant manager, is seriously ill and
will be absent for some time, and one or two other persons are also
ill. That leaves only one or two of us at the office, and the work
>which we have to do every day—our ordinary routine work—is prac
tically more than we can handle now; so I do not want to undertake
DISCUSSION
19
any additional work if a special limit as to time is going to be
placed upon it.
I f you wish that comparison within four or five months, or some
thing like that, we very probably will be able to give you the data
you ask for, but if you want that data within a month or two,
although we would be very glad to give you the information which
you request if we possibly could, you can see, in view of the explana
tion which I have made as to the situation of our office, that we can
not very well right at this time undertake any additional work.
The C h a i r m a n . May I suggest that this information, which I
realize would be important to have included in the report, be left to
correspondence between Mr. Stewart and those preparing the papers,
and that if such tabulation can be made in time for incorporation
in these minutes, that it be done ? If not, that a footnote of explana
tion be added. We surely do not want to press those who have been
kind enough to do this for us, to do additional work unless they have
the opportunity.
Mr. S k e l d i n g . A s I said, I think we have some of the figures on
some of the Provinces. I know we have the figures for Quebec.
The C h a i r m a n . It probably could be done if you have time
enough ?
Mr. S k e l d i n g . That is a mere matter of copy work, but the others
which have not been undertaken would require considerable time.
Mr. A l t m e y e r . I should like to ask the speaker whether the
method of using $26.85 for the weekly wage gives proper credit to
States that have a higher maximum than that amount? For ex
ample, you compare States having exactly the same schedule allow
ance for various types of permanent disability, one State having a
certain maximum and another State having $5 more for the maxi
mum, and the benefits would work out the same, would they not,
under your method ?
Mr. S k e l d i n g . Yes.
Mr. A l t m e y e r . Are you giving proper credit to the State with
the higher maximum ?
Mr. S k e l d i n g . Probably not; but as stated, this table is only in
tended to be approximate, to give approximate figures, and there
are all sorts of conditions which enter into the table which preclude
the possibility of getting a table which is absolutely and mathe
matically correct. As a matter of fact, we use this table in the
office quite frequently, and we have found it very desirable that
we be able to go from one State to another—that is, to measure the
Alabama act in theoretical terms, the Colorado act, and so forth—
which is why we have taken the national average wage of $26.85.
There could be all sorts of improvements made in the table as
far as wages go, but this table has really been drawn up for our
own use, and it is only an approximate table, and we have to bear
in mind the practical conditions surrounding the use of the table.
I f we were to try to make up a table which would be absolutely
mathematically correct, the amount of labor involved would t>e
enormous. We would not be able to do it.
20
SIXTEENTH ANNUAL MEETING OF I. A. I. A. B. C.
The C h a i r m a n . I s that satisfactory (
Mr. S t e w a r t . It has been the custom of the association to have a
statement of the legal changes in compensation laws during the
current year. We have prepared such a statement, which it will
take about five minutes to read. I f we are through with this
discussion, it seems to me that this is the proper time for this report
to be presented.
The C h a i r m a n . Shall we, for the purposes of getting ahead with
the work of this convention, declare the discussion on this paper
closed, and proceed as Mr. Stewart suggests ?
General Review o f Workmen’s Compensation Legis
lation for 1929
By Charles F. Sharkey, of the United States Bureau of Labor Statistics
The past legislative year has been an active one in the field of
workmen’s compensation. Of the 44 States having compensation
laws, all met in regular session in 1929 with the exception of four
(Alabama, Kentucky, Louisiana, and Virginia). Of those States
meeting in regular session, 35 acted on the subject of workmen’s com
pensation. Regular sessions were held but no action taken in five
States having such laws (Arizona, Nevada, New Hampshire, Tennes
see, and Utah) and in three States which have not yet passed any
legislation on the subject (Arkansas, Florida, and South Carolina).
The Legislature of Mississippi, the fourth State without a compensa
tion law, did not convene in 1929. In addition to their regular ses
sions several of the States met in extra session, but of those States
from which legislation is available none acted upon the subject of
compensation at the special session.
The outstanding progress to report since the last meeting, at Pater
son, N. J., is the enactment of a workmen’s compensation law in
North Carolina. This act became effective on July 1 of this year.
In Arizona the 1929 legislature passed a bill amending the law as
advocated by the industrial commission, but it was vetoed by the
governor. Arkansas again attempted to enact a workmen’s com
pensation law, but the measure failed to pass. The State, however, did
enact a law during the legislative session, providing compensation for
accidental injuries or death suffered by employees of the State highway
commission. The Maine act was completely revised and reenacted, as
was also the act of New Mexico, while a new draft of an act in New
Hampshire was defeated. In Oregon the 1929 legislature authorized
the appointment of a committee to study the needs of the workmen’s
compensation law, and to report its recommendations to the governor.
The Congress of the United States has also been in session since
our last meeting, but has made no change in the compensation already
extended to Federal employees, longshoremen, and harbor workers,
and private employees in the District of Columbia.
Naturally it would be impossible in the brief time at my disposal
to go into the details of all the amendments passed this year by the
various State legislatures. The tendency has been, however, to
strengthen the existing laws, to enlarge their scope, and to improve
GENERAL REVIEW OF COMPENSATION LEGISLATION
21
their administration. Fourteen States amended their coverage pro
visions (Delaware, Idaho, Illinois, Indiana, Maine, Maryland, New
Mexico, New York, South Dakota, Texas, Vermont, West Virginia,
Wisconsin, and Wyoming). A tendency was shown in New Hamp
shire and Tennessee toward the possible extension of the coverage of
the workmen’s compensation system, by the passage of an act
authorizing the payment of compensation for injuries to State em
ployees and to those engaged on highways and public works, in amounts
not exceeding those provided in the State workmen’s compensation act.
The waiting period was decreased in some States, notably in New
Mexico, where the period has been reduced to seven days. Other
States acting on the subject included Connecticut, Illinois, Maine,
and Montana.
Liberalization of benefits received the attention of 20 States, and
was effected by raising the minimum or maximum weekly payments, by
increasing the maximum amount in death cases and the number of weeks
for specified injuries, by a more liberal allowance in the case of medical
and surgical aid or burial expenses, and by other less direct methods.
Oregon enacted a provision to cooperate in the administration of
the Federal longshoremen’s act by authorizing the State fund to
insure maritime employers under the act.
In Pennsylvania extraterritorial effect is now given to the law,
affording protection to employees temporarily performing services
outside the State.
The time of notice of injury and claim for compensation was
extended or considered in Idaho, Illinois, Maine, Massachusetts,
Montana, New Mexico, and Wyoming.
In Minnesota a nonresident alien dependent may now designate
some person other than his consular representative to receive com
pensation for him.
In Kansas the administration of the act is transferred from the
public service commission to the newly created commission of labor
and industry.
The Kansas Supreme Court rendered a decision February 9, 1929,
holding that since the act is elective, contractual in its nature, there
was no provision made for an appeal from the District Court to the
Supreme Court on questions of law; the legislature therefore amended
the act permitting such an appeal. In Nebraska an appeal from a
decision of the commissioner must be taken to the district court of
the county in which the accident occurred unless otherwise agreed
upon by the parties, while in Montana an appeal to the district
court of the county of the accident may now be taken by either party
instead of by the employee only, as formerly. Appeals from the
court of common pleas in Pennsylvania may now be taken only to
the Superior Court.
The subject of accident reporting received attention in several
States, including Georgia, Indiana, New Mexico, and Oregon.
In Michigan double compensation is now assessed in the case of
the illegal employment of a minor under 18 years of age.
Two States (New York and Ohio) enlarged the list of occupational
diseases. The Ohio act added manganese dioxide and radium
poisoning, and two diseases peculiar to miners. In New York an
act was passed during the early part of the legislative session ex
tending the list of occupational diseases to include radium poisoning
22
SIXTEENTH a n n u a l m e e t i n g OF I. A. I. A. B. c .
in hospitals or laboratories only. This act became effective March
6, 1929 Subsequently, however, another bill adding 11 new diseases
was drawn by the industrial survey commission, which had the
indorsement of the department of labor. When the bill was about
due for final passage, it was hastily withdrawn, returned to the com
mittee, and amended by striking out all but four of the diseases,
including radium poisoning. The industrial survey commission
did not approve of this alteration. Governor Roosevelt, in signing
the bill, which became effective October 1, 1929, took occasion to
point out the inadequacy of the law as enacted by the legislature.
The present list of occupational diseases adds chrome poisoning
and poisoning by any sulphide, besides the diseases, newly included,
of methylchloride poisoning, poisoning from carbon monoxide,
poisoning from sulphuric, hydrochloric, or hydrofluoric acid, and
respiratory, gastro-intestinal, or physiological nerve and eye dis
orders due to contact with petroleum products. It appears, however,
that a court construction will be necessary to determine whether or
not the act giving relief to hospital or laboratory employees receiv
ing injuries from radium, radium emanations, or X ray, will be super
seded and annulled from and after October 1, 1929, by the subse
quent act of the legislature.
Four Territorial legislatures also met in regular session. Alaska
reenacted and made several changes in the compensation act, the
principal one being the extension of the schedule of partial disability
cases to include compensation of $720 for loss of hearing in one ear.
Hawaii and Porto Rico made several changes of minor importance,
while the Philippine Legislature added nothing new to the act.
Of the eight Canadian Provinces having compensation laws, the
1929 legislatures of Alberta, Nova Scotia, and Saskatchewan acted on
the subject of workmen’s compensation, while those of British Colum
bia, Manitoba, New Brunswick, Ontario, and Quebec did not. A
special committee, however, was appointed by the provincial gov
ernment of Manitoba to investigate the subject of workmen’s com
pensation in the Province. In Ontario, although no amendments were
passed by the legislature, the workmen’s compensation board passed
certain regulations approved by order-in-council having the effect of
an amendment, one of which was the addition of chrome poisoning
to the list of industrial diseases. Saskatchewan passed a workmen’s
compensation act similar in many respects to the existing Ontario act.
The Alberta act was amended by providing a right of action to a
workman in case of accident, against some person other than his
employer.
Nova Scotia increased the amount allowed for burial expenses from
$75 to $100. The maximum amount was increased from 55 to 60
per cent of average earnings in death and permanent total or partial
disability cases. Other less important changes were also made in
the Alberta and Nova Scotia acts.
In general it can be said, after a careful examination of the actions
of the 35 States and of the Territorial and Canadian legislatures which
took up the subject of workmen’s compensation, that for the most
art the amendments enacted into law were beneficial, that the acts
ave been enlarged and strengthened, and that the general tendency
was toward the improvement of the compensation laws.
E
SIXTEENTH ANNUAL MEETING OF I. A* I. A. B. 0 .
23
DISCUSSION
Mr. C u r t i s . I heard the remark of my learned friend from Massa
chusetts, and I do not know whether I understood him right or not.
He said they did not give anything for the loss of an eye if the man
went back to work.
Mr. K e n n a r d . Speaking from the standpoint of compensation,
that is true.
Mr. C u r t i s . We certainly need to amend that law.
The C h a i r m a n . There is, however, this provision in the Massa
chusetts law, that if he goes back to work immediately, but at some
later date-----Mr. K e n n a r d . There is a situation which does not leave the man
who lost his eye without money in the sense of damages, but it is not
compensation.
Mr. C u r t i s . But he must lose some time in order to get compen
sation ? I f he goes on and-----Mr. K e n n a r d . That is right.
The C h a i r m a n . Does he not get damages in addition ?
Mr. K e n n a r d . I wTould prefer not to continue this discussion.
Mr. K n e r r . But I would like to ask, how does he get the dam
ages?
Mr. K e n n a r d . It is so hard for us from Massachusetts to explain
our law to those of you who have scheduled injuries. We have
nothing of the sort. I have debated this subject before, and com
pensation insurance does not mean, as we see it, damages. It means
that industry shall bear the loss which the man suffers in industry
through an injury resulting in a loss of wages. Our law attempts
to reimburse him to some extent for his loss of wages. If he suffers
damages in the sense of injuries, physical suffering, and pain, we
do not pay for it, speaking broadly. Now, whether we ought to or
not is a fundamental question. Personally, I believe that the com
pensation law should remain a compensation law and I do not be
lieve in attempting to change it into a damage law. When you get
into the damage law you get into something that has no end. It
has no beginning. With your compensation act you have something
you can put your finger on and know what you are doing and know
why you are doing it. We do pay a small amount, $500, for the loss
of an eye, even though the man does not lose a day.
Mr. K n e r r . Then he is paid something for the eye?
Mr. K e n n a r d . Yes. It is not damages and it is not compensation.
The C h a i r m a n . May I state, for Mr. Curtis5benefit and the benefit
of some of the New York people who are here and who have not been
to other conventions, that there is a certain advantage under the
Massachusetts law which we do not have in New York. For in
stance, if a man injures his leg and osteomyelitis sets in it may last
the rest of his life. Under our New York State law we can pay
him for the loss of the leg and no more and when that period is over
he receives no more compensation even though he may have an
open ulcer, whereas under the Massachusetts law they may pay him
24
SIXTEENTH ANNUAL MEETING OF I. A. I. A. B. 0 .
a compensation for the rest of his life, so long as that open sore exists
and he is not able to work.
Mr. K in g s t o n . I s there not a maximum limit to the statement
you made?
Mr. K e n n a r d . There is a maximum of $4,500 or 500 weeks, 10
years’ disability, and if he goes back to work and earns his wages
and a year or two later he is once more unable to earn his wages
because of that injury, he again receives the compensation.
BUSINESS MEETING
[The chairman appointed the following convention committees:]
Auditing committee.— F. M. Wilcox, of Wisconsin; W. H. Horner, of Penn
sylvania ; Miss R. O. Harrison, of Maryland; D. J. Sullivan, of Nevada; F. W.
Armstrong, of Nova Scotia.
Nominating committee.—L. W. Hatch, of New York; Parke P. Deans, of
Virginia; W. M. Knerr, of Utah; W. T. Leonard, of Ohio; R. B. Morley, of
Ontario.
Resolutions committee.— F. A. Duxbury, of Minnesota; Clarence S. Piggott,
of Illinois; Charles R. Blunt, of New Jersey; Lawrence E. Worstell, of Idaho;
G. Clay Baker, of Kansas.
The C h a ir m a n . Shall we now hear the report of the secretarytreasurer of this association, Mr. Stewart?
Mr. S t e w a r t . There are mimeographed copies of the secretary’s
report on the table in the hall. I am simply going to hit the high
spots, and you may secure a copy of the report and get the details.
[Mr. Stewart presented extracts of the secretary’s report and of
the treasurer’s report. The full reports follow.]
REPORT OF THE SECRETARY
During the year just passed the Manitoba Workmen’s Compensation Board
dropped out of the list of active members of the association and the Quebec
Workmen’s Compensation Commission joined, the list of active members remain
ing at 36, as follow s:
United States Bureau of Labor Statistics.
United States Employees’ Compensation Commission.
Arizona Industrial Commission.
California Industrial Accident Commission.
Connecticut Board of Compensation Commissioners.
Delaware Industrial Accident Board.
Georgia Industrial Commission.
Idaho Industrial Accident Board.
Illinois Industrial Commission.
Indiana Industrial Board.
Iowa Workmen’s Compensation Service.
Kansas Commission of Labor and Industry.
Maine Industrial Accident Commission.
Maryland State Industrial Accident Commission.
Massachusetts Department of Industrial Accidents.
Minnesota Industrial Commission.
Montana Industrial Accident Board.
Nevada Industrial Commission.
New Jersey Department of Labor.
New York Department of Labor.
North Dakota Workmen’s Compensation Bureau.
Ohio Industrial Commission.
Oklahoma State Industrial Commission.
REPORT OF SECRETARY-TREASURER
25
Oregon State Industrial Accident Commission.
Pennsylvania Department of Labor and Industry.
Utah Industrial Commission.
Virginia Industrial Commission.
Washington Department of Labor and Industries.
West Virginia Workmen’s Compensation Department.
Wisconsin Industrial Commission.
Wyoming Workmen’s Compensation Department.
Department of Labor of Canada.
New Brunswick Workmen’s Compensation Board.
Nova Scotia Workmen’s Compensation Board.
Ontario Workmen’s Compensation Board.
Quebec Workmen’s Compensation Commission.
The above list includes three organizations (the United States Bureau of
Labor Statistics, the United States Employees’ Compensation Commission, and
the Department of Labor of Canada) which are given full powers of member
ship by the terms of the constitution itself and are exempt from the payment
of dues.
Mr. Walter F. Dodd joined as an associate member since the Paterson
meeting. There are now eight such members, as follows:
Associate Members
George E. Beers, attorney and counselor at law, New Haven, Conn.
Walter F. Dodd, Yale University School of Law, New Haven, Conn.
E. I. du Pont de Nemours & Co., Wilmington, Del.
I. K. Huber, Empire Companies, Bartlesville, Okla.
Industrial Accident Prevention Associations, Toronto, Ontario.
Leifur Magnusson, American representative, International Labor Office,
Washington, D. C.
Porto Rico Industrial Commission.
Republic Iron & Steel Co., Youngstown, Ohio.
Early in 1929 Mr. James A. Hamilton, who was elected president at the
Paterson convention, left the position of industrial commissioner of New York,
thereby creating a vacancy in the office of president, and under the authority
of the constitution Commissioner Frances Perkins, of New York, was elected to
the presidency by the executive committee. Upon the change in the presi
dency the date and place of holding the 1929 convention were changed from
Niagara Falls, N. Y., August 19-22, to Buffalo, N. Y., October 8-11, 1929.
During the year the association continued its cooperation with the American
Standards Association in its work of drafting national safety codes. Your
representatives have participated actively in the preparation of several codes
now under consideration, none o f which have as yet been finally adopted.
The secretary has on file in his office 14,198 forms containing data relative
to widows’ compensation cases, for use in compiling an American remarriage
table. The question is again raised as to whether or not this is not sufficient
information with which to begin the compilation o f the table.
A copy of the resolution passed by the Paterson convention requesting that
the executive committee be requested to consider ways in which interest might
be maintained in the work of the association during the period between sessions
was sent to the members o f the executive committee. The following sug
gestions were made:
“ It has occurred to me that the association might increase its usefulness
to its members if an invitation were extended to compensation commissioners
adjudicating cases with which they are not familiar to inform the secretary
briefly as to the circumstances surrounding such cases, the secretary in turn
94023°—30------3
26
SIXTEENTH ANNUAL MEETING OF I. A. I. A. B. 0 .
to forward copies of such statements to all other members with the request
that where officials have had experience or knowledge of similar cases they
communicate with the official requesting information.” (Stewart.)
“ I think it would be a good idea for the secretary of the association to
increase the circulation value of the Monthly Labor Review of the Bureau of
Labor Statistics by inviting compensation commissioners to inform the sec
retary briefly of the special circumstances surrounding difficult points of ad
judication in mooted cases and asking him to submit these briefs to the various
members of the organization for consideration. The members, in their turn,
after giving the cases careful thought could communicate to the commissioner
who had submitted the question for an opinion. This probably would keep
alive the interest o f our members in the organization’s work and certainly it
would give an opportunity for a full and free discussion of difficult legal
problems involving the adjudication of complicated compensation cases.”
(McBride.)
“ I think that the * * * interesting compensation cases dealing with
actual problems out of the ordinary would be of great interest either in a sepa
rate bulletin or in the Monthly Labor Review of the Bureau of Labor
Statistics.” (Kingston.)
In accordance with the instructions issued by the Paterson convention the
secretary addressed a letter to 72 principal medical schools and colleges in the
United States under date of December 8, 1928, calling attention to the situation
in regard to industrial medicine and occupational diseases, and requesting
that at least a minimum of class work along this line be included in their
courses. They were requested to inform the secretary as to what they were
doing along these lines and as to what action would likely result from our
communication. An offer to make suggestions as to ways in which this subject
could be introduced to the students was included.
In response the following replies were received:
University of Alabama, School of Medicine, University, Ala.—Now give only
first two years of medical curriculum, but planning to give 4-year course. At
present give a beginning course in history taking and physical diagnosis and
course of lectures which include consideration of occupational diseases as re
lated to general public health and preventive medicine.
Baylor University, College of Medicine, Dallas, Tex.— Curriculum over
crowded, but subject will be stressed in course in public health and hygiene.
Will appreciate suggestions.
Boston University, School of Medicine, Boston, Mass.—Keenly alive to im
portance of subject. Unable to give exact amount of time devoted to subject,
but it is in no sense relegated to a secondary position.
University of California, Medical School, San Francisco, C alif— Have always
stressed occupation in etiology of disease, and toxicologic aspects of certain occu
pations; have also kept before students accident hazards, of such operations
as railroading, electric servicing, steel milling, baking, building, dyeing, etc.
Have decided to include a short didactic course in occupational hazards; to
consider, in pharmacology, the industries in which poisons are used; to stress
in surgical lectures the possibilities of specific injuries in specific industries,
and to keep constantly before students need for considering the etiological pos
sibilities of occupation in every case. Would be glad to have suggestions, but
keep in mind overcrowded curriculum.
University of Cincinnati, College of Medicine, Cincinnati, Ohio.—Now have
course on occupational diseases.
University of Colorado, School of Medicine, Denver, Colo.—No special course
on industrial medicine. Trade or profession for applicants for admission to
hospital asked.
Columbia University, College of Physicians and Surgeons, Netv York, N. T.—
No definite course, but subject handled in various clinical departments as
occasion arises. Special clinic for industrial diseases associated with the
department of medicine and department of public health.
REPORT OF SECRETARY-TREASUREB
27
Cornell University, Medical School, New York, iV. Y.— No specific course in
industrial medicine, but recently received a small gift for furthering this
work and it is likely shall use it for a few special lectures each year. A
number of subjects mentioned are taken up in courses o f preventive medicine
and in clinical medicine. Students are expected to go into the occupation of
the patient in taking his history.
Creighton University, School of Medicine, Omaha, Nebr.— Issue pamphlet
giving form for routine medical history and examination, in which the question
of occupation—type, hours, nature, environment, how long at present work,
why previous work was given up—is included. Course on medical economics
includes one lecture on Nebraska workmen’s compensation law. Several of
the surgeons are active in this line o f practice and many patients come under
act, so there is a general acquaintance with the subject. It is undesirable
to fragment the curriculum into many minor items and highly desirable to
have new points of view infiltrate the general instruction. Would like to
receive suggestions.
Dartmouth Medical School, Hanover, N. H.—As institution is a 2-year school
we do not have such instruction within ordinary curriculum.
Emory University, School of Medicine, Atlanta, Ga.— Have no special course
on occupational diseases, but stress relation between occupation and disease.
Will take matter up with faculty. Would appreciate suggestions.
George Washington University, School of Medicine, Washington, D. C.—No
special course, but attention given is dependent on estimation of its impor
tance by individual teachers. In all histories occupation is ascertained, and
its relation to patient’s condition often discussed. Unavoidable fact that under
graduate student of medicine can not receive special instructions in all matters
that it is desirable for him to know. Would like to give further consideration
to matter, and would appreciate any papers or literature on subject.
Harvard University Medical School, Boston, Mass.— Students already have
sufficient training to avoid gross mistakes. Can not add additional subject
to overcrowded curriculum.
State University of Ioica, College of Medicine, Iowa City, Iowa.— Do not
include subject now. Under consideration.
Johns Hopkins University, School of Medicine, Baltimore, Md.— Whatever
instruction is given along that line is included in regular courses in pathology,
medicine, and surgery. Curriculum does not provide for any hours of in
struction in occupational diseases as such. Curriculum recently revised with
idea of eliminating many hours of required work.
University of Kansas, School of Medicine, Kansas City, Kans.— Instructors
emphasize importance of patient’s occupation, and this question is a routine
one in most clinics. Would like suggestions.
Long Island College Hospital, School of Medicine, Brooklyn, N. Y.—Now have
course including occupatilonal diseases. Shall appreciate suggestions.
University of Louisville, Medical School, Louisville, Ky.—No course on occu
pational diseases other than what is included in “ Hygiene.” Lectures in the
course cover subject. Would like suggestions.
University of Maryland, School of Medicine, Baltimore, Md.— Industrial cases
in hospitals used in instruction. Students see a large number of these cases and
have opportunity of learning much about subject of occupational diseases.
Meharry Medical College, Nashville, Tenn.— Include subject of occupational
diseases in course on general surgery. Will cooperate in any way.
University of Michigan, Medical School, Ann Arbor, Mich.— Actual instruc
tion in subject consists in lectures during third year and emphasis on these dis
eases during section work of fourth year in department of medicine. Line of
progress is likely to-be preparing for various departments a small syllabus
showing how the teaching in their fields can be best related to occupational dis
eases under the general heading of preventive medicine.
University of Minnesota, Medical School. Minneapolis, Minn.—Junior students
have course in preventive medicine which deals somewhat with occupational
diseases. Would be glad to cooperate, and would like suggestions.
University of Missouri, School of Medicine, Columbia, Mo.— School offers only
first two years of medical course, in wlrch there appears to be no proper place
for presentation of subject of occupational diseases except so far as they are
considered in course on hygiene.
University of Nebraska, College of Medicine, Omaha, Nebr.—Course of 16-hour
class periods in industrial insurance and group medicine consists of lectures
and physical examinations. No clinic in industrial medicine.
28
SIXTEENTH ANNUAL MEETING OF I. A. I. A. B. 0.
University of North Dakota, School of Medwine, University Station, Grand
Forks, N. Dak.—Two-year school devoting practically all its efforts to laboratory
branches of medicine. Practically no work in clinical medicine.
Northwestern University Medical School, Chicago, III.—No specific effort made
in teaching these as distinct from other forms of illness. So far as possible
such diseases are taught. Will be glad to get suggestions.
Ohio State University, College of Medicine, Columbus, Ohio.—Give five re
quired lectures on industrial hygiene and occupational diseases in last half of
senior year. Also have elective course in industrial hygiene and occupational
diseases of 30 to 50 hours’ work, which, however, is seldom taken by medical
students because of schedule conflicts. Also provide graduate instruction in
these subjects, in which two or three medical graduates have majored. How
ever, have been unable to get recent medical graduates to return for graduate
instruction.
In regard to specific cases of differentiating appendicitis from lead poisoning,
such mistakes, of course, should not happen. I recall that this differential
diagnosis was insisted upon in my own medical training 20 years ago. I also
recall, however, of running into cases in County Hospital, Chicago, when I was
an interne there from 1908 to 1910, which had been diagnosed chronic appendi
citis and were saved from operation by a closer study which showed them to be
lead poisoning.
Dean Upham is very much concerned about the status of physicians who
have graduated from some 12 to 15 years ago and have not kept up to date.
He considers this the major problem facing medical service at the present
day. Whether or not any solution for it can be reached is problematical, but
it is now the subject of serious discussion by those interested in medical
education.
University of Oklahoma, School of Medicine. Oklahoma City, Okla.—Will be
glad to cooperate. Will take up with faculty with request they take steps in
that direction. Would like suggestions.
University of Oregon, Medical School, Portland, Oreg.— No special course or
other work on occupational diseases. Agree that relationship between many
disabilities and certain occupations is sufficiently manifest to warrant special
attention in teaching subject to medical students, and should be very grateful
for suggestions as to manner of introducing it to students. Of course ordinary
occupational diseases are dealt with in the subjects of medicine and surgery,
but they are not selected as the subject of special discourse from the occupa
tional standpoint.
University of Pittsburgh, School of Medicine, Pittsburgh, Pa.—Realize that
all medical schools are still woefully short in the matter of teaching prevention
and especially in regard to the training of physicians for industrial problems.
Inject as much of this into curriculum as possible. Would like suggestions.
University of Rochester, Rochester, N. Y.—Nine lectures on subject of
occupational diseases and industrial accidents given to students by members
of New York State Department of Labor.
Stanford University, School of Medicine, San Francisco, Calif.— In course on
public health and industrial hygiene, 10 lectures on industrial accidents, medi
cines, surgery, etc.. 5 lectures on industrial hygiene, etc. Require each
student to make sanitary survey of a community, in which he must report on
at least one industrial concern. Draw attention to importance of industrial
hazards and methods to combat them.
College of Medicine of Syracuse University, Syracuse, N. Y.—No special
course on occupational diseases, but in department o f medicine considerable
stress is placed on occupation and environment. Routine history outlines
emphasize these factors and considerable attention is given to industrial hy
giene in course in public health. Endeavor to see that all students appreciate
the importance of the subject.
University of Texas, School of Medicine, Galveston, Tex.—No special branch
on subject but it is handled in various clinical chairs. In department of
internal medicine records must indicate occupation of patient. Although cur
riculum is crowded, subject should be stressed by departments in which the
different diseases fall. Would like suggestions.
Tufts College Medical School, Boston, Mass.— Instructors are supposed to
cover occupational diseases. Tendency, however, is to eliminate special topics
from the curriculum so far as they are part of the major departments.
REPORT OF SEORETARY-TREASURER
29
Tulane University, School of Medicine, New Orleans, La.—No special course
on occupational diseases but question as to occupation of patient is part of
procedure in examination of practical and clinical teachers.
TJnion University, Albany Medical College, Albany, N, Y.— Have cooperated
with Doctor Cofer, in giving lectures on occupational diseases.
Vanderbilt University, School of Medicine, Nashville, Tenn.—Devote part of
course in preventive medicine to occupational diseases, particularly lead poison
ing. Students get very definite idea o f importance o f subject.
University of Vermont, College of Medicine, Burlington, Vt.—No course on
subject, but subject is discussed quite fully. Curriculum overcrowded, but
would be glad to have suggestions.
Medical College of Virginia, Richmond, Va.— Course does not include any
special development of subject of occupational diseases other than that which
would naturally occur in a course on preventive medicine and in consideration
of various diseases, such as lead poisoning and other mineral or metallic
poisoning. Will be glad to see that more specific attention is directed to this
particular phase of medicine. Will be glad to receive material available for
the proper development of such a course.
Western Reserve University, School of Medicine, Cleveland, Ohio.—Devote
several periods to discussion of general principles involved. Part o f course con
sists of presentation of short papers, several on occupational diseases. Students
visit large factories in connection with their instruction.
University of Wisconsin, State of Wisconsin General Hospital, Madison, Wis.—
No special course, but subject given adequate attention in combined course
of medicine and surgery in third year. Subject is presented didactically and
in clinical conference augmented by collaterial reading, by the internist, the
surgeon, the neuropsychiatrist, the biochemist, and the hygienist. Would be
glad to get suggestions as to methods that have been tried out in other
institutions.
Woman's Medical College of Pennsylvania, Philadelphia, Pa.— Course on
hygiene and preventive medicine includes in third year lectures and field
excursions on industrial hygiene. Undergraduate course overcrowded. How
ever, above course in third year supplemented by attention directed to occupa
tional diseases in general courses in medicine, surgery, and therapeutics, with
illustrative cases in Philadelphia General Hospital, makes students aware of
these specific conditions, so that they are prepared to make intelligent diagnosis
in later practice.
Yale University, School of Medicine, New Haven, Conn.— In course on prin
ciples of public health—required of all students—three lectures, one conference
period, and one field trip are devoted to industrial hygiene. In addition an
elective course of 30 hours on the same subject is offered.
From an examination of the 44 received it will be noted that 4 stated that
they now have a course on industrial hygiene or occupational diseases; in 8 the
subject is included in history taking of patients; 4 said they would consider
the matter; while 5 definitely stated they would enlarge their work along
this line. A number stated that while there was no definite course on occu
pational diseases, the subject was included in courses on other topics in the
way of lectures, examination o f patients, visits to industrial plants, etc.
Seventeen requested suggestions as to ways in which the subject could be
introduced to their students.
The offer to make suggestions was included in the letter from the secretary
of this association at the request of Doctor Thompson of the United States
Public Health Service, who promised that he would get in touch with a
number of prominent industrial physicians and specialists along industrial
lines and outline a suggested plan for this purpose. However, owing to rush
of work Doctor Thompson has not been able to furnish the secretary with this
plan and the material has not been sent to those requesting it. Doctor Roberts
of Emory University wrote several letters saying that he had been requested
to outline to the faculty of his college such a plan and asking for any material
we might have along that line. He was informed that when such a plan was
worked out it would be furnished to him.
This brings up a question as to whether or not the International Association
of Industrial Accident Boards and Commissions would care to instruct its
30
SIXTEENTH ANNUAL MEETING OF I. A. I. A. B. O.
medical committee to go into the subject and prepare such a plan for the use
of medical schools and colleges that have requested it.
The proceedings of the Paterson convention have been published by the
United States Bureau of Labor Statistics as its Bulletin No. 485, and copies
are available at the headquarters here or will be sent from the bureau upon
request.
Respectfully submitted.
E th elbert Stewart, Secretary-Treasurer.
FINANCIAL STATEM EN T OF THE TREASURER
BALANCE AND RECEIPTS
1928
Sept. 4. Balance in bank, $1,591.71; unexpended postage and tele
graph fund, $4.63_____________________________________ $1, 596. 34
6 . Idaho Industrial Accident Board, 1929 dues______________
50. 00
Oregon State Industrial Accident Commission, 1929 dues,.
50. 00
19. Minnesota Industrial Commission, 1929 dues____________
50. 00
Montana Industrial Accident Board, 1929 dues__________
50. 00
Oct. 15. Interest on registered Liberty bonds (2 at $100 and 1 at $500) _
14. 88
22. Interest on Paterson Mortgage & Title Guaranty Co. cer
tificate ($1,500)__________________________________ ____
41. 25
29. New York Department of Labor, 1929 dues______________
50. 00
30. Interest on $1,000 coupon Liberty bond__________________
21 . 25
Nov. 5. Maryland State Industrial Accident Commission, 1929 dues.
50.00
20. Porto Rico Workmen’s Relief Commission, 1928 dues (As
sociate) _______________________________________________
10.00
23. Kansas Public Service Commission, 1929 dues___________
50. 00
1929
Jan. 31. Interest on Canadian bonds (5 of $100 each)____________
Apr. 15. Interest on registered Liberty bonds (2 at $100 and 1 at $500) _
23. Interest on Paterson Mortgage & Title Guaranty Co. cer
tificate ($1,500)___________ ___________________________
May 27. Washington Department of Labor and Industry, 1929 dues.
Interest on $1,000 coupon Liberty bond__________________
July 17. E. I. du Pont de Nemours & Co., 1930 dues (Associate)-Geo. E. Beers, 1930 dues (Associate)_____________________
Virginia Industrial Commission, 1930 dues_______________
Georgia Industrial Commission, 1930 dues_______________
Ontario Workmen’s Compensation Board, 1930 dues_____
23. Arizona Industrial Commission, 1930 dues_______________
Industrial Accident Prevention Associations, 1930 dues
(Associate)___________________________________________
Wyoming Workmen’s Compensation Department, 1930 dues.
West Virginia Workmen’s Compensation Department, 1930
dues__________________________________________________
24. Republic Iron & Steel Co., 1930 dues (Associate)________
Nevada Industrial Commission, 1930 dues_______________
26. Connecticut Board of Compensation Commissioners, pro
portionate share of 1930 dues, fourth district___________
Leifur Magnusson, 1930 dues (A ssociate)--______________
Aug. 5. Oklahoma Industrial Commission, 1930 dues_____________
Wisconsin Industrial Commission, 1930 dues_____________
North Dakota Workmen’s Compensation Bureau, 1930 dues.
Maine Industrial Accident Commission, 1930 dues_______
Iowa Workmen’s Compensation Service, 1930 dues_______
12. Maryland State Industrial Accident Commission, 1930 dues.
New Jersey Department of Labor, 1930 dues_____________
Massachusetts Department of Industrial Accidents, 1930
dues__________________________________________________
Connecticut Board of Compensation Commissioners, pro
portionate share of 1930 dues, second district__________
Connecticut Board of Compensation Commissioners, pro
portionate share of 1930 dues, third district____________
Illinois Industrial Commission, 1930 dues________________
Indiana Industrial Board, 1929 dues_____________________
13. 75
14. 87
41. 25
50. 00
21. 25
10. 00
10. 00
50. 00
50. 00
50. 00
50. 00
10. 00
50. 00
50. 00
10. 00
50. 00
10.
10.
50.
50.
50.
50.
50.
50.
50.
00
00
00
00
00
00
00
00
00
50. 00
10. 00
10. 00
50. 00
50. 00
31
REPORT OF SECRETARY-TREASURER
b a la n c e
and
r e c e i p t s — c o n tin u e d
1929
Aug. 12 . Indiana Industrial Board, 1930 dues_____________________
15. Delaware Industrial Accident Board, 1930 dues__________
Oregon State Industrial Accident Commission, 1930 dues__
Sept. 9. California Industrial Accident Commission, 1930 dues____
No via Scotia Workmen’s Compensation Board, 1930 dues_
Kansas Commission of Labor and Industry, 1930 dues__
New York Department of Labor, 1930 dues______________
Minnesota Industrial Commission, 1930 dues_____________
Pennsylvania Department of Labor and Industry, 1930 dues.
Utah Industrial Commission, 1930 dues__________________
Porto Rico Industrial Commission, 1929 dues____________
Porto Rico Industrial Commission, 1930 dues____________
Connecticut Board of Compensation Commissioners, pro
portionate share of 1930 dues, fifth district_____________
Connecticut Board of Compensation Commissioners, pro
portionate share of 1930 dues, first d i s t r i c t - _______ 10. 00
Washington Department of Labor and Industries, 1930 dues.
Idaho Industrial Accident Board, 1930 dues______________
10. Quebec Workmen’s Compensation Commission, 1930 dues.
17. Interest on bank account up to July 1, 1929______________
$50. 00
50. 00
50. 00
50. 00
50. 00
50. 00
50. 00
50. 00
50. 00
50. 00
10. 00
10. 00
10. 00
50. 00
50. 00
50. 00
21. 41
3, 816. 25
DISBURSEMENTS
1928
Sept. 4. Postage and telegraph fund--------------------------------------------20. Gibson Bros. (Inc.), printing 1,000 programs for fifteenth
annual convention____________________________________
Maryland Casualty Co., bonding secretary-treasurer for
year ending Oct. 23, 1929_____________________________
Miss Mae C. Kelly, services at fifteenth annual convention.
Mrs. N. W. Lameire, services at fifteenth annual convention.
Oct. 22 . Miss Rose Mark, reporting proceedings fifteenth annual
convention___________________________________________
Nov. 1. Gibson Bros. (Inc.), printing 1,500 letterheads___________
24. Postage and telegraph fund____________________ - ________
Glenn L. Tibbott, partial payment for clerical services,
1928-29______________________________________________
Dec. 21. Ethelbert Stewart, partial payment of honorarium 1928-291929
Jan. 19. C. O. Buckingham Co. (Inc.), 4 prints from negatives for
proceedings, fifteenth annual convention_______________
31. Ethelbert Stewart, final payment of honorarium 1928-29Feb. 15. Postage and telegraph fund_____________________________
1. Gibson Bros. (Inc.), printing 1,000 letterheads----------------Apr.
2. Dr. E. B. Patton, expenses attending program committee
meeting, Washington, D. C -----------------------------------------Parke P. Deans, expenses attending program committee
meeting, Washington, D. C -----------------------------------------July 29. Exchange on check for 1930 dues, Ontario Workmen’s Com
pensation Board______________________________________
Aug. 15. Glenn L.Tibbott, final payment for clerical services, 1928-29Sept. 10. Gibson Bros. (Inc.), printing 1,000 programs, sixteenth an
nual convention, and 200 receipt blanks________________
17. Exchange on check for 1930 dues:
Nova Scotia Workmen’s Compensation Board----------Quebec Workmen’s Compensation Commission----------
= = = = =
4. 63
35. 00
12. 50
25. 00
25. 00
250. 00
23. 00
5.00
150. 00
200. 00
8. 00
400. 00
1 5. 00
18. 50
26. 51
13. 40
. 63
150. 00
59. 00
. 63
. 63
1,412.43
Sept. 17. Balance, bank deposits----------------------------------------------------
2, 403. 82
3, 816. 25
1Of this check for $5 for postage and telegraph fund, there is an amount of $1.36 unexpended at this
time.
32
SIXTEENTH ANNUAL MEETING OF 1. A. 1. A. B. C.
Sum m ary
of
R
e c e ip t s
and
D
is b u r s e m e n t s
r e c e ip t s
Cash in bank Sept. 4, 1928_______________________________________ $1,591.71
Cash in postage and telegraph fund Sept. 4, 1928------------------------4.68
Membership dues--------------------------------------------------------------------------- 2,030.00
Interest:
Securities-------------------------------------------------- ------------- $168. 50
Bank deposits________________________________________
21.41
------------ 189.91
Total________________________________________________________
3,816.25
DISBURSEMENTS
Postage___________________________________________________________
Printing----------------------------------------------------------------------------------------Reporting proceedings, fifteenth annual convention_________________
Bonding secretary-treasurer____________________ *------------- -----------Honorarium and clerical service in secretary-treasurer’s office______
Clerical service at fifteenth annual convention______________________
Exchange on 1930 dues o f Workmen’s Compensation Boards o f On
tario, Nova Scotia, and Quebec----------------------------------------------------Expenses of attendance program committee meeting________________
Printing from negatives for proceedings, fifteenth annual convention-
14.63
135. 50
250.00
12. 50
900. 00
50. 00
Total________________________________________________________
Cash in bank Sept 17, 1929______________________________________
1,412.43
2,403.82
1.89
39.91
8 .00
3,816.25
ASSETS
Cash in bank------------------------ -------------------------------------------------------Cash in postage fund_________________________________ ___________
Securities:
United States Liberty bonds_____________________________$1, 700.00
Canadian bonds------------------------------------------------------500.00
Mortgage certificates, Paterson Mortgage & Guaranty
Title Co__________________________________________ 1,500.00
---------------
2,403.82
1.36
3,700.00
Total________________________________________________________ 6,105.18
In addition to the assets enumerated above there are the following unpaid
dues:
Montana Industrial Accident Board_______________________________
$50.00
Ohio Industrial Commission_______________________________________
50.00
New Brunswick Workmen’s Compensation Board__________________
50.00
150.00
The following securities are in safety-deposit box S-363, National Savings &
Trust Co.. Washington, D. C.— Ethelbert Stewart:
United States Liberty bonds:
$100.00
No. 1217874----------------------------------------------------- ---------------------No. 1217875-----------------------------------------------------------------------------100.00
No. 236204-------------------------------------------------------------------------------500.00
No. A-00031671_______________________________________ ________ 1,000.00
Dominion of Canada bonds (5) Nos. 1852-1856, inclusive, at $100
ea ch ------------------------------------------------------------------------------------------500.00
Paterson Mortgage & Guaranty Title Co., Certificate No. 6296, series
221, due Oct. 19, 1930___________________________________________
1,500.00
Total________________________________________________________
Respectfully submitted.
3, 700.00
E thelbert Stew art,
Secretary-Treasurer.
Septem ber
17, 1929.
REPORTS OF COMMITTEES
33
[On motions duly seconded and carried, the treasurer’s report was
referred to the auditing committee for analysis and suggestions for
investment of a portion of the cash on hand; the secretary’s report
was accepted, approved, and ordered on file; and the proceedings of
the fifteenth annual meeting, as printed, were confirmed as the
minutes of the convention.]
The C h a ir m a n . The next order of business is the reports of cer
tain regular committees of this association. The committee on statis
tics and costs, of which Mr. L. W. Hatch is the chairman, will now
present its report.
Mr. S t a c k . Before that report is filed, for your information I
want to state that I feel that we are making some progress with the
medical schools. The Eastern Medical Society, which, as I under
stand, includes the New England States, New York State, New
Jersey, Maryland, Delaware, and Virginia, holds its annual conven
tion in October. I had prepared a paper along the lines suggested
at Paterson at the request of the president of that society, and a copy
of the paper was sent to the dean of the Hahnemann Medical School,
in Philadelphia, the day before I left home.
They have added to their medical work not only industrial medi
cine, but industrial surgery, and my paper will be discussed by the
various States represented at this convention in October.
REPORT
OF
COMMITTEE ON STATISTICS
INSURANCE COST
AND
COMPENSATION
There is no report of this committee to be presented at this time so far as its
own activities are concerned. Nothing has come up during the last year for
consideration or action by the committee.
It will not be out of place, however, to report to the association at this time
what has developed since the last annual meeting in connection with the
revision of the standard plan for accident statistics, as this association was
sponsor for the existing plan and is now one of the joint sponsors for its revision
by a sectional committee of the American Standards Association. A similar
progress report was presented at last year’s meeting.
During the past year substantial progress has been made with the revision
work, as follow s: The subcommittee on definitions has completed its work and
filed its report. The subcommittee on accident rates has progressed with its
work to the point of having agreed on the substance of its report and this report
is now in the course of formulation. The next step in connection with that
part of the standard plan covered by these two subcommittees will be submis
sion of their reports to the general sectional committee. This will probably be
done without awaiting the reports o f the other two subcommittees as they can
very well be considered independently of the latter. The reports on definitions
and on rates will need to be submitted to the sectional committee together as
their subject matter is closely related and the two reports may overlap to some
extent.
The other two subcommittees, one on classification of causes and one on
classification of industries, have not yet filed reports. The work of the com
mittee on causes was set back somewhat by resignation of its first chairman,
necessitated by pressure of work due to change of professional position, but
the work is now proceeding under its new chairman.
34
SIXTEENTH ANNUAL MEETING OF I. A. I. A. B. 0 .
The personnel of the sectional committee and four subcommittees continues
as recorded in the report of your committee on statistics in the proceedings of
the Paterson meeting* (pp. 21 and 22) except for the following changes:
To the sectional committee have been added Mr. O. A. Fried, statistician o f
the Wisconsin Industrial Commission, as a representative both of that commis
sion and of this association. Mr. Fried being a member of your committee on
statistics; and Mr. E. J. Kreh of the Duquesne Light Co., of Pittsburgh, with
Mr. A. B. Campbell, of the National Electric Light & Power Association as
alternate, as representing electric light and power interests.
In the subcommittee on classification of causes Mr. L. L. Hall, formerly of
llie National Council on Compensation Insurance, resigned as chairman, as
above referred to, and Mr. H. W. Heinrich, o f the Travelers Insurance Co., has
been appointed in his place; and Mr. H. A. Reninger, of the Portland Cement
Association, resigned as member on account of pressure of other work. To this
subcommittee Mr. O. A. Fried has been added.
L. W. H a t c h ,
Chairman Committee mi Statistics.
[By motion duly seconded and carried, the report of the committee
on statistics and compensation insurance cost was accepted and ap
proved, the committee was continued with authority to act, and was
requested to report further at subsequent meetings.]
The C h a i r m a n . We will ask for a report from the committee o n
investigation of results of compensation awards.
REPORT OF COMMITTEE ON INVESTIGATION OF RESULTS OF
COMPENSATION AW ARDS
By Miss Rowena O. Harrison
The committee on investigation of results o f compensation awards has recom
mended to the various boards and commissions that each State inaugurate a
systematic follow-up system of four kinds of awards, namely—permanent par
tial., permanent total, fatal, and lump sum— and has prepared and offered a
questionnaire to be used as part of its plan.
The committee has made no attempt to control the details of the State
investigations, but has requested that the results of investigations be forwarded
to the secretary of the association, to be combined by him in such a way as
to furnish for all of the States the results of the investigation in each State.
The results of the investigations have not been furnished to the secretary, and,
therefore, our report is brief.
The committee finds that many of the States, although admitting the im
portance of knowing the effectiveness of their efforts, have been unable to do
anyth ng in this line of work, principally because of insuflicient funds.
The committee recommends that if the boards and commissions can not or
do not wish to follow up at the outset the four kinds of awards, that they
follow up the lump-sum awards of over $500, either by mail or by question
naire, using the questionnaire as part of their plan, and forward to the sec
retary of this association, before the seventeenth annual convention, the results
of this investigation or the questionnaires themselves.
In Maryland we are allowing over $200,000 a year in lump sums. Our in
vestigation now makes it practically impossible for lump sums to be received
for the purpose of going into the grocery or the chicken business, and shows
REPORTS OF COMMITTEES
35
that although lump sums are asked for in good faith, granted and paid in good
faith, they seldom inure to the best interests of the injured party.
The matter o f allowing lump sums in all the States lies in the discretion
of the administrative body. How can we exercise proper discretion without
weighing the results o f past acts and endeavors?
The committee reports on the suggestion that the secretary o f this asso
ciation communicate with the universities and colleges in the United States,
and offer the cooperation of the Bureau of Labor Statistics, and that of the
International Association of Industrial Accident Boards and Commissions,
that 650 universities and colleges have been communicated with and offered
this cooperation, and the returns from these communications have been incor
porated in the secretary’s report.
[Meeting adjourned.]
TUESDAY, OCTOBER 8— AFTERNOON SESSION
Chairman, Charles R. Blunt, Commissioner of Labor of New Jersey
OCCUPATIONAL DISEASES
The C h a ir m a n . I do not know just why I was selected to preside
at this session, I am so new in the work. I have been labor commis
sioner only since March, and before that I had not been connected
with the labor department, but I presume it is because in New Jer
sey we are doing so much thinking along the lines of occupational
disease and have recently set up an occupational disease investiga
tion bureau which is doing splendid work in surveying and recom
mending to the department various procedures.
I was interested in listening to Mrs. Perkins this morning to find
that we are in entire accord with her as regards three subjects on
which she has reached conclusions.
On the question of standards, I can not quite agree that we should
have nation-wide standards, because if we make States such as Ala
bama come up to the New York standard it probably would not be
fair to the employers; on the other hand, if we try to make an
average for the country it would not be fair to the employees. But
I do agree that within sections we should get just as close together
in our compensation awards and amounts as possible. For instance,
in the section of Connecticut, Massachusetts, Pennsylvania, New
York, and New Jersey the awards should be very near the same.
I happened to be a member of the legislature two years ago when
we raised the maximum for New Jersey from $17 to $20, and I re
member one of the strongest arguments the proponents of the bill
had was that New York, our next-door neighbor, was higher than
New Jersey, and it was a matter of pride on the part of many of the
legislators to raise our rates so that they would be somewhat com
mensurate with those of New York State.
On the question of noninsurers, as recently as three days ago I
called a meeting of our compensation board and we discussed for
two hours the question of noninsurers, and I undertook to make a
drive in the near future along the lines that Mrs. Perkins says they
have recently had in New York State to find out as nearly as pos
sible—it is never possible to find out 100 per cent, because pur factory
inspection, as in New York State, covers only manufacturing ana
mercantile establishments, but we are going to have such a drive in
the near future, and we hope that the publicity resulting from it will
bring in some of the others, such as the building contractors and so
on, that we have not been able to get into line.
Then, on the question of occupational disease, New Jersey is
situated exactly as New York, in that we just have certain diseases
that are included in our law. A few years ago there were only 4.
37
38
sixtkknth:
a n x fa i
m kettng
or
I. A.
I. A. B.
c.
To-day we have 10, and, like New York, I believe that our evolution
in the future will be along the line of adding diseases to this list
instead of getting a blanket bill through.
Before introducing the first speaker who is on the program, I
want to ask your indulgence to read a short paper that I have pre
pared along the line of occupational disease.
Occupational Diseases
By Charles R. Blunt, Commissioner of Labor of New Jersey
The importance of health conservation as a feature of depart
mental concern has been so emphasized during the past 15 years by
investigators’ reports, medical studies, etc., that now almost every
State has given some attention to the problem of removing noxious
fumes, industrial dusts, and poisonous vapors from the breathing
atmosphere of workrooms. It has been truly stated by eminent
health specialists that the subtle nature of air contamination com
plicates the problem of control to a much greater degree than in the
ordinary round of structural risks or machine hazards that make
dangerous many of the work places of the Nation. It is easy to
prove that health risks involve and cause more serious losses than
do any other species of physical exposure; for a man may work in the
resence of an unguarded machine for a long period of time without
aving an accident; structural conditions may violate almost every
sense of engineering prudence, and still we have on record instances of
workmen who go through long years of mechanical exposure without
physical injury. But in the presence of poisonous vapors or harm
ful dusts the situation is different, for the workman by prudence or
care can not protect himself from their evil effects. The lungs are
exposed to the destructive particles that wreck their life-giving effi
ciency. The poisonous vapors can not be avoided by any conduct
on the part of the worker, for often their presence becomes known
only when certain well-recognized diagnostic symptoms appear. A
man may go for 40 or 50 days without food and suffer no serious
inconvenience, he may abstain from water for three or four days and
still survive, but if his air supply is shut off, even for a few minutes,
life becomes extinct. This to the ordinary layman would seem to
show that a proper breathing atmosphere is a matter of such unusual
concern that departmental enforcement should be ever on the alert
to detect violations, while plant engineering departments and medical
supervision should do their part as well.
In America occupational disease causes were given scant consider
ation until a few years ago when, in a few States, an injury to
health wras made compensable for the same reason that compensation
was paid for an injury by violence to the human body. In these
States compensation payments are now made for all occupational
diseases on the ground that the injured man has been handicapped in
earning a livelihood. For it can matter but little to him whether
the handicapping cause came from a saw or from the inhalation of a
silicate. In any event, he suffers a physical loss that should be
recognized by society as needing compensation attention.
E
OCCUPATIONAL DISEASES
39
In many of the States groups of occupational-disease causes have
been made compensable by State legislatures whose action was based
probably on expediency rather than on a determination to render
social justice in accordance with scientific modern ideals. I hope
the time will come when all occupational injuries, whether they
result from mechanical tools, violations of sanitary practices, im
proper structural premises, or harmful working methods, will re
ceive full and adequate compensation.
In th« realm of dust exposures, Doctor Lanza, who is to discuss
silicosis, is an outstanding figure. His past connection with the
United States Public Health Service and his research work in the
mines where silicosis is only too common have given him a broad
view of the whole field. The studies made by Lanza and Higgins
in 1914-15 among the lead and zinc miners in Joplin, Mo., were
probably the first of their kind that were made in this country,
and the reports published showed the extremely high rate of silicosis
and tuberculosis and had a great deal to do with arousing the public
mind to the risks incurred by this class of workers.
In Butte, Mont., in 1921, Harrington and Lanza made their studies
of large groups of miners, which proved definitely that this work
was extremely dangerous to health and that the normal man had
very little chance of passing through a long period of such employ
ment without succumbing to the evil health-breaking presence of dust.
Winslow and Greenburg in their dust-hazards study in the axegrinding industry found that the death rate due to tuberculosis was
probably ten times higher among polishers and grinders than it
was for the male population of the State. Previous to this time
it was thought that wet grinding was safe, but their conclusions
showed that wet grinding was extremely dangerous.
Probably no metallic poison has received more treatment from
health writers than has lead. This is probably due to the fact that
lead is used in a larger number of occupations than any other of
the several trade substances that are listed as poisons. Recent in
vestigations would seem to show that lead is even more dangerous
than it was supposed to be by the writers who had given it considera
tion in the past. The symptoms of lead poisoning are more gen
erally understood to-day than heretofore. Its deleterious effect on
the health of the worker has been studied by experts who have de
cided that the health toll paid by the lead trades exceeds in volume
that of any other industry. Dr. May Mayers, of the New York
State Department of Labor, has given very careful technical atten
tion to diagnostic signs of lead poisoning. Her research work has
enriched current industrial literature and from it conclusions have
been formed that lead poisoning is a greater menace than the public
generally believed it to be.
It is fortunate for the worker that medical science is giving more
thoughtful consideration to industrial poisoning than heretofore.
In many of the States special bureaus have been created for the
purpose of studying the clinical aspects of poisoning cases. This
information is furnished to industries, and it is pleasing to note
that in a general way industry is moving with a procession and is
adopting measures of health preservation that will prove helpful to
workers.
40
SIXTEENTH ANNUAL MEETING OF I. A. I. A. B. 0 .
In New Jersey an occupational disease investigation bureau has
been formed, consisting of a field director, medical director, expert
chemical consultant, and a laboratory technician. Contacts are made
with plants handling poisonous substances, physical examinations
are made of the workmen employed, and in this manner an effort
is being made to determine whether the enforcement of regulatory
health measures by the department of labor is really furnishing ade
quate protection to workmen. The industries of our State are being
furnished with definite information of the physical condition of
workers employed, so that plant managers may know whether their
work is being performed with a reasonable degree of freedom from
occupational health losses. I am sure the time is ripe for pressing
this kind of departmental service to its fullest extent and that, within
the next few years, a very large percentage of all workers in the
poison trades will be given adequate physical examinations with
check-ups on health conditions that will stave off sickness due to the
inhalation, ingestion, or absorption of trade poisons.
The C h a ir m a n . N o w , I have pleasure in introducing Dr. A. J.
Lanza, who will speak on the subject, A Study of Silicosis in Rock
Drillers. Doctor Lanza is the assistant medical director of the Met
ropolitan Life Insurance Co.
A Study o f Silicosis in Rock Drillers
By Dr. A. J. Lanza, Assistant Medical Director Metropolitan Life Insurance Co.
In April of this year, 1929, the recently appointed industrial com
missioner for the State of New York designated a committee to draft
rules relating to the regulation of rock drilling, sand blasting, and
rock crushing for recommendation by the industrial commissioner to
the industrial board. Mr. Edward J. Pierce, of the New York De
partment of Labor, was made the chairman of that committee.
Before giving you a brief background of the events that led up to
the establishment of that committee, I would like to point out that
that action of the New York Department of Labor is a really con
structive effort to deal adequately with what is probably the principal
industrial hazard that we have in this country to-day. I think the
department of labor is to be highly congratulated for having taken
such prompt action.
In November, 1927, a committee was organized under the auspices
of the New York Tuberculosis and Health Association to make a
study of the hazards of rock drilling in Manhattan, and that study
was carried out by the New York Tuberculosis and Health Associa
tion, the Vanderbilt Clinic of Columbia University, and the Metro
politan Life Insurance Co. This study was made or carried on dur
ing 1928, and in February, 1929, the results of that study were pub
lished in the Journal of Industrial Hygiene for that month, and that
study served to focus a great deal oi general attention upon an in
dustrial hazard whose magnitude, on the one hand, could be com
pared only by the general apathy that existed toward it on the other.
On February 8, the New York City Board of Transportation
called a conference on silicosis at which were present the members
and representatives of the New York City Health Department,
STUDY OF SILICOSIS IK BOCK DRILLERS
41
operating contractors, rock drillers’ unions, manufacturers of drill
ing apparatus, and other interested parties.
Mr. Slattery, who was in charge of the conference, announced at
the end of the conference that every possible effort to lessen the dust
hazard would be undertaken in those operations which came under
the control of the board.
The crux of the whole business lies in the expression, a Every pos
sible effort to control the hazard.” An enormous amount of re
search, second probably only to that done on lead, has been done on
the action of silica on the lungs, primarily in South Africa. In
England, in some of the British dominions, and in this country
efforts have been made to lessen the dust hazard.
Studies and investigation made apparent that while the greatest
extent of the dust hazard was probably in hard-rock mining, never
theless it was a hazard that was spread throughout industry in gen
eral; it was found wherever work was undertaken in granite, in the
pottery industry, in the grinding industry, in sand blasting, in the
cleaning of buildings by the use of compressed air and sand, and
actually there was a great deal more exposure to siliceous rock dust
than had been thought possible.
We thought formerly that the problem was one of the application
of water to rock drilling. Time showed that the application of water
was not the solution. The introduction of wet drilling was an im
provement, but it did not do the job, because we found that the
fine dust particles came right on up through the water and got into
the atmosphere just the same and caused silicosis as they had previ
ously. In fact, the British authorities are apt to stress the fact
that the presence of moisture in fine silica dust makes it somewhat
more dangerous than it is when dry.
Now, in Manhattan it was obvious that on many of the operations
there—foundation work, tunneling, and subway work—especially in
the wintertime, water could not be used because of exposure to climatic
conditions; in the wintertime you would have a lot of ice around and
probably increase very considerably the accident hazard. So the
State department of labor concentrated its attention on stimulating
some other method of dealing with the dust problem.
It is a generally accepted proposition, that in dealing with a dust
hazard you must control your dust at the point of origin. Once your
dust gets into the air there is no practical method by which people
working in that dust can be protected from it. Now, mind you, my
remarks pertain only to silica dust. I am not discussing poisonous
dust or arsenate, the reason being that the particles of silica dust
which gain entrance into the lungs are so small that you can not con
struct a respirator that will filter the dust out and still permit the
man to do his work. The Army gas mask will take them out, but you
can not do an 8-hour shift witn a gas mask on.
In its efforts to deal with the situation, the department was assisted
by the contractors, who tackled the proposition from the viewpoint
of trying to adopt some sort of a suction apparatus at the drill hole
which would take the dust away as rapidly as it was formed. That
sounds simple, but it proved to be, and still proves to be, not only
difficult but, unfortunately, relatively quite expensive.
94023°—30------ 4
42
SIXTEENTH ANNUAL MEETING OF I. A. I. A. B. 0 .
The only way to determine whether a dust-removal system is ef
fective is to sample your air at the working place before your op
eration commences; when it is being carried on with your dust-re
moval system in operation; and after your dust-removal appliance
has been taken away.
In July, 1929, the committee of the State department of labor
made tests of a dust-collecting system devised by Mr. Kelly, of the
George Atwell Co. Before I left New York I tried to get some
pictures of Mr. Kelly’s apparatus. He was going to prepare some
pictures and a blue print, but I was informed by the department
that they were not yet forthcoming. Essentially the apparatus con
sisted of a loose metal ring. It did not fit snugly—just a large,
round, loose, hollow ring, resting of its own weight on the ground
at the drill hole. Connected with it was a rubber tube, which, in
turn, was connected to a tank with an exhaust.
That sort of thing had been tried before. I think the previous
error probably consisted in the thought of the designers that such
an apparatus would have to fit snugly around the drill hole. That is
a difficult thing to attain and made the work of the drillers much
harder, so that they did not want to use it, and as you know,
you must always take into consideration the human equation, for
the more reliance you have to put on each individual the weaker is
the effectiveness ox your scheme.
We tested this device for Mr. Kelly while it was in actual opera
tion at a subway tunnel construction. First of all, we sampled the
air before any work was done on that particular morning to deter
mine the normal dust content of the air at that place, and we found
twenty-three thousand and some odd-hundred particles per cubic
foot, and by that I mean particles under 10 microns in size.
Four jack hammers were then started up with Mr. Kelly’s device
working. I f you are familiar with a jack hammer, you know what its
possibilities are in the making of dust. With the four jack hammers
and the dust apparatus working, the dust count jumped from 23,000
to 114,000 particles per cubic foot. We then removed the dust-suction
apparatus and continued our sampling, and the count jumped from
114,000 to 423,900,000 per cubic foot. Needless to say, all of us
were very much encouraged. The United States Public Health
Service has adopted as a permissible limit 10,000,000 particles under
10 microns per cubic foot.
“ One swallow does not make a summer,” and I would not go so far
as to say that the efforts of the State department of labor have solved
the dust hazard in rock drilling permanently, but that is the most
hopeful, the most promising experiment that we have had yet.
Silicosis depends on the dosage of silica received. The dosage
depends upon the amount of dust in the air, the percentage of silica
in the dust, and the length of time which the man works. The
longer he works or the more steadily he works, the greater the
amount of silica, the heavier the dosage, and the quicker the disease
condition is produced.
It is obvious, therefore, that to protect him for all practical pur
poses we do not have to remove 100 per cent of dust; in fact, I
imagine under most conditions if we could get rid of 60 or 70 per
cent we would have given him fairly ample protection. I f these ex
SILICOSIS IN HOCK DRILLERS
DISCUSSION'
43
periments are borne out, I think we are upon the threshold of a
method of dealing with certain types of dust hazards that is going
to be very effective and save a great many lives.
On the table here are some pictures of dust sampling which I
would like to have you look at at your leisure. The method of dust
sampling itself is intricate and calls for training, and a number
of inventions, methods, and instruments of precision have been de
vised to give us an accurate estimation of the dust in the air at
any given place. Years of experience have attested the value of
the method illustrated there, which is about the most efficient. If I
remember rightly, it is ninety-odd per cent efficient on tobacco smoke,
which is the general standard that is used in testing the efficiency of
dust-sampling apparatus.
It consists essentially of a small glass flask about half full of water,
to which a little alcohol has been added, and the tube leading down
into the liquid, drawing in the atmospheric air, with a baffle plate
al the bottom so as to break up the air current as it comes into the
water; the suction tube is connected with a small motor. It can
be activated by an electric motor or by an air injector if compressed
air is available. It is rigged up with a U tube so that you can get
the actual suction pressure in the bottle, and that, with the length
of time, gives the number of cubic feet in the sample.
Now, in practice that bottle is put near the head of the operator—
that is, you want to get the condition of the air which he is breathing.
Not over there, or over there, but actually where he is located, and
the advantage of that type of sampling apparatus is that you can
run it for a long time—you can run it for a half hour and, of course,
the longer you can run it the larger the sample you can take, the
smaller is your margin of error.
Those bottles with the dust trapped in them are then returned to
the laboratory, where the dust is removed by methods of evaporation
and chemical treatment, and we are able to get the actual weight, and,
the amount of silica present, but the important point is to deter
mine the number of particles per cubic foot that are under 10
microns in size, 10 microns being about the largest particle that
will gain access to the lung tissue. Larger particles are blocked in
the upper respiratory tract. The particles that get into the lungs
and do the damage average somewhere between 1 and 5 microns.
DISCUSSION
The C h a i r m a n . Doctor Lanza’s paper has been very, very inter
esting. It is always instructive to listen to an authority on any
subject, particularly a subject in which we are so vitally interested.
I know we all would prefer preventing silicosis than to spend our
time seeing that those who suffer from silicosis get just compensa
tion. It is gratifying to know that you have arrived at such a stage
of success in the experiment.
Does anyone wish to ask any questions of Doctor Lanza? There
is no provision on the program for discussion of this subject, proba
bly because there are two long discussions coming later this after
noon, but I am sure Doctor Lanza will be willing and glad to answer
any questions.
44
SIXTEENTH ANNUAL MEETING OF I. A. 1. A. B. 0 .
Mr. W il l ia m s . Has Doctor Lanza succeeded in being able to form
an opinion as to how long after exposure to the silica dust, disease
may be expected—that is, how long a time may be expected to elapse
after exposure to silicate dust before development of silicosis from
that particular hazard may be expected to manifest itself?
Doctor L anza. It depends upon the dosage, Avhich depends upon
the amount of silica. Let me put it this way: A silica dust, like
flint, running 99 per cent plus of silica, men working in that steadily
will be seriously and usually permanently damaged at the end of
five or six years; the silica dust containing 70, 65, or 60 per cent
silicate, with perhaps little better working conditions— and that is
about the average that we get in this country, with one or two not
able exceptions—will run 10 to 15 years. It is a slowly developing
disease, and under most working conditions in this country, as far
as I know, it is a matter of 10 to 12, 14 or 15 years before the
man is aware, providing he has not been medically supervised, that
he is thoroughly damaged.
Mr. W il l ia m s . I did not make my question quite clear. Suppose
a man has been exposed to this hazard, say for 10 years. There is
no physical manifestation of the disease. He does not know there
is anything the matter with him—perhaps there is not anything the
matter with him then, but he ceases to be exposed to the hazard.
If silicosis does develop, how long a time should elapse before he
could say that it was not due to that old exposure but to something
else? How long does it take to manifest itself?
Doctor L a n z a . I do not know that there is an answer to that
question. For practical purposes the point is this: After a man has
had even a moderate amount of silica dust enter his lungs, he will
probably contract tuberculosis. The process, you might say, is
almost inevitable; and, having contracted tuberculosis, he does not
recover. He will not recover. He may have been dusted in this
industry to-day, leave the industry without knowing that his lungs
have been materially affected, and a year later develop symptoms
of tubercle infection, and, of course, his chances for recovery then
are practically nil.
Mr. K in g s to n . We have in Ontario a silicosis law which provides
that there must be an exposure to silica for five years before a man
is entitled to compensation under the silicosis provision. That is
to say, we will not allow a workman to come into Ontario and make
a claim for silicosis if he has been there only a year. We say he
must be exposed five years in one of our Ontario mines before he
becomes entitled to the benefits of the silicosis provision. Would
you say that that fairly represents the proper provision for such a
case?
Doctor L a n z a . I think it does. I would say, further than that,
that I have had the pleasure of visiting the Provincial silicosis clinic
up there in Ontario and I think it is the best. There is nothing else
in North America to compare with it in a practical effort to deal
with a very difficult problem.
Mr. K in g sto n . Is it known how long silica dust will remain in
suspense ?
SILICOSIS IN ROCK DRILLERS— DISCUSSION
45
Doctor L a n z a . Yes; it has been worked out. I can not tell you
offhand. They have made experiments to determine the length of
time it will float in the air, but I can not give you the time.
Mr. S t a c k . Are you able at any time to detect silicosis in the
blood stream?
Doctor L a n z a . N o ; we rely in our diagnosis almost entirely on
the X ray. That is to say, you will get a very demonstrable lung
shadow, which we check witfi the working history of the man, and
it may justify a diagnosis of silicosis or whatever may be indicated
even in the absence of clinical symptoms.
Mrs. P e r k i n s . Has any further work been done along the line
of the theory that silica might, in itself, be a protein poisoning
which has other effects on the entire system?
Doctor L a n z a . The generally accepted theory to-day is that silica
is a" protein poison; that the fine silica dust in the lungs goes into
suspension in the colloidal form and acts as a protein poison. Now.
even so, we do not yet know why these people get tuberculosis;
whether the colloidal silica in the tissue damages the tissues so that
the tuberculosis bacillus can take hold, or whether it forms a tablement for them, we do not know. That remains to be discovered.
Mrs. P e r k i n s . They are more susceptible to tuberculosis?
Doctor L a n z a . There is no question about that.
Mr. S t e w a r t . I want to ask Mr. Kingston a question. Do I un
derstand that Ontario accepts the experience of a man who has
learned the trade of mining or drilling somewhere else, and in that
learning and in that work has loaded himself more or less—we’ll
say less—with silicosis—that Ontario accepts and takes advantage of
and profits by that trade knowledge and trade experience, but
proposes to pay him only for the loading or dosage that he gets in
Ontario? What do you think Jesus would say about that?
Mr. K i n g s t o n . I do not know what the answer to your last ques
tion would be, but all I can say is this: That is the way we started
the question by saying that we will not take a man who—I do not
care what his experience may have been, but if he is loaded up with
silicosis and develops the degree of total disability within a year,
we are not going to accept the burden of that responsibility. We say
that he must be exposed longer than that time in Ontario before
Ontario feels itself justified in assuming the full responsibility.
Mr. S t e w a r t . Then do you train all your own apprentices?
Mr. K i n g s t o n . Let me go a step further. Just within the last
year we have developed the practice of testing every man out before
he is allowed to work at all, and if he comes to us with experience
and a load of silica on his lungs, looking for our employment, our
experts, who are now examining for silicosis, will say to him, “ We
do not want you at all,” and we do not allow a man with a suspicion
of silicosis to go into our mines, but we say, “ You must have five
years’ exposure to silica in our mines before you are entitled to
compensation.”
Mr. W i l l i a m s . I s the British silicosis act of 1895 a part of your
law in Ontario?
46
SIXTEENTH ANNUAL MEETING OF I. A. I, A. B. 0 .
Mr. K i n g s t o n . N o . We studied very carefully in Ontario the
provisions and the conditions in South Africa. I think probably
South Africa developed the silicosis provisions to a much greater
extent than in other parts of the world, and a couple of years ago a
gentleman from South Africa visited us and gave us an immense
amount of information as to what they are doing on this question,
and eventually our law as it stands to-day was developed from the
knowledge thus obtained.
Mr. C u r t i s . I s the British Dominion making any provision for
a preventive of silicosis ?
Mr. K i n g s t o n . Well, our medical health department in the Prov
ince, which our compensation board has nothing to do with, is carry
ing out a very extensive program in an effort to arrest the progress
of the disease as much as wre can. I can not go into all that with you
or tell you just what they are doing. That does not come within.the
jurisdiction of the compensation board but rather the medical health
department of the Province.
Mr. C u r t i s . Are you of the opinion that five years is doing justice
to the workman ?
Mr. K i n g s t o n . The legislature settled on five years, and we are
there to administer that law. I have no opinion that is worth while
presenting to you as to whether five years is fair. I asked the doctor
whether he thought it was fair under the circumstances, and ih*
reason why I asked the question is because I do not know. That is
the law.
Mr. C u r t i s . Would it not be better for us to find out whether it is
right or not, and then suggest to our legislature what to do? I can
say, regardless of what the medical profession may say, that is not
so. We have had men contract silicosis in less than two years. I
have four men to-day in the hospital who have not been working «*t
drilling for over two years, and the four of them are dying of tuber
culosis.
Mr. K i n g s t o n . When I mentioned five years, I was speaking of
silicosis. We have pneumoconiosis and we have miners5 phthisis,
which is somewhat different from silicosis, and I think three years is
the limit in those cases.
Mr. C u r t i s . Well, of course, we call everything in New York
State “ tuberculosis.” That is, when the doctors bury their mistakes
they call silicosis tuberculosis.
Mr. K i n g s t o n . I think there is a difference, however, between
tuberculosis and these other technical diseases that are mentioned
in the act as peculiarly applicable to mining.
Mr. C u r t i s . I happen to represent the men who are doing that
class of work, and our leath rate is climbing so that we are beginning
to know what our men are dying of without the medical profession
telling us. It is silicosis, but the form of diagnosis is tuberculosis.
That is, when it has gone beyond anyone’s being able to help the men;
so I just wanted to check up on that 5-year limit and see if you can
not reduce that to one year. You would be doing more justice.
Mr. K i n g s t o n . I appreciate the compliment paid to Ontario by
our friend, Doctor Lanza, but I am not pretending that we feel in
IN D U STRIAL DISEASES AND COM PENSATION
47
Ontario that we have the last word in what is right in our silicosis
law. We are groping and we are anxious to make progress along the
right lines.
The C h a i r m a n . With a word of thanks to Doctor Lanza for this
interesting paper and the discussion which followed, we will go on
to the next subject, which will be presented by Dr. May R. Mayers,
of the Department of Labor of New York, the subject being Occupa
tional Diseases and Workmen’s Compensation.
Industrial Diseases and Compensation
B y Dr. May R. Mayers, of ;he New York Department of Labor
The subject of compensation for industrial diseases is so large,
one is somewhat at a loss to know where to begin. One might for
example discuss the lack of uniformity in the various States in their
choice of the industrial diseases for which they are prepared to give
compensation. One might lament the fact that in one’s own State
the list of compensable diseases is so very inadequate, and that
recent attempts to add other important diseases such as silicosis,
poisoning by radium, etc., met with almost complete failure at the
last legislative session. On the other hand, one might very profit
ably discuss the statistical experiences of the various States in this
country as well as that of other countries in terms of the number of
persons benefited, the total expenditure involved, the administrative
machinery required, and so forth. One might consider the recently
much-debated question as to which is the more desirable and the more
practicable—a so-called “ blanket law,” covering all diseases arising
from occupation, or further extension of the law as we now have it
in the State of New York, to specifically cover all occupational dis
eases now known—provided, of course, that the list is periodically
modified to keep pace with scientific advances in the industrial
world.
It is not my intention this afternoon, however, to treat of any
of these things. As a physician, I should like very much to bring
to your attention some of the medical aspects of compensation; some
of the diagnostic problems and difficulties which makes the admin
istration of the compensation law so perplexing at the present time—
even as regards those diseases which are now listed as compensable.
Compensation for industrial diseases as distinguished from com
pensation for accidents is of comparatively recent origin. Its intro
duction has opened to the compensation tribunals a field of obviously
vast importance and vast extent; a field, however, which is also of
vast difficulty and complexity. To determine the extent of a dis
ability and its true cause is frequently enough a matter of real
difficulty even in cases where the disability is claimed to have re
sulted from an accident; immeasurably more difficult is it likely to
be where the alleged and possible cause is a disease, possibly devoid
of acute clinical symptoms; a disease of nonbacterial origin with no
pathognomonic sign or symptom; and the very existence of which
it may be difficult to predicate with confidence.
To illustrate: I f a worker accidentally breaks his arm while at
work, it is a relatively simple matter to get X-ray proof of the fact,
48
SIX T E E N T H A N N U A L M EETIN G OF I. A. I. A. B. C.
and he will in due course get the compensation due him under the
law. While there may be some subsequent question as to the exact
duration of the disability—particularly in a neurotic* worker, who
is perhaps subconsciously not overanxious to return to work—the
original condition is well established and no one questions the fact
that he broke his arm.
When we turn from the field of industrial accidents to that of
industrial diseases, we find that those diseases which are of bacterial
origin usually offer little more diagnostic difficulty than do injuries
caused by accidents. Thus, if a woolsorter develops anthrax, or a
butcher develops ringworm, the diagnosis can be clinched by actually
isolating the offending organism, and there can be no dispute about
it. The same holds true in the case of any of the industrial diseases
of bacterial or parasitic origin.
Unfortunately, however, in the case of the great number of indus
trial diseases which are chemical rather than bacterial in origin, the
diagnosis is far more difficult. This is due to the fact that the spe
cific chemical substance to which a worker is exposed is not usually
such as to make him ill at the outset. Indeed, he may feel no illeffects whatever of his exposure for many months, or even for years.
Nevertheless, if the substance is poisonous, a time may be reached
when he has absorbed so much of it into his system that he may begin
to appreciate that he is not feeling as well as he used to. This sense
of a lack of well-being need not be acute at first. Nor will the symp
toms of which he complains be characteristic of any particular disease
entity. He may have a headache or constipation or a stomach ache,
for example. And, if he consults a physician, the latter may be
hard put to it to ascertain the cause. It might be due to lead
poisoning, for example, but then it might also be due to any of the
conditions responsible for those same symptoms in those of us who
have never been exposed to lead.
While it is clear that the long-continued maintenance of abnormal
biochemical and physiological relations in the body, such as result
from prolonged exposure to the industrial poisons, must needs be
harmful in a cumulative way; actual disease entities may appear only
after gross injury has been done, and it is frequently very difficult to
determine with any degree of certainty what is the true etiology.
An environment not sufficiently injurious to produce a definite patho
logical lesion at the immediate site of injury, but which, nevertheless,
for a long time unduly taxes or disturbs any or all of the normal
regulating functions of the body, will eventually cause a break some
where in the human machine. And this break is frequently at some
point where the person is congenitally weak, or at some point where
the local resistance has been lowered, as by trauma, for example,
rather than where it would be naturally looked for on the basis of his
occupation.
Let us consider lead poisoning, for example, since it would be
manifestly impossible to discuss individually the diagnostic and
compensation problems arising from exposure to all of the many in
dustrial poisons met with in our complex industrial organization
to-day. Among the limited number of industrial diseases which the
Legislature of the State of New York has thus far seen fit to regard
as compensable under the workmen’s compensation law lead poison
IN D U ST R IA L DISEASES AND CO M PENSATION
49
ing is easily the most important. The proper solution of the prob
lems arising from claims of disability or death alleged to have been
caused by lead poisoning is thus of especial importance to us, not
only from the standpoint of the number of cases involved, but also
because such a proper solution must have a large influence upon the
proper development of the law and upon the procedure of com
pensation for occupational diseases generally.
There is perhaps no other industrial disease which has been the
subject of so much study, as has lead poisoning. Indeed, there is no
other industrial disease whose physiological and chemical effects
upon the body are better understood. It is a very natural assump
tion, therefore, that if a man contracts lead poisoning in the course
of his occupation he will receive compensation. It may surprise
you, therefore, when I say that, as matters stand to-day, such is not
necessarily the case. He will receive compensation only if it can be
proved to the satisfaction of the compensation tribunal that he has
lead poisoning. Obviously, if we are unable to establish the diag
nosis, the fact that we are sufficiently enlightened to include poison
ing by lead among the diseases for which we grant compensation
does not help the individual in question in the least; nor does it
give those who are keenly interested in the equitable administration
of the compensation law the peace of mind which they desire. In
other words, the ultimate success or failure of the compensation law
as applied to industrial diseases is in the last analysis essentially de
pendent upon accuracy of diagnosis and a corresponding ability to
prove that the diagnosis made is a correct one. The growing im
portance of the laboratory as an aid to diagnosis will be touched
on later.
Despite all that is known about lead poisoning at the present time,
its diagnosis in all but its acute or advanced stages is still beset with
difficulties, both because of the indefiniteness of many of the symptom
complexes—as already illustrated in the case of the lead worker with
a stomach ache—and because medical authorities have differed in
their interpretation of some of the terms used. Indeed, when one
consults the voluminous literature on the subject, one is immediately
struck with the fact that authorities have apparently disagreed for
generations as to what should properly constitute a diagnosis of lead
poisoning. There are those, for example, who consider that no case
should be diagnosed as lead poisoning in the absence of lead colic.
At the other extreme, there are those who take the position that no
case should be diagnosed as lead poisoning in the absence of stippled
cells, and still others who hold that the presence of stippled cells
in the blood is, in itself, sufficient for a diagnosis, even in the absence
of all clinical manifestations of the disease—in other words, even in
the total absence of symptoms. Innumerable intermediate positions
have been taken by as many different medical men. When these dif
ferences of opinion are examined, however, one is impressed with the
fact that they are usually due to differences of opinion as to the
precise definition of the term “ poisoning ” rather than to any funda
mental differences in the medical interpretation of cases. Neverthe
less, such a lack of standardization of terminology in connection
with a disease entity which of necessity presents true difficulties in
diagnosis, because of the indefiniteness of the clinical picture, must
50
SIX TE E N T H A N N U A L M EETIN G OF I. A. I. A. B. C.
unavoidably cause considerable difficulty for those charged with the
administration of the compensation law. Such is the case at the
present time.
It will be remembered that the absorption of lead into the body
may result in the production of a great diversity of symptoms refer
able to almost every organ in the body. These symptoms need not
necessarily differ in any respect from those produced by other dis
eases affecting the same organs. At the outset, therefore, the com
pensation tribunal is faced with the fact that the disability resulting
from exposure to lead may manifest itself only in such subjective
symptoms as headache, dizziness, and general malaise. There is no
way of establishing with certainty in these cases whether or not the
claimant is actually experiencing the sensations of which he com
plains. Yet, if he is, he may be just as truly disabled as if he dis
played the most convincing of objective signs, i. e., those which can
be elicited by the ordinary routine examination. In these cases,
therefore, the usual processes of inquiry as applied to accidents must
be reversed. Instead of inquiring first whether disability is present,
wre must first inquire whether lead poisoning is present, and if so in
what form and degree. These questions answered, it is possible to
draw from the resulting picture a useful inference as to whether or
not the disabling sensations described by the claimant are attribu
table to this cause.
As already pointed out, the answer to the question as to whether
lead poisoning or its sequelae is present might be difficult enough even
if the term 66lead poisoning ” as used in the law imported a wellrecognized and clearly defined disease entity. As has already been
pointed out, however, the term is wholly lacking in standard defi
nition of general acceptance.
Time would hardly permit me to review at this time the work of
the bureau of industrial hygiene, both alone and in cooperation with
committees of the American Public Health Association, directed
toward a standardization of diagnosis and terminology, not only in
this very important and perplexing disease, but in others of chemi
cal origin where the need for such standardization is equally great.
I do want to take a few minutes, however, to tell you a little about
an investigation of lead poisoning recently made by the bureau of
industrial hygiene because the findings are peculiarly pertinent to
the present discussion. In this investigation 381 lead workers were
examined in a number of lead industries in various parts of the
State. Complete occupational and clinical histories were taken, the
workers were given a thorough physical examination, and laboratory
tests were made of the blood and urine, for evidences of lead absorp
tion into the body. It may surprise you that one of the first ques
tions which presented itself at an early stage in the investigation,
and one which grew increasingly difficult to answer as time went on,
was, curiously enough, “ Exactly what is lead poisoning ? ”
Let us consider the light thrown by this investigation upon the
significance of the lead line in the diagnosis of lead poisoning. For
example, is a lead worker with a lead line in his gums and a stomach
ache, suffering from lead poisoning ?
That the presence of this single and well-defined sign (when it is
well defined) is direct evidence of lead absorption is generally ac
IN DU STRIAL DISEASES AND COM PENSATION
51
cepted—lead was absorbed, and subsequently deposited in the gums.
The practical questions presented to the examining physician are:
(1) May active lead absorption occur in the absence ox this physical
sign? (2) May the lead line in the gums persist long after active
lead absorption has ceased? (3) To what extent should the presence
or absence of the lead line in a lead worker affect the interpretation
of the symptom-complex which the patient presents at the time he is
examined—as, for example, a stomach ache ? It is a common exper
ience that stomach ache in a lead worker is only too frequently diag
nosed as lead colic without further investigation. When a lead
worker with a lead line in his gums, however, comes to a physician
and complains of a stomach ache, the diagnosis is almost a foregone
conclusion. And yet a lead worker, either with or without a lead
line in his gums, may have a stomach ache for any of the reasons
that anyone else may.
An analysis of some of the data on the lead line obtained in the
study above referred to brings out the pertinence of these considera
tions. There were in all, among the 381 workers examined, 31 cases
of lead line in the gums, or 8.1 per cent. No attempt will be made
at this time to discuss the difficulties in differentiating a true lead
line in the presence of cyanotic gums and carious teeth, both of which
are so common among lead workers. The 31 cases here discussed
were sufficiently definite to leave no doubt as to the diagnosis. Of
this number 10 gave no other evidence of lead absorption. Examina
tion of their blood showed no evidence of lead anemia, and their
urine was negative for lead, showing that there was apparently no
active lead absorption going on at the time they were examined. It
would seem proper to infer, therefore, that in the case of these 10
men, at least, the lead line had in all probability been deposited at
some previous time when active lead absorption had taken place, and
these lead deposits had remained there inert until the present time.
Leleky has reported a lead line in the gums in a worker 11 months
after exposure to lead had ceased. In the present investigation ap
proximately one-third of the workers with a positive lead line in
their gums appeared to be in the position of this man. For them
the presence of the lead line would not necessarily be contributory
evidence in the favor of a diagnosis of lead colic in the absence oi
other findings. On the other hand, in the series under discussion,
there were 201 men who showed laboratory evidences of active lead
absorption, but who nevertheless did not have a lead line in their
gums. Evidently the lead line may be frequently absent, even when
active lead absorption is taking place.
The practical importance of differentiating workers who are ac
tively absorbing lead at the time the lead line is observed, from those
who merely have inert deposits of lead in their gums, from some pre
vious time, can not be overemphasized. In order properly to appraise
the diagnostic significance of the lead line in any particular case
repeated laboratory analyses should be made both of blood and of
urine for evidence of active lead absorption. It is the presence of or
absence of active lead absorption rather than the presence or absence
of the lead line which is essential to a proper interpretation of the
symptom-complex presented by a given patient.
It must be remembered, however, that every worker who has any
lead stored in his body—whether in his gums, in his bones, or else
52
SIX TE E N T H A N N U A L M EETING OF I. A. I. A. B. C.
where—is at all times a potential case of acute lead poisoning. The
onset of an intercurrent infection or some change in his metabolism
may at any time cause a sudden mobilization of the stored lead, with
the result that it is thrown into his circulation in toxic amounts, and
an acute attack of lead poisoning will ensue. Such workers not only
require watching by the industrial physician, but they require proper
prophylactic treatment directed toward a slow mobilization with a
gradual elimination of these lead deposits from their bodies.
The lead investigation threw interesting light also upon certain
other questions as well, which are peculiarly significant in their com
pensation aspects. May a clinical picture suggestive of lead absorp
tion, for example, or even of lead poisoning, be present in the actual
absence of lead absorption ? On the other hand, can active lead ab
sorption be taking place in the total absence of all clinical manifes
tations? Our findings were as follows:
1. Of the 381 lead workers examined, 232 showed total absence
of symptoms or signs suggestive of lead absorption on physical ex
amination. Laboratory tests showed, however, that approximately
half of these men were actively absorbing lead at the time they were
examined.
2. Of the 381 workers examined, 149 presented a clinical picture
definitely suggestive of lead absorption. Laboratory tests confirmed
the diagnosis in approximately two-thirds of the cases. In the case
of the remaining one-third it was considered that the symptomcomplexes presented, while suggestive of lead absorption, were prob
ably due to other causes. While none of these workers were in
capacitated, cases are constantly arising in which disability is claimed
on the basis of clinical symptoms entirely analogous to those found
in this group of workers.
Considering the first of these two groups of cases, it would appear
that the absorption of relatively small amounts of lead need not
necessarily give rise to a typical or indeed even to a suggestive clini
cal picture. Workers who are apparently healthy on physical ex
amination and who complain of no symptoms whatever may never
theless be actively absorbing lead. Active lead absorption in these
workers presents no problem, however, from the standpoint of com
pensation, for there is obviously no disability present. These cases
are of interest primarily to those concerned with proper medical
supervision of lead workers, with a view to general prophylaxis and
the prevention of acute cases of lead poisoning.
The cases which come to the attention of the compensation tri
bunals are those in the second group where disability is actual or
claimed. The difficulties which arise with reference to these cases
may be grouped under two heads: (1) Difficulties arising from a
lack of standardization of terminology and diagnosis; (2) difficulty
in establishing an etiologic relationship between the disability and
exposure to lead.
In acute cases of lead poisoning these difficulties are not so apt
to arise, since the diagnosis can usually be made Avith a sufficient
degree of certainty. In the subacute cases, however, and those pre
senting a suggestive but rather vague and indefinite symptom-com
plex, the difficulties of diagnosis on the basis of the clinical picture
alone are obviously very great. In the case of such symptoms as
constipation, severe headache, or abdominal pain, as a result of which
IN D U STRIAL DISEASES AND COM PENSATION
53
a worker may claim tliafc he is unable to work, lead may or may not
be the etiologic factor. Nevertheless, the compensation courts are
continually faced with the necessity for making a definite decision in
these doubtful cases.
In the present series of examinations, the diagnosis of lead absorp
tion in cases of this type was confirmed by laboratory tests in approx
imately two-thirds of the cases. In other words, the probability that
lead exposure is the cause of a suggestive symptom-complex would
appear to be approximately two to one. It might properly be
argued, therefore, that if careful laboratory tests were made in all
cases of this type approximately two-thirds of the cases which are
so perplexing at the present time would be readily disposed of.
On the other hand, it must be remembered, of course, that even
where laboratory evidences of active lead absorption can definitely
be established, the symptom-complex may nevertheless be due to
other causes. An assumption that such an etiologic relationship
probably exists would, however, seem to be warranted. Compensa
tion would be justified in these cases and the worker very properly
given the benefit of what slight doubt must exist at all times.
In approximately one-third of the cases no laboratory confirma
tion of the clinical picture was found. In these cases, while, of
course, there is again a chance of error in that the laboratory can
not be regarded as infallible, nevertheless it would seem fair to
say that the presumption of evidence is rather against an etiologic
relationship between the symptom-complex and lead absorption.
If compensation were withheld in these cases, the making of re
peated laboratory tests by the physician in charge of the case would
automatically be stimulated, thereby reducing still further the
chances of error in diagnosis.
Unfortunately, at the present time laboratory evidence is rarely
available as an aid to the diagnosis of these cases when they come
up for compensation because the physicians are not in the habit
of making the necessary tests when the case first comes to them for
treatment. Frequently in difficult cases it is attempted to make the
tests at the time the case is being considered by the court. This
procedure is usually a failure, however, because such a long interval
has elapsed since the illness that positive tests are usually no longer
to be expected. For several years the New York State Bureau of
Industrial Hygiene lias offered to make the necessary tests for
physicians at cost, but for some reason they have not availed them
selves of this offer.
If physicians could be persuaded to prepare their cases fully by
making the necessary laboratory tests of blood and urine in every
case of suspected lead poisoning, it is believed on the basis of the
present experience that about two-thirds of the troublesome cases
could very probably be disposed of with greater justice to the
workers and with considerably less expenditure of time by the com
pensation courts; the presence of laboratory evidence of active lead
absorption being regarded as presumptive evidence in favor of lead
as the etiologic cause of the disability. In about a third of the cases
the absence of laboratory confirmation would still leave the diag
nosis somewhat in doubt, but it is believed that the presumption
would rather be against lead exposure as the etiologic factor. Even
taking into account the fact that a certain number of errors must
54
S IX TE E N T H A N N U A L M EETIN G OP I. A. I. A. B. C.
inevitably occur, these would be relatively small in number if
laboratory evidences of lead absorption were available to the com
pensation courts to supplement the clinical picture in all cases
presented to them.
It is not always appreciated, even by physicians, that there is a
vital difference between the diagnostic problem which confronts a
compensation tribunal and that which presents itself to the physi
cian in his ordinary practice. To the latter, every diagnosis is
tentative, and has usually for its chief purpose the determination
of the treatment to be given the patient; if the patient does not
respond to the indicated treatment, the correctness of the diagnosis
may be reexamined. In the compensation tribunal however, the
diagnosis must be determined at the outset.
The importance of the laboratory as an aid to the diagnosis of
lead poisoning has already been emphasized. When one considers
that before gross injury has been done and symptoms make their
appearance, the ill effects of exposure to an abnormal environment
can be measured only in terms of physiological and biochemical
changes in the body, one is impressed with the need for developing
proper laboratory tests for appraising these early ill effects. The
difficulties which arise in any attempt to appraise abnormal physiochemical relations in the body arise not merely from the fact that
the biochemical methods which are required for such determinations
are relatively new, difficult to carry out technically except by those
especially trained in their use, and that methods are entirely lacking
as yet for many of the determinations required; but also because
of the fact that many of the most important chemical elements in
the body are to be found there in amazingly small concentrations,
so that to detect variations in their relative amounts involves the
application of quantitative analytical methods to almost infinitesimally minute quantities. That the chemical detection, not to men
tion the quantitative determination of complex organic substances
such as these in the quantities in which they appear in the body,
may be extremely difficult, and in some cases even impossible, can
readily be seen.
I f one were to stop for a moment and visualize the body as an
elaborate chemical laboratory in which innumerable chemical re
actions are taking place simultaneously, and where chemical sub
stances in almost imponderable quantities may play determining
roles; and then imagine the introduction into this laboratory of
foreign substances, even in relatively small quantity, which are capa
ble of reacting chemically with any one of a large number of the
substances already present; only then can one get some conception
of the situation of workers who are exposed to the many chemical
abnormal environments which form a necessary part of our indus
trial world to-day. One is no longer surprised, when on investiga
tion of these workers one finds serious physiochemical and metabolic
disturbances, even in those wTho at the moment may show 110 clinical
manifestations of disease. The application of our newest and most
up-to-date biochemical methods or laboratory tests to the appraisal
of the health status of these men is not therefore theoretical in its
interest, but is highly practical from the standpoint of properly
safeguarding the health of our workers. They are, as we have seen
in the case of lead poisoning, frequently indispensable to clinching
IN D U STRIAL DISEASES AND COM PENSATION
55
the diagnosis of many of our industrial diseases. And we have
already seen that a law granting compensation for industrial diseases
means nothing in the absence of proper diagnostic methods.
Thus far we have been considering lead poisoning as an example
of a disease in which the diagnosis presents special difficulties.
There are other industrial diseases, however, such as carbon monox
ide poisoning, for example, where, though the diagnosis may be
established, it is difficult to determine with reference to a given
disability occurring at some subsequent time, whether or not this
disability is the result of the initial disease. In other words, may the
disability be regarded properly as one of the sequelae or not ? In the
case of industrial diseases this is frequently far more difficult to
answer with any degree of certainty than in the case of accident.
In the case of carbon monoxide poisoning, this question has come
up again and again. As you know, when carbon monoxide is inhaled,
it combines with the hemoglobin of the red blood cells. In doing
so it displaces oxygen from the hemoglobin molecule and so deprives
the various tissues of the body of their normal oxygen supply, and
asphyxia results. When a person who has been overcome by ex
posure to the gas is resuscitated, the carbon monoxide is very rapidly
removed from his blood stream; oxygen is once more restored to his.
blood, and thus to the tissues of his body, and to all intents and pur
poses, everything is restored to normal and he is restored 'to health.
It has been a not infrequent experience that such an individual,
some months later, begins to complain of cardiac symptoms of which
he was never before aware, and which gradually become so severe
as to incapacitate him for the type of work he has been doing.
Are these heart attacks the result of his asphyxia, or does he just
happen to have developed heart trouble which, as a matter of coin
cidence, began to manifest itself at this time ?
The authorities are in virtually complete agreement that such be
lated cardiac disturbances may be the direct sequela of exposure to
carbon monoxide; yet the burden of proof which rests upon the
shoulders of the claimant when he appears before the compensation
tribunal, to demonstrate that in his particular case his cardiac dis
ability is the result of his exposure, may be well nigh insupportable,
particularly when there is introduced evidence that his condition
may be the result of innumerable extraneous factors. So long as the
law places this burden upon the claimant, the task of correctly ad
vising the compensation tribunals in such cases will impose a severe
strain upon the resources of medical science.
From what has been said, I think it is apparent that in the ad
judication of claims arising out of such difficult conditions as I have
described, the referees and higher compensation tribunals are going
to have to depend to a greater extent upon expert opinion than is
necessary in the case of ordinary claims. And the question therefore
suggests itself, What provision exists for obtaining such opinion.
It has been the justifiable boast of those charged with the adminis
tration of the compensation laws of our several States that they
have divested their procedure of all of that technicality and cumber
someness which have subjected the procedure of the established
law courts to such widespread and severe criticism. It must be con
fessed, however, that in this matter of obtaining expert opinion, our
compensation tribunals have, in the main, but borrowed one of the
56
SIX TE E N T H A N N U A L M EETIN G OF I. A. I. A. B. C.
very features of judicial administration which has been most severely
criticised, and which the courts themselves are beginning to discard.
I refer to the method of seeking expert opinion, not from a dis
interested scientific source, but from the testimony, elicited by the
conventional method of direct and cross examination, centering
largely about incomprehensible hypothetical questions, from contend
ing experts in the employ of the claimant and the insurer, respec
tively. I venture to suggest that the time is ripe for compensation
tribunals to follow the lead of the more progressive courts in dis
carding this antiquated, undignified, and wholly inefficient method
of securing expert opinion, and attempt to elicit truth, not from the
strife of interested experts, going into battle under the lash of hec
toring attorneys, but from the matured thought of a body of dis
interested and impartial scientists, having no contact with either
party to the controversy, and responsible solely to the compensation
tribunal itself, and to the bar of the public opinion of their pro
fession.
DISCUSSION
Mr. S t e w a r t . Since the doctor, in her paper, called attention to
the fact that these diagnostic tests were largely at the expense of
the claimant, I am reminded of the fact that last week a convention
of physicians met in Washington and among other things, called
attention to the enormous increase in the expense of diagnostic data.
I do not know what the answer is, but I do know that we are getting
to a place where the ordinary worker is absolutely barred from
proving his claim in these obscure occupational diseases arising from
the new uses of chemistry and from such causes as silica dust, and
so on—not that the doctor is charging any more for a call but the
cost of laboratory analyses for diagnostic purposes are also included.
Now, from the workmen’s point of view, since it is the claimant
who must prove his case, since in most cases it is the claimant who
must pay these bills, I wonder if it is not up to us to say just how
much laboratory information the physician must have before he
knows whether a blue line on the gums means lead poisoning or not ?
Are we not getting to the place—not only in compensation cases,
but everywhere—where the diagnostic cost is practically eliminat
ing the whole field of workmen from any reasonable medical treat
ment or care?
The C h a ir m a n . The program calls for a discussion of this sub
ject, and the program states, “ In the discussion of this subject dele
gates are requested to state for their jurisdiction the number of oc
cupational disease cases handled in 1928, the administrative cost of
such cases in 1928, the average duration, and how the coverage of
occupational diseases has affected premium rates.”
I f you have that information, and it is too lengthy to read, you
may submit it to the secretary.
I shall call the roll of the States having a general law covering
occupational diseases, and we will be glad to hear from the delegates
from those States who care to discuss the subject.
Connecticut (Mr. W i l l ia m s ). Of course, you may all read the
Connecticut law on the subject. When we first adopted the com
pensation law we patterned it mostly after the English law, but we
took one phrase from the Massachusetts law which we supposed
OCCU PATIO N AL DISEASES— DISCUSSION
57
meant something. We left out of the statute the necessity for an
accident, and supposed that that was settled. But our courts
quickly said that our statute did not cover anything unless it could
be traced to a definite occurrence that could be located as to point
of time and place. Then we amended the law and said that that
should not be necessary, and we dealt with occupational diseases under
that system for quite a while.
In 1927 there was a general set of amendments and then, for the
first time, occupational diseases, under that name, came into the
statute, and this part of these amendments which were drawn origi
nated in a joint committee of the Connecticut Manufacturers5 Asso
ciation and the Connecticut Chamber of Commerce. We had a joint
committee, and our present statute on that subject was drafted at
their request by a gentleman who I believe is the best-informed
insurance lawyer in the United States.
“ The words 4occupational diseases 5 shall mean a disease peculiar
to the occupation in which the employee was engaged, and due to
causes in excess of the ordinary hazards of employment as such.”
That is not perfect, but I do not know of any better one.
Now, as to these risks, we have all heard of dermatitis. We have
had a duty thrust upon the Connecticut State Board of Health. We
have a special man there now, to whom all cases of occupational
diseases are supposed to be referred. There were 317 cases reported
in 1928 and it is too long a list with which to take up your time.
[The list is as follows:]
'Number of cases of occupational diseases reported to the Connecticut Depart
ment of Health in 1928
Disease
Cases
Disease
Cases
Allergy (vegetable dust)_________
Anthrax_________________________
54 Mercurial poisoning_____________
17
1 Occupational neurosis___________
2
Benzol_________________ _____ ____
1 Pneumonoconiosis_______________
1
Chromium poisoning____________
1 Pulmonary tuberculosis (sand)___
1
Conjunctivitis (various causes)___ 42 Silicosis_ ________________________
2
Cyanide burns__________________
1 Turpentine inhalation___________
1
Dermatitis (various causes)______ 174
Zinc poisoning___________________
1
Eczema_________________________
1
17
Lead poisoning__________________
Total...................................... 317
Number of cases of dermatitis and of conjunctivitis reported to Connecticut
Department of Health m 1928, by causes
Cause
Dermatitis:
Acid________________________
Acid plating________________
Arsenic_____________________
Bakers_____________________
Benzene____________________
Bichromate of potash_______
Brass (probably oil)_________
Fish________________________
Mercury____________________
Nitric acid__________________
O il.____ _______ ______ _____
Phenol derivatives__________
Plating acid________________
Plating solution_____________
Rubber accelerator__________
Sand blast__________________
94023°—30------5
Cause
1
2
2
1
1
1
2
3
127
1
10
1
1
3
2
1
Cases
Dermatitis— Continued.
Sand foundry_______________
1
Soap________________________
2
Soldering acids______________
3
Turpentine_________________
4
Turpentine substitute_______
1
Vegetable_____ _____________
2
Washing powder____________
1
Unknown___________________
1
Total___
...........174
Conjunctivitis:
Acid--------____
2
Carbon disulphide____
1
Hydrogen sulphide__________ 24
Mercury____________________ __ 15
Total_____________________ 42
58
SIXTEENTH ANNUAL MEETING OF I. A. I. A. B. 0 .
We divide our lung troubles into silicosis, pneumonoconiosis, siderosis, and tuberculosis. These cases first arose and were most valiantly
discussed in the case of concerns doing grinding work, and it was
oberved that after a while those men became ill and died. Three
of four such cases were taken to our supreme court before we learned
that such work filled a man’s lungs with metal dust and mineral
dust, tuberculosis developing, and the man dying.
Then these companies began to devise methods of improving their
processes. They did not want to kill their workmen, but they had
not thought much about it. Now they do think a lot about it.
We are not a statistical bureau, as I have several times had occa
sion to remark. We have a commissioner of labor statistics and
factory inspection, who receives copies of all of our accident reports.
I do not know how many of those cases each of us has had, or
how much they have cost us. You have the list there of the cases
which Doctor Gray says were reported to him, but I can give you
one or two practical illustrations of how this is handled.
Instead of long-drawn-out battles of experts, and long trials in
the superior court, and then an appeal to the supreme court, it takes
no longer than a week or 10 days to dispose of a case.
I was called by a representative of one of the large insurance com
panies, who said, “ We have a gas case. There is no controversy
about it. I suppose you want a hearing ?”
“ Yes; I want to see the marriage certificate of the claimant. I
want to know whether there are any children, and what the man’s
average wage was.” She told me about that and I knew enough
about it, so I turned to the insurance man, and I said, “ I suppose
you concede that this man had pneumonoconiosis, which developed
into tuberculosis and he died, and it was an injury within the mean
ing of the statute? ”
There is no need of taking up time about that. That is being
done as a routine matter, I think, in all our jurisdictions now, and
it marks a distinct advance from the day when there were long
battles of experts. I suppose that all your statutes have provisions
similar to ours.
As former Chief Justice Andrews of our supreme court said,
“ The law ought never to be a brawl for hire,” and it imposes upon
the commissioner the duty of studying all the standard authors, and
the latest medical journals, and 0 1 arriving at his own conclusions.
I suppose that is the common experience of all of us. I know it
takes up an everlasting amount o f time, but there are fewer battles
of experts than there formerly were, because we all know now that
we can, and we do, read the standard works on the subjects, and we
learn the latest views of the medical science.
So that with the rapid growth of industrial medicine, with the
great light that has been thrown on it by Doctor Hamilton and the
School of Industrial Medicine at Harvard—and Yale is going to
have such a school later on—and the information to be gotten from
such books as those written by Doctor Morehead; if we are willing
to study we can know pretty much what the medical situation is, and
it is not necessary to follow the lines, as Napoleon said, “ God is on
the side of the heaviest battalion.” I do not ordinarily decide the
case in favor of the man who has the most money and produces the
most experts.
O CCU PATIO N AL DISEASES— DISCUSSION
59
Doctor H a t c h . Mr. Williams, from the language of your act,
apparently there is no limitation as to classification of your occupa
tional diseases?
Mr. W il l ia m s . Not at all. I f the man is performing some work
that exposes him to hazards not common to occupations generally,
and he becomes ill, it is personal injury and he is paid compensation.
Mr. S te w a r t . What would you do, for instance, for anybody work
ing with lead—painters? The ordinary exposure there is sufficient to
lead him and kill him. Suppose it does? That is ordinary. Just
what do you consider as an exposure in excess of ordinary exposure
of the industry. Now, how much exposure must a painter have ?
Mr. W il l ia m s . If he is a painter, he works around lead and he
has a hazard which occupations in general do not have. I can tell
you what I did with the last case that came before me. I rather
thought from his symptoms that he had acute plumbism, and I sent
him to Dr. George M. Smith, who is lecturing at Yale on various
medical subjects, and who was formerly professor of surgical pathol
ogy at one the large colleges in St. Louis, and Doctor Smith took a
drop of this man’s blood and examined it under the microscope, and
he xound the typical stippling. The poor fellow has not recovered
yet. I do not know whether or not he ever will, but he is being paid
compensation.
District o f Columbia (Mr. S t e w a r t ) . The District of Columbia is
not represented here by its compensation commissioner. The
Federal law applying to the longshoreman was extended to the
District of Columbia. It is reasonably liberal on the occupational
disease question, and is liberally administered, I think.
North Dakota (M r . M c D o n ald ) . We have very few cases of occu
pational diseases in my State. Not all of you may know that it is
not a manufacturing State. It is an agricultural State—sometimes;
sometimes not. The covering of occupational diseases was made, in
my memory, in the 1925 session of the legislature. Prior to that
(the law was started in 1919) we had no coverage for occupational
diseases. In 1925 the law was amended and the exact words as used
in the Federal law were used.
The cases that we have had have been mostly from lead (painters
and printers), and carbon monoxide, or gas poisoning in garages.
But, as I said, we have had very few, and the cost has been so low that
we have not separated them from the other causes of accidents.
A few moments ago the secretary made a remark about the cost to
the claimant for examination, and I want to say that it does not cost
the claimant one dollar in North Dakota for examination or treat
ment unless the claimant wants to pay for another examination at his
own expense, because he is not satisfied. We have paid as much as
$6,000 for one claimant for hospital and doctors’ treatments, and
had it cost us $10,000 we would have paid it. It would not have cost
the claimant one dollar.
Wisconsin (Mr. W il c o x ) . I have discussed with this group on other
occasions this matter of occupational diseases under compensation
laws, and I get quite some satisfaction out of the fact that we warm
up a bit each year as to the need for such coverage.
I appeared before the National Safety Council in Boston in 1921
and there read a paper urging that it was the duty of the States to
60
S ix t e e n t h a n n u a l m e e tin g o f
i.
a.
i.
a.
B. C.
do the very thing that we are talking about to-day, and it was worth
about as much as your life was worth to say to that group at that
time that it was their obligation, and that a thing like this could be
done and States and industries still survive.
I call your attention to the fact that not only Mr. Stewart, or
some one in his bureau, has written an article which appeared in a
recent issue of the Labor Review, but also Doctor Hayhurst, of Ohio,
has written a lengthy article discussing this subject and what States
are doing. Particularly from Doctor Hayhurst’s article and his
citation of costs I get some satisfaction, because it compares with
the observations that I made back in 1921, that States might do this
and still not go bankrupt, and their figures are much as are shown in
my State.
A year ago, just as we were meeting, I sent to each of the jurisdic
tions a tabulation of seven years’ experience in Wisconsin under a
full-coverage provision, and I am quite sure all of you received it, and
we are now prepared to give you the 1928 experience. I have just
a brief tabulation of eight years5 experience, and in those eight
years we had 2,569 cases that we tabulated under the heading of occu
pational diseases, and the money cost of those 2,569 cases was $473.921, and the medical cost was $105,104. That means an average for
each of these eight years of 321 cases out of approximately ^0,000,
with indemnity cost of $59,240, and medical-aid costs of $13,138.
The average annual indemnity cost per case was $185, and the
average medical cost was $41,
Our experience for 1928 shows that the indemility cost of all of
our cases under compensation was $178 compared with this $185, and
that our medical cost in 1928 was $57 as compared with the average
of $41 for the 8-year period.
A word of explanation ought to accompany those figures. We,
from the very first, did not make any effort to separate into a different
classification those cases which we would compensate and which we
were compensating under our accident provisions. There are many
of those cases and there are many of them in this very experience
that I give you: Typhoid fever, carbon-monoxide poisoning (in
most cases it is sudden), caisson disease. And there are various
other types of occupational injuries: Poison ivy and poison oak, and
things of that kind, which you compensate under the accident provi
sions of most of our laws.
They are included in these figures that I have given you, and I
know from compilations that I have made that the actual cost of
covering all of these diseases—not part of them, but all of them—
under the compensation law does not exceed 1 per cent.
And just to illustrate this, as I have said before to this group,
when we set out upon this field, we added 1 cent to the insurance
rate to take care of this added cost. For example, if the premium
rate was $1.56, we made it $1.57; if it was 40 cents, we made it 41
cents, because we had no experience to go on, and we traveled along
on that basis for a year or two, and men we cut the whole thing
out, in fact, and there is absolutely no loading in the Wisconsin rate
for occupational diseases, except as our own experience may add to
the rate for the State of Wisconsin.
OCCUPATIONAL DISEASES— DISCUSSION
61
We pay no more on the rates that we have—to use the national
experience—for covering all of our occupational diseases, than other
States are now paying for coverage under accidents alone.
Mr. S t e w a r t . D o you mean 1 per cent of the pay roll?
Mr. W il c o x . One cent on the rate was what we charged at first,
and then we cut it right out because there was nothing scientific
about that.
I f there was any disappointing statement that came out of this
morning’s session, it was Mrs. Perkin’s statement that probably in
New York they would go on doing what they had been doing, add
ing now and then another disease to their list, because of their ex
perience during the previous year.
And I noted when I read Doctor Hayhurst’s reports that in this
last year or two, out of the very experience, Colonel Blunt, that
you had in New Jersey, we have added radium poisoning. It took
that catastrophe in your State to teach us that there was something
else we could do with our laws. Well, we do not have to worry
about that end of it, and you ought not to be worrying about it, and
I had hoped that out of New York, with the attitude of Governor
Roosevelt and his illustrious predecessor standing for full coverage,
would be marked the way and we would be brought to the point ot
view that we would say that now is the time to wash the slate clean
and cover these people with compensation insurance as we cover
other people.
You will have many occupational diseases, just as we have, that
are probably compensable under your accident provision laws, and
your statistics will usually include those, but they ought to be dis
tinguished, if what you are trying to do is to find out just how ex
pensive this is.
The cost is so little for full coverage, ever what you pay in your
scheduled States, that you should not hesitate one minute to fix the
law as it ought to be, and be done with it.
Mr. D u x b u r y . In your experience in adjusting your rates, did you
find certain classifications in which some particular occupational
disease was common, materially affected by the occupational disease
peculiar to that class of cases ?
Mr. W il c o x . Y ou will find now and then a death case in a grind
ing process; you will have some tuberculosis cases in the sand-blast
ing operations, and that will be quite serious and will influence the
rate.
Mr. D u x b u r y . Carbon monoxide?
Mr. W il c o x . They were compensated under the old system; that
is, for the most part. I am talking practically instead of scientifi
cally, because I can understand that you might have illness, calling
for compensation from corbon monoxide, continuing over a long
time.
Mr. D u x b u r y . What I was trying to bring to your attention is the
contention that while the total cost spread on the total loss would
not be a startling thing it would affect the compenstion rates of
certain particular classifications.
Mr. W il c o x . Yes; I am just so hard-boiled on that subject that I
am going to say this: I f industry on the whole, if thousands and
62
SIXTEENTH ANNUAL MEETING OF I. A. L A. B. 0 .
thousands of employers in your State and in my State, could know
just exactly what this means they would vote it into the law, and
they would let those industries that are causing those kinds of dis
abilities take on the added rate which they ought to carry until
they do something to clear it up.
Mr. W il li a m s . D o you have any hat factories in Wisconsin?
Mr. W il c o x . N o ; we have none.
Mr. W il l ia m s . Well, we have had quite a number of cases of
poisoning in Connecticut because of fur being treated with mercury
and when the manufacturers found they had to pay for it I think
they found a method of treating the fur by omitting the mercury.
Mr. W il c o x . I ought to make this one more observation, and that
is the schedules are continued in our States for the purpose of deny
ing compensation to the silicosis patient and the tuberculosis
patient. That is one of the reasons why we do not get away from
the schedule plan, and the discussion we have had here by Doctor
Lanza and Doctor Mayers ought to tell us where our course should lie.
Doctor H a t c h . I just want to ask Mr. Wilcox one question,
whether he has any leather or tanning plants in his State ?
Mr. W il c o x . Wisconsin is one of the outstanding tanning-andleather States in the United States, and we have all of the occupa
tional diseases that go along with that industry, all of them; but we
are worrying now because some particular industry in our home
State is, perchance, going to have to pay its own way. Well, let us
hasten the day. That is my parting message.
Mr. K in g s t o n . A s you know, some of our jurisdictions use that
old expression that has been handed down to us for generations, “ Any
injury by accident arising out of and in course of employment.” If
the words wby accident ” were eliminated, would you consider that
complete coverage has been effected for all industrial diseases as well
as accidents ?
Mr. W il c o x . California did it in exactly that way, and I think
that is about the situation in Connecticut and Massachusetts.
Mr. W il l ia m s . We tried it, but it did not work, so we put it in.
Mr. W il c o x . I think the safer way is to say it rather bluntly right
in the act. We just said this: The benefits of workmen’s compen
sation (of the provisions covering the entire compensation act) shall
be extended so as to.include diseases of occupation, and any other
injury that comes out of the industry. That will be sufficient.
Doctor H a t c h . Y ou said that the cost of covering all occupational
disceases in Wisconsin did not amount to more than 1 per cent. I
think I know what you mean; but we want to get that perfectly
clear. That is one of the most important statements it is possible
to make in any State where it is proposed to cover all occupational
diseases. Now, just what does that mean? Does that mean this:
That, as compared with the cost of compensation without coverage
of any occupational diseases, the cost of covering all occupational
diseases in addition would increase the total cost under the act 1 per
cent?
Mr. W il c o x . Not over 1 per cent.
Doctor H a t c h . Is that just what you mean!
OCCUPATIONAL DISEASES— DISCUSSION
63
Mr. W i l c o x . Is that what you mean, Mr. Altmeyer?
Doctor H a t c h . That is just exactly the ghost that is held up in
any State that does not cover all occupational diseases. “ Well, if
you make this coverage wide open, covering all cases arising out of
and in the course of occupation, nobody knows how much you are
going to increase the total cost of compensation.” Your figures are
exceedingly interesting and exceedingly valuable in that in Wiscon
sin, where you actually do that, the figures prove that it meant at the
most not over 1 per cent more in the cost of compensation.
Mr. W il c o x . That is what I meant, and if you will just take these
figures for the year, the average cost in these eight years was
$72,0*00.
Mr. K in g s t o n . Average cost of what?
Mr. W il c o x . Of all occupational diseases, and I am including
typhoid, and caisson, and carbon-monoxide poisoMiig, and all of
those groups that were formerly compensated under our accident
provisions. They are all in that one figure, $72,000. That was the
total cost of those items in benefits, whereas our annual cost for
compensation benefits is $5,000,000. Now that is 1.44 per cent of the
whole, but in those, mark you, you have those other classes of cases
that would otherwise be compensated under the accident provisions,
and I say, without very much fear of ever having it successfully
disproved, that I per cent more is sufficient to cover it.
Mr. S t e w a r t . In further answer to Doctor Hatch and to get it in
the record, I want to say that Mr. Leslie, whom you all recognize
as an authority on this subject, in answer to a letter written to me by
the National Council, estimated, for insurance purposes, that occupa
tional disease total coverage cost 2 per cent, but that their experience
so far had demonstrated that this was probably very high, and that
I could say to the State of Virginia, where the question was at issue
at that time, that the cost of total coverage would be somewhere
between 1 and 2 per cent, probably nearer 1 than 2 per cent.
Mr. C u r t is . Might I ask the pre^ous speaker a question, Mr.
Chairman ? Does your act bring in the question of expert testimony
on your occupational diseases ?
Mr. W il c o x . Well, the Wisconsin act is like all other acts, a case
must be proved.
Mr. C u r tis . In other words, the injured worker must prove his
case?
Mr. W il c o x . The injured man must prove his case. Now a judic
ial administration of law always means that you will not let a man’s
case go down because he doesn’t have the means to develop his case;
and so we take the pains in those cases where he himself apparently
is not preparing, and is not prepared, and can not prepare to pro
duce the proofs, to see that there is some one to take care of him.
We have in Wisconsin what is known as a legal aid bureau, and
if it is an attorney he needs, we put him in touch with the legal aid
bureau. I f it is a medical expert whom he wants, if ne wants doc
tors’ opinions, we can have it by independent examination which we
pay for out of our administration fund, or we can arrange with uni
versity authorities to see that he has the experience ©f their experts.
64
SIXTEENTH ANNUAL MEETING OF I. A. I. A. B. O.
Mr.
C u r t is .
What does it cost, as far as your experience goes, for
a claimant to prove that he has an occupational disease?
Mr. W il c o x . I said to Senator Duxbury a year ago that I thought
they were the easiest type of case to prove ox all of the serious con
tested matters, because, after all, you have the symptoms of the
disease, and we know what the known causes of the disease are, and
those diseases are not likely to occur except through contact with
those causes, and the question is, are they in the industry where the
man is working ?
My own notion is that they are much easier to handle than the
question of whether or not the arthritis I find in this man’s back has
been aggravated or in any way influenced by a fall he sustained.
Mr. C u r t is . Have you many physicians in your State who could
not even see a bruised arm?
Mr. W il c o x . Well, we have the same kind of experts in Wisconsin
that they have in other States. The kind that are for hire.
Mr. D u x b u r y . I never like to say that there is anything on
earth better than what they have in Wisconsin, because it is likely
to arouse a controversy, which I, of course, like to avoid, but in con
nection with the question the gentleman back here asked, I am re
minded of a provision in our law, which I think is a very useful
provision, one that we frequently use, and that is, we have a right to
appoint a neutral physician at the expense of the employer and
insurer, if we think the circumstances of the case are such that it
should be done, and we frequently do that in cases of that kind, and
the insurer pays for it without any regard to what the result may be,
whether favorable or unfavorable.
Mr. C u r t is . Then you have impartial specialists in your State, and
if you can find one for us in the case of New York we will give you
a whole lot of money.
The C h a ir m a n . We will have to hurry along with the program,
as we have another group of States to call for another discussion.
The next group is composed of States having laws covering specific
occupational diseases, and Minnesota is the first on that list.
Minnesota (Mr. D u x b u r y ) . We have practically the same list of
occupational diseases as defined in the New York law—not exactly
the same, but practically the same. That is the method by which
occupational diseases are compensated in the State of Minnesota, by
articular reference to the schedule, of which there are, I think, 24
iseases, about 23 of which never occur in Minnesota.
New Jersey (the C h a i r m a n ) . My own State of New Jersey is
next on the list, and I have here a table of all the compensable
diseases we cover, but it is too long to read. I am going to submit it
for the report, but I will read just the total, which is interesting as
compared with Wisconsin because our total compensation paid out
for the year was around $7,000,000, and we had 150 cases, and we
only covered 10. We have no general law, as Wisconsin has, but
our total claims were much larger—on just the 150 cases $85,000 as
against $72,000 for Wisconsin.
Then I also want to submit a table taken from a letter written by
the compensation rating bureau to our workmen’s compensation
bureau, taking issue with the commissioner from Wisconsin on the
question of rates, because here, in parallel columns, are the rates of
P
65
O CCU PATIO N AL DISEASES— DISCUSSION
lead manufacturing, leather manufacturing, and hat manufacturing.
It shows that the manual rate on lead manufacturing, red or white,
jumped from 1.55 in 1927 to 4.80 in 1929, an increase of about 210
per cent.
[The table and a quotation from the letter follow:]
To further illustrate the effect of occupational disease on manual rates I
am listing below three representative industries in which the increase between
1927 and 1929 is considerably greater and out of all proportion to the average
increase for all rates in the manual, which amount to 25 per cent. The cause
of these abnormal increases is due to lead, benzol, and mercury poisoning and
as recent experience becomes matured and available for rate making the pres
ent rate will undoubtedly be increased much more.
Class
1927
manual
rate
1929
manual
rate
1.55
1.40
.38
4.80
2.80.
.62
Lead manufacturing, red or w h ite .... . . . . . . ___________ ____ __________
Leather manufacturing, imitation. . . . . . . . ____________________________
Hat manufacturing, felt, etc______ . . . . . . ____ ____ ____________________
Per cent
of in
crease
209.7
IOOlO
63.1
Average increase for entire S t a t e ..........____ . . . . . . . . . . . . . . . . . . . . .
25.0
We cover only 10 diseases—anthrax, arsenic poisoning, benzol
poisoning, caisson disease, chrome poisoning, lead poisoning, mer
cury poisoning, phosphorus poisoning, mesothorium or radium ne
crosis, and wood-alcohol poisoning We would like to get general
coverage, but I will have to repeat the statement I made earlier,
which I think Mr Wilcox did not hear, that I believe we will get
full coverage only by adding to the list, agreeing with Doctor
Mayers’ statement. As she said, our lead poisoning was 51.5 per
cent of our total occupational-disease claims, although our total
paid out on claims was much greater on benzol. There were 18
cases of benzol poisoning and $43,973 paid out, while there were
77 cases of lead poisoning with only $23,602 paid out.
[The table follows:]
Compensated occupational-disease cases closed in New Jersey in 1928, by cause8
Number of cases
Cause or disease
A n t h r a x ..............................
Arsenic______ ___ . . . . . . . . . . . . . . . . . .
Carbon monoxide______. . . . . . . . . . . . .
Compressed air (b e n d s )-.........___
Chrome ulceration_______________ _
Dust ___________ ___________ ___
Handling and preparing hides, furs,
etc________ _________________
Heat and light (including heat from
asphalt, not burns) ____________
Lead poisoning____________________
Benzol, its homologues and deriva
tives____________ ____ . . . _______ _
Cellulitis, etc.*___________ _________
T o ta l...
Medical cost
Total
Total
days of
Death Per
compen
dis
or per ma Tem
Cases
ability
sation
manent po T ota l1 (weighted)
report Total
ing
nent
par rary
total1 tial
1
1
4
4
2
6
3
5
1
1
(1) 3
6
3
68
(1) 4
6
2
8
21
(2) 9
19
122
1
6,093
98
7,010
1,865
117
28
$2,832
206
6,730
3,770
198
44
1
16
22
3
a ) 77
40
24,221
5
2
8
7
5
1
3
2
4
3
2
$68
83
680
260
37
23,602
41
3,571
(1) 18
23
36,159
3,143
43,973
3,630
8
9
2,419
647
(2) 150
78,790
85,084
72
7,765
77
1Figures in parentheses show the number of permanent total disability cases included.
*Cellulitis cases due to cuts and bruises from falls or handling objects.
66
SIXTEENTH ANNUAL MEETING OF I. A. I. A. B. 0 .
A total of $85*084 was paid for compensation claims while medical
expenses for %2 reported cases amounted to $7,935. As this is less
than one-half of the total number of cases it is only fair to assume
that medical expenses were really more than double this amount. In
analyzing the contents of these tables it is to be seen that benzol and
lead caused more losses than all of the others combined. The reason
for this may be that, in New Jersey at least, the symptoms of lead
and benzol poisoning are being recognized by an ever-widening circle
of physicians, a situation which is probably due to the activities of
our occupational disease prevention bureau that for a number of
years has been promoting education along these lines. Even so, I
am confident that the 150 cases in no way represent the total number
that really occurred during this period.
I have been informed by the compensation rating bureau that a
substantial increase in premium rates has been made in a group of
plants where occupational disease claims have occurred. In one
plant an increase of 50 per cent in the premium rate was noted, which
should show the most skeptical-minded person who “ pays the
freight ” for occupational diseases that require compensation adjust
ments. I think we may expect a larger increase in rates as time goes
on and more cases are detected and adjusted according to the com>ensation schedule. It must be remembered that New Jersey is a
arge chemical-producing Statie; that we have a greater exposure to
occupational disease causes than any of the other States and conse
quently if occupational diseases are detected and adjusted according
to our elective schedule of compensation, the money must come from
the risks affected.
Mr. S t e w a r t . Before you leave that, do I understand that your
rate on lead poisoning jumped from $1.55 to $4.80 in one year?
The C h a ir m a n . In two years.
Mr. S t e w a r t . Well, is not that the answer—that the lead manu
facturers of New Jersey ought to clean up?
The C h a ir m a n . Yes; that is the answer.
Mr. S te w a r t . That is not an argument against coverage of occu
pational diseases; in fact, to my mind, it is an argument for it.
The C h a i r m a n . Yes; I agree with y o u o n that.
Mr. K in g s t o n . Y ou do not mean to say, of course, that the in
crease in the rate was entirely due to adding the occupational
diseases?
The C h a ir m a n . No; it was du e to the experience in those par
ticular factories. That is all.
Mr. K in g s t o n . And, perhaps without the occupational diseases
you would almost have had the necessity of the same increase in
rate because of adverse experience purely from accidents?
The C h a ir m a n . N o d ou b t.
Mr. K n err . Have you segregated th e occupational cost and the
accident cost?
The C h a ir m a n . Yes; I have.
Mr. K n e r r . How much do you charge to the occupational diseases)
The C h a ir m a n . No; I have them on rates.
{
OCCUPATION All DISEASES— DISCUSSION
67
Mr. K n err . In other words, you took the total experience includ
ing occupational disease and accident to fix your rate. You did not
have a segregation of the two?
The C h a ir m a n . In New Jersey we have a compensation rating and
inspection bureau, and they make the rate, based on specific inspec
tion of individual factories, and these rates that I am giving you are
just to impress the factories that are not listening to us on protective
measures as to what their individual rates may jump to and have
jumped to in these specific cases.
Mr. K n e r r . We are raising the rates in our State, and we have
not added occupational diseases or had the law ehanged within the
last four years, yet we have had to make a material increase in many
of our industries; so unless you have segregated the cost of your
occupational diseases you really can not tell whether or not that
should be charged to the adding of the occupational diseases, and
it would be rather unfair to compare it with the figures from Wis
consin, would it not?
The C h a ir m a n . Yes; it would. I agree with you. These figures
are not totaled.
New Y ork (Mr. P a t t o n ) . Well, I went on record very decidedly
last year at this gathering in favor of the blanket coverage of occu
pational disease. I heartily indorse all that Mr. Wilcox said in
that respect.
It seems to me that the original idea of workmen’s compensation
was that the injured worker should be compensated for disabilities
occasioned by his employment. At the time the workmen’s compen
sation laws generally were enacted disability was conceived of as re
sulting from accident, but certainly ever since the World War and
still increasing with great rapidity, as with the multiplication of
chemical processes in industry, an ever-increasing number of work
ers are exposed to chemical hazards; so, if you want to carry out the
original purpose of workmen’s compensation and compensate a
worker for the disabilities resulting from his employment, you must
compensate those whose disability is the result of occupational dis
ease and not merely the result of disability from accident.
In New York State, for the three years ending June 30, 1927,
1928, and 1929, we have had a classification which we call Compen
sation for harmful substances.” Harmful substances are divided
into three groups: One is corrosive substances, one is occupational
diseases, and the other is poisonous substances. Now, of those three,
the heading “ Occupational diseases ” includes only those cases which
are compensated because they are specifically listed in the occupational-disease schedule in the law.
For those three years the number of cases compensated under the
heading of “ Occupational diseases ” were as follows: 305, 287, and
345. That is, for the year ending June 30, 1929, there were 345 cases
of occupational diseases compensated, or considerably more than in
either of the two preceding years.
I would like, however, while we are on this question of the cover
age of occupational diseases to point out that under the general head
ing of “ Harmful substances,” which includes not only occupational
diseases, but corrosive substances, workers iji lime, for example, and
poisonous substances and other irritant substances, for the year 1927
68
SIXTEENTH ANNUAL MEETING OF I. A. I. A. B. O.
there were 1,338 cases actually compensated under the heading
For the following year there were 1,350
cases, and for the year ending June 30, 1929, there were 1,492 cases.
The reason I cite these figures is to support my contention that
even if we consider only the occupational-disease cases, we get in
New York, under that heading, only one-third of the total harm
ful substance cases.
Now, without giving you all of the details, for the year ending
June 30, 1929, the total compensation awards for the 345 cases of
occupational diseases was $112,000. The average award in those
cases was $325. That average award was greatly increased because
there were 6 cases, 1 permanent total and 5 deaths from lead poisoning.
Those cases, of course, had heavier awards. I f you eliminate those
6 cases from the 345, the average cost is then reduced from $325 per
case to $181 per case. In other words, for 339 of our cases the
average cost was $181 per case, and by including the 6 fatal cases,
the average cost is raised to $325.
And in this connection I would like to say this, in view of what
has just been said in the last few minutes: The total compensation
awards in New York for the year ending June 30, 1929, was slightly
in excess of $32,000,000. Now, the $112,000 which was awarded for
the occupational-disease cases was pretty nearly one-third of 1 per
cent, and also, it curiously happens that in round numbers the total
number of cases compensated in 1929 was 100,000, and the 345 cases
of occupational diseases are, practically speaking, one-third of 1
per cent. So, I think that the New York figures would bear out the
contention of Mr. Wilcox that the additional compensation premium
cost by reason of the inclusion of occupational diseases need not
frighten any of us. It need not frighten even the employers who
have to pay it.
I might also say, in passing, that the great bulk of all our occu
pational-disease cases were lead-poisoning cases. Of the 345 cases
in the year 1929, 246 were lead poisoning.
Ohio (Doctor O b e t z ) . During the year 1928 Ohio’s occupational
disease law included 15 diseases or subdivisions under which occu
pational diseases were compensated. Since that time the law has
been amended and three additional divisions have been added, includ
ing manganese dioxide, radium poisoning, tenosynovitis, and
prepateller bursitis.
The cost, I am told by our actuary, is practically 1 cent on each
$100 of pay roll. Our total premium being about $15,000,000, the
premium for occupational diseases would be about $150 per year.
The figures which I am about to give you are based upon the
reports as they come into our department. Occupational diseases
are classed in the occupational-disease list, and accidents are classed
in the accident list as nearly as we can. Occasionally a case of
carbon-monoxide poisoning or something of that sort comes in and
is paid (as was ivy poisoning and some others) as an accident.
This includes the large number of cases that occurred in the Cleve
land clinic disaster, which you no doubt read about. A number of
those were carbon-monoxide deaths, but nevertheless they were paid
as accidents because they were not drawn out as would be an occu
pational disease. That was quite an expense on the fund, and thou“ Harmful substances.”
Compensated accidents due to harmful substances in New York State, closed during years ending June SO, 1927, 1928, and 1929
1927
Total, all accidents______________ ____
1928
m
24
2
25
81
31
1
104
743
324
33
225
161
51
305
7
244
8
112
740
317
54
214
155
47
287
13
225
17
1
1
1
1929
1927
1928
307
29
(2) 17
24
105
23
4
(1) 1
120
796
336
73
216
171
44
345
(1) 5
6
1929
1927
1928
1929
1927
17
(1) 21
6
1928
252
18
2
25
81
27
1
1
1
(1) 11
(2) «
( 1)
(1)
(1 )
8
6
( 1) 6
246
9
4
103
52
4
29
18
101
56
5
24
16
3
1
1
1
2
1
99
640
272
29
196
143
50
302
11
217
16
1
2
1929
1927
1928
192&
1927
1928
1929
286 17,902 22,577 18,178 $115,969 $155,1,979 $129,376
6,048 6,142
206 34,873 41,692
2,887
61
3
24 *I,’m
126 ” "ii§ “ 6,115 2.017 ”2,047
154
222 248 2,134 3.018 3, 631
105
20 4,126 4,186 3,064 14,533 58,527 12,933
2 1,003
13 10,947
1 2,005 16,027
1
1
15
10
249
1
642
270
46
191
135.
45
273
1
1
1
1
1
Weeks awarded * Compensation awarded
1
104 5,*459 11,897 12,526 42,177 80,651
694 9,831 11,670 10,972 177,291 207,703
279 4,943 4,769 7,530 92,890 90,225
68 270 1,016 635 5,024 16,635
192 2,942 2,696 1,350 50,836 38,979
155 1,676 3,189 1,457 28,541 61,864
266
41
294
404
3,883
5,419
337 4,817 14,099 9,806 61,683 146,337
7
38! 1,055
5,812
56
487
240 3,44310,576 8,724 45,860 109,411
9
562
101
1,461
46
21
40;
1 10
604
10
15
290
29
l!
5l
1,016
11,075
15
144
13
1,044
14
14
142
10, 607
234
251
1
18
8 1,000
160
103
157
1
1
12
583
20
126
240
....
2,600
17
10
96,672
194,685
134,091
12,060
23,097
25,437
7,605
111,975
762
94,847
828
164
1,261
23
475
35
20
150
12, 531
3,200
1,319
346
23
288
9,166
113
4,139
15
1,350
1,492
(2) 19
(3) 34
0) 24
105
104
110 1,214 1,212 1, 358;32,816 48, 640 39,360 358,828 515,438 443,641
93,565 100,462 (41) 1,083 (52) 1,181 (61) 1,278 18,518 17,021 19,077 79,383 75,363 80,107.
1 Figures in parentheses show the number of permanent totals included.
* Includes the standard weighting of 1,000 weeks for each death and permanent total disability.
DISEASES— DISCUSSION
Total, harmful substances......................
239
14
Temporary
OCCUPATIONAL
P oisonou s substances^................. ........ ....
Carbon monoxide and dioxide_________
Arsenic.................................................—
Dyes and chemical preparation of sam e...
Poison ivy and other plants........................
Illuminating gas...........................................
Hydrocyanic acid, cyanide gases, fumes—.
Carbon bisulphide.......................................
Septic infection........................................... .
Poisonous substances, other or indefinite..
Corrosive substances..............................
Lime________ . ______________________
Cement______ . . . . . . _________________
Acids___ _____ . . . . . . . . . ______________
Alkalies............................. ...... ................
Other irritant substances.................... .
O ccupation al diseases............................. —
Anthrax_____________________________
Lead poisoning.........................................___
Handling and preparing hides, furs, etc___
Hydrocyanic acid....................................
M ercury................ ............................ .....
Phosphorus___ . . . . . ................................
Arsenic____ _____________________ ____
Zinc............... .................................. ........
Wood alcohol................................ ..........
Dope (lacquers)....... ................................
Carbon bisulphide................... ..............
Chrome ulceration...................................
Nitro derivatives of benzol.....................
Amido derivatives of benzol...................
Carbon monoxide.....................................
Compressed air........................................
Dust..........................................................
Heat and light.........................................
Occupational activity (cellulitis, etc.). .
Copper and copper salts..........................
Formaldehyde_____ ________ _________
Permanent par
tial
Death and permanent
total1
Total cases
Cause
70
SIX T E E N T H A N N U A L M EETIN G OF I. A. I. A. B. O.
sands of dollars were spent in medical expense. I believe the bill
for oxygen alone wras something in the thousands of dollars.
For the year 1928 we had 1,215 occupational disease cases reported,
and 84 of these were classed as noncompensable. That is, they were
filed for conditions which were not covered by the occupational
disease law, leaving a total of 1,131 cases of compensable occupa
tional diseases. Of this number, 886 were for some form of derma
titis. We have a great many claims filed for diseases of the skin
of some sort, and a great many of these are for medical expense
only, there being no disability as the man continues at his employ
ment. That left 245 claims for conditions other than dermatitis.
Of this number, practically 180 were lead poisoning. The total
days lost for all compensable claims was 148,273. That included
10 death claims, and in our method of estimating timeTlost, a death
is rated at 6,000 days. So there would be 60,000 days lost due to the
10 death claims.
I can give you no figures on the permanent total disabilities, if
there were any, or that would be an average of 131 days’ lost time
for each case of occupational disease. I am unable to give you the
total amount spent for occupational diseases or the amount per case,
but, as I explained, the 10 death claims being estimated at 6,000
days each, would run our days loss very high. That is the reason
for the 131 days lost for each individual case.
Nova Scotia (Mr. A r m s t r o n g ) . The Nova Scotia law names spe
cific diseases: Anthrax, lead poisoning, mercury poisoning, phos
phorus poisoning, arsenic poisoning, beat hand, miners’ beat knee,
miners’ beat elbow, and frostbite. I guess it is new to many here
to learn that frostbite is classed as an occupational disease. I
do not know whether any other jurisdiction has frostbite under the
head of occupational diseases.
Mr. W i l c o x . We have it so classified in our State.
Mr. A r m s t r o n g . On account of the limited coverage in Nova
Scotia we had only 30 cases of occupational diseases the past year,
and we found in many cases that it was rather hard to decide whether
it was an accident or an occupational disease. We make no special
rate for them and the cost is lost in the general figures. So we have
no data on the occupational diseases.
Ontario (Mr. K i n g s t o n ) . The Ontario law as first drafted 15
years ago, incorporated the industrial diseases that were then in force
under the English act, and were enumerated the same as Mr. Arm
strong’s I think, namely, anthrax, lead poisoning, mercury, phos
phorus, arsenic, and ankylostomiasis. The board got underway
with a few years’ experience, and from time to time, up to the
present, have added miners’ phthisis, benzol poisoning, stone work
ers’ or grinders’ disease, silicosis, pneumoconiosis, caisson disease,
and then one other that was added this year, namely, chrome
poisoning.
I have figures as to the number of industrial-disease cases for two
years only. For the year 1927 we had 140 cases, as follows: Lead
poisoning 36, mercury poisoning 1, arsenic poisoning 1, silicosis 29,
pneumoconiosis 1, and compressed-air illness 72. That year there
was an enormous surge of caisson disease.
o c c u p a t io n a l
d is e a s e s —
DISCTTSSlOH
71
In Toronto they were putting in a number of very deep sewers,
and men were working in compressed air, and the conditions were
such that the contractors could not get men to work in the sewers
unless they were covered by compensation. So they went to the
legislature, and a law was enacted which placed caisson disease
under the act, and they made it retroactive to include the operations
of this construction work for a period much prior to the enactment
of the law. So that all of the men who were engaged in the con
struction of that sewer were benefited by the act, and, of course, the
employers agreed to pay an assessment to cover the period during
which their exposure to this trouble arose, and made the coverage
necessary.
The previous year we had 230 industrial diseases on our list, as
follows: Lead poisonii^g 49, mercury poisoning 1, caisson disease 55,
and silicosis 125. That was the year previous to the one I men
tioned, and there were not nearly so many silicosis cases in 1927 as
there were in 1926, which rather led one to feel that the close exami
nation of employees or preventive measures were having some effect
in reducing the number of silicosis cases.
I am not able to give you the actual cost of our industrial diseases
as a whole, but we have a special silicosis act. When the silicosis
provisions were added to our law as described a while ago (that
applies only to the miners and the big mining companies up in the
Timmins Camp, Cobalt and International Nickel District), they
came forward and agreed to a proposition by which there would be,
in addition to the ordinary assessment for accident cost, a special
assessment to cover silicosis, and they organized a bureau in con
nection with that. Full-time doctors are engaged with every pos
sible facility and provision for examination and care of persons who
are suspected of being afflicted with silicosis.
The silicosis act, for the year ending December 31, 1928, cost
$51,000. For the previous year the total cost was $66,000.
Now, when I mentioned the number of accidents a moment ago,
230 in one year and 146 in another, bear in mind we had a total—
and these are included in them—of about 79,000 accident cases
reported last year, and 70,000 the previous year. Although the
results I give you and the number of accidents I give you were for
a limited list of industrial disease cases, it leads me to feel that
Mr. Wilcox, of Wisconsin, is not very iar out in the suggestion
that a complete covering for industrial diseases is not going to be
a large factor in compensation cost. Of course, nobody can say
exactly what it will be, but then I don’t suppose Mr. Wilcox pre
tends to say that his figures are absolutely accurate, but they are
sufficiently accurate to form a reasonably safe conclusion that 2
per cent additional would be sufficient for a complete coverage of
industrial diseases.
T h e C h a ir m a n . T w o States cover occupational diseases by con
struction as a form of accident—Maryland and Massachusetts.
Mr. K e n n a r d . I have stated, and I am prepared to state again,
that the Massachusetts act does not cover occupational diseases,
and by that I mean occupational diseases as such. We have no
schedule of occupational diseases, but those who framed our act,
through some good fortune, said nothing about accidents in the
72
SIXTEENTH ANNUAL MEETING OP I. A. I. A. B. 0 .
Massachusetts law. Our law says that a man who receives an in
jury in the course of and arising out of his employment, which re
sults in his being incapacitated for earning wages, shall be paid
compensation weekly within the statutory limits, during the period
in which he is incapacitated.
Let me interpret that in terms of occupational diseases. I will
change the word “ injury ” to “ trouble ” and I will change the
words “ out of ” to “ because of ” and I reach this result: “Any
man who has any trouble acquired in the course of and because
of injury which incapacitates him is compensated.5’
There is not a disease which has been mentioned here to-day
which has not been paid for in Massachusetts under the compensa
tion law, by the insurance company, voluntarily and without argu
ment.
We are not troubled a great deal with diagnosis, because the
supreme court has been kind enough to say that the findings of
the industrial accident board on questions of fact are final. I f a
man has been exposed to lead and has symptoms which satisfy us
we are warranted in finding that the man has lead poisoning; that
decision is final so far as that fact is concerned and compensation
is paid. The word “ injury ” has changed the whole situation with
us in Massachusetts and leads to that result.
As I have said before, we do not cover occupational diseases, but
I am becoming satisfied that we have the most liberal law in the
United States upon that question, in view of the interpretation
which the courts have permitted us to place upon it, and the in
terpretation which we have placed upon it.
We have silicosis in Massachusetts. You know there are a few
hills there, and we have quite a granite industry. I f we were to
follow Mr. Wilcox’s suggestion, I do not know what would happen.
They can not move their plants out, that is certain, and I do not
know where else they are going to conduct their business; indeed,
that has become a problem in Massachusetts with the granite
industry.
Down in Quincy it is practically exclusively a granite industry.
They are very much disturbed down there because of the number
of cases of death claims which we have had to pay because of sili
cosis, pneumoconiosis, and other diseases in the granite industry;
and, as I said before, we are not always disturbed about making
an exact diagnosis. We do not have to be. We have an act which
says that as long as you contracted silicosis in the business, which
is responsible for it, we can award compensation without making an
exact diagnosis, and I have heard a number of cases about which
the doctors have quarreled among themselves as to what the diag
nosis was, and I have written in my decision, “ I am not disturbed
about what that man has. That does not trouble me. I am satisfied
that what he has has been caused by his work and has come out of
his employment,” and we award the compensation; and I submit to
those of you who have not got your laws in a solidified form that
you might well consider whether or not you want to use the word
u injury ” instead of the word “ accident.”
The English law used the word “ accident,” and they changed it
in Massachusetts; and the Supreme Court of Massachusetts, in a
OCCUPATIONAL DISEASES— DISCUSSION
73
very early decision having to do with lead poisoning, pointed out
the difference between those two words and upheld the decision of
the industrial accident board awarding compensation for lead poi
soning, and that is the decision which formed the corner stone of
what, perhaps, has turned out to be the most liberal occupational
disease act there is in the United States.
Mr. K in g s t o n . D o you provide any limitation of time to a work
man in the granite industry; or, if he has symptoms of silicosis, do
you say that he must be employed a certain length of time in the
State?
Mr. K e n n a r d . We have met that difficulty with the assistance of
the court in one case by saying that the man receives his injury at
the time he becomes incapacitated, and the cost of that is assessed
against the insurance company that happens to be covering the last
employer. I am not arguing for the equity of that decision.
Mr. S t e w a r t . Mr. Kennard, it seems to me I remember that the
Supreme Court of Massachusetts one time sustained a ruling that
you made, and authorized compensation for sunstroke; is that true?
Mr. K e n n a r d . Absolutely. Yes; we have sunstroke cases, and
we have frostbite cases. It must appear, in that type of case, that
the exposure to which the employee was subjected was greater than
that to which the ordinary workman out of doors is exposed on that
particular day. In other words, if it is 10° below zero and the man
is frostbitten, it must further appear that he was doing some sort
of work which exposed his hands to a particular risk which another
man who was out of doors would not have. That is easier stated
than it is decided.
Doctor H a t c h . On that question of sunstroke, Mr. Kennard thinks
that Massachusetts has the most liberal disease law in the United
States, and I am not sure but that it has, but in the State of New
York our court of appeals has gone one step farther than any I
know of taken elsewhere, in a decision which holds that sunstroke is
an accident if it occurs to a man who, by reason of his occupation, is
exposed to the direct rays of the sun on a day of excessive heat. It
does not make any difference whether the whole community in
which he was working was also exposed to rays of the sun, the sun
stroke is an accidental injury growing out of his employment, a
very broad decision, which has the panacea of bringing nearly all
sunstroke cases into the category ox compensable accidents in the
State of New York.
I think, on the question of covering all occupational diseases in
the State of New York, the truth is we are already covering so
many of them, either as accidental in origin or under our schedule,
that the question of going the rest of the distance and covering all
occupational diseases—which, by the way, is what I believe should
be done and I think you will also find that Mrs. Perkins believes
the same—is a question of ways and means of arriving at that goal.
I think the question of cost is no longer a serious proposition. That
is why I have been so much interested in the cost figures that I
have heard given here to-day. I think the record of this day’s ses
sion is going to be one of the most useful pieces of ammunition in
94023°—30------ 6
74
SIXTEENTH ANNUAL MEETING OP I. A. I. A. B. 0 .
the campaign for the coverage of all occupational diseases that we
have had in a long time.
The C h a i r m a n . We will proceed to the next subject, and call on
Mr. Fred M. Wilcox, chairman of the Industrial Commission of
Wisconsin, to speak on the subject, Medical Care and Cost.
Medical Care and Cost
By Fred M. Wilcox, Chairman Industrial Commission of Wisconsin
Workmen’s compensation ushered in a radical change in the
method of determining liability for wage loss to employees resulting
from personal injury. Still more radical was the proposal of the
law respecting medical attention in such cases. In most jurisdic
tions it had the effect in practice of taking from the workers a right
which had theretofore been treated as so personal a matter that men
who have stopped long enough to view the situation calmly have
been amazed at the surrender of this right by employees with so
little of protest. These injured men gave up the personal privilege
of selecting the physician who was to attend them, the surgeon who
was to operate on them, the hospital in which they were to be con
fined, the assistant who was to give them an anaesthetic, and the nurse
who was to dress their wounds and measure out their medicines—
all for the purpose of developing a well-balanced and harmonious
compensation system by which employers should have opportunity
through contact with the medical attendance to protect themselves
from fraud.
Since the adoption of the compensation system in my home State
aproximately 300,000 men and women employees have been treated
for injuries which disabled them for more than a week, by doctors
as to whose choice they had substantially no voice. A larger num
ber of employees have been treated for lesser injuries, likewise by
doctors not of their choosing. Large numbers of these men and
women have been conveyed to strange hospitals at the direction of
employers or insurers rather than by request or even express consent.
They have submitted to anaesthetics, to the removal of limbs, to the
most radical type of operation, by doctors never known to them
before—doctors selected by an employer with whom they have had
no personal contact or by an insurance carrier directing the service
from distant headquarters.
The average expenditure per injury for all medical attention in
these cases where disability lasts more than a week is $40. Just how
responsive would a business or professional man be to any scheme
by which another person takes over the selection of his doctor?
Where is the employer who in order to save $40 is willing to submit
himself or his family to the care of a physician, strange to him, of
skill unknown, and as to whose selection he has no voice? And
where is the doctor who is ready to “ go under the knife” in the
hands of the surgeon who has not been tried and proven to him over
and over again?
This is not a criticism of the abilities of the physicians who are
treating injured workers, or of the hospital care they are given.
It is an endeavor to have the doctors and the hospitals and the
MEDICAL CARE AND COST
75
employers and the insurance companies appreciate as they should
what sacrifice of personal right and what resignation to legislative
plan has been made by the industrial workers.
Members of the medical profession know and appreciate full well
what unbounded dependence families place on their family physi
cian. No other person may inspire in that family so much of hope
and confidence. No other person assumes greater responsibilities.
And no responsibility to another was ever met by firmer faith. What
then has this same physician to say of the hopes and fears of the
injured worker who oomes under his care without having had time
or opportunity to develop confidence in this new relationship which
means so much to him ? It is to the everlasting credit of the workers
that they are responding so well to the plan of medical selection by
employers. It displays unusual faith in the judgment of those who
legislate and direct and adminster compensation affairs for them to
meet this radical reversal of what had come to be recognized as an
indisputable personal right. True, an injured employee may yet
refuse treatment by the company doctor, but the extremity of their
financial circumstances, particularly so when earning ability ceases,
usually forbids such course. Submission to employer-selected medi
cal attendance is next door to compulsory.
The near universal plan of employer selection of medical attend
ance is based on the theory that the employer is better1able to judge
of the needs of the injured worker and of the capabilities of those
called upon to treat him. Back of the employer is a volume of
experience with doctors, an intimate knowledge of their reputation
and skill in the profession, a keener appreciation of the results of
scanty or unskillful attention, and the faculty of determining emer
gency questions without a moment’s delay and with real vision.
Rarely indeed would an injured employee have experience so fully
fitting him to make the proper choice. The times when he has had
to assume the responsibility of selecting a physician to treat acci
dental injuries are nil—at most just a few times in a lifetime. The
employer of a few hundred persons in a plant of average hazard will
have to meet the need almost weekly of calling a physician to attend
some one of his employees who has been injured so seriously as to
cause him disability ranging from a day of lost time to fatal ter
mination. These observations will illustrate the better training of
the employer for the task.
The employee has no thought that he will ever have need of a
doctor for such an injury. Others may be injured but he has slated
no such mishap for himself, and so he has no plan for treatment
when the unexpected happens. The employer knows that accidents
will happen. He has his course well thought out in advance. He
knows just how he is going to proceed when the time comes to act,
when minutes are precious and frittered time means sacrificed lives
and limbs. Because the employer has prepared himself for the job
and knows how and where to procure the service and skill neces
sary to meet the situation and has a very direct interest in obtain
ing for his employee the fullest and largest measure of physical
repair that is possible, the legislature gave him the privilege of
making the medical selection.
76
SIXTEENTH ANNUAL MEETING OP I. A. I. A. B. 0 .
Judged from the standpoint of preparedness for emergency serv
ice, skillful treatment, and physical restoration and repair, em
ployer selection of medical attendance has demonstrated the sound
ness of the plan. Not so much may be said for it on other and quite
as vital grounds. The surrender to the employer and insurer of
the right to determine the medical attendance calls for something
in return besides good doctors and good hospitals. The privilege
accorded the employer and insurer puts upon them, and upon the
doctor and hospital as well, obligations which, if not met in full
measure, will in the end sacrifice the whole plan. I refer to the
morals involved in the relationship of physician to patient which
demand that the former exert no partisan influence in the deter
mination of indemnity benefits and that he does not violate the
privileges which statutes and professional ethics have laid upon
him.
In each case the period of disability becomes a matter of vital
importance. With chances for fatal results well past, with no need
for further medical attendance, and with healing period ended, the
measuring of disability then becomes the matter or dominant inter
est to the employee. The pain and discomfort that an employee may
suffer as he works with body or limbs once broken or bruised, the
realization that he may not again hope to do his former task as
well or at all will call to his mind often and again any lack of fair
ness to him when his disability was measured. It will cause angry
thoughts and criticism and resentment against the laws and every
one having to do with the miscarriage of justice long after he has
forgotten all the care and skill with which the physician sought to
protect him from pain and suffering and to bring him back to
health and usefulness.
In our insurance scheme of distribution of compensation cost the
overestimating of disability in an individual case is of comparative
minor importance to industry and to the consuming public upon
whom the burden eventually falls. On the other hand, any under
estimate of disability is of supreme importance to an employee
because he must bear the loss alone. In the fixing of the disability
period and the adjustment of compensation liability exceeding care
should always be exercised to the end that no employee be overreached.
Employers and their insurers have abundant means of protection.
The employee is of the dependent group. The need that is usually
present after a period of disability will force him to yield wThat he
believes to be his rights. The unequal opportunity to withstand
pressure must not be used to obtain unfair advantage of him. The
self-insured employer in his financial strength and his ability to pass
the cost of compensation to the consumer may not long reap unfair
advantage in adjustments and still retain right working response
from his employees. The insured employer has paid for just and
liberal protection to his workers and should see that they get it.
The insurer can not afford to apply common-law liability practice
to the adjustment of compensation claims. And the doctor—well, he
should be the last to tolerate any skimpy treatment of an injured
employee. This man was his patient and he had best not forget
about it, even though the period of treatment has ended.
MEDICAL CARE AND COST
77
The right of selection has led the employer and insurer to expect,
and all too many physicians to admit, that the relationship calls
for aid in establishment of disability at a minimum. They give
advice to the employer and insurer at the end of the treatment re
specting extent of disability, and withhold this information from the
employee for no sufficient cause. They inquire into the personal
affairs of the injured man, into his other physical ailments, and then
relay this information to the employer and insurer with a zest that
betrays unmistakable partisanship. They deny the employee access
to the hospital records for no better reason than the false notion that
their responsibility beyond the treatment of the man is to the
employer who pays them.
Many developments from the relationship must necessarily be
made known to the employer and the insurer and the commission,
as well as to the employee, in order that rights may be preserved and
responsibilities fully discharged. Good conscience will tell a phy
sician whether he is discharging his duty in such cases impartially.
These things that are really vital to the rights and liabilities of the
parties when treated by the physician with impartial frankness
will violate no privilege and give no offense. Beyond that, the
information is privileged; it belongs to the injured man, and the
physician who violates that confidence is hastening the day when the
employers and insurers will no longer enjoy the unusual privileges
they now possess. And it is hastening the day when the amount of
practice he has in this field will be limited to those cases in which
he is able to gain and maintain unassisted by the confidence of his
patient. The fact that the legislative plan made it possible for him
to establish the relationship of physician to patient, not by consent
of the patient but at the instance and pay of an employer or insurer,
does not warrant him in treating his obligation to his new patient
as differing in the least from his obligation to any other patient.
He should never again assume that aside from his obligation to give
the injured man the most skillful treatment possible, all other calls
for service belong to the employer and insurer.
The Wisconsin Legislature of 1921 passed the so-called medical
panel amendment. It represented an earnest effort to pry employers
and insurers and the industrial physician loose from the notion that
the framers of the first compensation act intended to give a monopoly
in the medical and surgical aid field to a comparatively few mem
bers of the medical profession and to disregard in whole the right
of an injured worker to have any voice in a matter more vital to
him than to all the other interests combined. It was an endeavor
to give the injured employee something approaching a choice of
physician, and to insure impartiality of the physician selected.
This legislation has been productive of good. For one thing, it
forced upon the attention of those immediately interested the under
standing that the public was demanding fairer play for the injured
worker and fairer play for the physicians of the State who were
being held out of the field of industrial medicine notwithstanding the
fact that their competency ranked well with the qualifications of the
chosen few. But the attitude of employers and insurers varies
widely. Some self-insured employers allow their employees to have
the service of any competent physician in the community. Some
78
SIXTEENTH ANNUAL MEETING OF I. A. I. A. B. 0 .
insurance companies allow employees in individual risks like oppor
tunity for choice. Although the medical panel provision is in effect
a minimum requirement, the majority of employers and insurers
treat it as a maximum requirement and give nothing of service
beyond what the law demands. And still others violate both the
letter and the spirit of the provision. Those who chose to limit at
tendance privileges to bare statutory requirements found oppor
tunity in the naming of clinics and partnerships to hedge in the
employee’s right of choice. It took a legislative amendment to free
the compensation system from that evasion of the spirit of the act.
It will not prove specially helpful to this group to present the
question of medical care at further length. I have dwelt thus far
on one phase of medical care—the selection of the physician—rather
than on the broad general aspect; this for the reason that as I meet
up with the administration of the requirements for securing medical
benefits, I see in the matter of the intelligent choice of physician
what seems to me the key to the wThole scheme. Because employer
selection is calculated to secure a higher type of skill than would
otherwise be obtained, I am insisting that it be not sacrificed by
overzealousness on the part of employer-selected physicians by par
tisan support of the employer and insurer in the rating of the
degree of disability.
The most trying situation results from the entry of the attending
physician, either voluntarily or by solicitation, into more or less
active part in the conduct of the compensation hearing. Sitting
elbow to elbow at the counsel table with the personal representatives
of the employer or insurance company, coaching the attorney, for
mulating questions, even going to the extent of cross-examining wit
nesses—these are the lengths to which some doctors are willing to go
and the lengths to which some employers and insurers are willing
they should go. I f they have not attended the employee and are
simply there as expert witnesses, their zeal for the success of the
cause many perhaps be their own affair. Physicians rarely appear
before the same circuit court jury on more than one occasion, so there
is in courts less loss of prestige because of frequent calls upon them
for service as expert witnesses. In compensation, however, the
appearances are before the same commission time after time, and the
cumulative effect of serving one or the other party in and out of sea
son is bad. The commission knows the physician whose attitude is
against the spirit of the system which gives him access to the case,
and it knows the physician who places his obligation to well-rounded
out administration of the law above any partisan influence. The
opinion of the former is discounted. The counsel and advice of the
latter is solicited.
My observations will appear overcritical of the attending physi
cians if I do not recognize that they, too, have a problem to meet.
They do have. The setting is bad. It is calculated to array the
physician on the side of the employer, and it will lead the employee
to assume that, after treatment has ended, his interest and that of
the physician are distinctly adverse. But if this is so, the strong,
independent, guarded physician who weathers the test and maintains
an impartial attitude to the end will be the preserver of the employ
er’s best interest. I f the system will not produce an absolutely fair
MEDICAL CARE AND COST
79
and impartial attitude on the part of the physician under all condi
tions, then such physician must not have certified entrance to the
family. The relationship entitles the employee to that consideration
regardless of all else.
Reference to the program makes it evident that Mr. Stewart ex
pects me to give attention to the cost item of medical and hospital
service. Earlier in this paper I stated that the average cost per
case where disability exceeded one week was about $40, That figure
must be understood as the average cover cost since the advent of
workmen’s compensation in my State. It was a much lower figure
in the early years, and is a much higher one at the present time. As
the medical service item became somewhat stabilized in 1912-13 and
statistics became measurably dependable we found the cost averaged
about $28 or $29 per case. Then for the succeeding 4-year period
the average cost dropped to $25. By 1918 it was back to $28, and
from that time there has been a very considerable and rather regular
increase so that the average cost is now between $57 and $60 per case.
We hear much, read much, these days of a critical complaining
type about “ mounting medical cost.” While I do not think doctors
and hospitals and nurses and masseurs are lagging behind other
skilled servants in the matter of getting pay for their services, the
facts do not justify singling them out for special criticism. While
medical cost doubled between 1911 and the present time, so also did
the average weekly wage of those employees who had the medical
benefits and likewise their indemnity benefits.
There is after all another and important reason why medical cost
has increased. While for illustration I must use the situation and
development in my own State, I feel reasonably certain that the ex
perience in other jurisdictions will be equally convincing. At the
outset medical benefits were recoverable for 90 days only. There
was no dollar limitation. Now, the right to medical service is un
limited both as to time and amount. In the early years an employee
could not compel reimbursement for his expense unless he made af
firmative demand upon the employer for service and was refused.
To-day, failure of the employer or insurer to tender service estab
lishes the right of an employee to reimbursement for his necessary
expense. These two changes alone materially affected the average
cost as compiled in my State, because in our statistics it is only the
expense of the employer or insurer that gets into the tabulation.
The medical expense incurred by the employee is not in the picture
except as to those items for which he obtained reimbursement.
But that is not all of the story. Medical attendance to-day is of
very different character and quality from what it was in the early
days of compensation. It was like pulling teeth to get an injured
man into a hospital. He and his family were perfectly sure that
it was only the exceptional patient of a hospital who came out alive.
Now hospital care is the rule for thousands of cases of such mild
severity that in an earlier period such care would have been deemed
wild extravagance. And these hospital patients now stay their
time out. You have difficulty in convincing them that they will be
safe outside the hospital.
The attention of trained nurses has developed at a pace which
gladdens the hearts of those who visualized great promise in that
80
SIXTEENTH ANNUAL MEETING OP I. A. I. A. B. 0 .
service. To-day the X ray is used as liberally as disinfectants were
in 1911. Massage, heat, light, and the varied devices for limbering
joints and muscles and for ironing out the pain and soreness are as
common now as the use of the physician’s thermometer. The care
now given to injured workers is a marvelously superior service over
that accorded in the earlier days of compensation. It costs money
and, of course, has its effect upon the figures. But cost what it wili,
I do not want to go back to the plans and experiences of 1911, and
it will take something more than the facts now available to me in
my State to make me believe that the added cost for added service
does not return fat dividends in reduced disabilities and decreased
indemnities.
I wish at this time to say a word in support of unlimited medical
attendance, both as to time and amount. I f limitations mean any
thing, if they are to be claimed by the employer or insurer, they
operate in their harshness upon the injured employee who is least
able to bear the burden. He is the one whose injuries were the
most serious. He is the one who has been compelled to live longest
on a percentage of his former earnings. Why leave him to his own
resources when he has no resources? What brand of justice do we
assign to such a system? It seems to me neither humane nor good
economy.
We may well expect the attending physician to do much toward
returning the man to active labor and thus relieving against in
demnity liability. Withdrawal of medical aid before cure has been
effected usually leaves the physician to lug the burden of further
treatment without hope of pay, or to abandon him and take on the
ill regard of his patient and violent condemnation by all his friends.
While Wisconsin indulged the 90-day limitation, one of our sur
geons told me that he continued the treatment in all his industrial
cases where the limitation attached, without added charge. He said
he could not afford to live under the charge of abandoning his
patient because the employer or insurer stopped paying. And,
furthermore, that if a physician did withdraw from attendance in
such case, the disappointment of the injured man would often be
such that he would undertake to build up a claim for malpractice.
And the man who is so minded can usually find a physician who is
willing to give support to such a claim. Even juries do not have
regard for the physician who quits because pay is not in sight. The
setting is altogether bad in a case where the limitation is claimed.
The wiser course for all concerned is to rid compensation acts of
such provisions.
I am not able to give you much helpful information on the items
suggested for discussion. We have never undertaken to tabulate
the actual source of the selection of the doctor and of the hospital.
There has been no effort to set up a fee schedule, or to undertake
regulations of charges in anv other manner than by individual con
sideration and endeavor to fix upon a reasonable figure for the spe
cific case.
As one would expect, the medical cost will vary according to
whether the injury is classed as temporary or falls in the permanent-
81
MEDICAL CABE AND COST
injury group. In the temporary disability injuries, the average per
case cost ranged as follows:
Medical cost in temporary-disability injuries in Wisconsin
Year
1916 . . _________
1917______ _________
1918 ............... ..........
1919 .........................
1920 ..........................1921.............................
Number of
fee cases
11,978
15,915
14,507
14,779
12,900
15,635
Average
medical
cost per
case
$17.74
19.10
21.55
23.40
24.78
27.68
Year
1922.............................
1923.............................
1924.............................
1927...................... .
1928.............................
Number of
fee cases
14,122
17,189
17,927
16,232
17,584
Average
medical
cost per
case
$31.71
32.30
40.86
40.13
42.73
In our tabulation of the experience in cases of amputation of
members we found as follows:
Medical cost in scheduled injuries ( amputation oases) in Wisconsin
Year
1916 ........................
1917
........................
1918
......................
1919 ........................
1920 ........................
1921.............................
Number of
fee cases
532
722
770
984
827
944
Average
medical
cost per
case
$61.70
58.08
64.69
60.49
68.32
73.37
Year
1922.............................
1923.............................
1924.............................
1927.............................
1928.............................
Number of
fee cases
769
808
813
730
759
Average
medical
cost per
c.ase
$86.63
102.15
106.00
119.00
132.00
For the permanent partial disabilities of the relative injury type
we obtained the following results:
Medical cost in permanent partial disability (relative mjuries) in Wisconsin
Year
1916........................... v
1917.............................
1918.............................
1919...........................
1920.............................
Number of
fee cases
194
278
366
444
539
Average
medical
cost per
case
$124.59
104.68
131.14
151.23
122 87
Year
1921.............................
1922.............................
1923.............................
1927.............................
1928.............................
Number of
fee cases
826
769
821
868
988
Average
medical
cost per
case
$149.69
201.84
175.71
244.00
235.00
While the average cost per case in amputations and relative in
juries increased in about the same ratio from year to year as did the
experience for the temporary injuries, the cost item was much
greater at every stage—approximately three times as much for am
putation cases and six times as much for the so-called relative injury.
For death cases the volume of experience is too small to furnish an
average figure that is dependable. From an average of $41.67 in
1916 the figure increased to $159.60 in 1920, $239 in 1924, and $289,37
in 1927.
82
SIXTEENTH ANNUAL MEETING OF I. A. I. A. B. 0 ,
In conclusion, let me give you a tabulation of our medical-cost
experience for each calendar year beginning with 1912 and covering
all cases where disability exceeded one week:
Medical cost experience in Wisconsin
Year
1912.
1913.
1914.
1915.
1916.
1917.
1918.
1919.
1920.
Compen
sable
cases
settled
1,725
5,092
ii, in
10,941
15,382
16,109
17, 230
14,996
16,246
Total
medical
aid
$50,470
174,700
249,527
293,512
367,277
396, 639
477,727
481,664
569, 571
Average
paid per
case
$29
34
22
27
24
25
28
32
35
Year
Compen
sable
settled
1921
1922
1923
1924
1925
1926.
1927.
1928.
15,898
16,705
20,941
22,766
21,137
22,177
20,473
21,818
Total
medical
aid
$661,562
746,429
924,032
1,153,332
1,100,852
1,122,624
1,154,171
1,250, 216
Average
paid per
case
$42
45
44
51
52
61
56
57
The medical benefits over the entire period have proved to be about
30 per cent of the money benefits. The importance of the service,
however, is not to be judged by what it costs, or by how it rates with
the indemnity benefits, but by that bigger and better scale—accom
plishment. How quickly and how completely did the service pro
vided cure and relieve the injured employees of your State and of
mine and return them to regular, self-sustaining employment?
DISCUSSION
Mr. F i t z g e r a l d . I see here under this heading you want a little
data on a number of other things, and I know it is near dinner time.
I have a few figures here that will not be a great contribution to the
literature of this conference, but I will hurry over them, and fol
low along by saying that under the system that prevails in Oregon
about 75 per cent of the injured workmen are free to select their
own doctors. There is a provision in the law that gives the right to
the employer to contract medical aid, and it also gives the right to
the commissioner to contract medical aid, at any one given plant, or
for any one employer. We believe that about 25 per cent, therefore,
of the injured men are confined to treatment by these contract
doctors.
There are some objections to that. The objections are becoming
fewer, however. Usually these contract doctors are quite high-type
men, learned in their profession and skillful, but there is the objec
tion of the man who wants to be free to select his own doctor. Per
haps he has been treating for years with a certain surgeon, and
when he meets with an accident he would like to go to that par
ticular surgeon to be cared for. I f the contract is in existence, he
is not free to do that unless he pays for it out of his own pocketbook.
We have a fee system in Oregon upon which the doctors bill the
commissioner for their services, and I refer to those doctors who are
treating patients where no contract is in existence, and a schedule is
published. I have one with me. I f it is of any value, you may
have it.
MEDICAL CARE AND COST— DISCUSSION
83
Mr. S t e w a r t . I would like to have it.
Mr. F itzgerald . The schedule is circulated among all the doctors
in the State, and when they treat an injured man or woman their
bill must be in accordance therewith. The average medical fee paid
for temporary total cases where no disability exists after the man
returns to work amounts to $22.22. We made another segregation
of injuries which left a permanent partial disability or a permanent
total disability, and the average paid for medical aid in that classifi
cation amounts to $90.35.
In fatal cases—the number taken into consideration in this brief
study, however, is not great enough to be dependable, but taking the
first year, ending July 1, 1928, 97 cases were given medical aid, with
an average of $81.45, and the following year, ending July 1, 1929,
on 90 fatal cases the average medical aid was $113.59, and the average
for the two years was $96.87.
A little different picture is presented in permanent total cases,
injuries which resulted in permanent total disability. However,
this is a brief study, and for the year ending July 1, 1928, 14 cases,
the average medical aid paid for their care was $943, and for the
following year, in the same number of cases, the average was con
siderably reduced, being only $633 and a few cents, making the
average for the 2-year' period $788 and some odd cents.
Mr. W il c o x . Is th a t f o r u n lim ite d a tten d a n ce?
Mr. F itzgerald . Unlimited medical attendance.
Mr. W il c o x . H ow do you figure it on permanent disability cases?
Are those cases that died within the year ?
Mr. F itzgerald . No; permanent total disability.
Mr. W il c o x . H ow do you know how much you are going to pay
in those cases if the men are still living?
Mr. F itzgerald . Those are cases which have been closed and
awards made, and a man may have lost an arm; he may have been
hospitalized for three months. He may have walked around, ambu
latory, for six months more, and nearly all this time under medical
care, and finally the doctor tells us that he is surgically healed, an
award is made, and-----Mr. K in g s t o n . Are you talking about permanent partial disability
or permanent total ?
Mr. F itzgerald . Permanent total cases.
Mr. K n e r r . D o you mean permanent total for life?
Mr. F itzgerald . Yes. I should not have made the illustration
about the arm being permanent total. The lowest amount paid for
medical aid for any permanent total disability case was $30.30, the
highest amount paid for any permanent total disability case was
$3,010.38, and the highest amount paid for medical aid for a case
which recently terminated fatally was $1,758.35.
Mr. K nerr . Does that include hospital cost?
Mr. F itzgerald . Yes.
Delaware (Mr. M cM a n u s ) . I shall endeavor to be very brief in
describing the practice in Delaware. The injured employee accepts
the physician of his employer. The physician of the employer is in
variably acceptable to the insurance company, and we have very
84
SIXTEENTH ANNUAL MEETING OF I. A. I. A. B. 0 .
few complaints from the injured man as to the medical care ren
dered by this physician or surgeon, and we also accept the hospital
of the employer. We have several hospitals, and one man may be
of the old school and the other of the new school, but we accept
the hospital assigned by the employer, and we have practically no
trouble on that end of the work.
I f there is a question in dispute between the injured man and the
physician, and the injured man is unable to employ a surgeon, the
board will assign a surgeon to examine that man and submit his
report to the board. If we are obliged to go outside of the State to
get a surgeon for the examination, we usually have an agreement
and it is understood between the employer and the board that the
surgeon will submit this report in writing, and that is accepted by
both parties.
We are unable to submit at this time the cost per case, the medical
cost per case. It is one of the most difficult problems we have, to
have the medical cost submitted to our board. We are making an
effort this year to get that part of the cost, and we hope to submit
these figures to you later on.
Mr. S t e w a r t . Will you repeat the statement you made to me about
the percentage of cost ?
Mr. McManus. I am afraid, Mr. Stewart, that I erred in stating
those figures to you. I made the statement to Mr. Stewart that our
compensation for the year would be approximately $74,000 in com
pensation, and that the medical cost would be around $96,000, but
after further consideration—of course, that was an estimated figure—
I feel obliged to revise those figures because I do not believe they
will carry out, but there will not be a serious difference in them when
they come down to the final estimate.
Mr. S t e w a r t . Y o u believe, then—we will correct this in the rec
ords if it is wrong—that your medical bills exceed the cash compen
sation in amount %
Mr. M cM anus. That is the feeling at the present time, yet we
have not been able to verify that by actual figures, but there is much
belief that it does exceed that.
Let me state, in regard to the hospital, we have contracts with the
hospital that they will take all ward cases at $3 a day, and that
includes the medical and surgical treatment and the attendance by
the staff physician on the floor.
Georgia (Mr. S t a n l e y ) . We have in Georgia the $ 1 0 0 medical
limit during the first 30 days. Very few of the stock companies ever
take advantage of that, however, but see the injured man through.
A great many—I will say most all of the mutual companies do take
advantage of everything they can and just as quickly as they can.
Most of our very large employers in Georgia, particularly the utility
companies, the express companies, and the telegraph companies, are
self-insured^ and nearly all of them pay full medical attention.
Now, in noncompensable cases we had $41,172. The average cost
was only $6.36 per case, and in the temporary total the average was
$24.11. In specific cases it jumped up to $44.18. In permanent total
cases we only had two, and in one of those cases the employer paid
$19,802 medical costs. In addition to that, that employer has paid
M e d ic a l ca k e a n d c o s t —
Discussion
85
several thousand dollars in rehabilitation. They sent a man from
the college to the hospital every day to teach this man accounting.
The insurance carrier got rid of the other case very quickly and only
paid out $91.86.
Massachusetts (Mr. K e n n a r d ) . The law in Massachusetts provides
that the insurer snail pay for medical expenses for the first two weeks
and thereafter in unusual cases or cases requiring surgical or special
ized treatment for as long a period as the discretion of the board
dictates.
The law provides that the injured employee may choose his own
physician. The medical question has caused us more trouble in Mas
sachusetts than all of the rest of the compensation law put together,
and when I tell you that under those provisions of the law the insur
ance companies are paying out in Massachusetts, of their total bene
fits of something over $8,000,000, more than one-third in medical
expenses, you can see that there are complications there far too
numerous for me to mention, and they are purely local, and I am
sure they would not help this convention in any way, shape, or man
ner ; but that has been the result. The doctors say the best thing to
do is to get the man back to work. Probably so, but the injured
employee wants something to live on in the meanwhile.
New Y ork (Mr. P a t t o n ) . It will not take New York long to give
what results it has. The bureau of statistics does not get the medical
cost, but what I regard as reliable evidence is that out of every $100
that are paid both for awards and for medical cost, $25 is for medical
cost and $75 for compensation awards. I can not prove that from
my own figures, but I think it is probably a reliable statement.
On that basis, New York State’s compensation awards for the year
ending June 30, 1929, were a little over $32,000,000. That would
make the medical cost something over $10,000,000, and in connection
with what Mr. Wilcox was saying, our industrial council of the State
department of labor had three sessions, one in March, one in April,
and one in May, devoted exclusively to the medical problems arising
under the workmen’s compensation law. A tremendous amount of
testimony was received from insurance carriers, from physicians,
from hospitals, from claimants, and from all possible angles of this
matter. The department is still considering the suggestions and the
statements made, but we have not yet evolved a satisfactory solution.
As Mr. Kennard said, and putting it in a different way, the medi
cal problems are the thorniest features of the entire workmen’s com
pensation game, and the man or the commission, or organization that
can devise and put into effect a workable plan to simplify, to smooth,
to lubricate the medical situation is going to deserve the plaudits of
everybody who is at all interested in workmen’s compensation.
Doctor H a t c h . I f I may supplement, along the line indicated in
the program, what Doctor Patton has said: There is no limit on the
medical treatment to be supplied to the injured claimant in the State
of New York. The statute specifies that he shall receive such treat
ment, and as long as the process of recovery may require.
The choice of the physician or hospital is, in the first instance,
with the employer. I f the employer, upon request of the claimant,
fails to provide it, then the claimant may seek his own medical
attention.
86
SIXTEENTH ANNUAL MEETING OP I. A. I. A. B. 0.
As to the matter of regulation of fees, the fee charged by a
physician or hospital is subject to regulation by the industrial board,
m the sense that any dispute over the reasonableness of such charge
is a matter which is adjudicated by the board upon the proper presen
tation of the case.
TJtah (Mr. K n e r r ) . We have no limit in Utah—we fix the medical-fee schedule in Utah. We fixed it in this fashion: We called the
medical society together and asked them to appoint a committee.
We then asked the insurance companies to appoint a committee. We
then handed that joint committee a tentative-fee schedule and retired,
so that the doctors and the insurance companies, in fact, adopted the
schedule.
We hold in Utah that the employee has the right to select his
doctor, excepting in self-insured cases. The figures show that in
1927 in 73.7 per cent of the cases the physician was selected by the
injured employee and in 26.3 per cent of the cases by the employer;
in 1928 in 75.8 per cent of the cases the physician was selected by the
injured employee and in 24.2 per cent of the cases by the employer.
The medical cost was as follows: Average medical fee per case in
1927, fatalities (burial excluded), $48.83, and in 1928, $50.60; per
manent totals (no segregation) , $15,000 in 1927, and in 1928, $15,000
(estimated). Permanent partials in 1927 were $227.30, and in 1928,
$140.90. Temporary injuries in 1927 were $16.44, and in 1928, $15.71.
We have a lot of trouble with doctors who pad their bills. We
told the medical society that they were responsible for this medicalfee schedule, and that we expect them to play square; so that
whenever we have a disputed bill we have a special committee ap
pointed by the State medical society composed of three doctors.
They usually select the three most independent doctors they can find,
and those bills are submitted to that committee and they call in the
doctor.
We had one case where the bill was very excessive for a very minor
injury, submitted by a doctor who does not enjoy the best reputation
in our community. The bill was cut by this committee from $150
to $14.
This is what happened: The employee was very honest. That
doctor was actually treating that man for a venereal disease and
included that cost in the bill submitted to the insurance company for
payment, and he was apprehended. But the medical society, instead
of expelling that man for that action, simply reprimanded him, and
I want to say to the doctors—if there be any here—that it is time you
cleaned house. It is time that you tell the disreputable physician
that he must play the game squarely.
In our State, unfortunately, we have developed what we call the
ambulance-chasing doctors, who actually have runners out, men
directing injured workmen to go to them, and they are not very
particular in their treatment. That is an unfortunate situation, par
ticularly in a State where we are trying so hard to preserve to the
injured workman the right, the absolute right, to select his own
physician; and I would like to see the day come when our medical
society would take hold of this question in the right way and serve
notice on all of these men who are not playing the game squarely
MEDICAL CARE AND COST— DISCUSSION
87
that if they hope to be members of that society they will have to
change their tactics.
Mrs. R o b l i n . For what reason are the employees of the self-insured
excluded from selecting their own physician ?
Mr. K n e r r . For this reason: They are composed of the largest
employers in our State—in our coal mines, metal mines, in isolated
districts—and it is necessary to have the doctor on the job. Now, if
the employee were permitted in those cases to select his physician I
do not believe the result would be good. The employer sees to it that
a doctor lives right in the camp to give treatment to those men, and
we had to make that exception in those cases for that reason.
Virginia (Mr. D e a n s ) . Our law requires the employer to furnish
medical attention for 60 days. The commission itself passes upon
the necessity of medical attention. Should the employer fail to fur
nish the necessary medical attention, the employee has the right, then,
to select his own physician. We have not found it as difficult as my
friend Stanley from Georgia. We find the mutual as well as the
standard insurance companies cooperating so far as giving medical
attention after the first 60 days is concerned.
Our statistician tells me that the total medical expense will amount
to one-fourth of the entire compensation expense. That is practi
cally what Doctor Patton told you about New York, although their
law requires unlimited treatment, while we have 60 days.
We find in Virginia that the compensation expense for injuries has
not increased, but we do find that the medical expense is increasing
each year. The average, or approximately the cost in each case
carrying compensation, including fatalities, specific and temporary
total disability, will amount to about $56. Cases where there is no
compensation will amount to about $9, and we figure in Virginia that
the approximate cost of each case will be $22 as an average.
Ontario (Mr. K i n g s t o n ) . I have just a few figures that I would
like to put into the record. We have in Ontario full medical aid,
without any limitation, and last year the total cost of all accidents,
including medical aid, was, in round figures, $5,000,000. Of that
amount, in round figures, $1,000,000 was medical aid, $4,000,000 being
compensation; so that the ratio is about 4 to 1.
The average cost of all cases in which compensation was paid was
$183, of which $147 was compensation and $36 medical aid. That
does not mean anything except to the statistician; but taking the
whole of our accident list and averaging the cost of medical aid in
these various cases, that is the way it works out.
Some one said a moment ago that the cost of medical aid was in
creasing. That seems to be the case with us. The figures I gave you
a moment ago were for the year 1928. For the previous year the cost
of all accidents was $4,700,000 as against $5,000,000, and of that figure
$3,700,000 was compensation and $1,000,000 medical aid. The ratio
of medical aid to compensation seems to be increasing slightly.
We have our problems which, as Mr. Kennard said, are largely
local and will not interest you folks here. We will always have
medical-aid problems as long as we are administrating compensation
laws.
We have a schedule of medical fees and surgical fees which we
adopted some years ago, with the approval of the medical society
88
SIXTEENTH ANNUAL MEETING OF I. A. I. A. B. 0 .
of Ontario, and if we have any difficulty with any of the doctors
over the correctness or the incorrectness of that fee we simply say,
“ You folks approved of this when we adopted it, and we adopted
it in good faith with your approval, and we are living up to it.”
O f course, some of the doctors were not present when the fee sched
ule was approved by this association; but take it on the whole, while
we have our problems here and there, I think the medical profession
is reasonably well satisfied with the situation, because they all
admit—if it is put up to them they must admit—that they are get
ting much more money in accident cases under the compensation
law than they got in the old days when they were dealing each with
his own case.
In the old days, of course, with an employers’ liability company
behind them, there was lots of money for the doctors in order to
get a settlement through. I f there was no employer’s liability in the
case, everybody knows that unless the workman was successful in
his action against the employer the doctor received no money for
his services, and, as I say, the doctors admit now that they are get
ting more money for their services by and large, with individual
exceptions, of course, than they did under the old system, and they
are reasonably well satisfied; and I do not think the occasional
grouch and the occasional exception to the rule—I should say “ occa
sional exception to the rule of being reasonable ”—really affects the
situation, because they are very much better off.
Mr. S t e w a r t . Who selects the physician?
Mr. K in g sto n . The board does not like to interfere with that situa
tion if it can help it. In our Schedule No. 2—that is our self-insur
ance cases—just as they do in Utah, the selection is made, naturally,
by the employer. In the Schedule No. 1 case—that is the group of
employers that contribute to our accident fund—in 99 per cent of the
cases the question of selection of a doctor never comes to the board.
I f a man is hurt, he is sent to the nearest doctor. I f the employer’s
doctor is near at hand, he is called in, and usually carries the case
through to completion. We have adopted the practice that the first
man called in to the case must carry it through, and the case must
not be taken away from him unless very good reasons are shown.
But we always answer the question as to who chooses the doctor
by saying that neither one has an inherent right to choose the doctor,
i i there is difficulty in the way, the board will try to settle it, but as
a usual rule, even in Schedule No. 1, the employer’s doctor is the
doctor who is chosen.
The selection of a physician is a very small problem with us.
In our system we do not have hearings to the extent that you
folks have in most of the States. I would say 90 per cent of
the cases are decided upon the record without the necessity of a
hearing. That is to say, when an accident happens and we learn
about it, the necessary forms are sent, which, when completed, will
put before the board a complete statement of the accident: One
form from the workman, one form from the doctor, and one form
from the employer. I f those three forms tell the story in substan
tially the same way, and are in fair agreement as to the estimate of
the injury, we accept that as a fact without a hearing, and compensa
tion is paid on that statement, subsequent reports, of course, coming
MEDICAL CARE AND COST— DISCUSSION'
89
from time to time as the case progresses, but we do not require these
people to come before us.
In long-continued cases, of course, where disability lasts 1, 2, 3,
or 6 months, we have reports every two or three weeks, or every
month, as to the progress of the case, and finally we may require the
man to come before us to see the extent of his injury.
Mr. K nerr . Do you send a man out to check up ?
Mr. K in g sto n . The extent of the injury ?
Mr. K n err . Yes.
Mr. K in g s t o n . We get reports from time to time on its progress.
I f there is any suspicion thrown on the progress of the case by any
body—sometimes an anonymous letter may throw some suspicion
which might be enough to put us on watch, although I do not, as a
rule, pay much attention to anonymous letters, yet occasionally a
letter indicating that there is a nigger in the woodpile will come in
and that immediately leads to an investigation.
Mr. S t a c k . Do you mean, Mr. Kingston, your law requires the
doctors to make a report to the board in every case ?
Mr. K in g s to n . Absolutely. The doctor, for the purposes of admin
istration of our act, is an officer of the board just as much as I am.
Mr. K e n n a r d . What do you do with the disagreements?
Mr. K in g s t o n . We try to settle them. As to the condition of the
man ?
Mr. K e n n a r d . As to any question arising in the compensation law ?
Mr. K in g s t o n . We get the people around the table if there is a
real disagreement. We have to settle it either by sending investi
gators out or by bringing everybody in before us. That is the ex
ceptional case. The great majority of the cases are disposed of on
the record without having the people come before us, but in problem
cases we sometimes bring the man before us, and sometimes we send
a man out.
Mr. S t a c k . Are those reports made b y the doctors in triplicate?
Mr. K in g s t o n . No ; the reports are sent into us in the form that
we send out. Some doctors, for their own record, keep a copy of the
report, because when a subsequent report is asked for, they naturally
want to know what they said before.
Mr. S t a c k . I wondered if he had a copy for his office, one for his
lawyer, and one for your board.
Mr. K in g sto n . Y ou see, the employer in our Schedule No. 1 is
not a factor in coming up before us, even in disputed cases. The
employer, when he pays his assessment to the board, is probably
more interested than not in seeing that his employee gets compen
sation.
Mr. F itzgerald . Does the employer make a report ?
Mr. K in g s to n . The employer makes a report. I f the employer’s
report disagrees with the workman’s report, we immediately put on
an inquiry, and the statements must be reconciled before the case is
passed or approved.
[The meeting adjourned.]
94023°—30------7
WEDNESDAY, OCTOBER 9— MORNING SESSION
Chairman, Verne A. Zimmer, Director New York Bureau of Workmen’* Compensation
MEDICAL SESSION
Mr. S t e w a r t . I want to say that the State of North Carolina,
which has just passed a compensation law, has representatives here
to-day in the person of Maj. Matt H. Allen, chairman of the com
mission, Mr. J. D. Dorsett, and Mr. E. W. Price, secretary.
North Carolina is not as yet a member of the association, but they
assure me they intend to join, and in any event, I move you that
North Carolina be given the privileges of the floor, not only as to
voice but as to vote. There is a precedent for this. The same privi
lege was extended to Missouri, at the Atlanta convention I think it
was, and I move that the privilege be extended to North Carolina,
and I want to ask the gentlemen, if they are in the hall, to stand up
so we may identify them.
[The motion was seconded and there being no objection, was passed
and the representatives of North Carolina were introduced to the
association.]
President P e r k i n s . Mr. Stewart thought it would be interesting and
illuminating to the members of this convention if we should set aside
a morning here for a clinic? to which some of the physicians of our
department would bring clinic material, as it is called in this case,
gentlemen who have been kind enough to agree to come here, and to
show and demonstrate to the members of this convention the method
by which we arrive at an agreement as to what constitutes a propor
tionate loss, and also illustrate some of our other medical problems.
Before going on with that program I wish to exterfd, on behalf of
this whole convention and particularly on behalf of the Depart
ment of Labor, our very great appreciation to the injured men who
have been willing to come here to-day, and, in the interest of better
workmen’s compensation administration all over the country, have
been willing to allow their injuries to be demonstrated for the benefit
of this audience.
I have assured them that this is an audience of serious people who
are profoundly interested in doing justice to injured workmen, and
because of that fact they have been willing to come here. I wish to
express to you [the injured men] my personal thanks and the thanks
of the whole convention for your presence here to-day.
Doctor Raymond G. Bell, who is the medical examiner in the
Buffalo office, and who has had a long experience in the examination
of such cases, is going to act as the clinic physician in this case. I am
going to ask him to come forward and call the cases in much the same
way that he would if he were having an actual hearing. He will be
very glad to answer questions and to explain any matters which may
not be clear to anybody in the convention.
91
92
SIXTEENTH ANNUAL MEETING OP I. A. I. A. B. 0 .
Doctor B e l l . Of course, we strip the man. It is necessary that we
look at both arms. We look for atrophy. We look for swelling. We
look for discolorings, and we look for anything of an abnormal nature.
The shoulder is the first part of the arm that we look at. We look
for restrictions in motion, with special reference to external and
internal rotation, which is this movement [demonstrated], and eleva
tion forward and elevation laterally, and we go down to the elbow
and we look for restrictions in flex and extension, and the forearm is
next.
We look for loss of supination. This motion here [demonstrated]
and pronation. Then we go to the wrist and look for loss of exten
sion and flex, and lateral motion, and the fingers and thumb looking
for swellings and enlargements, and extension and flex losses in all
the fingers and both thumbs.
Mr. Enser is 75 years old. He sustained a common fracture of the
lower end of the radius, also the tip of the styloid of the elbow—that
is, the wrist—the forearm. Also a fracture of the fourth and fifth
ribs in the axillary line. All his difficulties are due to the arm.
Mr. W il c o x . What was the date of the accident?
Doctor B e l l . The date o f the accident was September 17, 1927.
I will demonstrate how we arrived at the schedule on this case.
[Demonstrated.] Now that is what we term active elevation. In
addition to active elevation, we try to elevate the arm passively to see
whether the restriction is organic, or whether it is due entirely to pain.
You will recall that this claimant’s injury was down here—the
fracture was down here, and he has marked defects at the shoulder.
In these old gentlemen we always find defects at the shoulders, due
in a great part to inactivity. Fibrous-joint changes intervene. The
normal tissues become thickened, and the inactivity, of course, is due
to pain.
He favors his arm. The motion of function at the elbow is normal.
Owing to pain, he has practically no internal rotation at all. I f we
could get this man under an anaesthetic we could demonstrate that
he has no loss organically at the shoulder.
You will note here at the wrist there is marked bony enlargement,
due to his fracture and the excess callous that followed. He has
marked restrictions because of this new bone formation.
We do not like to handle these men too rough. They always have
a great deal of pain, but we try to get as much passive motion as
we can so as to come to as clear an understanding of the case as
possible. The most important parts of the whole arm, of course,
are the fingers and thumb. You will note that he has very little flex
in any of his fingers, and still he did not injure any of his fingers,
another evidence of fibrous joint change following injury. These
are very common in men past 50. I f we could give this man treat
ment, we probably could get those fingers down to normal, but within
one month following treatment they would revert back to the condi
tion now seen.
I gave this man 85 per cent of the entire arm, which includes the
hand—from the shoulder to the tip of the fingers—85 per cent.
Mr. K in g sto n . What is the arm with relation to total disability?
Doctor B e l l . The entire arm is 31 2 weeks. He gets 85 per cent
of 3 1 2 .
MEDICAL SESSION— CLINIC
93
Mr. K i n g s t o n . Y o u do not speak in terms of percentage?
Doctor B e l l . I speak in terms of percentage when I say 85 per
cent. I f he was given 100 per cent of his arm, that would be 312
weeks, and if he obtained the maximum he would receive it at the
rate of $20 a week. It would be six thousand and some odd dollars,
but he received approximately five thousand and some odd dollars
for the disability arising out of this injury.
Now, this has nothing to do with the case, but it is an interesting
feature. It is a normal condition of this claimant, and it is what
is known as a cobbler’s breast, seen very often in the old-time cobbler.
The depressed area here is due to the fact that he holds his shoes
up against his chest.
Mr. W i l c o x . I f he was 30 years of age he would receive exactly
the same compensation ?
Doctor B e l l . He would receive the same compensation, but he
would not have these restrictions, because a man 30 years of age
would not have these restrictions in the shoulder.
Mr. W i l c o x . He might if he had the injury in the shoulder, but
supposing he had it all the way up, would he receive 85 per cent?
Doctor B e l l . Yes; if he had these same restrictions. Age has
nothing to do with it. Neither has occupation.
Mr. K i n g s t o n . Supposing the claimant should die before the
number of weeks are up, does the money inure to the benefit of the
fund?
Doctor B e l l . I f an award has been made, then the remaining
money that he has coming to him goes to his estate. I f an award has
not been made, the estate is out of luck.
The C h a i r m a n . The balance of the award goes to the dependents,
if any, not to the estate. The dependents named in the compensa
tion law are the wife or the minor children.
Mr. W i l c o x . Does the question of whether or not the award has
been entered make any difference?
The C h a i r m a n . I f there has been an examination which indicates
exactly the schedule that would have resulted, we may make such
award after death.
[Examination of another claimant.]
Doctor B e l l . This is another arm case. I gave this man 40 per
cent of an arm in this particular instance. Mr. Michaels, in addi
tion to fracturing the left radius, sustained a laceration of the left
elbow and a fractured pelvis. Now, with regard to his pelvis, he
has made a good clinical recovery. He still alleges pain upon mo
tions requiring a squatting position, and he still alleges pain in
motions requiring twisting, but on the whole the X ray shows that
he has made a good recovery.
So far as new bone formation is concerned, his bones are in good
position, with good callous formation, so that the only thing to con
sider here is the arm.
Now, if this man had not fully recovered from his pelvis fracture,
then we would not give him a schedule on his arm. He would go
on permanent partial disability, depending upon what he would be
able to do. We can not make a schedule on an arm when a man has
94
SIXTEENTH ANNUAL MEETING OP I. A. I. A. B. 0 .
another disability, such as a fractured skull, or a back injury, or a
fractured pelvis, because we can not schedule those particular
conditions.
This man was injured in December, 1928. It has not been quite
a year, but it has been our experience that these old gentlemen do
not show a great deal of improvement irrespective of the time that
has elapsed beyond a period of six or eight months.
[Demonstration.] You see he has forward elevation at the
shoulder level only. He has fairly good internal rotation.
This is the way we test external rotation. [Demonstrated.] He
has no defects in the external rotation. His motion of function at
the elbow is normal. [Demonstrated.] He has normal motion and
functions at the forearm, wrist, fingers, and thumb. All his defects
are traceable to the shoulder area.
Mr. K in g s t o n . Was there direct injury to his shoulder?
Doctor B e l l . Not to his shoulder; no. He suffered a fracture of
the forearm just as this other old gentleman whom I presented to
you, but it is another instance of fibrous joint changes taking place
in the shoulder, due to inactivity. These men never recover except,
as I said, under treatment. These men can be given intensive
diathermy and physiotherapy to the shoulder and they revert to
normal—the normal motion and function of the shoulder, but one
month following the expiration of the treatment, they go right back
to the same condition in which you see them to-day. I have seen
that happen so many times, I have come to the conclusion that after
six or eight months in that type of case, it is useless to have them
come in and keep checking up on them.
Mr. K in g s t o n . Y ou would say for a man after 40 or 50-----Doctor B el l . I would not set any specific age. I would rather de
termine by looking at the man, but if an age must be set I would
say probably after 60.
Mr. W il c o x . May I ask, Doctor, how you rate the relative injury
of these two men? Is it your judgment now that it is 40 and 85
per cent?
Doctor B e l l . Yes; the last man whom I presented I gave 40 per
sent of an arm. That was because I felt he was unable to do any type
of work that required motions elevating his arm. In other words,
he is unable to do any work that would require him to place anything
upon a shelf, for instance, or to lift something from the floor and
place it anywhere above the shoulder level. You noticed on the
lateral motion he was not able to come to the shoulder level.
Mr. W il c o x . He c o u ld d o a n y k in d o f w o r k b e lo w the sh ou ld er
level.
Mr.
K in g s to n .
And there
is
perfect recovery of
the a ctu a l
injury.
D octor B e l l . Y e s ; th a t is th e p e cu lia r p a r t o f it, e s p e cia lly in o ld
gen tlem en .
Mr. S te w a r t . Y ou say you gave him 40 per cent o f an arm. Do
you mean 60 per cent disability, and 40 per cent of an arm, or do
you mean that you gave him 40 per cent o f the compensation ?
Doctor B e l l . I gave him 40 per cent of an arm. As I stated be
fore, the entire arm is 312 weeks. That is a specific loss, as against
MEDICAL SESSION— CLINIC
95
the pelvis, which is not a specific loss. We can not schedule a pelvis,
back, or head.
Miss B e c k e r . That is a permanent loss?
Doctor B e l l . That is a permanent loss.
Mr. K i n g s t o n . You gave him 40 per cent of 312 weeks?
Doctor B e l l . Yes.
The C h a i r m a n . I think Mr. Stewart meant, perhaps, whether we
base that on functional loss of the arm. Doctors’ examinations of
the arm are all supposed to be functional disability of the arm, not
applicable necessarily to this man’s particular occupation, but func
tionally he has lost 40 per cent of the use of his arm. In this State
loss of use is equivalent to the loss of.
Doctor B e l l . I wanted Mr. Kepka to be here to-day, and he
promised me he would be. It is an interesting case. Mr. Eepka
was working in the chrome industry, and he has a perforation of
the septum of his nose, due to chronic acid deposits upon the septum.
His perforation is about a half or three-quarters of an inch entirely
through the septum. This took about eight months to form entirely,
and, as you folks know, the chrome industry is something not en
tirely new, but the industry has grown by leaps and bounds, and all
of our automobile accessories are now plated with chrome where
formerly they were plated with silver, and our plumbing supplies
are now all plated with chrome; so that although it is not a new
hazard, still the industry has grown so rapidly we are seeing more
of these cases now.
With the proper ventilation of the tank—you see this chromic acid
is formed when the various elements are placed in an electrolytic
tank, the acid rises as a fume from this tank, and the deposits are
made upon the septum of the nose, and in addition to the septum of
the nose the chromic acid has a special predilection for the skin.
It will produce a skin eruption, but we so far have not seen any of
those cases of skin eruption.
Coincident with my finding of this case at the commission, Doctor
Dixon, of Cleveland, came out in the American Medical Associa
tion Journal with an article about 18 cases that he had seen in
Cleveland.
Doctor Legge, of England, in his practice has found 71 per cent
of the workers in the chrome industry with perforation of the nose.
It is a very high percentage, and I think with the increase in
ventilation, and the strides that have been made along preventative
measures, we will not find such a high percentage as that here.
I am sorry Mr. Repka is not present. He promised he would be
but, of course, he is working. From the standpoint of disability
in this case, the man has no disability, and he is able to continue
working. The condition is annoying, and he has a distinct loss,
and in this case I advised that a lump-sum settlement be made. He
will always be annoyed by this crust formation that takes place
about the perforation and undoubtedly there will be periods of
bleeding. He should wear some sort of a mask and there should be
some air currents placed in some way so as to carry these fumes
elsewhere than over the nasal apparatus.
96
SIXTEENTH ANNUAL MEETING OP I. A. I. A. B. 0 .
Mr. W orstell . What was the settlement?
Doctor B e l l . That is still under consideration. I have not heard.
Can you tell me, Charley; that was one of your cases ?
Doctor O ’C o n n o r . There was no disability in the case, and the
insurance carrier refused to grant any lump sum for the reason
that he had lost no time, received his wages, and there was no sched
ule of loss. At any time that it gives him any trouble, he can come
back and have the case opened up again. In this case the medical
bills were paid, and the case was closed so that any time it disabled
him he could have the case opened up again. Tne insurance com
pany, in view of the fact that he had no pecuniary loss, did not
consent to a lump-sum settlement.
Doctor B e l l . This is the first I knew that settlement had not been
made in the case. It seems unfair. I f a man has lost something
that he will never get back again, and it is going to be a source of
annoyance to him at all times, it would seem to me that the claimant
is entitled to something along those lines, but, of course, we can not
force settlement. The carrier and the employer are not under any
obligation to pay him anything, but if a man has lost a distinct part
of his breathing apparatus, it seems to me that it is distinctly unfair
that some settlement is not made.
Mr. K in g s t o n . Does the New York board agree with that con
tention, or has there been any appeal from the man to the New
York board for reconsideration?
Doctor B e l l . The man can not get anything until he loses time,
and then he must show by the medical testimony that the time he
has lost is the result of this injury.
Now the condition is not disabling in itself. It does not prevent
him from working, but he will always have to put petrolatum up
his nose at all times to keep the condition soft, to prevent crust
formation, to keep it from bleeding, and that is a distinct source of
annoyance.
Mr. G o o d w in . What is the age of this man?
Doctor B e l l . He is still a comparatively young man, in his early
thirties as I recall—32—still a young man with his whole life to
face.
Mr. G o o d w in . Did you recommend a certain sum?
Doctor B e l l . N o , I just recommended a settlement, and the set
tlement is up to the carrier and the claimant to agree upon, and
if the referee thinks it is reasonable, he will make such an award,
Mr. W eid n e r . Then, in other words, this man, injured as he is
from the work that he has been employed at, is compelled, from now
on for the balance of his days, unless he loses time, to pay for the
constant medical attention he will require out of his own pocketbook
without any recompense?
Doctor B e l l . No; any medical attention required as a result of this
perforation is chargeable to the employer.
Mr. W e id n e r . But you have already stated that the case is closed
without prejudice. “ Without prejudice ” means unless he loses
time.
MEDICAL SESSION---- CLINIC
97
Doctor B e l l . His case is closed in the sense that he is still able to
work, but a case in the compensation court is never closed. A claim
ant can always reopen his case, even 50 years after injury, if he
can show by medical testimony that there has been a change in his
status, or, in this particular case, if he finds himself unable to work
by reason of this perforation, all he must do is to get a medical
certificate to show that, bring it before the board, ^and his case is
reopened for further consideration.
Doctor S e s a n s k y . I think I had one of the first cases of chrome
poisoning in this city, and after having observed the condition fol
lowing this chrome poisoning, I find that it is not a serious defect.
It is purely an ulceration of the septum of the nose. In other words,
it is a complete connection between both airways, and the main fac
tor, in this case, is an attempt to prevent the condition.
After we studied the condition we went to this concern and we
laid our cards on the table, and since that time there has been no
chrome poisoning or ulceration of the septum.
Now. the actual condition readily responds to treatment by remov
ing it irom the source of irritation and local applications of vaseline
or some oil base, and when the acute condition subsides, it is purely
a matter of skill in penetrating a hole through the septum, and it
does not reoccur, and they have no ill effects except that they feel
a whistling every time they breathe, and as long as they take care
of themselves there is no disability whatever.
Mr. S t e w a r t . I would like to ask the doctor if he would recom
mend puncturing of the septum as a general practice.
Doctor S e s a n s k y . N o ; because the chrome does that.
Mr. S h a r p e . I would very much like to ask some member of the
New York commission how they justify the fact that if an injury
comes under their schedule, even if it does not interfere with the
man’s earning capacity, he receives a certain compensation. I f the
injury does not come under the schedule, apparently he gets nothing
if it does not interfere with his earning capacity. Is there any
explanation of that?
The C h a ir m a n . Oh, I think there is. It may not satisfy you.
The law in this State and in most of the other States was copied
after the English act, and in the old English act they set forth a
number of definite schedules. Now, the 312 weeks that we apply
to an arm is nothing more or less than a theoretical calculation of the
reduced earnings of that man for the rest of his life. It is entirely
theoretical in itself, and it is probably arbitrary. I do not know
how they arrived at it. We have never determined any better way
of making comparative schedules than existed in that act. That is
exactly what a schedule is in this State.
Now, schedules do not apply to the back, the head, the nose, and
so forth. We have nothing tor that. The doctor spoke about an
attempt being made to get the carrier to agree to a compromise
settlement. Whenever, in these non-scheduled cases, there appears
to be a permanent condition which at the time does not cause lost
time and for which there is no schedule applicable, then an attempt is
made to effect a compromise, which will supposedly settle for any
possible reduced earnings in the future.
98
SIXTEENTH ANNUAL MEETING OF I. A. I. A. B. 0 .
Now, take this particular man with the punctured septum. He
may lose only occasional days for the rest of his life, perhaps, two
or three days at a time when he needs some extra medical attention.
Of course that is, by the way, paid for by the employer as long as
he lives. Then he goes back to work. His lost time will be very
hard to keep track of and to keep restoring the case to the calendar
to consider, and so, if they can come to an equitable and reasonable
settlement, the referee permits it and approves it.
I think that every State that has scheduled losses has the very
same idea in mind. They are theoretical calculations of future re
duced earnings. We do not know in this State, nor do they know
anywhere in the United States, whether that is anywhere near exact.
I believe Professor Dodd is attending this convention. Professor
Dodd, in the investigation he is going to carry on throughout the
United States, is going to follow up many of these schedules that
have been made in this and in otner States and see whether, in
actual practice, this man with the loss of an arm actually was
damaged to the extent of 312 weeks, or $5,000 or $6,000, in his
actual earnings. It never has been demonstrated.
Mr. S t e w a r t . I would like to ask the commissioner a question if
I may. In your judgment, had this employer been insured in the
State fund of the State of New York rather than in a private insur
ance company, would settlement have been made ?
The C h a i r m a n . Well, of course, the State fund is under much the
same type of expert insurance management as the other carrier.
There are likely other carriers aside from the State fund who would
have compromised the case in order to get rid of it. It is perhaps,
an expensive thing to drag out, not knowing when it may be reopened
any time in the future. I hardly would want to answer that
question, Mr. Stewart. The State fund, in this State, carries along
pretty much like the best of the other carriers.
Mr. Y e o m a n s . I s there a possibility that the man might have
recovered in civil suit against his employer?
The C h a i r m a n . No ; in this State if an employer is covered by
compensation insurance he is released from any possibility of a
damage suit in civil action.
Mr. H o f f m a n . I s it not a fact that the real answer to that prob
lem would be that the compensation law in the State of New York
is not a damage law and by making him a settlement in a case of that
kind you are actually giving him damages ?
Now, may I ask those who believe a settlement in that case would
be the proper thing, how one could determine a lump-sum settlement
or final adjustment in that case?
The C h a i r m a n . Well, again it is purely an estimate, but per
haps the estimate would be as good as the estimate we put upon these
various schedules. We do not know that.
A M e m b e r . What would happen to this individual should the con
cern he is working for now go out of business? Would the State
fund take care of that? Would they take over that responsibility,
or would his benefits be defunct?
MEDICAL SESSION— CLINIC
99
The C h a i r m a n . Any carrier who is on that risk is there for good,
whether that employer goes out of business, or goes in bankruptcy,
or what not, it does not make any difference.
Mr. W e i d n e r . In this case, as the man grows older, naturally the
injury will become aggravated. You state that he now loses, one,
two, or three days at a time for treatment, and as he grows older he
will lose a great deal more time. Does he draw compensation for
that loss of time, or must he wait seven days, in future treatments,
before his compensation is paid?
The C h a i r m a n . After the first seven days have elapsed, then he
draws compensation for any day that he is disabled or that he goes
to the doctor for treatment.
Mr. W e i d n e r . But he has already lost the seven days. Must he
lose seven days each time ?
The C h a i r m a n . N o , there is only one 7-day waiting period in any
one case.
Mr. K i n g s t o n . Mr. Chairman, I would like to make a remark
before you proceed with the next case. It seems to me, from what I
have heard, that these schedule cases are, in a sense, preferred cases,
whereas I always had the idea the legislature included these sched
uled cases simply because, perhaps, somebody else had done it before,
so that it was easy to think of this particular type of injury; but I
always had the idea that other injuries, not enumerated in the schedlue, were to be considered with relation to those that were named in
the schedule; for example, it is an easy matter, when you see so much
given for an arm at the shoulder, or so much given for a leg, or
certain of these scheduled injuries, to determine some other injury in
relation to what has been allowed for that injury.
I judge, from what has been said, that that is not done; that be
cause an injury is not stated in the schedule unless there is actual
time lost, there is no compensation for the person. Take the pelvis
injury, for example, that is not stated. You have something stated
for a leg injury. It is surely not very difficult to determine by refer
ence to the leg injury, what a certain pelvis injury may amount to.
The C h a i r m a n . Well, I do not know, it seems to me it would be
pretty hard to figure out schedules for back injuries or head injuries.
Those are pretty sensible nonscheduled cases. The doctor told you
correctly when he stated that if a man has a scheduled loss of an
arm combined with a back injury, such as the man whom you saw,
we would not fix the schedule for the arm. It would be dangerous
to do it, because when the schedule has been paid—and this has
happened frequently in the old days—and the case closed, the man
will come back a rew years later and say, “ I can not work on
account of my back.” Now we can not, according to the court’s
interpretation, superimpose awards for other disabilities onto these
schedules. So we steer clear of making a scheduled award when
there is combined other types of nonscheduled injuries. Eather we
continue the whole thing under what we call paragraph 153 U ;
that is, permanent partial disability other than scheduled.
{Examination of another claimant.]
100
SIXTEENTH ANNUAL MEETING OF I. A. I. A. B. 0 .
Doctor B ell . This is another arm case. This claimant, in October.
1928, suffered a dislocation of the left shoulder. This is a case oi
recurrent, repeated dislocation. Following his original dislo
cation, with a certain period of disability, he returned to work
and again suffered a dislocation of the same shoulder. This hap
pened four times following his injury, so that it was necessary later
on to perform an operation, of which you see evidence in this long
scar.
This case was recently settled. I gave the claimant 20 per cent
of an arm. All his disability is at the shoulder. He has normal
motion and function at the shoulder, forearms, and hands.
[Demonstration.] You will note that he has about 10 to 15 per
cent full loss of forward elevation. [Demonstration.] His lateral
elevation, however, is only at the shoulder level.
He has normal external and internal rotation, so that the only
defects are 50 per cent of the lateral elevation and 10 to 15 per cent
loss of forward elevation. For these defects I gave him 20 per cent
of an arm.
[Maj. C. K. Blatchly assumed the chair.]
Mr. B a k e r . Your examination there is purely of a subjective
nature. What would you term the objective nature?
Doctor B e l l . No; the failure to fully elevate is objective. Any
complaints that he makes to me are subjective in nature.
Mr. W
ilco x .
Is there freedom from pain in the shoulder now?
Doctor B e l l . That is one feature he told me about this morning.
Since his case has been closed he has attempted to go into the open
market to try to get a job, but, of course, he has a handicap for
which he has been paid when he gets this 20 per cent loss of the use
of the arm. He is not able to do all types of laboring work. He is
not a skilled workman. He is an ordinary laborer and he is not
able to get out and do the things that an ordinary laborer is supposed
to do, so that he is handicapped. Later on he may find that his
condition is such that he will want his case reopened, and he may
feel that he is entitled to further compensation.
[Examination of another claimant.]
This boy is a case that I never saw before, but it is an interesting
case for the reason that he has lost a great deal of his hand, and
following this specific loss he developed neurosis, and following
the development of neurosis, he has been rehabilitated, and now is a
useful member of society.
You will notice that he has lost three fingers by amputation, the
index finger being amputated apparently at the middle joint, with
the second and third finger amputated through the proximal pha
langes, and the little finger because of a marked extension defect
at the middle joint, with the result of extensive scarring, and ap
parently the extensor tendon is involved. [Demonstration.] He is
unable to extend that finger. So far as extension goes he has lost
approximately the entire finger. He has fairly good flex. He was
given 90 per cent of his hand.
His thumb is normal as to function and motion, but the interesting
phase of the case to me is the fact that he developed neurosis and
was rehabilitated. It would be a shame for a young man such as
he to remain a permanent neurosis case.
MEDICAL SESSION— CLINIC
101
Mr. K in g s t o n . H ow w as he r e h a b ilita te d ?
Doctor B e l l . He did not return to work until a year and a half
following his injury. When he did return to work, he returned to
work at the Bethlehem Steel Co., where he was formerly employed
and where he was injured, as a sweeper. Well, he became discour
aged. He did not care for that type of work, and he wanted a lump
sum so that he could buy a home for his folks and himself. The
Bethlehem Steel Co. is a splendid company to work for. They are
very good to their employees. They cooperate with the commis
sion and they cooperate fully with their employees and they get
splendid results from their injured workmen as a result.
He was referred to the bureau of rehabilitation and it was dis
covered that he was interested in tool making. They did not think
they could do much with him on account of the enormous loss of
his hand, but he was sent to the Seneca Vocational School for a
period of about nine months, and there he learned a great deal of the
tool-making trade. He did not finish the course because he was anx
ious to get back to work. His mental condition had changed and
he wanted to get into an earning capacity.
In the interim, of course, the Bethlehem Steel Co. made it possible
for him to continue at this. They paid him his compensation, and
incidentally this is one phase that the private carrier is not able
to do. They do not feel as though they ought to pay a man while
he is taking up a course of rehabilitation for a period as long as nine
months. Of course, in this particular case he had it coming to him
because he had 90 per cent of his hand, which is 90 per cent of 244
weeks. He had that number of weeks’ compensation coming to him,
so that nine months in this particular case would not make any dif
ference when he has three or four years’ compensation coming to
him. But it it the spirit of cooperation that I am trying to get over
between the employer and the employee in this particular case and
in all Behlehem Steel Co. cases.
Mr. W il c o x . Did you have a schedule for the loss of all four
fingers ?
Doctor B e l l . Specific losses for each finger. This finger is 46
weeks, the thumb is worth 75 weeks, this finger is worth 30 weeks,
the third finger is worth 25, and the little finger is worth 15, and
here is a peculiar quirk in the law that I have never been able to
understand: The little finger is worth 15 and the little toe is
worth 16.
Mr. W il c o x . Does that include the healing period ?
Doctor B e l l . There is no healing period. There is no excess heal
ing period over a certain number of weeks. I do not know just the
actual number of weeks. The referees could give you that informa
tion, but I know for the arm it is 40 weeks, and for the leg it is 32
weeks, but I do not know just what the healing period is for each
individual finger.
Mr. W il c o x . The difference in the healing period is probably ac
counted for in the fact that there probably would be that much less
injury to the little finger than there would be to the toe; that is, I
mean inability to get back on the job.
102
SIXTEENTH ANNUAL MEETING OF I. A. I. A. B. 0 .
Doctor B e l l . I f the claimant made a normal recovery, such a s the
average case does: without infection, then there would not be any
excess healing period in any of these cases.
Mr. W i l c o x . Did he pay for his board during the rehabilitation
period out of his compensation ?
Doctor B e l l . Yes. I might say here that the bureau of rehabilita
tion also has a provision, through State funds, whereby they can pay
a man whom they think is cooperating and who is a good patient, $10
a week. That is, of course, left to the discretion of the man who is
handling the case.
Mr. K i n g s t o n . In addition to compensation?
Doctor B e l l . Yes.
A M e m b e r . H o w d o y o u a r r iv e a t 90 p e r c e n t ?
Doctor B e l l . It is purely a question of opinion. This opinion, of
course, is first based on experience. When I came into the depart
ment I did not know what it was all about. It was all Greek to me.
I did not know how to arrive at 90 per cent of the hand. You must
first have your foundation in the law. You must know that the
thumb is worth 75 weeks, that the index finger is worth 46 weeks,
that the second finger is worth 30 weeks, the third finger 25 weeks,
and the little finger is worth 15 weeks. You must know that the
whole hand is worth 244 weeks. Then it comes down to a question
of experience.
When I first became associated with the commission I did not see
any case like this, but my judgment would probably have been 75
per cent of the hand. At that time I had not reached this maturity
that I could tell that it was worth 90 per cent of the hand.
Mr. K n e r r . In other words, if the man had lost one more finger,
it would have been the loss of the hand ?
Doctor B ell. While we are on this subject of the hand, the courts
have recently handed down a decision that seems manifestly unfair
to me, and I hope that by the time this next legislature convenes it
will be corrected.
The decision reads to the effect that a man with an injury to his
fingers only—no other part of the hand involved, merely the fingers
or thumb—in which ankylosis results, and his defects are all con
fined to the fingers and thumb, shall be given a schedule of fingers
rather than a schedule of hand.
Now that is unfair in this way: Supposing a man had, we will say,
ankylosis of these four fingers at any one of the joints, the proximal
joint, the middle joint, or the distal joint. I f he had ankylosis at
the proximal joint, he would not be able to do this. He is not able
to make a fist. He has not any grasping power. Still, under this
ruling this claimant does not get a percentage of the hand. The same
thing would apply to the middle joints. I f he has ankylosis at the
middle joints, he has no grasping power, but still he is not able to get
a percentage of the hand.
Mr. S u l l i v a n . I f that hand was injured as you have stated, and
there were two or more fingers amputated, would not that be con
sidered as a partial loss?
Doctor B e l l . Amputation; yes. Amputation is covered.
MEDICAL SESSION— CLINIC
103
Mr. S u l l iv a n . That decision has been made on a technical point?
Doctor B e l l . That is only when there is no amputation of the
fingers, merely where there are restrictions, and I have taken anky
losis as an example because I can demonstrate it easier.
Mr. A l t m e y e r . The scheduled allowance for the fingers separately
adds up to 116 weeks. Now that is approximately 50 per cent of the
loss of the use of the hand as a whole. Now this man does not have
loss of the use—the amputation of all those fingers is at the proximal
joint—and still you allow him 90 per cent of the loss of the use of
the hand as a whole.
Doctor B e l l . Yes; and I will tell you how that come about.
There has not been anything said yet about grasping power. The
grasping power is very important in any hand. You can obviously
see that the hand to an injured man who is a muscle worker is very
important. I f he has not his hand, then he is considerably disabled.
He is not able to do anything. The grasping power, therefore, is
taken as the number of weeks between 116, such as you figure, and
244.
Mr. A m m e t e r . What grasping power would there be if there was
amputation of all the fingers at the proximal joint ?
Doctor B e l l . The law—I might interpose here for a moment, and
say that the law states that the loss of one phalange, or more than
one phalange, shall constitute the loss of the finger. You see this
claimant, in addition to one phalange, has lost two phalanges; so
he has a full finger loss here.
Mr. W il c o x . But for the loss of all four fingers he would get
116 weeks. He has much less loss than that.
Doctor B e l l . He has not much less loss than that. You see this
finger is practically useless. He has an extension.
Mr. W il c o x . That only makes 116 weeks.
Doctor B e l l . The rest of it goes into grasping power. You see he
has ankylosis of this, thumb. That is 37.5 weeks alone.
Mr. K in g s to n . I thought you said the thumb was normal.
Doctor B e l l . Well, I made a mistake. I am sorry. This is a case
that came before I came on. I was not entirely familiar with my
subject.
Mr. A l t m e y e r . Even that would only give him 152 weeks.
Doctor B el l . The rest goes into grasping power.
Mr. A l t m e y e r . But he would not have any grasping power i f he
had-----Doctor B el l . He would not get any more with those four fingers
off and the thumb normal. I gave the man 90 per cent of the hand.
Doctor H o u r ig a n . That hand is the same as the hand Joe Burke
has. Joe has not lost 90 per cent of his hand.
Doctor B el l . He has accommodated himself to his conformity.
Then, of course, he is a skilled workman. He is under the class
of skilled workman.
Mr. K nerr . Are you allowed to take that into consideration, o r
must you confine your decision to the atomic loss?
104
SIXTEENTH ANNUAL MEETING OF I. A. I. A. B. 0 .
Doctor B e l l . We can not take the man’s occupation into con
sideration.
Mr. K
loss?
ne rr .
So you confine your decision strictly to atomical
Doctor B el l . It is given to the medical examiner to decide.
Doctor H a l e y . I want to disagree with the statement made by
Doctor Hourigan that Doctor Burke has the same kind of a hand.
Doctor Burke has lost the index and little finger. I think the pri
mary thing to consider is the function of the hand. The law gives
about 190 weeks’ compensation for the digits alone. The hand
extends as far as the elbow. With all digits gone, the primary
function of the hand is destroyed, so that any adjunct functions
that remain in the wrist or forearm, although remaining, are useless
to the man. For that reason logs of the digits or loss of the use
of the digits constitutes an entire loss of the use of the hand; while
on the other hand, I feel that very frequently too high schedules
are given in the loss of the use of the adjuncts to the primary
function of the hand, to wit: Restrictions in mobility of the wrist
or fprearm, which, in my opinion are merely adjuncts to allow the
hand to function in different positions.
Doctor B el l . I s there anything more about this hand case?
Would anybody like to ask a question?
Mr. S h a r p e . I would like to ask the doctor if amputation of about
half of the terminal phalange is treated the same as the whole
phalange.
Docjtor B e l l . The half of the terminal phalange of any finger is
merely 45.
Mr. S h a r p e . How do you estimate whether it is half or three*
quarters ?
Doctor B e l l . We take comparative X rays. I f it is the index
finger, we take X rays of both fingers and then measure the bone
loss.
Mr. S h a r p e . Do y o u think that is fair ?
Doctor B e l l . Yes; the courts have interpreted it that way. Now
if this individual had lost one-half of the terminal phalange of any
finger, then it is up to the examiner who sees him to determine how
much percentage he has lost. I give a man with half of the distal
phalange missing 50 per cent of the finger.
Mr. B a jle r . Does your act allow a scheduled amount for the distal
phalange itself?
Doctor B e l l . No ; it does not. It ju s t says that the whole finger
shall be 46 weeks.
Mr. B a k e r . Some acts provide that ju s t the terminal phalange is
a certain disability.
Mr. K i n g s t o n . You give for half of the distal phalange half of
the whole finger?
Doctor B e l l . Taking the index again, if he has his entire distal
phalange and one-half of the middle phalange, I give him an entire
finger. This boy has an entire finger. He could still have part of
MEDICAL SESSION— CLINIC
105
his middle phalange present. I would give him an entire finger.
That is, the index.
Mr. K i n g s t o n . For the distal phalange you give him half of the
finger—for the distal phalange alone you give half of the finger.
For any more than the distal phalange, you give the whole finger?
Doctor B e l l . No ; if he has half of the middle phalange missing
in addition to the distal phalange. Now, if he only had, say, onethird of the middle phalange lost and two-thirds remaining, I
would give him two-thirds—-75 per cent of the finger, depending
on what the rest of the hand shaped up to. It is purely a question
of personal opinion. One man’s opinion is as good as another?s.
My opinion is not worth any more than the other fellow’s and it
is n<3t worth any less.
Mr. W i l c o x . I f I may just say one word right here. I think the
doctor ought to get out of that. This is not a matter of personal
opinion at all, and the law which says that an amputation just
short of the middle phalange entitles the injured man to the same
amount of compensation as the fellow who has his finger taken off
at the proximal joint, is just trying to uphold a schedule that will
not stand.
Now understand, this is not personal, Doctor, because I believe
these conferences ought to be the place where we ask no quarter.
We ask for none and we give none and it is all friendly, and that
is the way it is with me, but I condemn the schedule that tries to
tell the man who has lost his finger at the proximal joint that he
gets no more compensation than this other fellow who has them
taken off at the middle phalange.. I want to make myself clear that
I stand against that sort of thing.
The C h a i r m a n . Of course, the previous speaker understands that
is the law. The law says that the loss of the first phalange of the
finger constitutes the loss of the finger.
Mr. W i l c o x . I am condemning the law.
The C h a i r m a n . I just wanted the members to understand it is not
the doctor you are criticizing.
[Examination of another claimant.]
Doctor B e l l . This case is another Bethlehem Steel Co. case, with
which we have had splendid cooperation as always. This boy
suffered a fractured skull. He suffered a fractured pelvis, and in
addition he fractured a forearm. Following his injury he also de
veloped a neurosis. He is another youngster, as you can see, and with
the aid of the bureau of rehabilitation we also accomplished some
thing in this case.
This boy was also sent to the Seneca School and he has been made
a useful member of society. This case has not been scheduled, and
it probably will not be scheduled for some time. He is just in the
formative stage now. He has not been back to work long. They
have accomplished a great deal with him so far, and I am sure that
John has gotten rid of those mental ideas that he developed imme
diately following his injury, and will continue along the same vein
that he is now.
94023°—30------8
106
SIXTEENTH ANNUAL MEETING OF I. A. I. A. B. 0 .
John, like so many of our unskilled workmen, is a foreigner;
and when foreigners get a serious injury they oftentimes are not
able to rise above it. That was the situation here. You have to
treat these neurotic cases with kid gloves. You can not be rough
with them. You must baby them along, in other words, until you
get them in the frame of mind that something can be done for them.
Fortunately they were able to do something with John right away.
He was also sent to the Seneca Vocational School, and has become a
toolmaker. How much do you make, John?
Mr. M e d ic k i . $36 and $40.
Doctor B e l l . And how much were you making before you were
hurt?
M r. M e d ic k i . $27.
Doctor B e l l . Y ou see he is making more money now than he d id
before he was injured. These two cases are interesting, this case
and the former case, because of the fact that they were both neurosis
cases that were rehabilitated.
Mr. K in g s t o n . Y ou are not giving him any compensation?
Dr. B e l l . He will not draw any compensation at all. We are
keeping his case open because of the fact that he did have a frac
tured skull. The last time I saw him he was still complaining of
some headaches and dizziness, but not to any great extent; and he
still had some pain upon performing squatting motions.
Mr. S te w a r t . I see he is lame. Do you not recognize that?
Doctor B e l l . That is the result of the fractured pelvis. He did not
sustain any injury to either lower extremity, and this attitude—the
lameness—that he has developed is merely a defense against pain.
He still has defects, I might say, in his forearm, but, as I said once
before, we can not schedule his case. I f all of his defects to-day were
referable to his forearm we could give him a schedule and get rid
of it, but as long as he complains subjectively and presents objective
signs of disability referable to the pelvis and head, we can not
schedule the case.
Mr. S te w a r t . Doctor, do you think a good way to prevent “ lump
sum ” neurosis is to abolish the lump sum ?
Doctor B e l l . I will have to agree with you that it is remarkable
the number of cases that do improve or entirely recover following
lump-sum settlements, but if we can not determine whether a man is
trying to fool us, it is our policy in the department to give the
claimant the benefit of the doubt.
Mr. W ilco x . Y ou don’t have a lot of trouble in determining when
a man has neurosis?
Doctor B e l l . I can recall distinctly one case. This man was dis
covered a number of years after he was injured working for the
Bethlehem Steel Co. at $1.10 an hour. This man had been declared
a total permanent disability because of his neurosis following his
injury.
Mr. W il c o x . He might have had it at the time of the settlement.
Doctor B e l l . That is the charitable view. He did have it, but
when a man is discovered like that, I have my doubts as to whether
he d id have a neurosis at a n y tim e.
MEDICAL SESSION---- CLINIC
107
Mr. W il c o x . Y ou are not of the school that believes that an intent
to get a lump sum is the reason for neurosis ?
Doctor B e ll . Oh, no.
Mr. W il c o x . Then abolishing lump sums would not have any effect
on the people who have neurosis.
Mr. S t e w a r t . Oh, y e s ; it does.
Doctor B e l l . Well, if you could see this claimant whom I speak
of in this particular case, I think there would be no doubt that
you would all say that—in the vernacular—the man was “ goofy.”
Mr. W il c o x . He put it over on the board and made you believe
that he had neurosis when he did not have it?
Doctor B e l l . He was examined by, I recall, four of the cleverest
mental specialists in Buffalo. That is one of the things that we
have the advantage of. I f there is any examination that we medical
examiners desire, the carrier and the employer are always glad to
furnish specialists of any type, in order to give us some idea as to
whether our opinion is sustained or whether it is not sustained. We
can have as many doctors as we desire to look at a man.
Mr. W il c o x . I was concerned only in not having the impres
sion made here that neurosis is not a serious illness, and that want
of a lump sum has anything to do with neurosis.
Doctor B e l l . N o , no ; it is merely— now, for instance, I will give
you an example of where a lump sum in a neurosis case would be of
some avail. You take, for instance, a man who has developed neu
rosis following a fractured leg, as a result of which he finds him
self unable to get around except with an artificial leg, such as a
cane or a crutch. His mentality has not risen above his injury, and
as a result he has all kinds of mental symptoms. He is depressed.
He cries very easily, and he is excessively nervous.
He cooperates as well as he is able, or as much as his mentality
will permit, but he does not feel himself able to work, and the man
is worth very little out in the open labor market. What employer
would take a man carrying a crutch, for instance, or a cane ? What
employer would take him? I f his old employer would not take
him—the man who employed him at the time he was hurt—then you
can not expect any other employer to take him.
In that particular case, we might advise a lump-sum settlement,
so as to make the man a useful member of society. We would work
in conjunction with the bureau of rehabilitation, and we would get
their ideas, and they would get the man’s ideas by questioning him.
He might say, “I would like to run a little store somewhere, where
I can do something that will bring me in an earning capacity, and
the work will not be arduous.” In that case, if the man is agree
able to that, then the bureau of rehabilitation finds some location
near where he wants to be located, and they take it up with the
employer, and say, “ I think a $2,500 settlement in the case would
be a reasonable sum to get this man started, and I would so advise.”
Then I would go before the referee, and the referee ordinarily would
permit the settlement.
Mr. C u r tis . I just want to differ with my friend Stewart. This
is the first time he and I are going to lock horns on the question of
108
SIX T E E N T H A N N U A L M EETIN G OF L A, I. A. B. 0 .
lump sum. The doctor cites one case, and then we say, “ Why do
we not abolish lump sums?” You can cite thousands ox cases that
have been settled by lump sums, where the men never could go
back to their former work, but lump sums are made rather than
to continue the case at the expense of the administration.
In New York City or New York State, it would be physically
impossible, even if they had five times as many commissioners and
boards as they have, to take care of those cases without lump sums.
I have attended a number of these conferences, and it seems that
there is always some one to advocate the abolishment of the lump
sum settlement, and the lump-sum settlement has worked very
successfully in the State of New York. Of course there are isolated
cases, but we must put some blame onto the shoulders of our medical
department, or the medical science, if they can not tell when a man
is a malingerer.
That is where the whole point comes in, and when it comes to the
question of medical evidence, you can get them on both sides, and
when the commissioner or the referee has heard all of the evidence
he almost has neurosis himself listening to the doctors. That is the
condition that really exists, so that when physicians do not know
whether the man is truthful or not, there is another system, and
this system is to try to relieve the man’s mind if possible.
However, it does not in a great number of cases, because any
member of a board knows that the men are constantly coming back
to have their cases reopened, and that is why the lump sum is a
sort of a preventive, or an aid to get the man’s mind off his injury
and get him back to some kind of work; and that is the only way you
can do it.
Mr. S t e w a r t . I just want this for the record. In the first place,
do not confuse malingering with a “ lump-sum ” neurosis. Second,
we thought we were getting away from the ambulance chasers when
we passed the compensation law. The lump sum gives us the lump
sum chaser instead of the old ambulance chaser.
I want to say to Mr. Curtis that he does not agree with the New
York Department of Labor. They have said time and time again
that the lump sum was full of dynamite; that the tendency was to use
it less and less; that they very much doubted the efficacy of the
lump sum.
I believe that lump-sum neurosis is caused by lawyers and doctors
more often than it is caused by the person who is injured. I want
to say that the compensation law was meant, partially, at least, to
take the place of the loss of earning power; that it was intended to be
a weekly or monthly sum for the person to live on. It was never in
tended to start men who did not know a hen from a rooster into
raising chickens. It was not intended to start grocery stores next
door to three or four other grocery stores. It is an absolute perver
sion of the whole idea of the compensation law.
I know Mr. Wilcox can tell of cases, and I know that Mr. Little,
of the rehabilitation bureau, can tell about a lot of things they do.
The lump-sum settlement, however, is a violation of thQ spirit of the
law of compensation; and Patton or Hatch can tell you that you have
developed a bunch of lump-sum chasers, and so can the men of any
other State who see the “ wheels go round.”
MEDICAL SESSION---- CLINIO
109
The C h a ir m a n . We have on the program to-night the subject of
lump-sum settlements, which Doctor Hatch, a member of the Indus
trial Board of the State of New York, is going to discuss, and I think
we had better leave this until to-night. I see that we are going to
have a very interesting session on that subject. Let us permit Doctor
Bell to proceed now and reserve the discussion for to-night. He
has a long list of cases, and he has examined only seven or eight.
[Examination of another claimant.]
Doctor B e l l . This claimant suffered a compound comminuted
fracture of the femur on January 8, 1928. He was unable to get
around at the time of the last examination without the aid of a cane.
He walked with a marked limp favoring his right leg.
I might say that in all of these cases we strip the claimant and
get a view of both legs, the same as we do of both arms.
The examination here revealed an enormous callous at the junction
of the lower quarter with the upper three-quarters of the right femur.
The fracture was well united, with considerable anterior and exterior
growing, which means that the leg at the femur is bent upward.
The motion at the left is normal as regards flexion and adduction,
but he has no external and internal rotation. His knee is ankylosed
in the position of extension. He is unable to flex his knee at all.
Mr. K in g s t o n . What about the hip movement?
Doctor B e l l . The hip movement is okeh in flexion and adduction,
but internal rotation—that is this movement—and internal rotation—
that is inside—he is unable to move at all.
Mr. W i l c o x . And there is some shortening?
Doctor B e l l . The ankle presents a 75 to 80 per cent loss of lateral
motion. His inflection and extension at the ankle are normal. There
is a 2.5-inch shortening of the entire leg as compared with the oppo
site side, so it is necessary, if the patient is to walk with any degree
of comfort, for him to wear a raised shoe.
The left, or injured foot, showed a marked deformity at the proxi
mal joint of the great toe. Now this claimant was given 85 per cent
of the leg. You see the ankylosis of the knee joint automatically
makes it a percentage. Any involvement of the knee joint, means
leg; anything below the knee joint means foot, except in cases of
actual amputation.
Mr. K n e r r . That is written in your law?
Doctor B e l l . Yes; where there is actual amputation of the leg
below the knee and above the ankle we can give the claimant a per
centage of the leg also, but if it is simply restrictions without ampu
tation, then the law says that it shall be foot up to the knee joint
but not including it.
^In this case, of course, we never give a schedule unless it is con
sidered permanent and the claimant must adjust himself to his
present disability.
Mr. K n e r r . Has that man gone back to work ?
Doctor B e l l . Yes.
Mr. K n e r r . At the same job?
Doctor B e l l . What are you doing now, John?
110
SIXTEENTH ANNUAL MEETING OF I. A. I. A. B. 0 .
He tells me he is doing nothing at the present time. Of course,
he is an unskilled laborer. He must go out into the open market ana
seek work, and it is going to be difficult for him. With the labor
situation as it is to-day, he is going to have a hard time finding
a job.
Mr. K in g sto n . H ow much shortening was there?
Doctor B e l l . Two and one-half inches.
[Examination of another claimant.]
Doctor B el l . The next case I have to show you is a case o f a
double schedule. In other words, the claimant has been given onethird of the arm and one-third of the leg.
Mr. K n e rr . Do you take the bodily function into consideration?
Doctor B e l l . When the referee makes an award in a case like
this he gives him one-third of the arm, which is one-third of 312
weeks, and one-third of the leg, which is one-third of 288 weeks. He
receives his compensation every two weeks until it is entirely paid
up, or if he has a good reason for wanting a lump-sum settlement,
he is given a lump-sum settlement. For instance, a man may have a
mortgage on his home which he wants to pay off, and the bureau of
rehabilitation investigates, and if they find that it is reasonable, it
is granted; but in all other cases the compensation is paid to the
claimant every two weeks.
This claimant was injured on March 5, 1928, having suffered an
oblique fracture of the head of the left radius and a compound frac
ture of the great trochanter of the left femur. In other words, a
fracture of the hip.
This is another instance of that same condition which you saw in
the earlier cases which I presented, where the claimant has a dis
ability in the shoulder resulting from disuse.
Mr. K in g s to n . Really all the difficulty he has in the arm is the
trouble at the shoulder?
Dr. B el l . He has some defect at the forearms as the result of the
fracture. These are not as pronounced as the defects in the shoulder.
[Demonstration.] It is rather difficult for you folks in the back
of the room to see these cases demonstrated, as we have not a high
enough platform, but I will read his defects to you: “ Examination
of the left leg revealed a quarter of an inch shortening of the left
leg as compared with the right leg. Pain alleged over the left hip
area. Claimant walks with a limp and motion of the left hip
is limited, by pain, 20 per cent in all directions.
“ The knee joint is okeh as far as motion is concerned and there
are no extension defects. However, there is a full 40 per cent flexion
defect. He has a fairly good muscle tone of the left lower extremity
and there is no involvement of the ankle joint or any of the toes, no
soft tissue swelling. There are no unhealed areas and there is
nothing of an acute nature.” I f there was anything acute, of course,
we would not settle the case.
“ Motion at the elbow is restricted 15 per cent in full flexion, with
5 per cent extension defect. There is lateral elevation to the shoul
der level, and forward elevation just slightly above the shoulder
level. There is no loss of supernation or pronation. All fingers and
MEDICAL SESSION— CLINIO
111
thumbs are okeh as to motion and function. There is a small cyst
to be seen over one of the extension tendons, but it is better left alone.
“ The claimant is wearing a shoe which is raised one-half inch,
and in my opinion it is raised entirely too much. One-quarter of
an inch is plenty. I believe claimant should be furnished with new
shoes to take care of this quarter-inch shortening.
“ It is now one and a half years since the injury and in my opinion
the condition which exists to-day is permanent. The claimant was
given 33% per cent of the loss of the use of the left leg, and
33% per cent loss of the use of the left arm.”
[Examination of anpther claimant.]
Now, this case is a highly interesting one. He has not come up
before us yet in our capacity as medical examiners, but it is very
interesting from the standpoint of subjective complaints. This
claimant fell from the top of a crane, 40 feet, into a mass of pig
iron below, and suffered a complete fracture of the left frontoparie
tal region, with fracture of both the inner and outer tables of the
skull and laceration of the dura or the lining of the inside of the
skull, causing an oozing of the cerebrospinal fluid. In addition to
that he suffered a complete fracture of the sixth cervical vertebra.
That is the reason why you see him wearing this reinforced steel
brace about his neck.
The interesting part of the condition to me is the fact that he has
no head symptoms at this time. He was hurt the 21st of July, this
year [1929]. That is, roughly, about 10 weeks ago. It is interesting to
note further in this history that three days following his initial injury
he developed terrific hemorrhage from the nose, and following that
has had absolutely no head complaints. Now this may sound para
doxical to you folks, but we have more trouble from head injuries
that are of a slight nature than we do from severe head injuries.
I have seen men with fractures of the skull that you could almost
put your fist in, and they did not make any complaint at all. It is
remarkable. I confess that I am unable to understand it, except that
I have reasoned it out that a great many of these men are skilled
workmen, and after they do have an initial period of disability,
their job is waiting for them. They can go back and make the big
money they did before, but the ordinary, unskilled laborer who gets
a slight head injury, where there is hardly any evidence of lacera
tion, will complain of headache, he will complain of dizziness, and
say he is unable to work.
In these types of head cases where they have slight injuries, we
always make a complete physical examination, and a man is stripped
entirely. His blood pressure and his pulse are taken, and a com
plete neurological examination is made to determine it there is any
organic defect and this is always done at the first examination. If
the man is an unskilled laborer and he complains of headaches and
dizziness^ we ordinarily see him about three months following his
initial injury (sometimes it is two months) and if he still complains
of headaches and dizziness and we find nothing objective in nature,
then it is my policy, at least, to give him the benefit of the doubt
and advise light work. I give him what I term a 50 per cent
disability, and then I advise another examination in 30 to 60 days,
so that I can recheck the case.
112
SIXTEENTH ANNUAL MEETING OF I. A. I. A. B. 0 .
I f a man with a severe injury in which there is depression and
fracture, or in which there is a fracture of both tables of the skull,
does not continue to have symptoms, then I confess I do not see why
a man with a slight injury and with no fracture and a slight lacera
tion, should continue to complain.
Mr. K
nerr .
Do the employers respond in cases of that kind?
Doctor B e l l . Yes; the employers usually do respond. Now that
is another factor which I think has a tendency to keep the subjec
tive complaint alive. Oftentimes these unskilled laborers follow
ing a head injurv, or following any type of injury, lose their job.
They have no job to go back to. They must go out and look for
another job. Well, they come up before the board. They complain
of headaches and dizziness, and it is questionable whether the con
dition is disability or not. I always give them the benefit of the
doubt.
In my first examination I give them the 50 per cent disability,
and the next time, we will say, for instance, that it is four or five
months later, if the claimant still complains of the same symptoms
with the same degree of severity, without any improvement, then
I must judge for myself whether the claimant is magnifying his
complaints or whether he really has complaints.
This is a splendid boy. We do not have very many of this type
of claim, and I will bet he would go back to work to-morrow if
somebody would say that he was able to go to work. He is just
that type. He cooperates wonderfully and his employers have and
are doing all they can for him.
Doctor Handel, the surgeon who handled this case, is here, and
he kindly consented to bring this boy over and allow me to present
him. I think it is a prize case principally because of the lack of
head complaint at this time after such a severe injury.
Mr. K in g s t o n . What about the cervical*fracture?
Doctor B e l l . That, of course, is serious. Any fracture to the
cervical vertebra is serious, because the vertebrae are so fragile, but
recent X rays, Doctor Handel assures me, show that the condition
is coming along nicely. The fracture is in good position and new
bone is forming, so that eventually he will undoubtedly make a
recovery. He probably will have some stiffness for some time, per
haps always. It is hard to tell. We can not figure out what is
going to happen in this particular case, but we know he has no
neurological signs, indicating any pressure on his spinal cord.
Doctor H a n d e l. I might say that this man now takes his harness
off at night and sleeps with it off. He has never complained of any
ain in the morning since then. This has been about two and onealf months now. He drives his automobile against my orders,
and I have a hard job holding him down.
Mr. K n e r r . H o w long was he in the cast ?
Doctor H a n d e l. When we first got him to the hospital we put him
in a temporary extension until we were able to turn him around
and put him in a cast, and he was in that cast for a period of about
eight weeks. Then we put him in a jacket, and he was in that for
about six weeks. Then we took him out of that and put him in this
harness.
E
MEDICAL SESSION— CLINIO
113
[Examination of another claimant.]
Doctor B e l l . My next case is an occupational neuritis. It is in
teresting from the standpoint that it is not covered in our law.
This claimant is an ironworker. He has been an ironworker since
he was a boy, and he has complained recently of inability to per
form his regular work as an ironworker.
The history is very interesting. In J a n u a ry , 1929, he went to
work for the Houdaille Engineering Co., handling an air gun and
also acting as a calker, which required him to use a small hammer,
continuously hammering. In July, or, roughly, six months following
his employment by the JSoudaille Engineering Co., he complained
of weakness in the hand'and, in fact, he complained before that, but
it was in July that he had to stop work because he was unable to do
this work.
The history is that he has been unable to work since July at his
former trade. He has not sought other work, and he has been
wondering whether he is entitled to compensation, and he put in a
claim.
The examination of his hand revealed atrophy of the thenar, the
muscular part of the thumb, and the hypothenar, and slight atrophy
over the dorsal surface of the hand. The grip of the hand is con
siderably lessened because of atrophy, and there are some sensory
disturbances.
The history is typical of an occupational condition. It does not
indicate any specific injury at any time. He did not, on any par
ticular day, have something specific happen to him. Therefore,
under our law, it is not an accident and the condition becomes occu
pational. It is a serious loss to the man. He will undoubtedly have
to readjust himself to some other type of work, where he will not
have to use the hammer or use the air gun, because he is now unable
to do that because of weakness and loss of grasping power.
Mr. K in g sto n . I s it not one of your occupational diseases?
Doctor B e l l . No.
Mr. H a t c h . There is a very simple way to cover that kind of
injury. The way has been pointed out by the Massachusetts law.
I f our law, instead of reading “Accidental injury arising out of and
in the course of employment,” read “ Injury arising out of and
in the course of employment,” it would be precisely as the law is in
Massachusetts. A case such as we have just seen would be compen
sated in the State of Massachusetts, because they eliminate that word
“ accidental ” which means some single event or unexpected episode.
[Examination of another claimant.]
Doctor B e l l . This is another percentage loss of hand. This claim
ant suffered a fracture of the radius of the right arm on December
21, 1928. This claimant shows a marked deformity of the promi
nence of the styloid of the elbow. [Demonstration.] You see the
forearm is very much broader through here than it is through the
normal side, due to the prominency of the ulnar. There is 10 per
cent loss of supernation. He is unable to put his forearm over as
far as he should and there is 20 per cent loss of pronation. This
is, of course, best demonstrated with the arm against the shoulder.
That is pronation in that position.
114
SIXTEENTH ANNUAL MEETING OF I. A. I. A. B. O.
There is marked bony enlargement at the wrist. There is no loss
of dorsal flexion. The arm flex is limited one-third and the lateral
motion at the wrist is limited one-third. There is no interference
with the function of the fingers or thumb. The little finger of the
right hand is missing as a result of a previous injury not connected
with this injury.
This case is interesting because of the fact that the claimant pre
viously fractured this same forearm in the same area. It would take
a Houdini to determine how much of that arm defect is the result
of his former injury and how much of it is the result of this injury.
We have no record of his former injury. All we know is that he
fractured it. He, himself, tells us that ne fractured it.
Mr. K n e rr . H ow do you adjudicate that ?
Doctor B e l l . My method here w as to give him a percentage loss
as the actual findings exist to-day, and I left it to the judge to de
termine how much percentage loss the claimant should be given.
Mr. K in g s t o n . Was th e former injury a compensable one?
Doctor B e l l . No; it happened a long time ago. It was unrelated
to industry. As I said in my report, it is absolutely impossible to
determine just how much of the defects which now exist resulted
from this injury and how much resulted from the former injury,
or how big a part both injuries play in the defects seen. The
only thing I can do is to give a scnedule as it exists to-day. This
schedule, in my opinion, is 30 per cent loss of the use of his right
hand. Now, I know, following the resumption of the hearing at the
table after I examined it, that the claimant was given 25 per cent
loss of the use of his hand. It could not be demonstrated, you see,
that he had lost anything as a result of his former injury. There
was no medical report to show that he had made complete recovery.
All we had was the claimant’s story that he had fractured his arm
before and that he had made a full and complete recovery.
I f we had accepted his statement as a fact he would have been
given 30 per cent loss of the use of the right hand, but in view of
the fact that he had had a previous fracture of the forearm, and
they usually do leave some defect, 5 per cent was deducted for his
former injury, and I think he was given the benefit of the doubt
when he was given 25 per cent as a result of this injury.
[Examination of another claimant.]
Doctor B e l l . In this case the original injury occurred on August
1, 1928. He suffered an abrasion, swelling, and ecchymosis to the
bone, with open wound, and periostitis. That is the original report
filed by the attending physician. Now his complaint to-day, or at
the time of examination, is pains of some kind through the hand,
occasionally radiating to the forearm, and especially noted when
performing hard work which causes any jarring of the hand, and
there is some tendency to swell. There has been no change in his
condition since the last examination, and he has been examined
repeatedly.
The bluish discoloration has slightly disappeared but there is still
some remaining. There is slight oedema of the dorsum of the hand.
The measurement is 8% inches posterior surface. The defect as
MEDICAL SESSION— CLINIC
115
noted makes it impossible for claimant to close his fingers, and loss
of grasping power is marked for small objects.
You gentlemen who are up here in front can see that there is
considerable swelling over this area. It is a question of diagnosis
here. Sometimes a malignancy will produce a swelling like this,
but an X ray was taken of it and it showed periostitis with rarification of the bones, and the oedema is quite marked and is permanent
in nature because of the length of time that it has existed,
Mr. K nerr . Will it get worse ?
Doctor B e l l . There may be a possibility upon continued grasping
and the type of work that the swelling will take place. The claim
ant may have to lay off a day or two until the swelling subsides,
but we have not that type of history. All we have is the continuous
enlargement that we see here, which does not seem to get any worse
nor does it seem to improve, and we figure that the condition is
permanent.
[Demonstration.] You can see that his grasping power of the
small objects is considerably lost. He has a little bit of grasp in that.
Mr. K n err . Has he been rated?
Doctor B e l l . Yes; he was given 25 per cent loss of the use of the
left hand. You see he has not lost anything by amputation and his
wrist is okeh. It is merely the soft tissue swelling with inability to
make a fist, a complete fist. This was in August, 1928.
The swelling is chronic in nature. We have observed this swell
ing over a period of months and the swelling has been station
ary. We have not seen any improvement in the condition and we do
not get any history from the claimant that there is any increased
swelling.
Mr. K in g s t o n . There were no bones broken?
Doctor B e l l . There were no fractures of any kind, merely an
abrasion with periostitis following. The claimant tells me he is do
ing the same type of work. He probably is not able to do all types
of heavy construction work that he had done, but he is able to do
considerable. There is no loss of earning power, as he is earning the
same money.
[Examination of another claimant.]
Doctor B eli *. This claimant’s disability is due entirely to infec
tion, another case in which we have no specific losses by amputa
tion. His injury was on August 24, 1928, over a year ago. He
was given a schedule in September, 1929. You will note the marked
loss of grasping power in this hand. [Demonstration.] He has
very poor grasping power even for large objects.
This man is a muscle worker, pure and simple. He can not be
classed as a brain worker. All he can do is go into the open
market and get a job as an ordinary laborer, and the loss of his
hand is quite a thing to him. I gave this man 70 per cent loss of the
use of the left hand based on this marked interference with the in
flection and loss of partial extension of all fingers and thumb.
[Examination of another claimant.]
This is a foot case. It is profoundly interesting to note that
following this man’s injury he developed tuberculosis in the foot;
and he was in the Perrysburg Hospital for a period of 19 months.
116
SIXTEENTH ANNUAL MEETING OP I. A. I. A. B. 0 .
He now presents a healed lesion, but has defects referable to his
ankle joint and his toes. Ordinarily in tuberculosis cases we do not
like to close them, but we do close tnem with the understanding that
the case may be readily reopened at any time, and we do not give
the man a schedule until a great many months have elapsed follow
ing his entire technical healing, and the X ray must show complete
lack of osteomyelitis or any other infection of any kind.
He was discharged from the tuberculosis hospital in May, 1929,
as clinically cured. The examination of his leg reveals consider
able atrophy of the entire left lower leg with a discoloration and
thickened area. There is very little lateral motion at the ankle
joint. There is normal plantar flexion and about 20 per cent loss
of full dorsal flexion. There are no unhealed areas or sinus to-day,
and this foot has been healed for about a year. There are to be seen
several well-healed scars on the lower third of the left leg unrelated
to the injury.
My conclusion is, in view of the time that has elapsed and in
view of the clinical picture to-day, that this condition is perma
nent and equivalent to the loss of the use of 25 and 40 per cent of
the left foot. The claimant actually was given 38 per cent loss of
the left foot. He has a pretty useful foot to-day. He has not
returned to work as yet. He is apparently satisfied to rest awhile.
Mr. K in g s to n . The tuberculous condition was not a factor in
your award at all?
Doctor B e l l . Yes; it was a great factor. The tuberculosis was a
result of the injury, indirectly.
Mr. K i n g s t o n . I s he cured of that?
Doctor B e l l . What I meant was that following his injury when
he developed tuberculosis, his tuberculosis is a factor in it.
Mr. K in g sto n . That had to do with his temporary total; but is
tuberculosis not a factor in his permanent partial disability ?
Doctor B e l l . N o ; as long as he is clinically cured of tuberculosis,
tuberculosis is out of the picture. It is possible at this time, or at
any time in the future, if he should develop tuberculosis, to easily
reopen his case. He can go back on compensation.
Mr. K in g s to n . Then the compensation in this case is for 20 per
cent loss of dorsal flexion, and in the ankle I understand he has
complete plantar flexion or 38 per cent of the foot.
Doctor B e l l . I distinctly remember stating that he has no lateral
motion at all. There are three big motions in the foot—the exten
sion, flex, and lateral motion. The most important motion of the
foot, however, is the dorsal flex, that is, extension; and the next im
portant is the lateral motion.
[Examination of another claimant.]
This is another unusual leg case. This claimant had a long
period of disability following his injury. He originally suffered
a fracture of the left patella. That was his original injury, but
following the original injury he sustained a marked swelling and
oedema of the entire leg with synovitis and it prolonged his disabil
ity tremendously. Instead of having a normal period of disability
(roughly, 8 to 10 weeks) such as he should have had following
a fracture, his disability was continued for months and months. In
MEDICAL SESSION---- CLINIO
117
fact, his injury occurred December 15, 1927, which is nearly two
years ago, and it is only within the last month that this claimant
has been certified as being able to return to work.
So his defects to-day are measured increase in the lower third
of the femur. There is three-quarters of an inch increase in the
size of the left calf to-day as compared with the right, with onehalf inch increase in the size of the left lower leg as compared with
the right, with no oedema existing to-day, and none of the bony
induration or unhealed looking tissue which was noted the last time
this claimant was seen by me.
The claimant has been advised to wear the support continuously
in view of the past history of the swelling, and because of the state
ment made that swelling occurs to some extent in the leg. The sup
port the claimant now has is elastic, taking in the lower leg and
posterior dorsal half of the foot, and it is doing him a great deal
of good. The claimant is now able to have adjustment of his case.
As long as he wears the support he is able to get around. I would
advise, therefore, that the case now be closed out on a schedule,
such as I have previously given, namely, 50 per cent loss of the use
of his left leg, which is permanent, the restriction being the same
as noted in my report of December, 1928.
The motion at the hip in this particular case was normal. There
seemed to be some hyperextension at the knee with .50 per cent
flex defect. Motions at the ankle are somewhat restricted by sec
ondary fibrous joint changes, being most marked in lateral mo
tion at the ankle.
His greatest handicap, of course, is the knee, and he is unable
to flex it one-half what he should normally do, and with the defect
in hyperextension which is not marked.
[Examination of another claimant.]
I gave this man 50 per cent of the leg. You see, the knee was
involved there, so I naturally gave him a percentage of the leg rather
than the foot.
Doctor H o u r ig a n . That is pretty nearly all absorbed?
Doctor B e l l . N o , he gets an excess healing period.
Now, this is a case of where one of the gentlemen in the front
row spoke about the healing period. This man was given 72 weeks
healing period. In other words, in addition to his 40 weeks normal
healing period allowed for the leg, 72 weeks additional healing period
was allowed because of total disability; that is, there were 112 weeks
total disability in this case. He is entitled, under the law, to any
excess over 40 weeks, which would be 72 weeks in this case in addi
tion to his schedule. He gets 50 per cent of a leg plus 72 per cent
of this excess healing period.
[Examination of another patient.]
My next case is a back injury. It seems lately that I am getting
so many of these backs where there is a preexisting osteoarthritis
of the spine. In other words, there is new bone production about
all of the vertebrae. I f not in all of them, at least the lumbar and
dorsal region, especially, and these claimants come in with a history
of falling on the back, or falling on the spine, in some way or other
so as to produce an aggravation of the preexisting condition.
118
SIXTEENTH ANNUAL MEETING OF I. A. I. A. B. 0 .
This man was in an explosion. He worked at a gasoline sta
tion, and he was on the ground floor of the gasoline station when
an explosion took place, and the next thing he knew he was in the
cellar of this gasoline station. Fire had taken place, and in ad
dition to that mere were two or three timbers over his head and he
tells me that his hair was on fire at the time.
The important thing here is the claimant’s preexisting condition.
He had X rays taken immediately, which showed without the
shadow of a doubt that he did have a preexisting back condition,
and X rays taken at repeated intervals have shown that there has
been an increase in the bony production of this man’s vertebrae,
which bore out my theory of aggravation of symptoms.
This man has been declared by me recently a total permanent
disability. In other words, I do not think he is fit for industry
of any type. [Demonstration.] You will note the peculiar way in
which the claimant stands because of osteoarthritis. They all do
that as a defense against pain. They adopt an attitude of stooping
forward. This is the easiest way for them to be relieved of pain.
They have continual pain at all times. The normal cushion or shock
absorber between the individual vertebrae or segments has been
coming down with any force
shooting way up to the head,
in the cartilaginous disks that
are between the vertebrae. In addition to that he presents a fixa
tion of ribs; the cartilaginous area between the rib fixation is ab
sent. It has also been destroyed by this process, and the bridging
between the vertebrae is marked. This man has what we call the
Marie Strumpell type of spine and the condition is progressive. It
is painful, and the outlook is bad. The prognosis is bad. The only
relief we can give the claimant is to furnish him with a reenforced
steel brace covering his entire dorsal region and lumbar spine, which
admits of rigidity.
He is unable to flex his back in any manner which would be con
sidered useful from the standpoint of industry. There is not any
employer who would take him and you must demonstrate in these
types of cases a difference between a practical earning capacity and
a theoretical earning capacity. He is 58 years old.
You may say, “ Well, can’t he sign papers? Can’t he address
envelopes? Can’t he sit down at a bench and sort out bolts and
nuts? ” Yes, he could do any of those things, if an employer could
be found who would give him that type of work. His own employer
where he was hurt will not give him work. This man is a total loss
as far as earning capacity goes from the standpoint of the employer,
because he is useless to him.
A sympathetic employer might be found to give this man work,
and if such an employer is found I will change my recommendation,
instead of making it total permanent disability, until he loses his
job or until he finds himself unable to work.
Mr. K in g s to n . Y ou said awhile ago that you are not allowed to
consider the question of employment in considering the question of
permanent partial disability or permanent total disability.
Doctor B e l l . The question of employment?
Mr. K in g s t o n . Special employment.
MEDICAL SESSION— CLINIC
119
Doctor B el l . That is in the schedules. This is not a specific loss.
This is a back injury. Of course, we are often asked on the stand,
“ Don’t you think there is something this man can do ? ” And I
invariably answer, “ What is it you have in mind ? ” or “ What do you
think he can do ? ” And they will probably ask me if he can not
sign some papers, or words to that effect. It does not mean any
thing. In other words, he has a theoretical earning capacity but
not a practical earning capacity. He could not go out and get a job
in the open market, and that is what we must consider.
Mr. H e a d y . Might I ask if this man’s total permanent disability
is due to some functional defect in mobility of the spine or member
or whether it is due to pain?
Doctor B e l l . It is due to both. He has marked bony pathological
changes in his spine. They existed before the injury, as I said be
fore, but they were aggravated by this injury.
Mr. H ea d y . Might I ask if this man did not have pain, whether
he could perform some type of work ?
Doctor B ell . I f he did not have pain I should think that possibly
he might.
Mr. H ea d y . Is it regarded that pain is a permanent condition?
Doctor B el l . Pain is permanent in this type of case; yes.
M r. M cD o n ald . Y ou d e cla re th is m an a p erm a n en t to ta l. D o e s
he d ra w com p en sa tion f o r th e e x p e cta n cy o f life ?
Doctor B e l l . He draws it as long as he lives. He gets paid every
two weeks at the rate of $25 a week. Every two weeks he receives
a check for $50, and that will continue as long as he lives, or unless
it is brought up that he is not a total permanent disability.
Mr. K in g s to n . Could you venture an opinion as to how long he
would have been able to carry on with that old condition had this
accident not happened?
Doctor B e l l . No; that is purely speculative.
Mr. K n err . W a s not the old condition bothering him?
Doctor B e l l . The old condition was possibly latent. It might
have been growing slowly. He might have, in the natural course of
events, had he not been injured, probably become totally disabled in
a speculative number of months or years by reason of this focal
infection irrespective of the injury, but that is getting in the specu
lative realm, and we have too much speculation as it is.
Doctor H o u rig an . Is it not possible, in giving this man total per
manent, that at his age we are likely to have such condition because
of the age?
Doctor B e l l . I admit there is something to the employer’s side
in these cases. It might seem unfair to the employer that he should
be penalized.
Doctor H o u rig an . Unfair to labor.
Doctor B e l l . Or it might be the other way. It works both ways,
but all we can consider in the case is whether he was able to work, or
whether he was unable to work, and then we make our findings from
that,
120
Doctor
pension.
Doctor
point.
SIXTEENTH ANNUAL MEETING OF I. A. I. A. B. O.
H o u r ig a n .
B ell.
That is an argument in favor of the old-age
Well, I do not know, Doctor; it depends on the view
M r. M u c k l e r . I s th e p r im a r y cause o f th is, fo c a l in fe c t io n ?
Doctor B e l l . Always.
M r. M u c k l e r . Local infection?
Doctor B e l l . We do not know where it is. It might be in the
teeth. It might be in the tonsils or in the kidney. It might be in
every organ in the body. No one knows where the focus of infec
tion comes from. The most commonly accepted theory is that
osteoarthritis is due to focal infection, although some men do not
believe it.
Mr. M u c k l e r . If that focal infection were removed and his verte
brae became stationary, would his pain cease?
Doctor B e l l . N o ; because he already has bony changes which will
not be absorbed.
[Examination of another claimant.]
This is the only lady claimant I have to present to-day. This
is a percentage loss of the hand, illustrating amputation here.
This lady was given 45 per cent loss of the use of the right hand.
Her amputation involves only the second, third, and fourth fingers.
The second finger has been amputated at the distal joint. In other
words, the terminal phalange is missing. The ring finger has been
amputated at the middle joint, and there are two phalanges missing
from the ring finger. The little finger has been amputated at the
distal joint, with one more phalange missing there.
Her thumb, index, and wrist, and the rest of her right upper
extremity is normal. This is merely a question of percentage based
on amputation. Personally I gave this young lady 60 per cent of a
hand, but in the final analysis, due to difference of opinion, she was
given 45 per cent of her hand.
I always figure that in amputation or any serious injury to a
woman, the results are more far-reaching, more serious than they
are in a man. A woman is more sensitive, and will oftentimes
develop neurosis following such an injury as this. Fortunately, we
have not such a condition here. The lady will accommodate herself
in time. She has not as yet accommodated herself to her loss. Dur
ing the last examination she had an emotional upset, but possibly
that was merely a temporary condition. But that is liable to happen
with any of the ladies, and I feel that with this type of injury in a
woman, that one can afford to be a little more liberal if the employer
does not object. He usually does not object if it is not too liberal,
and for that reason I gave this lady more than I would a man for
this particular type of injury.
I have been criticized for this and possibly the criticism is merited,
but I do not think any of the carriers of any of the employers object
if the schedule is not placed too high.
These are all the cases I have to present.
Mr. B e l l . I wish to offer my thanks to my namesake for the lucid
manner in which he has conducted this remarkable display along
the lines with which he is familiar, but in this particular case I
MEDICAL SESSION— CLINIC
121
am more interested from an angle of a case that he very clearly
explained this morning and indulged in humanitarian views.
I refer to the chrome case. That in itself gave me an idea that we
could adopt remedial measures in this particular instance. I as
sume—and I am not socialistic when I give utterance to this opin
ion—there is a contractual relationship between the State and its
citizens: The right of the pursuit of life and happiness under happy
conditions.
I believe those in authority are familiar with the laws that have
been enacted and they are familiar to all of us because when a law
becomes mandatory we all become familiar with it.
I believe it is well within the jurisdiction of the State commission
to exercise supervision over all factories and employers engaged in
employments that are of a character that might be catalogued as
objectionable in nature.
The C h a ir m a n . That is now being done.
Mr. B ell . I assume it is. Well, we are now confronted, as Grover
Cleveland said, not with a theory but with a condition. The doctor
examined a patient and, if my memory is correct, he stated that
these conditions have prevailed for quite a considerable period of
time. I believe that an analysis of a statement of that character
would show that there had been some delinquency on the part of
the State, or, may I be charitable in assuming that this inaction is a
case of the lack of sufficient inspectors to make an investigation of
these conditions? However, the tact remains that this man acquired
this condition because of the condition that existed. He was ex
amined by the doctor and found to be not disabled, and finally
there was a desire on the doctor’s part, because of the humani
tarian views expressed by himself to compromise this case. Am I
correct in making that statement?
The C h a ir m a n . That is correct.
M ?. B e l l . N o w , in this particular case it appears that the insur
ance carrier did what was well within his statutory rights when he
refused to attempt a compromise, for the very simple reason that
there was no disability existing, and there was no loss of wages, and
the medical angle of it had been taken care of, and he claimed he
was under no obligation, and therefore he refused to compromise
or to pay any sum of money, no matter from what angle it could be
advanced. That is the state of affairs that is existing.
I am asking this question in my own mind. Assuming that it had
been a State case, would the State reject the moral right, because of
the contractual relationship between the citizen and the State, and
take an attitude such as that ? I believe the compensation law was
enacted for the express purpose—and I am only quoting the indus
trial commissioner now, who says that the humanitarian point shall
be given full cognizance at stages of the game, if possible—of doing
something definite from an angle that will be conducive to the benefit
of the claimant.
In this particular instance, assuming from a hypothetical angle,
the State had rejected a compromise, it would place itself in a very
obvious and dubious position.
94023°—30-----9
122
SIXTEENTH ANNUAL MEETING OF I. A. I. A. B. 0,
Assuming again, Mr. Commissioner, that, as I contend, this state
of affairs is due to inaction or delinquency on the part of the State,
is it not liable under the damage law ?
The C h a ir m a n . My answer to that question—if you desire an
answer at this time—is no.
Mr. B ell . N o w , Mr. Commissioner, that is all I wish to say upon
that subject. I assume that the commissioner may have sufficient
influence along legislative lines to see that some remedial measure is
adopted, but I am here for the express purpose of taking into con
sideration matters that are entirely personal to the organization
which I have the honor to represent. I believe I am sufficiently
acquainted along compensation lines to tell this audience that most
of the large builders in New York City at the present time are selfinsurers, and because of that very statement I am here to present to
them a view which I think will meet with their deep and thoughtful
consideration.
Consider a building such as the Chrysler Building or the Cheney
Building. They are self-insurers, and at the present time they
have—I assume you all know this—a stipulated sum set aside for
the express and specific purpose of paying compensation when an
accident occurs.
I may tell you beyond the fear of contradiction—I will not say
yer or the builder, but because
economic reasons—they have
employed a safety supervisor or a man possessing mechanical abil
ity, and competent under all conditions to rectify any defect that
might create an accident, and that suggestion is one that I wish
to have this audience give a deep and thoughtful consideration to
when that subject becomes a theme of deliberation.
Now, I am not desirous of creating jobs for any of us. That is not
my hope. My contention is that if there is any lessening of acci
dents, there must be a lessening of expense so far as the compensa
tory angle is concerned, and with that contention expressed, I thank
you for the privilege you have accorded me.
The C h a ir m a n . You all know that the present administration
of the labor department of the State of New York—the industrial
commission and the members of the industrial board—have worked
very earnestly to secure such amendments to the compensation law
as will protect the workman in the State of New York, and they are
always glad to have the cooperation of the various labor unions,
social workers, and others interested in the laborer.
There is no question that the law can be strengthened for the
benefit of these injured workmen in the State of New York. How
ever, how far it can go along those lines will have to remain for
future discussion.
[Meeting adjourned.]
WEDNESDAY, OCTOBER 9— AFTERNOON SESSION
Chairman, R. B. Morley, Secretary Industrial Accident Prevention Associations of Ontario
ACCIDENT PREVENTION
The Chairman. Accident prevention is a subject that is very close
to my heart, and, as I have occasionally said to some of my good
friends in Canada, I have both a job and a hobby in one. Our
workmen’s compensation act contains a clause (No. 114) which
authorizes the industries to set up accident-prevention associations.
That same clause in the act also authorizes the workmen’s compen
sation board to make grants for the maintenance of those organiza
tions; that is to say, they calculate that it is better to prevent
accidents than it is to compensate them, that it is reasonable that the
accident fund of the compensation board should bear the expenses
of accident-prevention work.
I think the nearest you have to that condition is in Ohio. So far
as I understand it, none of your compensation laws in the United
States have a clause similar to the one of which I am speaking, but
two of our Provinces have—Nova Scotia and New Brunswick.
Under that section of the act, in Ontario approximately 99 plants
have set up accident-prevention associations, or at least have com
bined into accident-prevention associations, and under the authority
of the board they are spending approximately $100,000 a year—
slightly over that.
Our statistics—as I understand it, it is practically the same in
many of the jurisdictions under compensation—show an increase in
the number of accidents reported to the compensation board. That
increase lies largely in accidents that involved no money payments
whatsoever and in the medical aid only, so that the matter is not
quite so serious; in fact, I am inclined to agree with some statis
ticians who say that there is no definite proof that accidents are
increasing. Certainly the system of reporting has improved.
I think that I am safe in saying that with us in Ontario a fairly
large number of plants are operating for long periods of time with
out lost-time accidents. Now that is largely a result of the interest
taken by the executive head of the particular industry involved.
He starts something at the top, and it goes on down through. I
think that the average executive has become convinced that acci
dent prevention is both economically sound and sound from the
humanitarian point of view.
And, speaking of compensation, I think that we have, with all
due deference to all of the other jurisdictions here, certainly one
of the most generous laws on this continent, and that, of course,
means anywhere in the world. Our law has not been a burden to
industry for two reasons: One is because we have a State fund and
a competent board administering it and we are doing fairly effective
accident prevention work in our Province.
123
124
SIXTEENTH ANNUAL MEETING OF I. A. I. A. B. 0 .
I think employers more and more are coming to realize the tie-up,
the hook up, between safety and efficiency, and the statement that
I heard made last week at the National Safety Council annual con
gress at Chicago, to the effect that accidents are the result of under
lying inefficiency, is quite correct and is something that should be
taken to every executive whom we have.
Now, to-day we are devoting our time entirely, for the balance
of this afternoon and evening, to the general question of accident
prevention, and in connection with this program I am going to
call first on Mr. Frank E. Redmond, of this city. Mr. Redmond is
director of the Educational Bureau of the Associated Industries of
New York State.
Safety Progress in New York State Through Organized
State-Wide Accident Prevention Campaigns
By Frank E. Redmond, Educational Director Associated Industries of New York
State (Inc.)
Associated Industries, the State organization of manufacturers in
New York, is now fostering its fifth annual state-wide accident pre
vention campaign with the largest and most enthusiastic enrollment
yet of wide-awake firms, working cooperatively and concertedly
toward the elimination of unnecessary waste occasioned by prevent
able accidents. Approximately 1,400 industrial firms, employing
more than 300,000 workers in the manual trades, started September
1 on a 13 weeks’ drive against accidents, with the object of bettering
the excellent records made in past efforts of this kind. I believe
I may state without fear of criticism or contradiction that this
campaign, in point of exposure, is about the largest effort of this
nature yet put forward in the interest of safety. Best of all, it
is a campaign of action, an organized drive in which each one of the
1,400 industrial firms is working among its employees, promoting
safety within the confines of its own plant, while at the same time
it is joined with the others in this one big state-wide movement.
It is not a campaign of safety propaganda alone, sent forth in hitor-miss style with the hope that it may reach a few, but, I repeat,
an active campaign based on a common-sense method of arousing and
sustaining interest in safety.
What do I mean by a campaign of action? Just this: That each
one of these firms has first been approached and the campaign out
lined to them. With the idea sold, each firm has then formally en
rolled as a contestant with the agreement to report to the general
supervisory committee, in charge of the drive, tneir weekly experi
ence as expressed in terms of man-hours worked and man-hours
lost, if any, through .accidents.
Associated Industries does not conduct the campaign. It merely
fosters it. It provides a reason for greater accident prevention
activity within the plants, does the clerical work necessary to keep
a record of progress made, and provides prize awards. The conduct
of the campaign is in the hands of the competing plants themselves,
right where the causes and the responsibility for accidents arise.
Associated Industries lays out a basic plan for all contestants to fol
low and aids in every manner within its power for its success but
SAFETY PROGRESS IN NEW YORK STATE
125
in the last analysis results are obtained solely through the effort
each individual plant puts forth. That is what makes this a cam
paign of action and concrete results rather than one of hit-or-miss
type with intangible benefits.
Campaigns of this nature can not be a success unless the employees
themselves take part in a spirit of wholesome cooperation. It has
been proved to us many times over that the employees in these cam
paigns are just as enthusiastic as the employers. The drives are
looked forward to with lively interest. We have had numerous
examples of employee spirit brought to us. I have had the good
fortune to be present at a great many plant meetings held in connec
tion with the campaign and have seen for myself the fine spirit dis
played by the workers.
I attribute this to the very nature of the campaign, which appeals
to the red sporting blood or every man and woman. The fact that
they are competing against other workers in other industries in
other sections of the State seems to put everybody on his toes with
a resultant real interest in safety and honest effort put forth to
reduce accidents.
As an educational feature of accident prevention, we believe the
competitive campaign to be a great force. Education is needed not
only among employees, but in some instances among the employers.
The fact that these drives have enlisted such a large number of socalled small plants is evidence that the small employer is ready to
do his share if the opportunity is presented. In the present drive
we have enrolled 675 firms with an average employment of 56
workers. This group makes up class 3 of the campaign, devoted to
firms with from 15 to 104 employees.
The work of organizing and carrying on a drive of this nature
is considerable. Many problems arise which demand immediate
action if the campaign is to be kept moving. We find firms fight
ing to keep from the records those odd and unexplainable injuries
which arise so often. It is neccessary to refer these problems to the
general supervisory committee of 15 and often the vote as to whether
or not the disputed case shall be counted is very close, but in all
instances, the majority opinion of the committee rules and the ruling
is accepted in the very best spirit.
Once the reports for a week are received, it is necessary for us to
separate those with 100 per cent standing, figure the percentages
of those reporting accidents, total the figures to date on all reports,
arrange them in their proper order in their proper groups, and then
make mimeographed copies of the class and group standings for
mailing to all contestants. This is a^ weekly task throughout the
campaign and one which is of great importance, for these weekly
standings are a big factor in maintaining interest in the drive.
Associated Industries, in the present campaign, is issuing 100,000
special safety posters. These are supplied w e& y to the contestants
in a number sufficient to fill the needs of the bulletin boards of all
plants.
Now, as to the progress made through these state-wide drives:
The most gratifying progress, I think, is the increasing interest of
employers and employees as shown by the great number of new
firms enrolling each year. In our first drive we were able to inter
est just 175 firms. In the second year this number was doubled and
126
SIXTEENTH ANNUAL MEETING OF I. A. I. A. B. 0 .
doubled again in the third year and increased annually until, in
the present drive, as I stated before, we have an enrollment of
1,400 plants with 300,000 manual employees.
Our system of scoring is on a percentage basis, calculated on the
number of man-hours worked to the number of man-hours lost
through accidents, this latter figure to include a charge of 12,000
man-hours lost in case of any accidental death. This system has
never been changed. Our records each year, therefore, are com
parable with those of the previous drive regardless of the number
of firms participating. The percentage figure reached each year,
therefore, represents a severity experience. With 100 per cent repre
senting a perfect record, the campaigns to date show that in 1926,
the first year in which records were kept, the entire group of con
testants completed the drive with a percentage figure of 99.636, in
1927 with a percentage of 99.682, and in 1928 with a percentage of
99.755, a constant and steady improvement in severity over pre
ceding years. In the present campaign, for which reports of the
first three weeks only are available, we find the experience is a little
behind that of 1928. There seems to have been an unusual number
of fatalities so far in the 1929 drive, which has worked havoc with
the record. The general experience, aside from the death cases,
however, is considerably better. We hope to have a brighter tale
to tell at the conclusion of the drive.
Statistics are uninteresting to talk about but are most interesting
to study. I shall not go further into statistical data, therefore,
at this time. It is enough for us to know that these campaigns
have shown a steady and gratifying decrease in accident severity.
It is enough for us to know that so many firms are anxious to take
part in these annual drives. It is enough for us to know that em
ployees look with favor upon this system of safety education as a
means toward the conservation of lives, limbs, and wages. It is
enough for us to know that the employers of New York State are
fully alive to their responsibility in accident prevention and are
able, through their central organization, Associated Industries, to
promote these annual state-wide drives. The statistical data ob
tained are valuable to us in planning future efforts of this nature
and in informing us of the progress made to date.
There are in this drive ^
^
y placed in
that number of groups
nature of
their accident hazards.
Oroups with
the best record on the final day of the campaign, Associated In
dustries will award one of these mounted trophies. [Displaying
trophy.] In case of percentage tie the trophy will go to the firm
having the largest man-hour exposure. Where more than one firm
completes the campaign with a record of 100 per cent, the trophy
will be awarded to the firm having the largest man-hour exposure,
but to the other 100 per cent firms a certificate of merit will be
presented. The general supervisory committee will award, also, a
few certificates of honorable mention to those firms which, in the
opinion of the committee, are deserving of them because of the
record made.
I would like to take this occasion to announce something which
I believe to be new in the line of accident prevention campaigns.
This is the age of nonstop flights and endurance contests of all
SAFETY IN INDUSTRY
127
sorts—spaghetti eating contests, marathon dances, and other en
durance feats. Efforts are being made to hang up new records in all
lines of endeavor. That a new record for sustained safety may be
made, Associated Industries wishes to announce that at the con
clusion of this fifth annual campaign a safety endurance contest will
be launched, in which all those class 1 contestants who are still 100
per cent on November 30 will be enlisted. The contest will continue
until the last of these firms has lost its 100 per cent standing. Then
to the firm which completed the greatest number of man-hours with
out accident from September 1 until the date on which the last firm
is eliminated, a special cup or other trophy will be awarded. The
firm winning this cup will have made the best no-accident record
among all contestants and will have set up a mark which contestants
in future campaigns may strive to surpass.
I should like to thank, publicly, in the name of the board of
directors of Associated Industries, the various chambers of commerce,
insurance carriers, industries, and individuals throughout the State
who have worked with us to make our annual drives successful. It is
due to their efforts as much as our own that the annual state-wide
accident prevention campaigns of Associated Industries have been
made possible.
DISCUSSION
The C h a i r m a n . I think the value of the record that Mr. Red
mond’s organization is going to build up from year to year is going
to be something that will show very considerable worth, and I think
that their method of dealing with the small firms shows a satisfac
tory idea in the background in this effort to get the small firms in
terested, because the small firm is a very real problem.
Mr. S t e w a r t . I would like to ask just one question, and that is, do
they take only severity records, or do they also take frequency records ?
Mr. R e d m o n d . We base our standing in the campaign solely on
severity. At the conclusion of the campaign we are able, from the
figures given us, to work out a frequency figure also, but we are
basing the standing in the campaign solely on severity, that being
the simplest way and we believe the best way to set a standing.
The C h a i r m a n . I am now going to call on Doctor Hatch to read
Senator Wagner’s address. Senator Wagner was to have been with
us to-day, but owing to the tariff, or some other matter of that type,
he has been prevented from coming, and Doctor Hatch has his paper.
[Dr. Hatch, before reading Senator Wagner’s address, read a let
ter from the Senator expressing regret that he could not be present.]
Safety in Industry
B y Senator Robert F. Wagner, of New York
[Read by L. W. Hatch]
For the past two decades the doctrine has been preached that the
promotion of industrial safety is a function of government. Basic
ally that doctrine rests on an article of faith—the firm belief that
the so-called hazards of industry can be eliminated. Upon this con
viction was erected a moral precept: That industry has a right to the
labor but not to the lives of those who are employed in it.
128
SIXTEENTH ANNUAL MEETING OF I. A. I. A. B. 0 .
In less than a generation both the doctrine and its moral have
become the accepted principles of the economic world. To-day they
seem so obviously right, so compellingly sound, that it is difficult to
imagine that they have only recently supplanted the heartlessly cruel
notion that each industry had its risks which those who entered it
assumed and bore; that ix they lost in the gamble and brought misery
upon themselves and destitution to those who depended upon them,
only the fates were to be blamed.
Those who first rebelled against the complacent pessimism of the
belief in the inevitable risks of industrial occupation had little
evidence to support the new faith. There were no records, no statis
tics, few observations, and fewer experiments. We did not know
how to make industry safe. We did not know what it would cost
to make industry safe. We could not measure the effect of the com
petition of those who would refuse to join in the enterprise. The
only force which motivated us was the violent reaction against the
useless maiming and killing of which the factory was guilty with
increasing frequency. Out of that spirit of rebellion were precipi
tated the two specific remedies which are to-day coming to be uni
versally applied. The first, workmen’s compensation, rests on the
proposition that if there be an industrial risk its burden should be
distributed by insurance and not be permitted to lie where it falls.
The second, industrial safety, is devoted to the task of reducing the
risk by eliminating the danger.
The safety movement has gone far beyond its first stage. It has
gradually built up a body of information. It has devised for its
use a statistical method. Thousands of safety mechanisms have been
contrived and hundreds of salutary statutes have been placed upon
the law books of the country. All this, however, is only secondary
to its true accomplishment which is hidden in the unrecorded number
of lives saved, of accidents prevented, or of families shielded from
the occurrence of that terrible day when the bread-winner fails to
return.
None can now deny that the faith and the hope upon which we
built have been justified beyond the most sanguine expectations.
Now, then, is the time to pause to take inventory of our problems,
to find our bearings, reset our compass and fix a more distant
objective for our journey.
Already many of the laws that have been written legislate against
a past which is no more. As such they constitute a barnacle which is
possibly harmless but certainly useless. Meanwhile, new industries,
new processes, new methods and practices are developing at a pace
at which the law has not yet learned to follow. The methods of
industrial supervision have been somewhat sluggish. It has not
interceded until the price of delay has been paid in broken lives. In
this speeding century safety administration must keep pace with the
industry it is designed to regulate.
My point is that safety legislation must continuously reorient itself
to the new and ever-changing industrial environment in which it is
meant to operate. The law must be such as will not hinder industrial
progress; the progress must be such as will not jeopardize life.
To illustrate my proposition, let me cite two instances, each repre
senting a type of change which calls for adjustments in the handling
of the safety problem.
SAFETY IN INDUSTRY
129
When we first started to civilize the factory it was with so-called
big business that we had to contend. The opposition was organ
ized against what was termed the intrusion of Government into the
private management of business. Now, however, our concern is no
longer with the large enterprise. Large-scaled business has defi
nitely mastered the lesson that industrial safety and health pay in
terms of increased production, in terms of waste elimination, in
terms of fewer sleepless and fretful nights for employer and em
ployee alike. Corporate industry has come to realize that the same
energy and application which are devoted to the improvement of
production and the increase of dividends must likewise be devoted to
the reduction of hazards and the promotion of safety. In innumer
able cases the large plants have gone far beyond the minimum
requirements of law.
The legislator or industrial commissioner is now confronted with
a new kind of resistance to the safety program. He is now met by
the indifference of the small-plant operator who combines within
himself the functions of owner, financier, production director, and
sales manager. He literally has no time to think of safety. He can
not devote to it the constant thought and diligence which it demands.
Payment of an insurance premium, in his case, serves only to elimi
nate the apprehension of possible legal liability.
Comparisons recently made between the small and the large plant
have shown that the former is the more serious offender against the
safety code. To be specific, in machine-tool factories it was shown
that one large plant had an accident frequency of 12.8, whereas 11
small plants together employing as many operatives as the one large
plant, had an accident frequency of 34.15. In paper making one
large plant showed an accident frequency of 4.82, while 10 small
plants together employing as many as the one large one had a com
bined record of 63.18. In automobile manufacturing, 11 plants
showed a frequency of 36.12, when one large plant had succeeded in
reducing its accident frequency to 0.4.
In spite of the apparent trend toward large-scale production, it is
nevertheless true that a tremendous portion of our manufacturing is
done in plants of moderate size. The problem of the small plant
will therefore have to be solved if the record of improvement in
safety and accident prevention is to be continued.
Another change concerning which industrial legislation and admin
istration must bestir themselves is the increasing importance of
chemistry in industry. We have always had some occupational dis
eases but never before have they come upon us with such plaguelike
rapidity and variety. The new uses of chemical energy and chemi
cal processes have let loose a flock of new poisons frequently
mysterious in origin and always insidious in attack. In combating
this menace the Government must become more alert to the dangers
and exhibit greater celerity in forewarning and forearming those
who will be exposed to them.
What I urge is that the Government be one step ahead of industry
in its acquaintance with industrial chemistry. The Government ought
not to wait until it is called to action by some dreadful calamity. If
radioactive substances are to be employed in industry their utiliza
tion should be rendered harmless before wage-earning men and
130
SIXTEENTH ANNUAL MEETING OF I. A. I. A. B. O.
women are invited to use them. I f caissons are to be used in bridge
construction it is the province of government to insure their safety
before workmen are invited to work in them. I f a spray gun is to
be employed in painting, it is the duty of the Government to ascer
tain in advance that it may be done without danger to health.
I do not want to shackle the adventurous spirit of invention, but I
believe that we are moving forward fast enough to afford the short
pause necessary to make certain of safety for the sake of the health
and welfare of our working people and the resultant well-being of
our entire population.
In the sphere of industrial lawmaking the States are, of course,
the primary jurisdictions. Since I have been in Washington, how
ever, I have interested myself in the assistance which the Federal
Government might render toward the accomplishment of the objec
tives of the health and safety movement. The Federal Government
has three divisions concerned with these problems—the Bureau of
Labor Statistics, the United States Public Health Service, and the
Bureau of Mines. Each has to its credit many major accomplish
ments. There is one unique service, however, which the Federal
Government might have performed but it has tailed to take advan
tage of its opportunity.
I refer to the fact that the Federal Government is in its own right
probably the largest employer of labor in the world. Contrary to
common belief, the men and women which it employs are by no
means all engaged in clerical work. Several departments operate
plants in which the conditions of work are comparable to conditions
which prevail in private enterprises. The Navy Department employs
over 40,000 men in its yards. The War Department has similarly
over 40,000 employees on its pay rolls engaged in industrial pursuits.
These agencies of the Federal Government had it in their power to
teach a mighty lesson in safety by example rather than by precept
The Federal Government should have established the standard to
which private industry might aspire. That opportunity the Federal
Government has not seized.
There is particular reason for dissatisfaction with the record of the
War Department. In 1926 the Navy reported an accident frequency
of 17.62 per million hours of exposure. The War Department acci
dent frequency was during the same year 43.82. That is consider
ably in excess of the average accident frequency for all industry
during that year, which was 27.7.
In 1925 the record of the War Department was even worse. Its
accident frequency during that year was twice as high as the average
for all industries and almost four times the accident frequency re
ported by the Navy Department.
I am authoritatively advised that the work of the Navy Depart
ment and War Department is comparable. Why, then, is there so
marked a difference in their records? I assure you that upon my
return to Washington I shall take the necessary legislative steps
not only to discover the reason but to provide the remedy.
Let me name another definite direction in which the Federal Gov
ernment might usefully have taken the lead. The Budget of the
Federal Government yearly includes hundreds of millions of dollars
for construction. It spends in that manner more than any other
NO-ACCID ENT CAM PAIGNS
131
single agency. Of all our industries construction reports the great
est relative number of accidents. The Government does not directly
act as employer in its construction work. The projects are usually
executed under contract. But the Federal Government might have
written into these contracts a safety code which would have been a
practical piece of instruction to the building industry of the country.
That it has failed to do.
In the short history of the safety movement we first passed
through a period of emotionalism. At the present time we are in
the midst of developing the technique of safety, its rules and
mechanics. These have been vital influences in reducing the risk
of factory work. We still report, however, 3,000,000 accidents a
year, of which 24,000 are fatal. It must be apparent to us all that
we can not achieve the final goal of industrial welfare by a mixture
of ballyhoo and mechanics alone. The realization is gradually
growing upon us that safety can not be isolated as an individual
objective; that it is the product of perfect coordination in industry
in all its phases; that it is a necessary aspect of civilized business
wherein men respect themselves and respect each other, where life
is highly regarded, where man is master of the machine and not its
servant.
There are thus brought into the scope of those who promote indus
trial health and safety a host of correlated problems which concern
hours of labor, adequacy of wages, satisfactory housing, opportuni
ties for self-expression and self-improvement on the part of the
worker. The safety movement must consciously recognize that it
both contributes to and is dependent upon the general advance of
industrial security.
The C h a i r m a n . We have another story of no-accident campaigns
this afternoon. The Merchants’ Association of New York City
has been carrying on safety work for the last two years, with
a committee under the general chairmanship of Mr. L. A. DeBlois.
a man who is known throughout this country for the safety work
he has done.
Mr. Yeomans, the manager of the Industrial Bureau of the Mer
chants’ Association of New York Citv, will give us an address on
the subject, “ No-accident campaigns, and that, as I understand,
will be simply a statement of the progress made up to date.
No-Accident Campaigns
B y W. E. Yeomans, Manager Industrial Bureau of the Merchants’ Association
of New York City
I sometimes quarrel mentally with the program committee that
places me on this program, usually following Mr. Redmond’s report
of his association’s activities, because as I listen to him I get the
impression that what we have been doing in the Merchants” Asso
ciation seems so small by comparison, and still when I consider
the problems of an association such as ours, working among concerns
in a city such as New York City, I realize that a statement I heard
made by Doctor Robinson, of the city administration in Chicago,
last week, to the effect that where there is stimulation there is irri
tation, is all but too true.
132
SIXTEENTH ANNUAL MEETING OF I. A. I. A. B. C.
We discover in New York City, acting as we do as the chamber of
commerce, that just as soon as we start to stimulate something,
we start irritating something else; so that we have had to start
quite modestly. We have had to proceed quite carefully. We feel
tnat we have been doing a constructive piece of work, and we are
glad of the opportunity to appear here and let you know just what
New York City is doing, through its chamber of commerce, in the
prevention of accidents.
Last year in the report which was made in Syracuse before this
body we told of three small accident-prevention contests which we
were at that time conducting among three groups of industries in
our membership: The metals group, the warehouse group, and the
food products manufacturing group. Those were all short contests.
We chose the metals group first because, with a great many others,
we had the opinion that where there was machinery there was hazard.
We discovered that the hazard in the metals group, just as others
have before us, is not so great as it is in others where the human
element in the process of manufacture has greater play.
So, as our second experiment we chose the warehouse group. The
third, the food products manufacturing group, was a sort of a
hybrid group.
Each one of those three contests of the four months’ duration in
1928 was conducted along the same lines so far as reports were con
cerned, the individuals participating in the contest or the individual
companies participating in the contest sending to us a small card
weekly upon which they noted the number of man-hours worked and
the number of lost-time accidents which had occurred, and we com
puted those into relative standings, which we sent back to the con
testants monthly.
In all of those three contests there were but 143 plants. However,
we were greatly delighted when 128 of the 143 went through the
4-month period of the contests, and we were interested in the records
they set up.
Thirty thousand employees in those three contests, I believe,
worked 24,000,000 man-hours of exposure and reduced their fre
quency during the contest, according to our monthly reports, from
22 and a fraction during the first month of the contest to something
like 17.
In each group the association awarded trophies. In each group
they awarded a different sort of trophy purely for the sake of the
experiment. In one group it was $100 in cash, gold, to the em
ployees of the winning company. Another group received banners,
and the third group received a cup.
In one group we set up the experiment of placing on our staff n
contact man. We borrowed him from an insurance company, and
there came some of our irritation, because he was a mutual insur
ance man. Our good friend, Mr. DeBlois, was chairman of our
committee, as the chief safety engineer for the Bureau of Casualty
& Surety Underwriters, and immediately his association, represent
ing the stock companies, came to the front with the kick that we
were allowing a mutual insurance man to get into plants that were
insured in stock companies, and that he would probably wean them
away. However, we were not interested in the insurance phase of
NO-ACCIDENT CAMPAIGNS
133
the problem so much as we were interested in what we could do by
maintaining on our staff a contact man who would do nothing
except circulate among the contestants in our movement.
Those three contests were eminently successful, so far as the num
ber of small plants which we were able to get into them, the interest
which we were able to maintain, the number of plants finishing, and
the records they set up, are concerned. They were so successful that
out committee met and decided that it was foolish to attempt to
bite off each industrial group in our membership successively and
conduct a program of accident prevention among them, at the same
time holding the interest of those groups which we had previously
attacked. So we abandoned our first idea of having successive group
contests, and we decided to experiment with a longer contest among
one of the groups which had already been attacked, opening it to
other than members of the association and letting it run over a period
of one year, to satisfy ourselves that interest could be maintained in
a larger contest, where we were not able to get such close personal
contact with the contestant, in order to evolve some plan by which we
could attack our entire membership at once.
So we invited the metals group again to come into our fourth
effort, it being the second phase of our movement. We chose the
metals contest because most of the metals companies, operating as
they do with machine processes, are fully aware of the need for
safety and for the elimination or hazards, and we were able to get
(I think this contest was in process at the time of our last appear
ance before this group) 117 companies into that second metals con
test of one year’s duration.
The contest was run just as the other had been so far as reports
were concerned. The association awarded a trophy and certificates
to all plants which went through the entire period of the contest
without an accident;
Just as the other contests were conducted under a group, a com
mittee chosen from among the executives in the plants entering the
contest, so was this contest supervised and guided by a group of
metal manufacturing executives working under our special commit
tee on accident prevention.
We estimated that 10,000 employees were concerned with that con
test. During the year they worked approximately 20,000,000 manhours of exposure with but 269 lost-time accidents and no fatalities,
although, I believe, in the city of New York during that year there
were 1,185 fatalities in other plants than those in our contest. The
frequency rate which that group set up, 13.89, was the lowest that
had been set up by any contesting group.
This contest, too, we believe was successful. It sold us on the idea
of further expansion of our movement, and during this summer our
accident prevention committee again met and decided that they
would run a contest or promote a contest among all of the industrial
members of the association.
For the sake of the survey and the results which it might show we
grouped our association’s industrial members arbitrarily, taking the
grouping of the associated industries. We discovered that we had
something like 3,000 members who were essentially manufacturing
in nature and that we could divide them into arbritrary groupings of
30 groups.
134
SIXTEENTH ANNUAL MEETING OF I. A. I. A. B. 0 .
Our committee met after we had grouped them, decided upon a
plan of contest, made recommendations to our board of directors
that the association conduct or promote a contest among all indus
trial concerns in the membership of the association, and, upon the
approval of the board of directors, called together a committee of
about 30 men representing other chambers of commerce, other trade
associations, insurance interests, those groups which we had already
had in contests, and others whom we thought might be interested in
the movement.
The first recommendation which that committee made was that we
had started wrong. It felt that the association would be neglecting
an opportunity in its program to foster the welfare and trade of
New York City if it eliminated from participation in our accidentprevention movement any concern that was not a member, and sent
back to the board of directors the recommendation that it open its
future movements to all industrial concerns in the metropolitan area,
which covers an area of about 40 miles radius from New York City.
Just before I left New York to attend the National Safety Con
gress in Chicago, the board of directors approved that plan, and
it will be my first duty when I get back to New York City to call
together again this committee and to work up with them, or to help
them work up, or have them work up some plan by which the
association can get into an intensive accident prevention campaign
all of the industrial plants in that New York City metropolitan
area.
It is going to be a stupendous task for the association to under
take with the machinery which it has at the present time, and it no
doubt will have to be expanded.
According to the census there are 62,000 industrial establishments
in the metropolitan area. There are about 1,000,000 workers in those
62,000 establishments. I have no estimate of the number of manhours they are likely to work, but in the next report which I will
make—if I am invited to—I feel that we will have something really
constructive to offer as a result of this effort on the part of the
association.
Many folks have asked us why the association is interested in
such things as accident prevention and accident-prevention move
ments, and while some of you here are familiar with the work of
the merchants5 association, some others are not. It might be well
to explain, for those who are not familiar, that the merchants’
association is, in effect, as I stated before, a chamber of commerce
of the city of New York. It is an organization of 8,000 companies
who have headquarters, or offices, or who operate in New York City.
The program of the association, which is organized somewhat on
the lines of all chambers of commerce, with committee organizations,
boards of directors, etc., is based upon direct personal service to its
members and to the city. It is organized into a series of bureaus,
each of which serves its members directly in a consulting capacity
on the problems which come under that bureau’s supervision. The
industrial bureau, serving our members as a consultant in industrial
problems, is interested in safety.
It is interested for the reason which you know only too well. We
believe that we can save our employers dollars and cents. We be
NO-ACCIDENT CAMPAIGNS
135
lieve that we can assist them in saving their employees and society
that loss in dollars and cents and in suffering.
The plan by which we have promoted these contests so far has been
based upon personal contact. In each case the plant is invited to
come into the contest, and if no reply is received to our first letter of
approach, the firm is called upon personally by a representative of the
association and the employer is induced, sometimes by high-powered
salesmanship, to enter his plant. He is sold on safety so far as we
can sell him, and at least far enough,, if it is humanly possible to do
it, to get him to come into the contest once. Then we feel that the
lessons he learns by participation in the movement will be so valu
able that he will not want to forget them.
After he is in the contest we have a contact man, as we did during
our food products contest, who visits him at intervals and asks him
how things are getting along, questions him on the way he is keeping
his records, makes plant inspection, helps him to conduct safety
rallies, and as far as he can, appears for him before the industrial
commission in behalf of injured workmen. He performs all of the
work that an insurance carrier service man might do if he were
carried by that insurance company.
This has an immense advantage we feel in dealing with small
plants. As a matter of fact our whole effort in all of our programs,
not only of accident prevention but in other things, is directed
toward the small company. The large company has its safety engi
neer. It has its industrial relations department. It is equipped by
machinery and can afford the machinery to do the things which we
feel we can do for the small plant.
The small-plant owner is too busy to think of safety, and some
times it is not until we get to him that he has ever given it a
thought.
The members of our association are represented in the association
by an executive of the company designated as its representative. We
have no contact with any of our members except through the repre
sentative. I f he needs salesmanship, we give him salesmanship.
Every report that we send to that company goes to the individual
who is their representative in our association. He gets an analysis
of every accident and its cause. I f there seems to be something
which should be corrected, he is advised of it.
That is not done in the spirit of interference. It is done purely
because the company has designated him as their representative in
our association, and we are merely following out the line of our
organization in approaching him, but we find often that a company’s
officers are never aware of accident occurrences in setting up experi
ence of accidents, and we have found that we have awakened those
officers, and the company in many cases, to the importance of safety
organization and accident prevention.
Many small companies, of course, have said, when we approached
them, and they will when you approach them on the question of
accidents,44We never have any accident. We have not had an acci
dent in, oh, so long. We do not need any more accident prevention
than we have. We are careful.” And it is hard to sell them, of
course, on their part in the frequency of accidents as they occur in
all small plants as a group.
136
SIXTEENTH ANNUAL MEETING OF I. A. I. A. B. 0 .
You can not do that by sending them a letter and asking them to
enter the contest. You can not do that by purely circulation methods.
When you circularize any group of industries on the question of
entrance into an accident prevention contest you get those which are
the easiest to get. You get those who will reply to a letter. You do
not get the follow who, so far at least, thinks it is all a lot of bunk.
You must go see him and sell him, and our program, at least so far
as we have been able to maintain that program, because of the small
group that we have attacked, has been to get to them personally and
sell the fellow who has not been sold, and possibly forget for a while
the large fellow who has been sold all of the time and who enters a
contest only because it is one more thing that he can easily enter
and possibly win a trophy with the machinery which he has already
set in motion and is working effectively, and will work effectively
whether or not he is in this contest or any other contest.
Oftentimes we have had the experience that the small-plant owner
who has refused to enter our movement comes to us in a little while
and asks us for permission to enter, because he has had an accident,
and while he realizes, upon explanation that he can not win a trophy
because he can not work man-hours enough to compete with the
larger plants, he will derive from it the service which we are able
to render by this contact service, and possibly be shown how his small
plant can set up an effort which will be effective.
I do not know that I can show you the actual benefit to the small
plant of coming into these contests better than by reading a para
graph from a report on our second metals contest. The contest was
won by a comparatively small plant—250 employees. This report
tells that until July, 1926, which was in advance of our work, this
plant had no safety organization. Their compensation rate for that
year was $2.16 per hundred dollars pay roll. In 1927 they developed
a definite safety program and their rate decreased to $1.66. When
they entered the merchants’ association contest in 1928 they had had
18 months of organized safety work. As a result of that experience,
and the added effort they claim they gave in attempting to win our
contest, they reduced their compensation rate so that their rate for
1929 is $1.01.
I will warrant that if that experience were placed before any
number of small companies, not one of them would fail to see the
advantage of setting up some sort of safety effort.
Now the work oi the merchants’ association is not to reduce in
surance premiums. It is interested, yes, in showing any of its mem
bers how they might reduce a cost or an expense. The work in
accident prevention of the merchants’ association is purely educa
tional. We believe that you can not have safety in any plant without
the full cooperation of the employees in that plant and the manage
ment of the plant. We believe that employees are more easily sold
on safety than are employers. In the first place, the employee is
brought closer to accidents.
You who were at the clinic this morning and who saw those men,
know that if you were working alongside of a man who had lost
four fingers, or if you were working alongside of a man who fell and
who came around as soon as he was able with his head or neck in a
cast, you would be mighty careful for at least a little while, until the
ACCIDENT PREVENTION— DISCUSSION
137
effect had worn off or you had become calloused to seeing him. The
employee has the actual experience, the contact with accidents, that
the employer never has. We believe, therefore, that the way to
get cooperation between employers and employees is not to first
attack the employee. We believe it is to educate the employer, par
ticularly of the small plant, especially the hard-boiled employer,
that it means dollars and cents to him, and we further believe that
once having sold him on that idea, there need be no outside force
entering into attempt to educate his employees. He will see to that;
and so we believe that—because of our organization we are able to
do this piece of educational work, to contact with executives—
we should continue to do that at least until we see some other
phase of accident prevention work into which we can logically enter.
DISCUSSION
The C h a i r m a n . I think there is one thing that-we in accidentprevention work must never overlook, and that is the fact that me*
chanical accidents are often of very considerable severity. I think
that too often people will tell you that the so-called human-element
accidents are greatly in excess of the mechanical accidents, but all
of us who know anything at all about the mechanical accidents will
remember that too often they are extremely severe.
Has anyone a question to put to Mr. Yeomans in connection with
the campaign of the Merchants’ Association as he has outlined it
for us?
Mr. S t e w a r t . I would like to ask one question. In talking with
Mr. P. G. Agnew, of the American Standards Association, I got
the impression that the Merchants’ Association was doing something
in the building-construction industry in New York. I f that be true,
I think we ought to have some idea as to what they are doing.
Mr. Y e o m a n s . Mr. Stewart, you have led me to talk on something
of which I am not privileged to speak fully at this time. However,
I can give you a hint. I spoke of our plans for the future. Our
committee of 30 has been asked to promulgate a plan by which we
can conduct a contest among all of the manufacturing industries in
and about New York City. We are not able to say now what that
plan will be, but we have a hunch, as we secretaries sometimes do,
that the committee will decide somewhat in this fashion: We think
that we will ask every trade association who has manufacturing
members to conduct a contest among its members, setting up prizes'
or awards if it cares to do so, whereupon we will agree to give awards
for the grand winners, or a grand award for the winners of all of
the contests, and certificates to all plants that go through the entire
contest without an accident.
In that way we will conserve our own machinery. We will not
only sell the individual plants but we hope to sell trade associations
on the advantages of doing safety work among their members.
We have one experience with our warehouse group, who, after
the completion of our contest, started a contest of their own, inde
pendent of any work that we might do. It is true that some asso
ciations have already been sounded out on that. It is also true that
94023°— 30------ 10
138
SIXTEENTH
annual
MEETING OF I. A. I. A. B. 0 .
one of those associations, the New York Building Trades Employers’
Association, is on the eve of starting some sort of a safety movement
among its members. It covers almost the entire construction field
in New York, and we have at least an unofficial assurance from it
that it will come in on this plan. As a matter of fact, Mr. Wheeler,
of the Building Trades Employers’ Association, is a member of this
larger committee just mentioned.
Mr. S u l l i v a n . I heard a remark made about offering trophies
and rewards to the various employers of construction labor. We
have an element in that body that no human persuasion will change
so long as they are able to make a few extra dollars by the methods
which they are pursuing, and trophies mean nothing to them. The
only way they can be reached is through their pocketbooks.
The gentleman has told us that the Building Trades Employers’
Association of New York City is about to start a campaign. They
told us a year ago, in Syracuse, that Mr. Bowman, of the Em
ployers’ Association, had appropriated $15,000 for a campaign,
and asked for the cooperation of the labor organization. I belong
to an organization and I immediately went back and had the secre
tary of my organization, through vote, communicate with Mr.
Bowman, offering him the cooperation of that organization, and
that is the last we heard about it.
Now we admit that we have the careless workman in our organi
zation. We have the jumping jack, the fellow who jumps around in
order to make a good fellow of himself with the boss, and he does
not suffer the penalty until others have suffered for his carelessness.
As I stated before, we must reach the employer who does not give
the proper protection to the employees under him, and there is only
one way of reaching him and that is through his pocketbook. You
must pass legislation to compel him to carry out the provisions of
the safety law and protect human life, and that is the only way
he can be reached. He is the man who is a menace to industry
to-day, the man who carries his office around in his pocketbook.
There is no doubt in the world that the legitimate contractor
protects and has at heart the interest of human life and limb, but
it is the contractor who jumps around and who gets a job to-day and
to-morrow—God knows where he is—who is the menace.
As was stated yesterday by Commissioner Perkins, he is the one
who will take out insurance and never even pay the premium. That
is the element that we want to reach, and as soon as that is done
we will be able to ‘educate organized labor; or organized labor will
be able to educate its members, or the majority of its members, as
to safe practices; but what is the use of educating a man if when
he goes into a building there is an employer who will not give him
the proper protection, who will fire him if he does not go out on a
flimsy scaffold to work in an unsafe position? That is what we are
up against. Until such time as we can get rid of that element we
will have the same trouble right along.
The C h a i r m a n . I will answer Mr. Sullivan’s question, if I may,
Mr. Yeomans. In the first place, I think that the commissioner
showed us very clearly yesterday that so far as New York State, at
least, is concerned, the proper authorities are cognizant of the
situation and intend taking some action.
ACCIDENT PREVENTION— DISCUSSION
139
We have, in our Ontario act, a clause that authorizes the work
men’s compensation board to penalize an employer who has too
many accidents, or who, in the phraseology of the act, “ Maintains
his ways, works, machinery, or appliances in any defective man
ner.” Something of that type would seem to be almost necessary
but, Mr. Sullivan, there is one phase of your remarks that personally,
not as your chairman but simply as one taking part in the discussion,
I am inclined to object to, and that is the use of the word “ care
lessness.” I do not like the word carelessness. I think that men
engaged in any business care whether they are hurt or not.
I f you analyze the word “ carelessness ” you will see that the use
of the word in the promiscuous fashion in which we have become
in the habit of using it, I am afraid, in the safety movement is all
wrong and, as I said, I do not like the use of ttie word “ careless
ness ” when applied to men on a job. Those men do care whether
they are hurt or not and their families do care whether they are
hurt or not, so that as far as I am personally concerned I have
written out of my vocabulary the word “ carelessness ” when it comes
to any attitude of mind of any worker on any job at all.
Mr. S u l l i v a n . The reason why I used the word “ carelessness ”
is because, if you will pick up any of the statistics about the causes
of accidents in any industry, submitted to you by the heads of those
industries, you will find that they all state,“ The cause of the accident
was some carelessness on the part of the worker.”
The C h a i r m a n . Not always, Mr. Sullivan.
Mr. S t e w a r t . Mr. Chairman, it seems to me that we might just
as well face the situation. The law of New York, and the laws
of most of the States of the Union, do not provide for even the
inspection along safety lines of buildings under construction. New
York inspects factories and mercantile establishments. It has no
business to inspect for safety purposes a building under construc
tion, and the inspection that the builder has is a city inspection which
has for its purpose and object simply public safety; that is, to see
that the walls are not going to fall over on the sidewalks and kill
somebody passing along.
They have no legal interest in how many bricklayers or carpenters
are killed in that construction. Now, that is true in most all of the
States. The building trades have a grievance, and I do not believe
in using words that do not do any good, and yet I am rather weary
of pussy-footing on this question of accidents in the building trades.
Those fellows do not pay any attention to the ordinary rules of
safety, and in Ontario, in Chicago, New York, and everywhere the
accidents are increasing most in the building trades, and when you
try even to get them to agree upon any sort of a safety code they
get up and howl and they do not hesitate as to what they say about
me or anybody else who proposes to jam the Government into private
business.
I do not know what to do, but I know what I would like to do.
We are not going to decrease the total number of accidents until
we get hold of the building trades industry.
Mr. W iddi. I have been attending these safety conferences now
for the last 12 years, and for the first time, to-day I have the urge to
140
SIXTEENTH ANNUAL MEETING OF I. A. I. A. B. 0 .
say something. I can not say it with the fluency of my friend of
the labor organization and the industrial commissioners, because I
have not the experience in speech making, but I have a little thought
that I want to give to you.
Personally I do not think that safety campaigns and giving out
medals and parchments or anything of that kind is going to prevent
accidents. The only way to prevent accidents is to have satisfied
employees, and when you do have satisfied employees you have no
accidents, because it is to their interest to prevent accidents, but you
may have thousands of campaigns and thousands of medals, and you
may preach safety, but when a man is injured and he appears before
a referee and his employer makes him lose six days’ wages in order
to get $12, and when someone prevents him from getting what the
law provides is justly due him, preaching of safety means nothing.
Therefore, to my mind the most important thing to do to prevent
accidents is to teach employers of labor to give the employees what
the law intended that compensation for injuries sustained during
employment should be.
Mr. W e id n er . A moment ago Mr. Yeomans stated that he repre
sents what takes the place of the chamber of commerce, and he talked
very strongly about interesting the manufacturers.
They have contractors among their membership who insist that
the employees work with absolutely no scaffolding, and the men must
steal from other contractors on the job. It may be boards that have
been eliminated by the other contractor, and the new man coming
on can not tell what it is because it is covered with debris. The
scaffold is put up, and the men get up on it to work, and there is
an accident.
I think if that same organization would spread a few of their
pamphlets among their own members, making sure that none is
missed, and advocating that each contractor assuming a contract
make sure that adequate scaffolding is furnished, he would have
fewer of these accidents or man-hours lost on his next report.
The C h a i r m a n . I think we are getting just a little ahead of our
program.
Some of you know a little something of the governor’s safety
committee that has been set up in New York. We have been talking
about certain problems here that I really feel should come after this
part, at least after the address on accident prevention campaigns
among State unions.
We have with us to-day, Mr. Thomas J. Curtis, the vice president
of the New York State Federation of Labor, and he is going to
speak to us on that subject.
Accident-Prevention Campaigns Among State Unions
B y Thomas J. Curtis, General Manager Building and Allied Trades Bureau,
New York City
I am in a very peculiar position here, because nearly all of my
thunder has been stolen, so that I must omit some parts of my speecn,
but at this time I want to correct Mr. Stewart’s statement that there
is no inspection of buildings in New York State. There are six
ACCIDENT-PREVENTION CAMPAIGNS
141
inspectors, of course not half enough, but we have six inspectors who
inspect buildings in the city and State of New York, and that is
under the department of labor.
On June 26 of this year the governor called to Albany all of the
organizations of the State—I mean all of the unions of the State—
and appointed a committee on safety. The large majority of those
men came from the building trades, because the governor realized
there were so many accidents in the building trades that the organ
ized workers should start a movement among themselves.
So a committee consisting of 37 men was appointed and the com
mittee met in August of this year and appointed a subcommittee of
10 to cooperate with the department of labor to have all accidents
reported and to get statistics on the occurrence of those accidents.
That committee is now functioning, and the department of labor
has set up an organization to cooperate with the committee, and we
are receiving 100 per cent cooperation.
The unions, in order to carry out this campaign, are holding
meetings. Those meetings are addressed by persons from the de
partment of labor and also from the different labor unions, and
pictures are shown.
We have developed a novel scheme to insure the success of this
plan. We have in our unions what we call a summer meeting, and
we assess a fine against our men if they do not attend the meeting;
so we have a full attendance at that meeting. That is done every
three months, and under that plan we are able to reach practically
every man in that union, ranging from 500 to 1,500 men at a meeting,
and we are receiving wonderful cooperation from the men in this
respect: They are reporting the different violations or the different
things that might be made safe on the job.
We have no protection in our building code as far as the city of
New York is concerned, and up until two years ago we had no
protection whatever from the State, until a committee got together
and asked the attorney general for an opinion as to who had the
jurisdiction over buildings. The attorney general held that the
department of labor and the city both had a responsibility and that
is the reason why those inspectors were appointed to inspect build
ings. We are in a position now so that if there is a violation or
conditions are not safe, we can call on the department of labor to
send an inspector to that work and inspect those conditions, and he
has the power to stop the work until it is made safe.
We are having some difficulty in making workers understand how
to report. A number of them fear that they will be discharged if
it is found out that they reported the conditions on the job. So we
have established in the organization a committee of two to whom
all reports may be made, without anyone knowing who the man was
who made the complaint, and in turn that committee will report to
this committee that has been set up by the governor or to the labor
department; so that we are correcting a number of the conditions
that existed in the building trades.
The greatest difficulty we are having is with the subcontractor.
We have a general contractor who is willing to do the right thing,
but he is careless in letting his subcontracts, because he does not see
that safe contractors get the work. We have the noninsured sub
142
SIXTEENTH ANNUAL MEETING OF I. A. I. A. B. O.
contractors. We have the subcontractor and the submarine con
tractor, so that when a man is hurt it is almost a physical impossi
bility to find out who he was working for. It has taken as many
as five and six hearings before the industrial board to determine
who was the employer in the case, and yet it reverts back to the
general contractor if there is no insurance.
Those are the men with whom we must contend. I had an ex
ample only last week of a contractor doing work in the Borough
of Brooklyn. He had six jobs, and one out of the six insured, so
that he had an automobile waiting at each job for an accident to
happen, and when it did happen they got the injured person to the
job where the insurance was carried. He was a regular business
man.
A man was very seriously injured. He fell five stories and was
taken in an automobile at least 8 miles from where he was injured
to this job that was insured, and the ambulance was called at that
job. I asked the man where he was when he first came to. He
said, “ My God, I came to in that automobile, and I think they
must have been making 90 miles an hour to get me to the job where
the insurance was carried.”
Those are the conditions that exist in the building trades. There
are six jobs going on and only one insured.
Under our system in the city of New York or in the State of
New York, before you can get a permit to start a building you must
show that you are insured. I think sometimes our officials do not
go into it very thoroughly to find out whether they have a policy
and they are granted a permit, and in a large number of cases there
is no insurance.
There is no way of preaching safety to those people who will not
take out insurance. The only way to do it is by law, and to make
our laws so that there may be a penalty charged to the employer
who does not obey the safety orders.
I had a man call on me last Monday morning before I left to
attend this meeting. He went to work at 8 o’clock and he had
four fractures of the arm. He was working on a scaffold, and he
said the plank was so warped that when he got on it he thought he
was at sea. He told the foreman that he could not work under those
conditions, and the foreman told him that he would either work or
get out, and he got out, because he was there only about 25 minutes
when he fell off the scaffold, falling two stories, and the result of
the fall was four fractures of the arm; so that is the kind of men
with whom we must contend.
We do have some employers who are willing to cooperate, and
some of them are taking the men right from our ranks and making
them inspectors; and they have on one job in particular in New
York, where the rate would run at least $39 on the hundred, re
duced that to 1.5 cents on the dollar by putting a competent man,
a mechanic, on the job to inspect conditions.
They had four mechanics on that job going from the top of the
building; one was going up while the other was coming down, and
they covered all the floors, and if they saw a hole left open or a barri
cade down they would nail it up, and in that way there was not a
serious accident on the entire construction.
ACCIDENT PREVENTION— DISCUSSION
143
That goes to prove that where safety is taken in hand it is cheaper
for the employer, but we have a most peculiar situation in the build
ing trades in New York City—not so much up the State here as
we have in the city—to try to educate both the worker and the
employer. We are making wonderful strides and it is our hope,
the hope of the commission appointed by the governor, that one
year hence we will be in a position to state that we have at least
reduced the accidents in the building line 25 per cent. ^
There are more accidents happening in the building line now than
when there were three jobs for every man, and there is one way of
reasoning that out, and that is that working men are taking greater
chances to keep their jobs and they are meeting with more serious
accidents.
I have a very striking example of a young boy at his first day’s
work. He was put on as a timekeeper. He had just graduated
from high school. He was up on the seventeenth story of the build
ing and he walked into an opening, and his people were not per
mitted to see him, because of the condition he was in.
If we can, in our campaigns, bring this to our public schools and to
our unions and educate the younger element along lines of safety,
we will be doing the job that the governor expects us to do. I desire
to say, on behalf of the labor movement of this State, that we are
very thankful to the governor for asking us to do this job, and we
mean to be 100 per cent successful if that is possible.
I want to say to you that I am glad of the opportunity to be here
with you to-day and all through this session, and I hope that when
we meet again we will have a report from the building line that we
have reduced the accidents almost to a minimum.
DISCUSSION
Mr. H u t s o n . In regard to the previous speaker’s remarks and
also those of my friend, Mr. Stewart, I just want to relate my
experience in the building industry as I found it in the last 25
years.
No doubt every workman is familiar with his own particular line
and can see the remedies and offer suggestions, but I think Mr.
Stewart hit the nail on the head in regard to our industry. I am
an ironworker in the construction of steel buildings and bridges,
and when he said that the inspection in the city of New York was
done by the city to see that the walls of the buildings do not fall on
the sidewalks, he is more right than wrong as far as inspection is
concerned. That is our code.
The most important thing, in my opinion, in regard to the
safety campaign, is that we must educate the members of every
organization; in fact, everyone who works for a living, but in this
education we certainly must have the cooperation and the protection
of the city, the State, and the builder.
Take my line. I think I can offer a suggestion here that will
reduce accidents at least 25 per cent. In the code, concerning the
construction of buildings where steel derricks of any nature are
used in the construction, it says that a flagging of the derrick floor
must be securely covered and project three feet over the building
line. That is safe as far as the operation of that derrick at that
144
SIXTEENTH ANNUAL MEETING OF I. A. I. A. B. 0 .
time is concerned, but when the derrick is taken out of the cellar
to the first floor, the second floor, the third floor, and the fourth
floor, the material that it rests on must be moved up, and in the
course of raising the derrick, all the floors that have been built up
to that point are more or less open. There are numerous things on
those floors—broken pieces of planking, bolts, washers, and the
material that is used in the erection of the steel. Planks are torn
up and they fall below.
At the Syracuse convention it was contended that the principal
causes of accidents in the building line were falls and falling ob
jects, and I agree with that.
My point is that I am maintaining that the code should be changed,
and in the construction of buildings the contractor should be com
pelled to use two sets of planking, and when the derrick is resting
on the second floor, those planks should remain there, and a cover
ing should be furnished for the fourth story, and when the derrick
is raised to the fourth floor, whatever objects may be on those planks
will rest there, and should a workman happen to fall he will fall
only two stories.
What I mean by that is that we should have two sets of planking
on a building where there is steel construction and a derrick of any
land is used, and it should start from the second story. I am sure
if that is done at least 25 per cent of the accidents in the building
line will be prevented, not only for the ironworkers, but for the
men who come after us. There are many accidents happening to
the men who work underneath us for which we receive the blame,
caused by carelessness and everything else, but it is because we have
not the proper protection to work under and work on.
Now I want to cite another thing that has cropped up in the city
of New York in the last year, and I do not know that there is any
rule or regulation governing it, and that is the wrecking of build
ings. I do not know of anything in the code pertaining to the
wrecking of buildings.
Previous to a year ago, in dismantling a building they took it down
two stories at a time and you had your floors to work on, but very
recently, within the last 60 days, a new process has been started
in regard to wrecking buildings, and that is done by one of the
biggest contractors in the city of New York.
The scheme is to close all of the windows in the building from the
cellar up, cut all concrete out of the floors, from the top floor down
to the cellar, and then allow the space that is required to take down
that building, whether it is light or heavy, and all the steel is burned
off and dropped to the cellar.
On the particular job I refer to there were three men killed.
Why? Because there was nothing for those men to get around on,
and when anything fell it fell in the building. The contractor pro
tected himself so nothing would fall out of the building because he
would have a damage suit, but it seems that the fellow on the inside
was not looked after at all, because there were three deaths on that
one job.
Now, there is something that the labor department should take
hold of immediately, because it is a condition that is going to get
away from us, and it will be hard to correct. As I said, there is
nothing in the code that covers the wrecking of a building.
ACCIDENT PREVENTION---- DISCUSSION
145
On the other point that I brought up, our code needs amending.
Our code has not been amended for a long time and I think that is
one of the things the labor department should take up and consider
as soon as possible, because when it is all said and done the laboring
man is not considering the compensation. He must conserve his
health, and that is the important thing in industry.
The C h a i r m a n . I think there are certain suggestions likely to be
advanced here this afternoon that might more properly be put either
to Mr. Curtis or to the governor’s committee. As I see it, this floor
is not a place for debating other situations as they may apply to New
York State or New York City alone, to the exclusion of a lot of
other material that we have on the program for this afternoon.
Mr. G e r n o n . I would like to correct a misstatement. Mr. Stew
art said that we do not cover buildings in New York State or in New
York City. It is true that we do not cover them to our satisfaction.
We have 17 inspectors instead of 6, as incorrectly stated by Mr.
Curtis.
Seventeen inspectors will not cover the buildings that are now
in the course of construction from Twenty-third Street to Sixtieth
Street.
With these 17 inspectors we have prosecuted so far this year 140
contractors. We have tagged over 1,400 pieces of equipment for
buildings and declared them unsafe, but you can readily realize, if
you know the State of New York or even the city of New York,
what a fallacy it is to say that we are covering building construction
work with the number of inspectors we have.
Basically we had better find out what is causing accidents, and
I am only going to refer to a couple of phases o f accidents. We
know that falling objects stand highest, falls are second, and the
condition of the machinery in the State of New York is third.
Basically we have not as yet taught people to stand industrially.
They can not keep on their xeet industrially. Why? We get right
back to the problem that industry is not properly maintained. The
machinery of this State is not maintained in the condition that it
should be, and somebody said that the employees were injured be
cause of their carelessness. It is not their carelessness. They are
supposed to work with these tools, and if they do not work with them
somebody else w ill; so conseqeuntly they try to work with them, and
there is an injury. It is not the fault of the employee. It is the
fault of the maintenance of that machine.
The thing that causes the most accidents or injuries, whichever
term we desire to use, in the building industry is maintenance—the
failure of maintenance. I will defy anyone in this audience to go
into an ordinary building under construction and keep on his feet, no
matter how efficient he is on his feet, and the war demonstrated how
inefficient a great percentage of the people are, as far as their feet
are concerned.
Every Thursday at least 25 contractors are called before me for
failure to comply with the orders, and every one of them is told that
if he has not complied with the orders by the time the inspector
makes his next inspection he will be taken into court. That is a
stock phrase that we use, and we do take them to court if they do
not comply with the orders.
146
SIXTEENTH ANNUAL MEETING OP I. A. I. A. B. 0 .
They comply to-day, and to-morrow that building is just as unsafe
as it is possible to make it. Why? Some employees tear down the
barriers. They must tear the barriers down in order to do their
day’s work, as the employer does not furnish them with the equip
ment necessary.
And then we have Mr. Speculator Builder. You say you can not
find him. Well, we can not find him. We make an inspection of a
building, and we do not know who owns it. It is almost impossible
to find out who is the owner of the building. Of course you can
always tag the equipment, but primarily in the enforcement of this
law you are not going to do it for the purpose of putting people
out of work, if it is only for a day or for a week.
The building industry is practically new as far as that phase of
it is concerned. It is only a few years that we have been applying a
very obsolete law. This law was enacted when they did not con
struct buildings as they do to-day—nothing like it. The construc
tion was entirely different. The law was enacted when the walls
carried the structure. That is not so to-day. When you enter a
building you are taking all kinds of chances unless there has been
a real effort to make it safe. We must admit that the very nature
of the industry makes it unsafe. We know that some wonderful
records have been made on buildings, but still there is a hazard. It
is always there and always will be there, but we can minimize it to
a great extent. There are accidents happening every day for which
there is no excuse, and the best thing we can do is to make these
people clean up the building.
Nobody ever thinks of taking a broom or a rake and raking up the
material that is on the floor, and you do not know what is going to
happen when you walk across some floors. Just notice the temporary
stairs and the permanent stairs they put in some of these buildings.
That is the situation and it must be remedied, but any remedy you
may suggest will require a fairly adequate force of inspectors. I
do not believe you are ever going to be able to enforce all of the laws
with inspectors or officials. We have basically something more to
do than that. We have to educate many people. We must educate
the employer and the employee^ but it is not fair to ask people to
work in an industry under conditions as hazardous as in a trench.
The only new thought I got at the National Safety Council was
this: The people who are selling equipment for men and women to
work with have done considerable in the last few years in the mak
ing of shoes and hats. Anybody who was at that council last week
saw that instead of making the trench hat of steel it is now being
made of a heavy fiber. At the display there I saw hats which would
eliminate many of the hazards if the men in the building line
would wear them. Of course, it is a problem to induce men to wear
certain clothes.
Mr. S u l l i v a n . I am going to offer a suggestion, and that is for
a starter—qualified inspection of all buildings by qualified inspectors
paid a living wage, because the wage paid to factory inspectors
to-day is not at all a credit to the State of New York. I f a living
wage were paid, many more men would be induced to leave the
building industry and take examinations to become inspectors, be
ACCIDENT PREVENTION---- DISCUSSION
147
cause when you want a man in the building industry you do not
want to select a dry-goods clerk. That is one suggestion.
The other suggestion is what was embodied in the talk by Brother
Bell this morning, that a safety adviser be installed, whose duty
would be to look after the safety of buildings only. I will cite
you an instance of Reilly & Son, a contractor, who had two men
whose duty it was to look after safety in the construction of a large
building, one of the largest buildings in New York City, and they
did not have even one minor accident in the construction of that
building from the start to the finish. So there are many ways of
doing this if we are sincere in our effort.
Now, in regard to Brother Curtis’s statement. Let us call a spade
a spade. We do not go to a fish store to buy drugs, and there are
many of the 37 members of Governor Roosevelt’s committee present
to-day, and we can have an exchange of ideas from men all over the
Union, from every State in which compensation laws exist, and
this is the place where you are going to learn by the exchange of
ideas on safety, and let us be sincere. I am sincere in this movement.
I know Brother Curtis is sincere, but I am not going to accept an
appointment by the governor on a committee just to get my name in
the paper. I would not accept the appointment unless I meant to
work.
Mr. M cG r a n e . I have a sugguestion which I think is good.
I think if the builders of New York and the architects of
New York, or of any part of the world for that matter, would
investigate the character of the subcontractor and see that he carries
insurance to take care of the injured worker, it would help a whole
lot.
The C h a i r m a n . I think that is getting into the general question
of human nature and that is a large problem for us to handle this
afternoon.
Mr. Y o u n g . I have been working on a job in Brooklyn which has
been going on for two years and which I think is one of the largest
reenforced jobs that has been done in some time, the remodeling of
Loeser’s old building in Brooklyn, being done by John Thatcher &
Sons, and at times we have had as many as 60 men on the job, and I
am very glad to report that we have not had one accident on that
job, because Mr. Thatcher is on the job every morning instructing
the subforeman to leave nothing open, no loopholes. In other words,
acting as an inspector on the j<H) and, as this brother says, 17 inspec
tors could not cover half of the jobs in New York, not to mention
Brooklyn or Long Island.
I think this job in Brooklyn has established a record. It has been
under construction for two years. I am working there myself and
I am very glad to make this report for that particular job.
Mr. S t e w a r t . In New York City in 1928 there were 8,395 build
ings erected and there were 2,920 buildings torn down.
The C h a i r m a n . I am going to suggest that we go on with the
program. There has been sufficient said in regard to the matter of
the building trades here this afternoon to indicate that there is a
very considerable responsibility resting on all lines, all trades, in
connection with that industry, the same as there is in any manu
facturing business.
148
SIXTEENTH ANNUAL MEETING OF i. A, I. A. B. d .
We are going to switch over from building and construction to
the chemical industry, as I understand that there have been a certain
number of chemical accidents that have called for considerable dis
cussion, and Mr. Burke, the chemical engineer of the Bureau of
Industrial Hygiene of New York, is going to speak to us. Mr.
Burke’s subject is, u Accidents and Health Hazards in the Chemical
Industries.”
Accidents and Health Hazards in the Chemical
Industries
By William J. Burke, Chemical Engineer of Bureau of Industrial Hygiene o f
New York
As another paper is to be read at this meeting on accidents and
health hazards in the chemical industries, I have decided, in order to
eliminate repetition as far as possible, to treat the subject more from
the viewpoint of the investigations of the department of labor of
New York State in connection with some of those industries in this
State.
It has been said that this is an age of science and ours a nation
of science. The advance in the conservation of health and safety
is, indeed, an index of the progress of modern civilization.
Health and safety conservation with all of its wealth of scientific
achievements, with all its learned and earnest workers, would never
have progressed to the point attained without the aid of a sympa
thetic and intelligent public sentiment. Public attention to health
in the manufacturing field was directed in particular to the chemi
cal industry during the late war because of the hardships and suffer
ing caused by some of the mushroom chemical plants which appeared
almost overnight, and in most cases little thought was given by the
manufacturer to the welfare of the worker. The slogan in use at the
time of “ production at any cost55 provide a costly one in pain and
suffering to the employee.
When men in different walks of life think independently of each
other and come to the same conclusions, action usually follows and
with the evidence weighed there is likely to be progress along the
right lines.
Education or advancement in knowledge is, therefore, the dynamic
force of our civilization. Education has broken down the barriers
of folly, superstition, and ignorance and it will continue to break
down many more, of which, may we not include the accidents and
health hazards of the chemical industry? The most cherished thing
in life is life itself, with health the most important controlling factor
and if man’s principal asset is health, it follows that any impairment
of this great gift results in decreased or inefficient work, misery, and
even early death. While these things apply in all forms of industry
the chemical industry offers no exception.
What constitutes the chemical industry? Is it a branch of in
dustry in which acids, alkalies, salts, colored pigments, and dyes
are made, or is it a part of industry, which includes also the manu
facture of such articles as soap, white lead, metal reduction, cal
cining carbonate of lime, making plaster of Paris from gypsum
ACCIDENTS IN THE CHEMICAL INDUSTRIES
149
rock, for, bear in mind, finished products are made from raw mate
rials involving chemical changes. May we not also include the com
pounds of the numerous drug products, of varnish stains, lacquers,
and paints. I f all of these articles are included in such a branch
of industry, then surely the chemical industry in New York State
is a large one and covers a great field.
The object of this assemblage is, I believe, to determine what
progress has been made in accident prevention in industry and to
attempt to devise ways and means toward health conservation and
prevention of accidents.
The Statistical Bureau of the New York State Department of
Labor reports that accidents have decreased in the chemical industry
in this State during the last two years. What has been the cause
of this decrease? Why should accidents decrease, and by that I do
not mean only number of accidents, but also accident severity. The
answer is that the workmen are becoming wiser day by day, and
take a keener interest in their work while employers take an interest
in their employees with a different spirit than they formerly did.
Workmen’s environment has improved; it will continue to improve,
it is hoped, and keep pace with the new hazards that may occur with
the progress of the chemical industry.
It was stated that men are becoming wiser. Let us consider
some of the things in which the average chemical worker is becom
ing wiser. He is becoming wiser in the matter of personal hygiene;
this is plainly shown by the care he is exercising in keeping his body
and apparel cleaner, in the use of soap and water and individual
towel for the removal of poisonous or injurious chemicals from his
person and especially from his hands, where contamination is more
likely to occur, and in the avoidance of such dangerous practice as
wiping his hands on his clothing. In relation to the avoidance of un
clean habits I would like to mention one of the many cases which
were investigated by some of the personnel of the Bureau of In
dustrial Hygiene of the New York State Department of Labor.
In this case, which resulted in death, the man was employed in a
concern which manufactured antimony sulphide. He was very un
clean in his habits and absolutely disregarded the ordinary rules of
personal hygiene. He was provided with a suitable locker, which he
used alternately for street and working garments, but it was so rarely
cleaned that its floor was covered to a depth of one-sixteenth of an
inch with dust, which chemical analysis showed to contain 22 per
cent of antimony sulphide. The fatal poisoning in this case was
undoubtedly largely due to the man’s own careless habits.
The average worker in the chemical industry is giving a great deal
more thought pertaining to proper working shoes. He is realizing
the danger resulting from wearing leaky or defective shoes which no
longer serve the purpose for which they were intended, protection
of the feet. Defective shoes not only expose the wearer to the
hazard of poisonous chemicals by absorption through holes or other
wise, but may result in fallen arches or other body deformities due
to the continued use of shoes run down at the heel. While I am on
this subject of shoes, permit me to stress the importance of proper
working shoes, as a great many of our industrial maladies can be
150
SIXTEENTH ANNUAL MEETING OF i . A. I. A. B. C.
directly traced to the continuous walking or standing in improper
shoes.
Men are becoming wiser in the avoidance of such accident and
health hazards which may result from—
Eating in workrooms in which injurious chemicals are handled or
manufactured;
Carrying matches or cigar lighters into, or smoking in, places in
which inflammable liquids or gases are present;
Neglecting to seek first aid for apparent slight illness, eye injuries,
cuts, bruises, or burns;
Placing ladders near open vats which are filled with liquids of a
dangerous or poisonous nature;
Entering a tank without knowing whether it contains fumes or
vapors of a dangerous nature, or failing to provide themselves with
a life line held by helpers outside of tank;
Blowing a stream of compressed air into an acid carboy in order
to force out the acid content;
Leaving their station without permission when they are supposed
to watch constantly a tank or device which may explode by the
generation of unusual heat if the cooling device fails to work;
Without permission, try to melt, burn, or otherwise destroy con
tainers or utensils in which dangerous or explosive materials have
been stored;
Failing to use properly the lock and chain provided for the pur
pose of locking control valves to tanks when men are at work therein;
Neglecting to clean tools which have been in contact with poisonous
or explosive materials;
Allowing salts or liquids of a dangerous or deleterious nature to
remain on the floor when dropped or spilled;
Sweeping floors, walls, or machines during working hours in any
manner which may cause dust of a dangerous nature to be released
into the workroom;
Throwing oily rags or other dangerous refuse near steam pipes;
Lowering an electric light globe which is not furnished with a
safety vapor-proof globe and guard into a tank in order to observe
conditions therein.
I wish to cite one case of fire which was investigated, the direct
cause of which was the lowering of an unprotected 40-watt incan
descent light through a small opening in a closed tank which con
tained benzine, to observe the amount of liquid. The fire was defi
nitely determined to have been caused by the ignition of benzine
vapor which came into contact with the glowing filament of the light
when the globe was broken against the inside of the tank. This nre
caused the severe burning o f five employees and the destruction of
the factory.
Men are taking an interest in their work more intensely than they
formerly did; this fact is borne out by the decrease of injuries re
sulting from unsafe methods and practices. It can be said without
any fear of contradiction that unsafe methods and practices (which
include carelessness, chance taking, disregard of established rules,
and lack of knowledge and judgment) cause more accidents with
injury to limb and body, loss of life, and damage of material and
property, than the accidents which are classed as unavoidable be*
cause their occurrence could not be foreseen.
ACCIDENTS IN THE CHEMICAL INDUSTRIES
151
Many chemical firms in New York State take an interest in their
employees in a different spirit than they formerly did; this is
shown in most cases by the whole-hearted spirit in which they are
meeting all the provisions of the labor law relating to sanitation.
These laws require an adequate supply of good drinking water;
an ample supply of hot water, soap, and individual towels where
lead is handled; a suitable place, separated from the work room, in
which meals may be eaten; clean windows, floors, walls, ceilings,
and unoccupied space; covered receptacles for waste; adequate light,
at least one-quarter of a foot candle of light at the floor level; and
most important of all to my mind, an efficient ventilating system
for the proper removal of dusts, fumes, vapors, and gases. A word
here about the efficiency of these ventilating systems: Some manu
facturers seem to think that any tinsmith can devise and install a
suitable ventilating system, and that such a system will fully ac
complish the purpose for which it has been installed, the adequate
removal of dusts, fumes, vapors, and gases. It has been demon
strated time and again that such a system is worse than useless for
the purpose sought to be attained. The installation of a suitable
ventilating system is a rather difficult engineering proposition and
should be handled by engineers familiar with work of this nature.
The bureau of industrial hygiene is willing to cooperate at all times
with the manufacturer in New York State relative to the installa
tion of adequate ventilating systems.
It can be said with all fairness to the management of the chemi
cal industry in New York State that a great many of them go a
step farther than only meeting the requirement specified by law and
have themselves installed some of the following safeguards for the
elimination of accidents and health hazards:
They have a properly organized and well functioning safety
organization in which they are devoting the same amount o f interest
as is given to their production problems. They are aware of the
danger of letting such organizations drift along by themselves and,
without proper accounting of their activities, reach such a dor
mant state as to their usefulness that their work along safety lines
can be identified in name only.
The manufacturer is also becoming awake to the necessity of the
proper education of the employees pertaining to accident and health
hazards. The modern method of education along safety lines is for
the safety organization to explain to the prospective employee, be
fore he leaves the employment office, the nature of the hazards which
might result from his employment and to outline ways and means
by which he can protect himself against their occurrence. It is only
fair to the new employee that he be made fully familiar with the
nature of the hazards involved in his new employment at the time
of hire, in order that he may be in a better position satisfactorily to
judge the merits or demerits of the new work and also properly to
safeguard himself against those hazards, should he decide to enter
the employment. Ignorance of methods, equipment, or materials
handled is one of the outstanding causes of industrial accidents. I
will give for illustration at this time only one of the many cases
which were investigated where ignorance resulted in hardship to
the workman. In this particular case the man was employed in a
factory engaged in the manufacture of colors; he was found to
152
SIXTEENTH ANNUAL MEETING OF I. A. I. A. B. 0 .
have suffered from five attacks of dinitrobenzol poisoning, each at
tack necessitating his removal to a hospital, where a diagnosis of
64carbon monoxide poisoning55 was made, the error being due to
the similarity of the symptoms produced by the two poisons. Investi
gation of this case proved that the man, never having been informed,
was totally unaware of the poisonous nature of the material which
he was handling, and was not only exposed to the fumes in the
usual way but even wiped his hands, soiled with dinitrobenzol, on his
clothing and thus presented for evaporation a large surface from
which he inhaled the fumes at close range.
The chemical manufacturers in many cases are providing safe
guards to their employees along the following lines:
Equipping all tanks in which a pressure is carried or may be
generated with one or more safety valves of sufficient size and ca
pacity to relieve all the pressure from the tanks should it become
greater than the maximum working pressure allowable for these
tanks.
In all works where inflammable gases, vapors, or dusts are present
or likely to be present, the lighting system is usually of such a type
as to prevent ignition of any of these substances. This is accom
plished by the use of vaporproof globes and the location of switches
and controllers so as to insure that there shall be no means by which
ignition shall take place.
All shafting and belts are electrically grounded and no motor
of a sparking type is installed where there may be present any danger
of the ignition of inflammable materials.
Installation of radiators or steam pipes are conducted in a manner
to allow at least two inches of space between the walls to protect
against the accumulation of dangerous chemicals.
Air intake of all fans used in conjunction with drying ovens or
drying rooms are so placed as to insure that the incoming air shall
be absolutely free from contamination of inflammable dust or gases.
Browning tubs, or showers, are provided in places where acids or
alkalies are handled or used.
Separate double lockers for care of both working and regular
clothing are provided for each employee where necessary to protect
him against poisonous materials, and it is mandatory that the
employee keep the lockers clean at all times.
Shower baths in the proportion of at least one to every twenty
employees are provided in places where irritant or corrosive chemicals
(such as aniline colors, Paris green, chromium compounds, naph
thalene, acids, alkalies, etc.) are made, handled, or used in quantities.
In addition to these safeguards, the manufacturers in a great many
cases are equipping valves connected with pipe lines or tanks with
tags and are placing them to be within easy reach for safe and speedy
operation when necessity for operation arises.
Posters are furnished to the employees detailing the safe method
of handling and storing carboys which contain acids, as well as the
proper equipment necessary to safely handle the same.
Adequate aisle space is provided in at least two directions to
furnish safe exit for attendants near tanks or vats in which there is
the possibility of danger from the sudden boiling over of the con
tained material.
ACCIDENTS IN THE CHEMICAL INDUSTRIES
153
Proper ventilation of pits, tunnels, vats, or tanks in which em
ployees must enter, where there is danger of fire, poisoning, or
asphyxiation.
They are also providing special clothing and devices to protect the
employees from the inhalations of injurious dusts, gases, or fumes
or to prevent contact on their skin with irritant or poisonous sub
stances. The special clothing and devices include respirators, pro
tective devices for the head, neck, ankles, and feet, jumpers, overalls,
aprons, shoes, gloves, goggles, and masks.
They are realizing the necessity of teaching the workmen to
thoroughly examine and properly clean pipe lines, traps, machines,
or other devices which may contain substances of a nature detri
mental to health, before making repairs on same.
The providing of suitable reliefs to the outer air on receptacles to
conduct the vapors of volatile liquids of a deleterious nature, which
may arise during the filling operation, and also the conducting of
experiments relative to the substituting of chemicals of less hazard
ous nature and are making such substitution wherever it is possible.
The ever-changing processes and introduction of new chemicals
of which very little is known of their toxic properties, impose unusual
requirements on safety measures to protect life and property in the
chemical industries. The avoidance of such hazards can be accom
plished only by constant vigilance on the part of the management
and works.
While it is true that the management of many of the chemical con
cerns in this State are taking pains to safeguard their employees,
it is equally true that the less progressive concerns are still wasteful
of this human factor.
They do not seem to see that it is sound business properly to guard
the invironment of the workers intrusted to their care. The acci
dents of both health and traumatic nature that occur in some of these
plants are due mainly to ignorance or greed on the part of the
employers.
Such conditions keep the worker uncomfortable; they hinder his
work and make him an easy prey to such accidents. They are like
wise harmful to the employer, for he is the constant loser from poor
and careless work, spoiled stock, absences, and high labor turnover.
It is an old axiom that good health and work go hand in hand.
The Bureau of Industrial Hygiene of the Department of Labor
of New York State recognizes the inherent health and accident
hazards in its chemical industries, but also realizes the possibility
of the elimination of these hazards.
The department is anxious and willing at all times to work with
the manufacturers and workers of the chemical industries in an
endeavor to overcome these health and accident hazards.
The C h a ir m a n . I suggest to you that we combine the discussion
on the three addresses relating to the chemical industry after the
other two addresses have been presented.
Mr. Burckel is going to give us an address on “Accidents and
health hazards in chemical industries.” I think that we will find
that safety fundamentals are pretty much the same in all lines of
industry, and it is a very great pleasure for me at this time to call
on Mr. J. A. Burckel, the vice president of Du Pont Viscoloid Co.,
New York City.
94023°—30-----11
154
SIXTEENTH ANNUAL MEETING OF I. A. I. A. B. C.
Accidents and Health Hazards in the Chemical
Industries
B y J. A. Burckel, Vice President Du Pont Viscoloid Co., New York City
E. I. du Pont de Nemours & Co. has long been associated with
the work of your organization and has received considerable help
and benefits from its cooperation with representatives connected
with your association, gathered together from all sections of the
country and of the world and representing the interests of all parts
of the general public. We hope that our company has contributed
to the good work you are carrying on, and I can assure you that
nothing is considered by the management of our company to trans
cend in importance the protection of health and life of the employees
engaged in manufacturing its products.
To such an extent is this true that recognition of safety perfor
mance and special incentives for improvement in safety records
have for many years been established by the president and board
of directors of the company. A plant which surpasses a standard
of safety performance established by the company receives more
commendation and recognition than would result from the estab
lishment of a new record in volume production, cost of production,
profit on sales, or any of the generally accepted measures of com
mercial success.
In appearing before this assembly I realize that there is little
if anytnmg which I can contribute in the way of concrete ideas
or plans. I have not the technical training of a chemist, of a me
chanical engineer, or of an expert on safety devices. I am here
to express to you the attitude of the Du Pont company and all Du
Pont subsidiary companies in supporting with 100 per cent sincerity
the idea and the practice of safety in industry.
In discussing accident and health hazards in chemical industries
it is appropriate to ask ourselves first, what is included in the term
“ Chemical industries.” There is, I believe, no commonly accepted
definition, no hard and fast rule by which it may be determined
whether or not an industrial enterprise comes within this scope,
but Dr. John Teeple, one of the leading chemical engineers of this
country, has pointed out four characteristics of a chemical industry
which are significant.
1. A chemical industry manufactures and sells materials which
are essentially different chemically from the raw materials.
2. The production involves a preponderance of chemical processes.
3. The operations are controlled by trained chemists and engineers.
4. The management possesses chemical understanding and a chem
ical outlook.
I f we consider this a fairly good description of what the chemical
industry is, and look back over the developments of the last de
cade or so, there are several points which stand out impressively.
One undoubtedly is the magnitude and diversity of this industry.
According to the last census figures available (1925), the annual
products of American chemical industries amounted to $21,021,875,000 not including the metallurgical industries, which would
raise the total to over $23,500,000,000. The annual increase in the
ACCIDENTS IN THE CHEMICAL INDUSTRIES
155
value of the products resulting from chemical and metallurgical
processes was over seven billion dollars. The figures for 1929 will
probably be even greater. Another measure of the size of the
chemical industry is the power consumed. According to the same
census report, the chemical industries used over 7,800,000 horse
power, while it is interesting to note that the mechanical industries,
in what we consider to be the mechanical age, used only about
6,500,000 horsepower. The products of the chemical industry in
clude such contrasting materials as rayon, chlorine gas, rubber,
dynamite, medicines, xertilizers, flotation agents for ores, cement,
paint, etc.
Another point is the number of new industries constantly being
developed by chemical research. Historically, of course, the syn
thetic dye industry, to which synthetic medicines are closely
related, is a conspicuous example. Another instance is the whole
electrochemical industry, with such products as alkali, bleach, alumi
num, and carbide, which in turn is the starting point for a variety
of other products. The manufacture of an ever-increasing variety of
synthetic plastics with a multitude of applications, the fixation of
the nitrogen of the air to make explosives or fertilizers, the manu
facture of new motor fuels, of new kinds of lacquers, and of new
solvents for use in chemical industries are developments which are
very important not only in the size of the commercial developments
but also in their effects on the living conditions and convenience of
all of us.
A third point, equally significant but perhaps not so frequently
stressed, is the extent to which old established industries are becom
ing chemical industries in the somewhat restricted sense of the defi
nition suggested above. What I mean by this can perhaps best be
shown by the mere mention of three such industries; for example,
the preparation of food, the tanning of leather, and the making of
glass. All of these processes are extremely old. They were carried
on before there was any science of chemistry or indeed any science.
But to-day we listen to the expert advice of food chemists, leather
chemists, and glass chemists, because it has been found that chemistry
can make extremely important contributions to these industries which
are to a greater or less extent in individual cases becoming chemical
industries. As another example, the United States Steel Corpora
tion is now one of the largest manufacturers of by-product chemi
cals, and metallurgical processes are more and more the subject of
chemical control and research. A similar change is taking place in
the petroleum industry, where, in addition to increased chemical
processing and control, we note the use of petroleum derivatives for
the synthesis of new organic materials such as solvents.
It is perhaps superfluous for me to emphasize the widespread rami
fications of the chemical industry, for you must be aware that in our
modem industrial civilization chemistry is becoming more and more
a dominant factor in providng new materals for our constantly
heightened standard of living. It has been said that the measure of
a civilization may be taken by the amount of soaj) it consumes.
Chemists have measured it by the amount of sulphuric acid, but as
Doctor Herty has said, the criterion does not matter, for both soap
and sulphuric acid are chemical products.
156
SIXTEENTH ANNUAL MEETING OF I. A. I. A. B. 0 .
The numerous contacts of the average citizen with the products of
chemical industry have been brought home to audiences by the device
of following a man through his normal day’s activities and noting
that almost everything he touches has to a greater or less extent been
the result of chemical operations. Another method of visualizing
the same truth is to consider such a familiar object as the automobile,
which presumably most of you are accustomed to think of as dis
tinctly the achievement of mechanical industry. Yet, if you go over
the different parts of this machine, the glass of the headlights, the
finish of the body, the electric storage battery, the fabrics used for
upholstery or for the top, the special alloys from which the engine
is made, the synthetic material for the distributor, and even the
lubricating oil and fuel used in the engine, you will be impressed
by the fact that there is not one of these items which is not the result
of chemical industry.
To-day, in fact, we are in the midst of a chemical revolution which
will perhaps be as wide-sweeping in its effect as the mechanical revo
lution which began a century ago. The chemical industries underlie
nearly all others. The paper and ink of the daily paper, the glass
of the window, the wire of the electric lamp, the paint or paper on
rhe wall, the color of your clothes—all are products of chemistry.
There is another viewpoint from which we may consider the chemi
cal industry, one which is perhaps of particular interest to this
group, and that is the increasing variety of methods which are
available to the manufacturing chemist. The use of electric current
has become familiar. Such means as extremely low and extremely
high temperatures have been followed by the use of extremely high
pressures. In the synthesis of ammonia from the air, for example,
the gases are compressed to nearly 15,000 pounds per square inch
and this not in a small laboratory, but on a regular manufacturing
scale. The use of contact substances to speed up chemical reactions
is another modern development which may truthfully be said to be
the foundation of many modern synthetic processes.
While these new resources have increased the possibilities of chem
ical industry, they have not, I think, greatly increased the hazards.
Those to whom the chemical industry is not familiar possibly think
of its hazards in terms of the corrosive action of such material as
sulphuric acid or of molten caustic which destroy human flesh with
which they may be in contact. Or possibly, they think of such
hazards as toxic gases of which a few breaths may be sufficient to
kill. These of course are the more spectacular hazards, and it can
not be denied that they are real. Nevertheless they are the sort
against which safeguards may effectively be raised, and are less
difficult than those cases where, for example, a worker may be slowly
and quite unconsciously poisoned by the gradual absorption into his
system of materials with which he works, whose toxic nature is not
yet understood. This sort of hazard will possibly increase with the
numerous new synthetic materials which modern industry utilizes;
but it has not been possible for the chemical industry to avoid pro
cesses because they were known to be or might possibly be hazardous.
The fact that the chemist in industry can not avoid processes or
products because they may appear hazardous is justified by experi
ence in numerous lines where, because of the public need for the
accomplishment of certain results, industry has accepted the initial
ACCIDENTS IN THE CHEMICAL INDUSTRIES
157
risk of dealing with dangerous materials and has not only accom
plished for the public welfare the beneficial results which constituted
the goal of achievement but also, by recognizing and studying the
source of the hazards, has developed safe processes so that operations
which appeared extremely hazardous have been made safer than
many other processes where, because the hazard was less evident, the
study of protective measures has been less thorough.
Perhaps no better example can be cited than dynamite and other
explosives, which have become one of the absolute essentials in every
day industrial life. Explosives, which were originally designed for
destruction, have come to be recognized as an absolute necessity in
constructive work throughout the world. When Nobel first dis
covered dynamite the process was considered so extremely hazardous
that restrictions were made, so severe that a large part of his early
development work had to be carried out on a barge anchored at sea.
Contemplate for a moment what would have been the result had this
product been abandoned as being too dangerous for development
and production. During the past year more than 500,000,000 pounds
of commercial explosives were consumed in the United States in
industry. Without this tremendous, controlled, safe force, it would
have been beyond human possibility to have mined the millions of
tons of metallic ore and coal; to have provided the millions of tons
of stone for buildings, for roads, for railroads; to have provided the
materials for the millions of barrels of cement, etc. In short, the
hundreds of products which are cheaply provided in unlimited
quantities from nature’s bountiful mineral resources would have
remained unavailable except to the extent that they could be exca
vated by hand labor. The production, storage, transportation and
use of this enormous quantity of explosives was accomplished with so
small a toll of injuries or loss of life that the industry compares
favorably with dozens of other industries which the public never
thinks ox in terms of hazard. The inherent danger in the process of
manufacturing explosives is no less now than it was at the time of
the early experiments. The safety accomplishment has been the
result of recognizing and studying the hazards and providing the
necessary precautions regardless of the trouble and expense involved.
Safety of operation has been made absolutely the first consideration.
The soundest basis for safe practice in industry is to know the
facts and provide precautions.
The National Safety Council in carrying on its splendid work
recognizes that the safety problem centers in education. The series
of talks recently broadcast throughout the country by that most
modern educational factor, radio, has accomplished a tremendous
result in bringing the safety idea into the homes of millions of
industrial employees who have heretofore heard safety preached
only in industrial plants. One can not fail to be impressed with
the statements so amply supported by statistics that the safety work
which is being done by all of the representative industrial organiza
tions is producing constant reductions in the number and ratio of
accidents and fatalities. It is no less impressive to recognize the
fact that almost wthout exception the leading organizations in any
line of industry are also the leaders in safety accomplishments.
The published accident statistics of the National Safety Council
for 1928 cover 2,557 establishments, 1,828,186 employees, and
158
SIXTEENTH ANNUAL MEETING OP I. A. I. A. B. 0 .
4,266,262,858 hours of exposure. These statistics are tabulated sepa
rately covering 16 industries, in which the chemical industry is
included. As has already been said, the segregation of chemical
industries as such is largely arbitrary, so that in these statistics the
chemical group represents industries covered by the narrow defini
tion. As the chemical group in the above statistics represents ap
proximately 5 per cent of the total, the figures showing frequency
and severity of accidents should be fairly comparable. Taking the
average rates for the three years of 1926, 1927, and 1928, the fre
quency rate for all industry was shown to be 27.27 and for the
chemical industry 18.30. The average severity rate for all industry
was 2.17 and for the chemical industry 2.07.
One of the most interesting and significant disclosures of the
National Safety Council statistics is that the record of the 2,557
establishments which report accident statistics and which recognize
organized safety work as sufficiently important to receive special
attention, have a decidedly better safety rating than the total for all
industry. Expressed in another way, the statistics indicate that if
all industry had the same safety rating as those industries cooperat
ing with the national association, the industrial fatalities for the
year 1928 would have been 8,600 less. It is further significant that
the establishments which have operated under organized safety plans
oyer a period of years show lower ratings that those establishments
which have more recently adopted safety work.
The importance of these conditions as indicating the need for ex
tended education among all industrial organizations, along with
education of employees, can not be overemphasized.
The Hon. James J. Davis, Secretary of Labor, has listed the
causes of industrial accidents as follows: Faulty instruction, 30 per
cent; inattention 22 per cent; unsafe practices, 14 per cent; poor
discipline, 12 per cent; incompetency of employees, 8 per cent; physi
cal unfitness, 3 per cent; mental unfitness, 1 per cent.
The causes of accidents in the chemical industry differ very little
from the causes of accidents in industry as a whole. The large ma
jority of accidents in the chemical industry do not occur from what
may be called process hazards or hazards peculiar to the particular
industry, but from the common everyday causes encountered in all
industry. For example, falls rank as the first cause of accidents in
the chemical industry and rank fourth in industry in general. The
fact that the hazards which cause the accidents in the chemical are
not peculiar to the industry is not difficult to explain. The obvious
hazards are surrounded with maximum safeguards, and the presence
of an obvious risk engenders greater care on the part of employees.
Poisons or corrosive chemicals encountered in the chemical industry
are handled so far as possible in closed equipment and usually under
the protection of elaborate ventilating systems. In other words, the
hazards peculiar to the industry are largely eliminated in the design
of the equipment used. Goggles, gas masks, protective clothing,
etc., are provided for emergencies.
Since the accident prevention problem of the chemical industry is
so similar to that of industry as a whole, a brief discussion of the
subject of accident prevention should concern itself not with the few
accident hazards confined to the chemical industry, but rather with
the fundamentals of accident prevention applicable to all industries.
ACCIDENTS IN THE CHEMICAL INDUSTRIES
159
Accident prevention appears to embody at least four fundamental
activities: The elimination of hazards through the design of build
ings and equipment; the guarding of machinery or mechanical
hazards; the provision of protective devices and clothing; and most
important of all, and most difficult of all, the education of employees
in safe practices.
The first of these four fundamentals requires that any installation
be studied carefully from the stage of design to the finished unit for
the purpose of eliminating accident possibilities. The processes, the
machinery and equipment, and the buildings housing them should
all come under the scrutiny of these careful studies.
The second fundamental is virtually the same in all industries. It
can be accomplished, except in a few special cases, by observing
established standards for guarding machinery.
The third is also comparatively simple, merely requiring a study
of the materials handled and the method in which they are handled,
and thereby determining what devices are necessary to protect the
workers. The care of these devices so that they do always protect,
and the problem of seeing that they are used by employees, are not
so easy, however, and demand unceasing vigilance.
The fourth, the safety education of employees, is the most import
ant and also the most difficult. It is accomplished by instruction
and supervision of employees and by safety incentives such as safety
rallies, contests, prizes for safety records, and other forms of propa
ganda intended to promote carefulness in the employees.
Very important in the carrying out of all of these fundamental
requirements is the safety organization of the individual plant or
unit of the industry, and a word about the plant safety organization
should not be out of place.
As accident prevention on the plant is one of the most important
parts of the plant operation, the operating organization must be the
safety organization. There appears to be some tendency to-day,
perhaps hanging over from the early days of organized accident pre
vention, to charge a certain individual—the safety engineer if there
be one—or a small group of individuals of the plant personnel with
the whole task of preventing accidents. This is theoretically and
practically wrong. The responsibility for accident prevention on
the plant should be divided among the personnel so that each is given
his responsibility in the same field and to the same extent as for the
other phases of his operating duties. The coordination of the safety
work is accomplished by an arrangement of safety bodies or com
mittees ; a central or guiding committee composed of the staff of the
plant, a departmental committee in each department, consisting of
the department head and his foreman; and workmen’s safety com
mittees under each foreman. The plant safety engineer, if there be
one, should act in an advisory capacity to the safety organization
as a whole.
The control of health hazards in the chemical industry, like the
control of accident hazards, is dependent upon the two basic prin
ciples of recognition of hazards that exist and adoption of adequate
measures to control these health hazards.
The manufacture and handling of certain materials are definitely
recognized as health hazards, and the methods of protection against
them are well defined and understood. This group includes such
160
SIXTEENTH ANNUAL MEETING OF I. A. I. A. B. 0 .
materials as lead, benzol, aniline and its derivatives, mercury, arsenic,
toxic gases, etc. In addition to this first group, which we may
classify as known hazards, there is another group whose status has
not been fully established, and it is this group which at this time
must be given most careful and scientific consideration.
In order to recognize health hazards it is essential carefully to
study and analyze the effects that the chemicals under consideration
have upon the human body. Do they enter the body and after so
doing, do they disturb the function of certain organs or perhaps
impair them to such an extent that they seriously jeopardize health
and even life ?
The skin, the digestive tract, and the lungs are the three most likely
channels through which poisons may be introduced, and entrance may
be by one or all of these channels. Thus it becomes necessary to
study carefully and scientifically all chemicals and determine just
how they may produce injury to health, and learn as a result of this
study just what may be expected in the way of physical signs and
symptoms. This work should be investigated by animal experi
mentation in the laboratory, and by careful and frequent physical
examination of employees, this examination being for the purpose of
detecting signs of absorption. Thus it becomes imperative that every
employee be carefully examined before beginning work in chemical
operations, in order to have an accurate record of his existing physical
condition and in order that we may at the time of periodic physical
examination be able to detect any changes, and after careful analysis
determine whether or not they have been caused by working condi
tions or bear no determinable relation to the work. It is of course
undesirable to send into an operation an employee who is already
suffering from some condition which may be aggravated by his
work. On the other hand, it would be a grave injustice to choose the
healthiest types of industrial manhood and then fail to do every
thing humanly possibly to protect and maintain this standard of
health.
Having determined that a certain chemical is toxic and may enter
the human body by one or more routes of entrance, every possible
effort must be made to surround the handling of this material with
safeguards to protect against its hazards. There must be careful
study of the methods of handling throughout the course of manufac
ture with the thought in mind of introducing newer and better
methods that will entirely eliminate the possibility of any health
hazard. The surest method of determining the success or failure of
these methods is carefully to follow up the physical condition of the
employees so engaged, watching carefully for any signs of absorp
tion as manifested by physical signs and symptoms.
With a recognition upon the part of industry of its responsibility
for providing safe processes; with the assistance of such organizations
as this association in bringing to light the types of hazard requiring
special study; and with the education of employees to the point of
full cooperation in safety work, the chemical industry as well as all
industry will continue to fulfill its function of meeting the increasing
demands of an ever-increasing scale of human progress—the objec
tive being to make the world a better place in which to live.
[Meeting adjourned.]
WEDNESDA Y, OCTOBER 9— EVENING SESSION
Chairman, Parke P. Deans, of the Industrial Commission of Virginia
The C h a ir m a n . It is a pleasure of mine to present at this time
the incoming president of this association, Mr. W. O. Stack, of
Delaware, who will address you on the subject, “Accidents resulting
in no lost time.” Mr. Stack is also president of the Industrial Acci
dent Board of Delaware.
Accidents Resulting In No Lost Time
By Walter O. Stack, President Industrial Accident Board of Delaware
In addressing a large group of superintendents, employment man
agers, and foremen at an industrial safety management meeting,
one of a series of safety meetings sponsored by the Delaware Safety
Council, in my home city on May 24, I said, in referring to the
subject matter of this meeting: “ Again I digress, this time to call
your attention to what is considered by some a very serious matter.
As all of you know, safety campaigns, such as the one now on
here, are being conducted in many sections of the country, and so
keen is the interest manifested where such campaigns are in prog
ress that some plants in their efforts to go for a long period of time
without a lost-time accident are, I was recently told in Washington,
keeping certain injured employees about their plants, although not
able to work, paying them their usual wages, so they may continue
their safety campaign without having to report a lost-time accident.
Such practice, my friends, is considered bad not only by the adminis
trators of the workmen’s compensation laws but also by the medical
profession, because it robs the injured worker of the proper medical
treatment, sanitary isolation, and rest which nature demands to
bring around good recovery. It tends also to defeat one of the very
purposes for which workmen’s compensation laws were created. So
serious has the matter become it is to be discussed at the meeting of
the International Association of Industrial Accident Boards and
Commissions to be held in Buffalo in October, and as I have been
named chairman of the session called to discuss this very important
question, I sincerely hope I may be able to report that none of the
Delaware employers have indulged in this unsound and improper
practice. Your failure to carry out the provisions of the Delaware
workmen’s compensation law will result in the industrial accident
board penalizing the offenders.”
I do not know, my fellow members of the International Associa
tion of Industrial Accident Boards and Commissions, to what extent
this reprehensible practice has gone, and I regret that I am not able
to recommend some definite action without the waste of time and
words. It is not, I am sure, the desire of a single member of this
association to discredit the splendid achievements of those engaged
161
162
SIXTEENTH ANNUAL MEETING OF I. A. I. A. B. 0 .
in safety (prevention) work. They deserve our support and co
operation, for they in their unselfish services for the conservation of
life and limb give substantial evidence of what President Hoover
has called “ the surer forces of human advancement.”
Since industrial accidents cause an annual loss of many millions
of dollars and create much grief, sorrow, and distress in many
hitherto happy homes, I believe it should be the duty not only of
this association but also of all individual accident boards and com
missions to aid and encourage the world-wide accident-prevention
movement so effectively in progress. Delaware has had for some
years a very active safety council, supported financially and morally
by its citizens. Its success in reducing accidents and saving lives
and property has been most gratifying.
The most cordial and helpful relations exist between the council
and the State industrial accident board. I am a member of the
council’s advisory board and attend so far as time will permit the
board’s bimonthly luncheons, and there learn what is being done in
our industrial plants in the furtherance of safety. So illuminating
are the reports made at those luncheons, I have not hesitated to say
to the officials of our industrial plants and to the press, that the
council is materially assisting in stabilizing the cost of compensa
tion insurance in the State. Earnest and intelligent accident-pre
vention work means more than the saving of dollars in compensa
tion insurance, however. It goes further. It saves the lives and
limbs of human beings—of husbands and fathers, of our women and
children, of dependent sons and daughters of aged parents. We,
charged with the responsibilities of administering laws enacted for
the benefit and protection of our industrial workers, should continue
to cooperate in such humanitarian service, so ungrudgingly rendered;
but we can not do it if unfair and illegal practices are resorted to by
ill-advised or thoughtless plant officials. The rivalry among large
groups of industrial men for the longest period of no lost-time
accidents is not surprising. Our senses would indeed be dull if we
did not with admiration applaud their enthusiasm. Whether such
enthusiasm always creates a safe and sound accident-prevention
policy is a question that time and experience will determine. The
Electric Railway Journal has said: “ The ideal man for safety work
is not an enthusiast, but a man with keen, analytical mind, a proper
sense of values and, above all, a thorough understanding of human
nature.” While there is much to be commended in what the Electric
Railway Journal has said relative to the type of man best qualified to
do safety work, I can not subscribe to the whole of it. Personally,
I believe the enthusiast frequently succeeds where others fail. But
it is possible that too zealous enthusiasts have been responsible for the
delinquencies we are to discuss at this meeting. Personally I haven’t
the slightest patience with such practices. No employer should be
allowed to take a chance—to gamble with a personal injury the
result of an accident.
To keep an injured employee physically unfit for work around a
plant under such conditions is not only contrary to the intendment of
the workmen’s compensation laws, but also may result in a perma
nent impairment of a hand, a foot, or fingers or toes, so that the tem
porary advantages the injured employee may receive in full-time
ACCIDENTS RESULTING IN NO LOST TIME
163
wages during such period may in the last analysis cause him an un
toward financial loss in depreciated earning power due to such
impairment to the physical function or usefulness of a member.
The so-called trifling injury of to-day may develop into a very
serious affair to-morrow. For, as an example, a splinter from a
rough board has brought about such a serious iniectious condition as
to cause the loss of the hand. A slight puncture of a finger by a nail
has set up such a bad case of blood poison as to all but cost the
injured worker his life. A slight abrasion of the skin has left
a twisted and useless hand: in every case some one left maimed for
life because some one’s injuries were considered trifling. This,
gentlemen, is not a fanciful picture but a statement of facts founded
•upon the actual work done by your board and by mine. Therefore it
is your duty and mine to see to it that every injured worker is
properly treated and housed that he may recuperate with as little
pain and discomfort as possible and, above all, be anatomically sound.
We owe it not only to the injured worker but to his family, to the
end that he and his loved ones may enjoy the fullest advantages and
opportunities of life.
So serious has the matter of industrial accidents and resultant
effects become during the past few years that those at all familiar
with the true conditions are demanding a fuller conservation of life
and limb. Can we, then, as administrators of the workmen’s com
pensation laws justify the jeopardization of human life or body
members by an overzealous employer striving for a community,
State, or national “ no lost-time record ” ? In dealing with this
grave question I am not sure you all agree with me that such an
employer has no desire actually to violate a law or jeopardize life
or limb. I want to believe that he, like other employers, possesses
that newer spirit founded upon a broader brotherhood of men that
touches alike the hearts of employers and employees, courageously
accepting that centuries old challenge “ Am I my brother’s keeper ’’
in the affirmative with the enthusiasm which is so characteristic of
the American and the Canadian employer. I want to believe that his
act is an act of omission rather than an act of commission; the result
of a blinded ambition to do the job just a little better than his
neighbor. But, gentlemen, such actions on the part of employers
not only are positive violation of the intendment of the workmen’s
compensation laws but will, if continued, discredit accident-preventive campaigns; therefore such practices should be stopped. As
it took years of patience, sympathy, and toil to create the industrial
world in which we live to-day, an idealistic world of common inter
est, we can not hope to succeed in our efforts to reduce accidents and
save human lives and property unless we exercise the patience, sym
pathy, and toil that so strongly predominated in those too oiten
inhumanitarian days of our fathers when capital and labor were so
widely separated.
Problems incidental to accident-prevention work, particularly
those that enter into modern industrial relations, have so many intri
cate ramifications that they can not be solved overnight. We must
apply patience, intelligence, and sanity to our task or we will fall
short of the goal we would reach. It was Pope, I believe, who said
“ To err is human, to forgive divine ” ; so I would suggest we first
164
SIXTEENTH ANNUAL MEETING OF I. A. I. A. B. 0 .
deal leniently with our erring brothers, and if we can not thereby
eradicate the injustice done this class of injured workers of which
1 speak, we must resort to more drastic means, that the workers may
not be further denied the medical care, hospitalization, and rest
which the framers of the workmen’s compensation laws so wisely
provided for them.
I know of no part of our work that demands a more thorough
supervision than medical treatment for the injured. I f we fail in
this, we have been unpardonably derelict. It is your duty and mine
as administrators of workmen’s compensation laws to keep whole,
as far as medical science can make it possible, the human body that
God has so wonderfully created. Regardless of any opinion I have
suggested as to what I believe should or should not be done in
dealing with this subject, I hope those who speak will be perfectly
frank in their opinions. As I see it, the subject is one of great
importance.
DISCUSSION
The C h a ir m a n . Mr. Stack’s paper is an excellent one, and it de
serves the consideration of all branches—the employer, the employee,
and the accident board. I sincerely hope that some of you present
at this time may have some remarks to advance the thought sug
gested by Mr. Stack.
Mr. S t a c k . I hope some of you will speak very freely on this sub
ject. I do not care whether you agree or disagree with me, we will
be friends when we leave here.
Mr. R ed m on d . We have been directing the state-wide campaign
in New York State for some five years and the campaign has, as I
said this afternoon, grown from a group of 175 firms to 1,400 firms
at the present time; we anticipated just such conditions, and we
placed in our rules the penalty that if such practices were carried
on that such firm was on the outside looking in and not on the inside
iooking out, and that happened to those firms which we found doing
that very thing.
I want to say there were very few, extremely few, in consideration
of the number of firms that were entered, and during the 5-year
period we have carried on a campaign of education along with our
safety campaign, attempting to prove to these people the fallacy of
such a thing, and I think we have succeeded quite well. As I said
this afternoon, and I want to repeat again to-night, I believe that
in our campaign to-day our competitors are reporting truthfully,
and that even though they are zealous in their effort to hold their
100 per cent standing, when they do lose it they report it to us.
I do not think there has been one instance in the present campaign
of bringing back to the plant a man who should not be there. I
do not think there has been even a small lost-time accident that has
not been reported, and it is due to the fact that we foresaw this
practice, and we have been working along this educational line. I f
a firm knows that they are out of the campaign if they indulge in
that practice, they are not going to indulge. That is all there is
to it.
ACCIDENTS RESULTING IN NO LOST TIME— DISCUSSION
165
Mr. W il c o x . Some years ago a hospital was afire in Madison, and
that prompted our commission to set about a survey of the doctors
of the State, as to what sort of orders ought to be adopted in order
to make certain that fires would not occur in hospitals, and at that
time we had the picture in our minds of the horror of hospital fires
with so many, many people there unable to take care of themselves.
This fire occurred while one of our doctors had a patient on the
operating table for a serious operation, and it was necessary for
him to temporarily close the wound he had made and get the patient
out of the operating room. It was a serious matter.
Now I speak of that because we had a few doctors who said
that it was the obligation of the authorities to see that hospitals
were built absolutely fireproof, but we had a very large percentage
of our doctors who said to us that we must not set up standards
for hospital construction which would mean that hospitals were not
to be built that did not comply with what we might call modern
standards, and to which the hospitals then in existence would not
comply.
This may shock you, but the doctors said that the danger from
hospital fires and the hazards to patients and employees was insignifi
cant compared with the damage and harm that might be done if
the hospitals were not permitted to develop.
Now I make my application: I have no patience with the em
ployer who in order to remain in the accident campaign will keep
a man on duty when he is probably doing him some harm. Of course
there is no one who will justify that, but it is a drop in the
bucket—and Mr. Redmond will bear me out—compared with the
harm that is done if we stifle no-accident campaigns.
You will save more lives and you will do more good by the no
accident campaign, and if someone violates his moral obligation
to an injured man—cheats—it is just too bad, but we ought to take
care of that in some other way, and let us not stifle no-accident
campaigns in order to prevail against that sort of thing.
Mr. W il l ia m s . The Workmen’s Compensation Commission of Con
necticut, in its latest report, called special attention to the type of
accidents and the methods of treating them, so that there is no lost
time.
I do not know anything about drives and campaigns. I have
never taken part in tnem, but we have noted that in the large selfinsured plants, with perfectly equipped emergency hospitals and
staffs of trained nurses in attendance, and skilled surgeons visiting
the plants daily, there are very many workmen who receive prompt
attention to what might otherwise be serious injuries resulting in
a good deal of lost time. Because there is a good hospital and a
good nurse and a good doctor there to give them prompt atten
tion, they go right to that emergency hospital and have the injury
dressed, and they come again when the nurse or the doctor tells
them to come, and they do not lose time.
The way to prevent accidents from resulting in lost time and in
doing anyone harm, is to have good care given the workman as soon
as an injury occurs.
Mr. H u t so n . I would like to ask the commissioner if the injured
workman has a right to choose his own physician.
166
SIXTEENTH ANNUAL MEETING OF I. A. I. A. B. 0 .
Mr. S t a c k . Under the Delaware act; no. There is a sum for the
first 30 days and then, when the 30 days have about elapsed, if the
physician feels that the patient will require additional service he so
advises the injured workman, and the law permits the injured work
man to apply to the board for additional service, and we are per
mitted to grant that additional service. We grant it from time to
time, and some of the medical bills run into quite large sums of
money. Of course if the employer refuses to furnish necessary hos
pital service as required by law, then the employee has a right to
select his own physician and the law requires the employer in that
case to pay the cost.
Mr. C u r tis . Who is the ju d g e of whether the treatment is
necessary?
Mr. S t a c k . The attending physician.
Mr. C u r tis . D o you mean the carrier, th% employer’s physician, o r
the physician who has the authority to treat ?
Mr. S t a c k . No; when I speak of the attending physician I am
referring usually to the physician selected by the employer.
Mr. C u r tis . Does he determine when the treatment should stop?
My point is, where does the commission come in?
Mr. S t a c k . I f in our judgment the physician is trying to get rid
of the patient before it is time to discontinue medical attention, we
step in and say, “ Continue to treat this man or we will put somebody
else on the job.”
Mr. C u rtis . I s that determined by the physician for the com
mission or by the commission itself ?
Mr. S t a c k . Under amendment to our law we have full jurisdic
tion in those cases.
Mr. C u r tis . I do not know whether you got the question or not.
Does the commission determine that or the physician for the
commission ?
Mr. S t a c k . N o ; the commission determines that.
Mr. C u r tis . That is a very good law.
The C h a ir m a n . The next subject seems to be particularly im
portant to every commission in existence; that is the subject of
lump sums. It is with pleasure that I introduce Dr. L. W. Hatch,
who will discuss the subject, “ Lump-sum settlements, when, if ever,
and how.”
Lump-Sum Settlements—When, if Ever, and How?
By L. W. Hatch, member New York Industrial Board
In this paper I have undertaken to answer the question asked in my
subject by the method of considering the main aspects of lump-sum
compensation in the light of the basic principles of a sound compen
sation system and noting the conclusions which these principles seem
to make necessary. In other words, I have endeavored to outline a
theory of the subject in accordance with the general principles of
workmen’s compensation. It has seemed to me worth while thus to
weigh the matter not only as the necessary means in the last analysis
LUMP-SUM SETTLEMENTS
167
of making sure of a sound answer but as particularly desirable be
cause it is very easy in dealing with this question to be led astray
by considerations of convenience in disposing of troublesome cases
or of accommodation of importunate parties to claims. This is a
matter in which constant taking of bearings by recalling correct
principles is necessary to keep practical expediency within safe
bounds at all.
Definition o f terms .—It will conduce to clarity if our terms, as
used in this paper, be defined. In the first place, the term “ lump
sum compensation ” will better indicate the scope of the present dis
cussion than “ lump-sum settlements,” meaning by the former
payment of compensation in a single sum covering all that the claim
ant is to receive instead of payment in periodical installments in
the manner of wage payments. This will leave the term 44lump-sum
settlement ” as an appropriate designation for one class of lump-sum
compensation, namely, when the lump sum represents a settlement
of the compensation claim where practical difficulties have prevented
definite determination of weeks of disability or rate of compensation,
or both. Another class to be distinguished is that in which the lump
sum represents the present capitalized value, actuarily computed,
paid in lieu of future installment payments which have been definitely
determined as to rate and period over which they would be made.
This class may be termed “ lump-sum commutation.” I shall also
have occasion to use the term “ installment compensation ” as a short
designation for compensation paid in installments in contrast to
44lump-sum compensation.”
Lump sums a departure from the normal.—At the very outset
it is to be noted that lump-sum compensation must always be weighed
in the balance as being a departure from the normal as to mode of
payment of the benefits conferred by compensation laws. Com
pensation is granted for loss of wages for the purpose of affording
partial relief from such loss, and in order to fit such relief most
effectually to the loss, its payment is required ordinarily, in all laws
so far as I am aware, to be in installments in like manner as wages.
Installment compensation is for sound reasons the rule and lump-sum
compensation is an exception with the burden of proof of its justifi
cation on its side.
Desire o f em ployer or insurance carrier alone not sufficient to jus
tify lump sums.—Lump-sum compensation can not be justified
simply on the ground that employers or insurance carriers desire it
for the purpose of closing out an indefinite liability much as such
an end may be useful for more certain determination of reserves or
for the purpose of avoiding expense of continued installment pay
ments. Compensation is not for the aid of employers or insurance
carriers, and their convenience or interests, while by no means to be
ignored, can not be admitted as controlling in the matter. There is
something of an exception to the foregoing in the case of alien
claimants residing abroad. Here, as is commonly recognized in
the laws, considerations of practical difficulties attendant upon in
stallment payments going abroad afford ground for substitution
therefor of lump-sum commutation.
Desire o f claimant alone not sufficient to ju stify lump sums.—The
desire of an injured employee for lump-sum compensation constitutes
168
SIXTEENTH ANNUAL MEETING OF L A. I. A. B. 0 .
in and of itself no sufficient ground to justify it. Request for it may
be an occasion for granting it, but is no proof that it may not be
disastrous rather than beneficial to the claimant. Something more
than a claimant’s desire must be in evidence before safe ground for
it is reached. Why this is true on general principles will appear later
in this analysis. If further support of the proposition were needed,
it would only be necessary to cite the lesson of experience in not a
few cases where claimants having had their desire for lump-sum
compensation have thereby suffered loss and not gain.
Agreem ent o f both parties alone not sufficient to ju stify lump
sum .—The question of whether lump-sum compensation shall be
awarded is commonly presented in the form of a proposal agreed
upon between employer or insurance carrier and injured employee or
his dependents. But the fact of such agreement between the parties,
and as a joint request for it, while it may be better reason for con
sidering the proposal than request for it by one party, does not of
itself warrant approval of it. To accept such ground as sufficient
warrant for lump-sum compensation is virtually to hark back toward
the claim settlement of employers liability days and open the door
to the evils of compromises where the two parties are far from any
equality in negotiating power, with the claimant the one who is
handicapped. It runs counter, in fact, to a fundamental principle
of the compensation system, namely, that the benefit for a given ex
tent of disability shall be certain and uniform in all cases as specified
by statute, and not subject to the variations and inequalities resulting
from suits or compromises.
Lump sums must benefit employees to be justified .—It is axioma
tic that compensation is for the benefit of injured employees. This
fundamental purpose gives the general clue to the answer to the
question of when lump-sum compensation is permissible, namely,
when it is evident that such will be to the benefit of a claimant as
compared with installment compensation. Here is sufficient ground
for it in keeping with the very purpose of the compensation system
but without it there is no other justification for it.
The compensation administration must make sure o f benefit to
claimants .—The question of when lump-sum compensation will be
for the benefit of a claimant is one for the compensation adminis
trative authorities to determine. This responsibility of the compen
sation administration is, of course, but a part o f and necessarily
follows from its general responsibility in all cases to see that claim
ants receive all that the law intends. Any lack of such responsi
bility, or anv failure to live up to such duty under any compensation
system, marks it as falling short of what all experience shows to be
a necessity in compensation practice. But in lump-sum compensation
because of the peculiar difficulties indicated below attaching to deter
mination of and assurance of its benefits, the necessity of vigilance
and care by the administrative authority is increased.
B oth amount and security o f benefit by lump sums must be
weighed .—In determining with any degree of accuracy whether
lump-sum compensation will benefit a claimant, two elements must
be considered. One of these is amount of compensation, and the
second is security of compensation. In other words, two questions
are to be weighed: (1) Will the claimant receive as much money
LUM P-SU M SETTLEMENTS
169
relief by the lump sum as by installment compensation? (2) Will he
be as sure actually to realize that much relief ? It seems obvious that
unless a claimant receives by lump-sum compensation economic bene
fit equal in amount and security to what he would receive by instal
ment compensation, the former will mean less of compensation than
the law intends. I f amount and security be the same, either lump
sum or instalment compensation will fulfill the intent of the law.
I f with security the lump sum realizes a greater amount of economic
benefit, then the scale tips positively in favor of the lump sum as
affording a greater benefit.
Lump sums naturally tend to uncertainty o f benefit.—Upon analyz
ing possibilities as to the two elements of amount and security of
economic benefit under the two forms of payment, it is clear that
in the nature of the case lump sums tend to introduce uncertainty
in both amount and security of benefit as compared with installment
payment. This is most obvious in the matter of security. Under
installment compensation future payments are as secure as modern
insurance under compulsion of the State can make them, which
means that they carry about as high a degree of future security as
is humanly attainable in financial matters. But under lump-sum
payment all security for the future becomes dependent upon the
claimant’s ability to manage a capital investment. The same is true
also, though in lesser degree, with respect to actual amount of benefit
realized. The difference is virtually that between an assured in
come and a speculative investment. The degree of difference varies,
of course, in different cases but it is a difference that, as a rule, is
bound to be in the direction of substituting a lesser for a greater
certainty in the case of lump-sum payment of compensation.
Thorough investigation o f lump-sum proposals imperative .-—Since
lump-sum compensation necessarily involves dependence upon the
claimant’s so handling the capital sum turned over to him as to
realize the economic benefit intended by compensation, it is evident
that the compensation administration can have no assurance of a
probability, let alone any certainty, that that benefit will follow
except by a careful investigation of the prospect of the claimant’s
actually accomplishing that result. Such an investigation must
cover not only the claimant’s general capacity for such a responsi
bility, but also the actual use to which the claimant proposes to put
his lump sum because the average wage earner has had neither train
ing nor experience to fit him for such an undertaking.
Adequate investigation not a simple matter .—The investigation
necessary to determine what the prospect is that a claimant will use
successfully a lump sum, is more often than not, particularly if the
sum be a considerable one, far from a simple matter. It often re
quires weighing of a more or less complex business proposition which
looks speculatively into the future. Such investigation, therefore,
to be adequate requires ability to investigate thoroughly the claim
ant’s circumstances, to appraise his personal qualities, and to apply,
or secure, experienced business judgment upon proposed investments
or enterprises.
Follow -up after award needed .—I f lump-sum compensation is to
be safeguarded by anything like reasonable assurance that it will
94023°—30------12
170
SIXTEENTH ANNUAL MEETING OF I. A. I. A. B. O.
realize a benefit to claimants, there must be not only thoroughgoing
investigation of prospects at the time the question of granting a lump
sum is decided upon, but oftentimes a follow-up of the case to see
that the course proposed is actually working out as hoped or to
guide by counsel and advice in its working out. Aside from the
fact that experience bears witness to this, it is the only logical view
in the light of what has heretofore been pointed out as necessary
to justify lump-sum compensation. Only by such follow-up in many
cases can the uncertainty introduced inevitably more or less by award
of lump sums be reduced to a minimum.
Rehabilitation agencies best fitted to investigate .—In view of the
importance and the inherent difficulties involved in investigation of
lump-sum compensation prior to award and in follow-up afterwards,
a problem is presented as to how the most adequate facilities for such
work may be provided. I believe I am correct in saying that ex
perience is more and more demonstrating that where there is a public
agency charged with the general work of rehabilitation of injured or
crippled persons, such agency is best fitted for this work. Aside
from experience there is logical reason for utilizing such agencies
for this work on general principles. In large measure lump-sum
compensation aims at, and, if it is to pass the tests of admissibility
at all as indicated in the foregoing analysis, must tend to promote the
economic rehabilitation of claimants. Such rehabilitation is also
the aim of the work of the rehabilitation bureaus, though the method
in other cases may be somewhat different. Furthermore, the investi
gation work itself for lump-sum cases is for the most part different
as to both matter and method from that required in the ordinary
adjudication of compensation cases, and is much the same or very
similar to that necessary in general rehabilitation work. Where avail
able, therefore, the rehabilitation agencies are the logical aid to the
compensation administration for this. Where such do not exist, the
compensation administration itself must be provided with facilities
for skilled and thoroughgoing investigation of lump-sum cases if
mistakes in this field are to be adequately guarded against.
Lump sums pu t on the defensive .—What now is the answer to our
question of this brief analysis on broad general principles? I said
above that lump sums must bear the burden of proving themselves
beneficial. The trend of our analysis is to an even stronger conclusion
as to the admissibility of lump sums to compensation practice. I f it
does not compel a totally adverse conclusion against them, it certainly
puts them on the defensive. They should always be considered as
a doubtful substitute for installment compensation.
Particularly open to question and to be weighed with the greatest
caution are lump-sum settlements as above defined. With these there
is not only the element of uncertainty as to amount and security of
money benefit involved through tne problem of the claimant’s
capacity to handle the lump sum wisely and safely, but also the
initial uncertainty as to what he would be entitled to under the law
anyway. Lump-sum commutations do not have this initial uncer
tainty and at the start can fit the lump sum to the amount of com
pensation intended by the law. But these are still liable to the
uncertainties of the claimant’s capacity to properly use the lump
sum. They are less open to question, but still require great caution.
INVESTIGATION OF PROPOSED LUM P-SU M SETTLEMENTS
171
Corwlusion.— T o give an answer to our question which in less
technical fashion will express what this theoretical analysis leads to
by way of conclusion, in respect of lump-sum settlements, by some
odd mental suggestion there occurs to me as about fitting the case
the reply of the admiral in the opera of “ Pinafore55 to the queries
of his crew concerning his seasickness. You remember his emphatic
assertion in his solo that he was “ never, never sick at sea,” to which
the flagship’s crew in chorus respond sceptically—“ what, never? ” ,
and the admiral’s first reassertion of “ never,” but final qualification,
in face of the chorus’ continued incredulity of “ well, hardly ever.”
So to the question of when, if ever, should lump-sum settlements be
resorted to, the answer on general principles may well be: “ Never—
well, hardly ever, and then only when benefit to the claimant is
assured.” As for lump-sum commuted payments, an answer may be
borrowed from traffic signal terms about thus: “ Proceed with
caution and go ahead only when you are sure by survey of things in
all directions, that the way is safe for the claimant.”
Now, if I am right in my pronouncement that lump sums, if they
are justifiable at all, will contribute to the economic rehabilitation of
the claimant, then it seems to me we have the most logical reason
for including under this contemplated Federal rehabilitation act,
and the New York State law, and I have no doubt in some other
States, this kind of cooperation. Now, as a matter of fact, that is
exactly the position at which we have arrived in the State of New
York, and under the present industrial commissioner of the State,
arrangements have been completed definitely and formally for the
referring of lump-sum proposals which come to the compensation
administration authorities to the bureau of rehabilitation of the
State educational department, for their thorough investigation of the
proposition as an economic rehabilitation proposal.
Now that is where I am going to stop with my paper, but the next
speaker will give you, I am sure, some most interesting examples
and points relative to the actual work of this sort of cooperation in
cases of lump sums.
The C hairman . At this time I present Mr. Rufus Jamegan, of
the New York State Rehabilitation Bureau, Buffalo, N. Y., who
will speak on the subject, “ How to investigate proposed lump-sum
settlements.”
How to Investigate Proposed Lump-Sum Settlements
B y Rufus Jamegan, of the New York State Rehabilitation Bureau,
Buffalo, N. Y.
I am happy that Doctor Hatch, in his able presentation of his
paper, has concluded it by showing to you so definitely the con
nection between bureaus of rehabilitation which have been created
in some 43 States of the Union, in practically every State where
compensation commissions function. I am happy also that he has
taken occasion to refer to the fact that the practice which has been
in vogue in the Buffalo district the past six years has been extended
just recently throughout the State, under the administration of the
present industrial commission.
172
SIXTEENTH ANNUAL MEETING OF I. A. I. A. B. C.
Early in the beginning of rehabilitation work we realized, those
of us in rehabilitation work, the definite connection between all lump
sum commutations, all lump-sum settlements, and the constructive
rehabilitation program. It was in the fall of 1923 and the spring
of 1924 that we had some 80 cases brought to our attention where
lump-sum settlements had been granted. These men and women had
been referred to our bureau for rehabilitation, that is, for their return
to remunerative employment.
The fact that they had been granted lump-sum settlements, or
had their compensation commutated to lump sums, and the fact
that it had been dissipated, or lost, multiplied the rehabilitation
problem. Frequently it compelled reemployment in stop-gap jobs,
when the compensation moneys, if conserved, would have made pos
sible a far more constructive program.
We ’found some of these people with their morale shattered by
the financial loss, and it required months and months of advice and
guidance to bring them back temperamentally and mentally to the
point where they could seek employment; others who had lost the
work habit had to be nursed along for weeks and months before
they were employable. Many never could return to work, and from
a rehabilitation standpoint they were a total loss.
When these facts were brought to the attention of Bernard L.
Shientag, the industrial commissioner, he directed that in the Buffalo
district, embracing the eight western counties of New York State, our
bureau investigate all lump-sum settlements or commutations in
excess of $500, and since that time all have been referred to our
bureau, investigated by our bureau, and a written report submitted
to the industrial board.
The first thing we did early in April, 1924, was to visit each of the
leading banks in the city of Buffalo, interview the president, the
chairman of the board, or other responsible officers, and point out
to them the definite need of assisting us to conserve any moneys com
muted into lump sum and paid over to crippled people, widows, and
orphans. We approached them on the ground that it is the civic
duty of the bank, and as private citizens interested in the welfare
of the community it was their duty to help us save this money.
Without exception each of the larger banks, all of the banks so
licited, agreed and for nearly six years the representatives of the
banks have appraised properties, they have gone into the stores, they
have appraised stores, and they have helped us in every way.
We have not felt that we were competent to pass judgment on
some of these investments that were proposed, and we did not dare;
we would not recommend to the industrial board the commutation
of any compensation into lump sum until we had competent authority
to justify any such award.
We do have applications for lump sums in the rural communi
ties, and as these were submitted and investigated we called upon the
local banks, and without exception the country banks, the banks in
the smaller towns, agreed to and did extend to us that same coopera
tion in appraising properties or any other investment submitted by
a claimant who requested compensation in lump sum.
We visited tax appraisers5 offices. We got the appraisal of all
the properties, where is was a question of the purchase of a house or
INVESTIGATION OF PROPOSED LUM P-SUM SETTLEMENTS
173
a farm. Frequently they were in a position to give us an estimate of
the value of these investments*
When this foundation was laid, securing the aid of these cooperat
ing agencies—and to me that is most essential if any lump sum is
commuted or paid in a final settlement—we began to handle all of
the investigations of lump-sum applications.
The process has been tor the lump-sum application, as heretofore,
to be filed with the industrial board. It, in turn, is referred to our
bureau and contact is established with the claimant by efforts of
our bureau. A thorough and careful analysis of the man’s character
and his past experience and his education is gone into, with a dual
purpose in mind: Rehabilitation, that is, returning him to remunera
tive employment, and determining whether or not conditions exist
that will warrant deviating or departing from the spirit and intent
of the law.
1 might just allude here to the fact that Doctor Hatch touched
Upon in his paper, and that is5 the bureau of rehabilitation is more
interested in the whole circle of information surrounding crippled
people, because it is their job and always their job to return them
to employment and to keep them in employment. The compensation
men are interested primarily in the physical or the financial side of
the adjudication of compensation claims. We, as rehabilitation
men, are interested not only in the physical side as to compensation,
but also in the physical, the economic, the education and social
aspects.
I f we are going to succeed in returning a man to employment and
keeping him in employment we must have a whole cycle of
information.
When our investigation is completed we submit a formal report
to the industrial board, embodying all pertinent facts that might be
connected with the case, whether it would warrant the lump sum
being granted or disallowed. We definitely recommend what action
shall be taken in every single case.
You might be interested in some of these figures. For the five
years ending March 31, 1929, there were referred to our bureau and
investigated 833 lump-sum applications. Five hundred and fortysix, or 66 per cent, were disallowed. Two hundred and eighty-seven,
or 34 per cent, were approved. That is, we recommended that two
out of three be disallowed during that whole 5-year period.
I am interested in this, and I am sure you are, from the rehabilita
tion angle. Of those cases investigated, 224 were rehabilitated, that
is, returned to employment with reasonable assurance of permanent
and steady work. The surprising fact to so many of you may be
that a big majority of those cases that we returned to remunerative
employment, with reasonable assurance of good and steady work,
were the cases where we recommended that the lump-sum applica
tion be disallowed. In 128 of the 224 rehabilitated we recommended
that the lump-sum application be disallowed, and in only 96 cases
did rehabilitation result where we recommended that they be
approved.
You will be interested, I know, in the purpose for which these
lump-sum applications may have been granted. As I said, the
industrial board upon our recommendation disapproved 66 per cent
174
SIXTEENTH ANNUAL MEETING OF I. A. I. A. B. 0 .
of the cases and granted 34 per cent. Of that 34 per cent, 15 were
for the purpose of purchasing homes or paying off mortgages. No
homes were purchased unless unusual family conditions existed that
would seem to make that a social and economic investment if not a
necessity.
Early in our work of making these investigations we did recom
mend the commutation of compensation for the purpose of retiring
second or third mortgages. We have since tightened up on that
and do not recommend that compensation be paid in a lump sum
for the purpose of retiring any mortgage unless the equity of the
claimant or crippled man is in jeopardy. I f it is jeopardized we do
recommend the commutation of his compensation m a lump sum for
the purpose of protecting any substantial equity which he may
have in the property.
In 72 cases, or 9 per cent of those filed, we recommended that the
lump-sum application be granted for the purpose of establishing
the man in some form of business, whether it be a store, garage,
restaurant, trucking, contracting, depended entirely upon the man’s
background of experience and education and general probability
of success in that line of employment.
In 28 cases, or 3 per cent, we recommended that the lump sum be
paid for the purpose of establishing the man on a farm, and, bear
in mind, in every case we had a thorough investigation into his back
ground with reasonable assurance that he would succeed in that
venture.
In 5 per cent of the cases, or a total of 41, we recommended that
the lump-sum application be granted for reasons which I have
described as social service. I will be glad to touch on that in more
detail later.
In 18 cases, or 2 per cent of the total, we recommended that the
compensation be paid in a lump sum for the purpose of permitting a
man to return to his native land, a foreign country.
There is another interesting feature of this experience which we
have gone through. Prior to the inauguration of these investigations
by this bureau, from the best figures available it was apparent that
in this district more than 90 per cent of the lump-sum applications
were granted. It was only an occasional case that they disallowed.
The first year that our bureau recommended these lump-sum applica
tions we recommended that less than 50 per cent be granted, and
they were. The second year and third year we recommended that
less than 40 per cent be granted. The fourth and fifth year we
recommended that only between 16 and 17 per cent be granted.
You will observe from that that we have gradually looked with
more and more reluctance upon the granting of these lump-sum ap
plications. I think that the reason for our recommending that fewer
and fewer be granted was the fact that, as we learned more about
the work, we learned to solve the man’s problems in some other way
than through lump sums.
I have included in my figures here lump-sum applications disal
lowed where we would recommend an advance of $50 or $100 or $200
in order to meet certain pressing obligations, unexpected sickness on
the part of the wife, or some member of the family, or a boy about to
get married. We have had cases of girls entitled to compensation
INVESTIGATION OP PltOPOSED LUM P-SU M SETTLEMENTS
175
who wanted to get married, and $100 or $200 was allowed to tide
them over. We recommend that the lump-sum application be dis
allowed, but this small award granted, and it solves their problems
and satisfies them.
I think perhaps I can explain this work better by citing, as Doc
tor Hatch suggested to me, a few cases.
I have a note here of a young boy who applied for a lump sum on
four different occasions, and he was very badly hurt. He was
working for a house wrecker and was struck in the back. A vertebra
was fractured, and there was an indenture in his back in which you
could put your fist.
He was advised by a friend—with a question mark after the
friend—to get this compensation in a lump sum. He submitted one
application after another, and he and his friend began to reason why
we were disallowing them, and he thought if he refused our rehabili
tation service he would be given the lump sum. We stood firm, and
finally we gained his confidence and prevailed upon him to enroll
lor training in a vocational school. He was trained in battery work,
and he was returned to employment at a wage of $24.30 a week. He
is now receiving $40 a week. I do not doubt if that man’s compensa
tion had been paid in a lump sum it would have been lost within a
year. To-day he is restored to society at a cost to the carrier, and
indirectly to the employer, considerably less than he would have been
paid if they had settled that case in a lump sum.
I feel that the man has been fully protected under our State com
pensation law, because we followed the case very carefully and saw
that he was given full compensation for so long as he was entitled
to it while he was in school. After he was returned to employment
we watched the case very carefully and saw that he was paid in full
on his reduced earning basis until such time as his wage was in ex
cess of that to which he was entitled, that which he was receiving
when he was hurt.
Here is another boy. Frank Euder was also advised by a friend
to secure a lump-sum compensation, and no less than nine different
applications were submitted for almost every conceivable purpose:
Buying a home, buying a farm, investing in a silver fox farm was
one of them, buying some gold-mine stock. We stood strong in op
posing that lump-sum application.
Finally we prevailed upon that boy to return to school. He had a
good high-school education. We placed him in a training school, a
commercial college in this city, and after about nine months of train
ing he was returned to employment at a wage of $18 a week. Our
last check up six months ago indicated that he was making $45 a
week. His was a scheduled loss, and he was entitled, at the time his
first application was filed, to something more than $3,000.
When he returned to employment we prevailed upon him to de
posit his compensation money in a bank. We went to the bank and
arranged with the banking officials—with his permission—that that
money could not be withdrawn over a certain period of time. We
had no legal right to do that, but the bank was working with us and
the result was that this boy saved for something more than a year
every dollar of his compensation. How much he has now I do not
know because we have not seen him in more than six months.
176
SIXTEENTH ANNUAL MEETING OF I. A. I. A. B. 0 .
Here is another boy, about the same age, who wanted his com
pensation in a lump sum for the purpose of buying a home. He
had, I think, about $1,300 coming to him and he wanted to put $800
of that into a home and give it to his mother, and take the other
$500 to go to New York to find a job. We trained him here in
bookkeeping and stenography, placed him in employment at $18 a
week after nine months of training, and our last report was that
he was making $22.50.
I could go on and cite you any number of such cases. Many of
the applications that were disapproved resulted in rehabilitation,
that is, returning the man to employment at a wage that makes him,
at least self-suporting.
There are many other reasons why lump-sum applications should
be disallowed and why very careful investigation should be made
into them. I have a note here of a young man 29 years old who
lost 46 per cent of the use of his hand while engaged as a punch
press operator receiving $22 per week.
He was a very ambitous young man. For several months follow
ing his accident he was not physically able to return to the kind of
employment he had been following, that is, a punch press operator;
so he started a cigar business. He had formerly had some experience
making cigars, and some money was invested in that establishment,
something less than $100, but approximately that amount.
After he had been going along six months, he requested that his
compensation be commuted, into a lump sum. He had something
like $2,200 coming to him. He thought he would hire two men
to help him make cigars and he woula buy at least one truck for
deliveries. Our investigation and the reports we received from the
banks and others indicated that it would be a most unwise thing
for him to continue this venture, or to enlarge on this venture of
making cigars, so many of them are made by machinery now, and it
is impossible for a man in this part of the country, at least, to compete
with these machines. We advised him against enlarging upon this
and we recommended that the lump sum be disallowed. It was.
He was persuaded to dispose of that business, much against his
wishes at nrst, but when we were able to procure employment for
him along the lines that he had been working, as a punch press
operator, at $30 a week, he was glad to take that job because he really
had not—we had an accountant show him that he had not—been
making any money.
There is one other point that is very important. That is, if any
lump sums are granted anywhere in the United States I think it
is the duty of the compensation administrators to see that the money
is used for the purpose for which that money was awarded,, and
you can not get that assurance unless you detail some responsible
person to see that the money is used for that purpose. We have been
doing that for nearly six years in the Buffalo district, and in several
cases in which we have recommended that the lump-sum applications
be granted we have had the checks sent in care of the industrial
board which saw to it that the money was used for the purpose for
which it was requested.
We have had several cases, five I believe, where it has been neces
sary for us to return the check to the insurance carrier and have
INVESTIGATION OF PROPOSED LUM P-SU M SETTLEMENTS
177
biweekly payments renewed, and the lump-sum check canceled, be
cause the man had pulled the wool over our eyes. He wanted to
use that money for some other purpose than that stated in his appli
cation, and, because he would not or could not follow through the
recommendation, we returned that check to the carrier and biweekly
payments were renewed.
We have had a number of cases where we have recommended that
the lump-sum application be granted, but only after a most careful
investigation. I have in mind one case where the insurance company
thought it was a permanent and total disability, and several of our
doctors in Buffalo advised us to the same effect.
This was another back injury and for nine months the man was
totally paralyzed in both legs, and for two years very seriously
partially paralyzed. He was an Italian with not much education,
but good intelligence—a splendid appearing chap. The doctors said
that we could not do much with him from a rehabilitation stand
point, because he could not stand for more than two or three hours
at a time and he could not sit for more than two or three hours
at a time on account of this back condition. They constantly ad
vised operation. After the man had been operated on three times
he refused to have another operation.
Well, we trained that man to be a barber, because he had a splen
did personality and a nice appearance, and he was given employ
ment in four different shops, but he was unable to follow the trade
for more than three days in any one case because it was necessary
for him to stand longer than his physical condition would permit.
It then occurred to me that if this man had a shop large enough
to have two or three barbers working for him he could run the
shop for himself. I was convinced he had the intelligence to do it,
and so I went to the insurance company and asked them, when
we had selected a suitable place, if they would advance $1,800 to
purchase this shop for this man. They agreed to do that. It was
nearly two years compensation, and the case was closed without
prejudice. That is the way it stands on the docket to-day. It may
be reopened at any time and the man paid additional compensation,
but what has been the result?
It was four years ago that we bought that shop for that fellow.
He had been a common laborer all his life. He had never earned
more than $30 a week. For four years now he has operated this
shop, and he has two men working for him during the week and
three men on Saturday, and his income runs from $42 to $57.50
a week. That is his net profit. His home surroundings are better
than they had ever been before.
It would have been an injustice, I think, to have denied that
man that much money. It meant the restoring of that man
to usefulness, at employment that could not possibly have been
provided any other way, because as proprietor of the shop it is not
necessary for him to take care of every man who enters the barber
shop. He only helps out when the trade is pressing. He does
take care of the cash.
I would like to tell you about a number of other cases, but I am
a little pressed for time.
178
SIXTEENTH ANNUAL MEETING OF I. A. I. A. B. C.
There is a case of a man in Fredonia, a man 42 years old who
fell from a telegraph pole and sustained permanent paralysis of
the internal organs. The insurance carrier was most cooperative.
When we saw we could not rehabilitate him in any other way they
agreed to advance $1,500 to purchase a cigar store for this man. A
store was located and purchased. At the end of six months he
apparently was doing quite well, and making about $25 a week
clear.
The insurance company wanted to settle the case, as Mr. Hatch
says, for the purpose of reducing their reserve, and they offered to
settle for $5,000. Our referee told me that it was a good settlement,
and I think perhaps it was, but I took the stand that we were inter
ested in this man from a rehabilitation standpoint, and that his
case should not be settled until such time as we definitely knew he
would be successful in that employment.
Well, in another two months the insurance company raised that
ante to $6,000, but I took the same stand as before and said that it
made no difference how much they wanted to pay the man, the case
should not be settled until he had definitely been returned to em
ployment, with more than reasonable assurance of a steady income
for the balance of his life.
I stood firm on that in spite of the advice of our referee, and when
this man had been in business something more than a year his ac
counts were audited by Ernst & Ernst, public accountants, and they
showed a clear profit of $1,300. There were other conditions that
entered in which gave us more than reasonable assurance that the
profit would increase in the next few years, and I was then quite
willing and happy to recommend that a lump-sum settlement be
made, and this was a lump-sum settlement instead of a lump-sum
commutation. I think the final settlement was $7,000, which with
the $1,500 that had been advanced to him amounted to about $8,500.
That man to-day has one of the most successful stores in Fredonia.
He has money in nrst mortgages and on deposit in the bank in excess
of $6,000. He has a business that is netting him more than $3,000 a
year. Of course, his wife helped him. We capitalized on her and
there were other factors which entered into the case.
That man and his wife could not live happily on the $19 or $20
a week he was receiving. They were constantly going into debt.
They were most cooperative. It depends entirely upon the man
whether you are going to be successful in rehabilitating him or in
helping him to conserve his compensation if it is granted in a lump
sum, and unless you can be reasonably sure of full cooperation in
every case, it should be disallowed.
I would like to tell you about a Polish man, 44 or 45 years old.
He sustained a back injury and an arm injury. The scheduled loss
of his arm was 65 per cent. There was no schedule on the back,
of course. It is not provided for in our law. The insurance com
pany paid the full schedule for the arm and we had great difficulty
in prevailing upon them to pay more money for his back injury.
Meanwhile a neurosis had developed, and all in all it was about as
bad a case as we had ever had. It seemed hopeless to restore him
to employment; that is, to restore him in the' employ of others.
LU M P-SU M SETTLEMENTS— DISCUSSION
179
Our only hope of getting that man back into employment was to
establish him in some sort of a business for himself.
Finally, when it looked like we were not going to be able to get
another dollar from the insurance company, they agreed to advance
him $700. He had little education and was not highly intelligent,
but it was our only hope. We selected a very good corner for him
with the help of the banks and others and established him in that
store, and with the help of his children—there were several, I
think the ages were 16, 18, and 20, and the 16-year-old girl was the
one on which we capitalized most—we were able to get him started.
I visited that man eight or nine months after he was established
in that business and found that he had spent $300 out of the profits
from the store for a fur coat for his wife. He had spent $250 in
cash for a stove for his kitchen in the back of the store. He was
making money.
He continued in that employemnt for a couple of years, or less
than two years—20 months, I think—and then he failed. Off-hand
that would be a failure from the rehabilitation standpoint. I look
upon it, however, as a conspicuous success from our standpoint, be
cause when he failed he had debts. The people in the community
owed him something like $1,400, or twice as much as he originally
invested in the store. Much of that was not collectible, but before
he failed, or about that time, we were able to return him to employ
ment as a truck driver at a wage of about $27 or $28 a week, and
the man had not worked for years before we established contact with
him.
Establishing him in that business and permitting him to operate
that business, even though he failed at the end of 20 months, restored
that man’s morale and made him employable again.
DISCUSSION
Mr. K e n n a r d . May I ask one question? Do you have any question
of lump sums in the case of widows or dependents ?
Mr. J a r n e g a n . Yes.
Mr. K e n n a r d . Do you have a lump sum?
Mr. J a r n e g a n . We have, yes.
Mr. K e n n a r d . I ask the question because in Massachusetts we
never had lump sums in widows’ cases.
Mr. J a r n e g a n . We never do for dependents and minors, of course,
and it is only in the most unusual cases that we recommend it for
widows, and then it is thoroughly safeguarded.
Mr. K n e r r . H o w do you handle your lump sum in the case of
foreigners who want to return to their native country?
Mr. J a r n e g a n . The money is turned over to our bureau through
the industrial board. Such money as is necessary to pay the fare
and the fare of his family, railroad and steamship from Buffalo to
the point to which he wants to go, is turned over to him, or the
tickets are usually purchased. The balance of the money is trans
mitted through a Buffalo bank to the town nearest to where the
man is going, whether it is in Rome, Italy, or Budapest, or Moscow,
or Madrid.
180
SIXTEENTH ANNUAL MEETING OF I. A. I. A. B. 0 .
Mr. K n e r r . We follow the same practice in Utah.
Mr. S t e w a r t . What do you mean by “ safeguarded” ? What do
you mean by u lump-sum settlement ” ?
Mr. J a r n e g a n . I am sorry you were not here to hear Doctor
Hatch’s paper. He gave a very pertinent definition of lump-sum
settlement, and also of lump-sum commutation.
Mr. S t e w a r t . They are two different things?
Mr. J a r n e g a n . Yes.
Mr. S t e w a r t . H o w do you safeguard a lump-sum settlement in
the ordinary meaning of the term?
Mr. J a r n e g a n . I suppose that is an exaggerated phrase. It is
safeguarded as much as it is possible for us who are making the
investigation to safeguard it. We are calling upon these cooper
ating agencies, the banks and others, to help us out in these things.
It is safeguarded so far as human limitations and our own personal
limitations permit.
Mr. S t e w a r t . That does not answer the question. Let us be plain
about our definitions. A lump-sum settlement, as I understand it,
is where you settle the case, pay the man the money, and you have
nothing more to do with the case. You have no business to ask
him any questions. Now then, in that kind of a lump-sum settle
ment how do you safeguard it?
Mr. J a r n e g a n . We do not p a y him the money.
Mr. S t e w a r t . Then you do not make a lump-sum settlement. Let
us understand what we mean by lump-sum settlement.
A lump-sum settlement is where the amount of the disability is
fixed. The man is entitled to $25 a week, or $20 a week, for a cer
tain number of weeks. Instead of paying weekly, as the spirit of the
compensation law requires, you multiply the number of weeks by 20
and you give him that much money down and the case is closed.
He goes ahead and does as he pleases. What I want to know is,
how do you safeguard it ?
In Salt Lake City we tried to learn what was really meant by lump
sum settlements. Mr. Clark, of Ohio, discussed the subject, but as far
as I could learn from him lump-sum settlements meant taking care
of widows.
Commutation, or a supervision of that sort of thing, is an entirely
different question. I stated my position on the lump-sum settlement
in the convention in Baltimore, and I have not changed my opinion.
To begin with, I do not think much either of the supervision or of
the commutation. Let us stick to what we mean by lump-sum settle
ment—cases in which a man is paid a certain amount of money,
and that is the end of it.
Now, you talk about investigation. Just let us be honest with
ourselves for a minute and see how funny it feels. I f I could look
into the womb of time, as Shakespeare has said, and see what seeds
will grow; if I knew what business would pay and how much it
would pay, believe me, I would not be commissioner of labor sta
tistics, nor would you be commissioners of workmen’s compensation
for three minutes! I f we would, we would be fools! If, by any sort
LUM P-SU M SETTLEMENTS— DISCUSSION
181
of investigation, we knew what investments were safe and sound and
would pay, we would not be here to-day. This would not be the
place for us.
Any investigation that you can make means nothing, because you
do not know. The fellow who started a cigar store and, finally,
at the end of two years went broke and became a truck driver because
he bought his wire a $300 fur coat—you can not foretell that, nor
can anybody else. Lump-sum settlements are in absolute violation of
the spirit of workmen’s compensation.
Mr. R o b i n s o n . After hearing Doctor Hatch define a lump-sum
settlement and lump-sum commutation, I want to say that Virginia
makes no lump-sum settlements. It is commutation of lump sums
based on a specific award, but for the satisfaction of Mr. Stewart
I want to say that, regardless of any settlements that are made, they
are subject to reopening on a ground of change in physical condition.
We make no lump-sum settlements.
Mr. S t e w a r t . Well, it is not a lump-sum settlement.
Mr. R o b i n s o n . It is a lump-sum commutation. What provision
is made in New York, where compensation is payable to a widow
and infant dependents, and where that family has a home that is
mortgaged, and where they have a considerable equity in it? Does
the New York commission allow a commutation or lump-sum settle
ment in that case ?
Mr. S t e w a r t . Do not confuse the two terms. A lump-sum settle
ment ends the whole transaction.
Mr. R o b i n s o n . I f the amount necessary to pay it off does not
require the whole amount, I would say it would be a commutation,
but if it required the entire amount I would say it would be a
settlement.
Doctor H a t c h . I do not know. We are quarreling over terms.
When you get to quarreling over definitions, there is no end to it.
To answer your question, we could, as far as the law is concerned,
grant a lump sum or a partial or an installment in a lump sum in
such a case. That does not say we do it, necessarily. It all depends
upon circumstances.
Now, if Mr. Stewart thinks we can not safeguard that business-----Mr. S t e w a r t . I am not opposed to installment commutation. I
am talking about a settlement.
Doctor H a t c h . I understand what you mean, I think, Commis
sioner, and if we all are ready to accept your proposition that you
can not safeguard such settlements, then I think we are about ready
to vote unanimously that they ought to be out of the picture of
compensation, but it is not true in my opinion. I think the kind
of experience that Mr. Jarnegan has described to you here in New
York proves that under certain conditions sometimes it does appear
that a lump-sum settlement, or commutation of part of the com
pensation or all of it into a lump sum, may benefit the claimant.
As I said in my paper, when that is proven, as it is asserted, within
a reasonable degree, as reasonable as you could get in this world,
then it seems to me you have sufficient ground for granting a lump
sum. Call it a settlement, or commutation, or what you please. It
i8 2
SIXTEENTH ANNUAL MEETING OF i. A. i. A. B. 0 .
does not make any difference what you call it—a settlement op
commutation.
The problem is created, just as Commissioner Stewart has sug
gested, by the fact that what you do is to turn over to the man a
capital sum and trust to his ability to handle a capital investment
successfully. Now that is why I said in my paper that it is a
doubtful proposition in the nature of the case, but sometimes you
can resolve the doubt to the point where your lump-sum settlement
seems desirable from the point of view of the claimant. Now, that
is a thing we can dispute about all night, but there is nothing
certain.
Suppose you give a man $20 a week compensation, or $40 every
two weeks, you are doing just the same thing. You are trusting to
that man’s ability to use $40 every two weeks. For aught we know
it means one drunk biweekly, and no more of the $40 afterwards.
You have the same proposition there. We are dealing with human
uncertainty.
Now, the point of the whole thing is that this is a dangerous busi
ness unless you know exactly what you are doing. The man can
get drunk biweekly, but he must repeat it a great many times be
fore he will use all of the compensation for the loss of an eye. I f
you give it to him in a lump sum, in one sum, he can have one tre
mendously grand spree, and it is all done. It is a matter of degree
more than anything else.
What we mean by safeguarding in New York is to determine by
all reasonable prognostication what this man’s ability is and probably
how he can handle money; but more than that, as Mr. Jarnegan has
pointed out, by counseling with him, by checking up and helping him,
sometimes you can rehabilitate better than you can by paying him
by installments.
Now, I am not prepared to rule out that possibility completely
from the picture of workmen’s compensation, but I do say, as I
said in my paper, proceed with the very greatest caution.
Mr. D u x b u r y . I have been perplexed with this question like
every other administrator of a compensation law, and I always
have a considerable doubt and but little confidence in my judgment,
because, as Mr. Stewart has pointed out, if I had the judgment that
ought to be required for this momentous responsibility, I probably
would not be doing the job at all; but we must realize that the pri
mary purpose of the compensation law is rehabilitation.
The law wisely provides that in most instances rehabilitation, or
returning to useful occupation as an independent, self-supporting
member of society, is accomplished best by the periodic payment
provided by the compensation law, but that is not absolute. There
are many cases where that fails, and when the claimant is through
drawing these periodic payments the object of the law has not been
accomplished.
There are, no doubt, instances in which the peculiar character of
injured persons and the circumstances and the economic conditions
will promote that return to useful endeavor more certainly and more
expeditiously if they are financed to accomplish the thing which they
wish to accomplish. I f you do not finance them, but keep them on
LUM P-SU M SETTLEMENTS---- DISCUSSION
183
that mere pittance each week, they never will be returned to useful
employment.
Now I know it is presumptuous for anyone to say just which case
belongs in the one group and which case belongs in the other group,
but you have that responsibility.
Up in Minnesota I use a lot of slang expressions because they seem
to be more effective. One of them is that we are hard-boiled on this
proposition of lump-sum payments, or lump-sum commutations. In
other words, we sometimes say that we are from Missouri. They must
show us or convince us that that is the best thing to do in that par
ticular case for that particular individual, and that it is more likely
to promote the primary object of the law—restoration to useful en
deavor, either employment or in his own capacity in his own busi
ness—than the periodic payments. We have many cases in which,
hard-boiled as I am, and much as I like to shirk responsibility and
let things take their own course, I do take the plunge—the chance on
that being the best way to restore them, or the best way to accom
plish what I consider the primary object of the compensation law.
Mr. F i t z g e r a l d . I am from Oregon. Personally I am in accord
with the paper read by Doctor Hatch, and the rehabilitation gentle
man from New York. There is no doubt if the Oregon commissioner
were to be consulted he would say that they were trying to carry
out the policy, as far as they are able, and the principles as outlined
in these two gentlemen’s papers; but, of course, when applications
come before the commission in Oregon the human element enters
into it and sometimes good resolutions are broken.
The commission, many times after granting a lump-sum advance
ment observes that they did not use very good judgment, they were
not lucky because the injured man has soon dissipated that portion
of the award which the Oregon commission had authority to grant.
By legislative enactment, the Oregon commission is restricted and
can grant only up to 50 per cent of the amount set aside as an award
in payment of the permanent partial or permanent total, and when a
lump-sum advancement is made to the applicant his monthly pen
sion—we pay it by the month out there, not weekly—is reduced in
proportion.
What influences us, perhaps, in granting a larger number of the
applications for these lump sums is what we think is an inadequate
monthly pension. Oregon is not liberal, we think, in the amount
paid monthly. The time in which it shall be paid is spread out o m
a longer term than in most States.
The highest single award to be made for loss or separation of an
arm, or total lack of use of it, is $2,400, and that must be paid out at
the rate of $25 a month, which means 96 months. When an applica
tion is made for lump sum the commission in its discretion, by a
legislative permission, is allowed to grant one-half of it to the appli
cant, that being the maximum. Then his monthly payment is
reduced to $12.50 a month.
We often are forced to face this situation: A mistake has been
made. The commission did not exercise very good judgment. It
thought it was a judge of human nature and that the applicant
would make good use of the $1,200, but the business opportunity did
184
SIXTEENTH ANNUAL MEETING OF I. A. I. A. B. O.
not pay. The cigar store or the pool room was in the hands of a
sheriff in a short time.
Then the man with the one arm goes around and he says to his
neighbors and friends, “ The great State of Oregon is paying me
$12.50 a month for the loss of that arm.” He does not tell the whole
story. He does not tell that he put the commission to the expense of
several thousands of dollars, perhaps, in medical aid and hospitaliza
tion, and to additional expense for the award. People think, of
course, that it is an outrage that he receives only $12.50, and he
receives that for a period of 96 months.
Of course, we refuse many applications for lump-sum advance
ments, and we never have any regret over having said “ No,” be
cause if afterward we find that it perhaps would be advisable, we
change our order, but if we grant it we have many times cause for
regret. We can not get the money back. The money has gone over
the wheel, into the hands of some business-opportunity fellow.
However, I would not want to see striken out of the theory of the
compensation law altogether the right to grant lump sums if those
who have the administration of the law think it desirable or advis
able. I do not believe that we should adopt that premise.
I think the flower of manhood and womanhood who are engaged in
gainful industry, and who come within the benficence of the work
men’s compensation law because they are so unfortunate as to lose
bodily functions, should not be told by the administrators of the
compensation law, “ No, we have superior judgment. You can not
use any capital sum. You will receive this money in the monthly
or weekly pittances.” I think many thousands of the injured work
men are just as good business men as we are and in many cases
lump-sum payments should be made, and they inure to the benefit—to
the financial and moral benefit—of the injured workman.
The C h a i r m a n . May I call attention to the program for just one
moment? We have been discussing two subjects for 2 hours and 10
minutes. We have 75 minutes more in which to discuss four more
subjects, and I wish some one would make a motion to limit this
debate or discussion in some way in order that the Chair might at
least control this situation.
[On motion it was decided that the subject of lump sums be dis
cussed until adjournment, that other subjects on the program be de
ferred until Thursday afternoon, and that in the debate on lump
sums each speaker be limited to 3 minutes.]
Mr. C h a r l e s D. S m i t h . I want to say one word about the investi
gation of lump-sum settlements. For the information of Mr.
Stewart I want to say that our supreme court, in a very recent case,
in the case of Tim Cannon against the compensation commissioner,
has ruled that there is not any such thing as a lump-sum settlement;
but I want to indorse what the gentleman from New York had to
say relative to the investigation of a lump-sum settlement, and I
want to add just one other thought, and that is, investigate the
claimant.
The C h a i r m a n . Next on the program is a gentleman from
Virginia,
LU M P-SU M SETTLEMENTS— DISCUSSION
185
Mr. R o b i n s o n . I had hoped that the gentlemen from New York,
Doctor Hatch and Mr. Jarnegan, would pass on one question and
give us some light on one phase, and that is, what to do with com
pensation that is payable to a widow and the infant dependents?
You may look at compensation as being for rehabilitation of the
injured employee, but here is a family who have a mortgage on
their home. They have considerable equity in the place, and yet
they are not entitled to compensation. They will receive it weekly
or monthly.
Virginia does one thing there, and that is where there is only the
widow, they discourage it in every way possible. Of course, if she
is not apt to get married, if she is running a business, some mercan
tile establishment, and needs the money and the insurance carrier
is willing, it may be considered, but in most cases it is not
considered.
There is always the possibility that the widow may remarry and
part of the compensation which would not be payable to her will
have been used, but I would like to hear some discussion on how
this would be handled in cases where there are infant dependents
to be educated, or a home to be saved. I don’t want to advance the
thought, but I would like to hear some discussion on the subject
from New York.
Virginia does, in those instances, allow a lump-sum payment, or
partial payment necessary to save that home for that family, or
necessary tor the education of the children, so that they will become
wage earners—and, by the way, that is under the supervision of
the rehabilitation department.
We do not turn over all cases to the rehabilitation department. We
do put under the guidance of the rehabilitation department, the
cases that involve the training of some minor member of the family
to become a wage earner for the benefit of that family, but the
industrial commission itself assumes responsibility for the other
cases. I f a personal investigation is required it may be referred to
the deputy commissioner, or one of the men from the office may go
out and investigate.
There must be three recommendations in behalf of the applicant;
that is, from the bank or the store, or some person with whom we
can establish contact before we really consider seriously that applica
tion. I f it is for the saving of a home we want to know what the
appraised value of the home was, what they paid for it, the indebted
ness against it, and the date of maturity of the mortgage. I f we
find that it is worth while to make a personal investigation we make
one.
In those cases I don’t think we have any regret, but those cases,
Mr. Stewart, would be where the widow and the dependents are
entitled to a definite amount, we say a limitation of 300 weeks. I f
that is paid out and paid out under proper supervision, invested
toward the saving of the home, or the education of those children,
we are not prejudicing at all the rights of those applicants.
Now, that is not a lump-sum settlement. I told you Virginia
doesn’t make such settlements.
As to the injured employee, we do, for rehabilitation purposes,
allow a partial lump-sum payment, or entire payment, for the pur940230—30----- 13
186
SIXTEENTH ANNUAL MEETING OF I. A. I. A. B. 0 .
chase of a farm if the claimant is qualified and has been raised on
a farm and is qualified to go back to the farm and he is partially
disabled and unable to follow an industrial pursuit. It is with
close scrutiny, however. Or, if he is qualified to go into some busi
ness, but it is only in scheduled cases, and if we allow an entire
settlement, under the Virginia act it is possible for that man to
come in and if he shows a greater disability than that for which he
has already been compensated by weekly payments and by commuta
tions, his claim is then reopened and additional payments made in
accordance with the injury.
There is no inducement for the self-insurer or for the insurance
carrier in Virginia to try to commute or make any kind of a settle
ment at all in order to end its liability. There is never an end to
liability unless there is no physical disability present.
Mr. L i t t l e . I do not wish to trespass upon the time of the audi
ence. but from the point of view of both rehabilitation and work
men s compensation, if lump-sum settlements were to be interpreted
strictly as Commissioner Stewart speaks of them, I would quite
agree with him that the whole system ought to be stopped, because
of the loss of money, the waste, the inefficiency that follows the
giving of lump-sum settlements to injured workers.
It has been a fundamental weakness in workmen’s compensation
since it was started, but Commissioner Stewart fails to recognize the
intent and purpose of the rehabilitation act enacted by the Federal
Government and by 43 States, and if he will follow through the
intent and purpose of the Federal rehabilitation act and the State
rehabilitation acts, and that which is available to you workmen’s
compensation officials in coupling up with the rehabilitation service
of 43 States, he will find therein, by law and by procedure, a method
by which to handle this question of lump-sum requests. It is writ
ten into the law. It is in the procedure. It is in the nature of the
case, and it was put there by people who knew what they were
doing.
#The rehabilitation movement in this country was started by offi
cials of the Federal Government, some of whom were acquainted
with workmen’s compensation. It had its rights and its motive
power out of that experience that there needed to be a follow-up
service, a follow-up service not only to conserve the money, but
to conserve the worker and his economic and social welfare, and
to restore him to gainful occupation whenever it was possible.
It was discovered by careful investigation in some States in this
country, taking hundreds of records, and going to the field to fol
low them up as to what became of the permanently partially dis
abled worker, that one-third of them never got back to a job; that
they had spent their conpensation; that they received their medical
or surgical benefits, but they were adrift, and they were dependent
upon their families, and upon their friends, and upon the com
munity.
That was one of the motives for starting this rehabilitation work;
others need not be mentioned. Therefore it was coupled with the
very question that you are discussing, and it is written into the
Federal rehabilitation act, and no State can have the advantage
of the Federal aid for rehabilitation unless it sets up a cooperative
LUM P-SU M SETTLEMENTS— DISCUSSION
187
relationship with the compensation officials of the various States,
and a follow-up service in compensation itself.
The immediate, direct purpose of it was to brace up and
strengthen this very point that you are discussing here to-night,
and it is written into the Federal act; therefore, it is also written
into the State acts. They had to write it into the acts to get the
advantage of the Federal fund. Therefore, you will find that pro
vision in the law in every one of the 43 States.
Now, you will not find it in all the functions of the rehabilitation
agencies of your various States, because it is such a complicated
question. It is so full of misunderstandings that very few of the
States have worked it out, but you have listened to-night to one
district at least, the State of New York, where, for over five years,
it has been worked out, and it has not only been worked out but it
has been worked out constructively. It has been worked out success
fully, and if you paid close attention to it you will see its impor
tance, both in law, in procedure, and in constructive results; there
fore, Commissioner Stewart needs to enlarge his idea a little, or at
least his definition of a lump-sum settlement, that it is giving to the
hurt worker a settlement, complete, of his claim, in a check, and
that he can do with it as he pleases.
I f that is all there is to it, I agree with him that the whole affair
should be stopped, but that is not all there is to it, nor ought it to
be, because there is written into the act of this State and of every
other State, the words, “ In the interest*.of justice,” and the courts
of this State, as well as the industrial board, have interpreted the
words, “ in the interest of justice,” the economic and social advantage
of the claimant and his family as above the advantages of biweekly
payments, and anyone who deals—not merely in the office but out in
society—with the hurt worker knows perfectly well that there de
velops situations in the lives of the injured workers and their fam
ilies, and that their economic and social advantage may be advanced
by granting to them the advance award or lump-sum commutation
of their compensation, that it will meet the exigencies of their situa
tions better, and by careful planning of it with them, and following
it up, we will get a more constructive result than by paying it to
them at the rate of $20 or $25 per week, biweekly, in compensation,
and that has been demonstrated again and again, and it is a feasible
and it is a workable proposition.
Therefore, what I mean to say is this: You touched upon some
thing here to-night that since workmen’s compensation was started
in this country and in the world it has never yet been well solved, but
you have found the place and you have found some men who know
how to do it in harmony with the purpose of the law, the economic
and the social benefits of the law, and you may check up the results
and find that it is beneficial.
Mr. S t e w a r t . I think it is due to me to say that when I announced
my opinion of lump-sum settlements at the Baltimore convention
there was no rehabilitation movement on foot. I want to say that
lump-sum settlements then meant settlements which ended the whole
transaction. Doctor Little has well said that other things have been
hooked on, and I want to italicize the “ hooked on.”
188
SIXTEENTH ANNUAL MEETING OF I. A. I. A. B. 0 .
I was just as much opposed to lump-sum settlements as it was
understood then as now, and Doctor Little agrees with me. Since
then a lot of other things have come up and you still say lump-sum
settlements when you mean a commutation for a specific purpose of
a part of the compensation award. I have never said anything about
that nor have I ever said that I am opposed to that.
I want to repeat what I said at the rehabilitation conference in
Memphis, that the compensation legislation was never intended to be
“ hooked on 55that way. I f you can rehabilitate, have special legisla
tion for rehabilitation—make it a separate issue. You are muddy
ing the waters—confusing the whole thing. You are getting some
of the compensation money for rehabilitation, which is not a part of
the essence and theory of compensation. It is a thing apart and
ought to be able to stand on its own feet.
While I am in favor of rehabilitation, I am not in favor of using
the compensation fund for any purpose except that for which it was
intended. I am in favor of commutation occasionally, perhaps, but
that is not settlement. You still have a hold on the injured em
ployee. He is not absolutely divorced, without alimony, from the
whole compensation question. Let us talk in a language which
means what it says. You have entirely distorted the old idea of
lump-sum settlements; and I do not believe there is a man in this
house who believes in the old idea of lump-sum settlements.
Mr. L i t t l e . Just for clarity now, the New York law used the
language, “ commutation to one or more lump-sum payments.” That
is the language that we are using. Do not forget that, Commissioner
Stewart. We are talking within the meaning of the law as written
when we talk about the commutation of compensation to one or more
lump-sum payments. That is a quotation from the act.
Now, this question of lump rehabilitation being hooked on, no, it is
not hooked on. It is extended, and that is decided by the United
States Supreme Court; that the rehabilitation is an extension of the
principle of compensation. Do not forget that, Brother Stewart.
Furthermore, there is not any denying or taking from the injured
worker his compensation benefits to pay for the purpose of his
rehabilitation in the State of New York. Nothing of the kind. We
help to get him more compensation money than he otherwise would
receive, many times. We do not deny him. It is not a question of
the amount of money the man receives. It is how, and it is when,
and it is the method of receiving it, and the use to which he puts
it, and in that act—and New York is the only State in the Union that
has it, and it is worthy of the attention of you compensation
officials—in the rehabilitation act of the State of New York there is a
part of it an amendment to the workmen’s compensation act, and it
is an amendment to the education act, and virtually an amendment
to the health act of the State. It is a composite act, and that part of
the rehabilitation act of the State of New York which is an amend
ment to the compensation act has in it this very interesting pro
vision : An injured worker, under the compensation act, who dies or
who is killed by an industries accident that is compensable, and there
is no claim, the insurance carrier or the employer, if he is a selfinsurer, pays into the State $1,000 for the industrial death, where
there is no claimant, in addition to $100 funeral expense.
LU M P-SU M SETTLEMENTS— DISCUSSION
189
That $1,000 paid into the State is divided into two funds; the
first is the special disability fund, administered by the department of
labor, to cover that element of permanent total disability after a
scheduled loss has been paid out following a second injury. For
example, in the case of the man with one eye or one arm who is re
employed in the State of New York, and who loses another member,
or combination of members, the insurance carrier pays a scheduled
loss for that particular member, and then the subsequent and follow
ing years of his life are covered by this insurance provided as I have
mentioned. The carrier is assessed for deaths where there are no
dependents.
The other $500 is turned over to the rehabilitation fund for the
payment of all necessary expenses for the rehabilitating of compensa
tion cases and can be used only for those cases, and that provision of
the law was adjudicated through the courts of New York and through
the United States Supreme Court and it has been sustained, and it
ives to New York 50 per cent more of the money that they use
or rehabilitation, because 60 per cent of the cases we handle are
compensable cases, but it does not diminish by one cent the scheduled
rate of compensation to an injured man whom we rehabilitate. He
receives this other in addition by the extension of the principle of
the workmen’s compensation, and it has been sustained by the United
States Supreme Court.
Mr. H o r n e r . In the State of Pennsylvania practically 90 per cent
of the contacts that the bureau of rehabilitation makes come through
cooperation with the bureau of workmen’s compensation. When an
application for a lump-sum payment is filed with the work
men’s compensation board in a permanent injury case, the case is
referred to the bureau of rehabilitation for investigation and a report,
with a recommendation to the workmen’s compensation board, just
as you do in New York.
However, in fatal cases there were some questions as to whether
the bureau of rehabilitation had the authority, because of the fact
that the money was appropriated to them by the National Govern
ment, and they did not rehabilitate in fatal cases, whether it was
good policy to have the bureau of rehabilitation investigate those
cases. Therefore, when petitions are filed and applications are filed
for lump-sum payments in fatal cases they are referred to adjusters
connected with the bureau of workmen’s compensation, for investi
gation.
In answer to the gentleman from Virginia, if there are minor de
pendents under 16 years of age who are beneficiaries under our law,
the board requires that a guardian be appointed for those minor de
pendents, and that guardian must join the widow in the application
for a lump-sum payment. The purpose of that is, in the event the
money is granted to pay a mortgage or for the purpose of buying
property, the interests of these minor dependents are preserved,
either by a mortgage, or in the deed, or in some other way; so in
that way we try to protect the interests of the minor dependents
when lump sums are granted in fatal cases in the State of
Pennsylvania.
Mr. W i l c o x . I think the distinction that Mr. Stewart is making
as to what constitutes a lump-sum settlement and what constitutes
f
190
SIXTEENTH ANNUAL MEETING OF I. A. I. A. B. O.
commutation is thoroughly confusing to the administrator of com
pensation, and that it means nothing to those who adminster the
law.
I was unfortunate enough not to be able to attend the Baltimore
meeting, and I never have known until this evening that Mr.
Stewart was contending for any different definition on this practice,
or any distinction between a commutation for one purpose and a com
mutation for another purpose. I had understood that the objection
that he entertained was one which directed itself to the fact that
the compensation laws contemplated that the payments were to be
made in weekly amounts, representing the wage lost, and that his
objection to the whole thing was because it set aside that theory.
This other matter of distinguishing between those cases where you
just turned the money over and forgot about it, and the cases where
you exercise a measure of control as to how the money shall be used,
never occurred to me. I did not believe there was any person' under
the heavens administering workmen’s compensation in this country
who was so foolish as to forget about the purpose for which this
money is to be used. I thought that we expected that we were going
to look after it, to see that the money went for a definite and good
purpose, and that we kept a sufficient amount of control over it to
see that it did.
I never heard of any State yet that thought of such a thing as
turning money over to individuals who had no competency for the
handling of it. Now, I have no patience with that notion, with a
good deal of the contending against lump sums. I have no sympathy
whatsoever with a notion that you can pay—how much for an eye
injury? One hundred and sixty weeks? The idea of turning over
$25 a week, as they do in New York, for the loss of an eye, added to
the wage that a man earns, because we know, as administrators of
compensation, that these men go back sometimes into the same in
dustry in which they worked before, without any loss of wage, and
we build up their weekly income by $25, and let them go on and work
through 160 weeks, and reach a standard of living that they can not
continue. That ought not to be. That is the worst thing that can
be done for any family; so I believe in controlling the investment
of these moneys when commuted for payment of debts.
We commute for payment of mortgages. We commute for various
purposes, for the purpose of buying homes. When we purchase a
home we write into the deed a clause prohibiting them from dis
posing of the property or the mortgage or doing anything with it.
I f it is for investment purposes, we require the securities to be
left in the bank or in the trust company, or somewhere where we
know they can not get them, and we make sure that the money goes
for a decent or legitimate purpose. We do not turn money over to
anyone who has not built up with us a record of ability to handle it.
We use the rehabilitation department, but I object to this notion
that every one of these commutation matters shall be turned over
to any rehabilitation department. I f I have a man who has bought
on a building and loan plan, and he is paying for his home at the
rate of $30, or $40, or $50 per month, and I look at his little book,
and I find that he has paid out half of the original purchase price of
that property, that he has been meeting his payments weekly or
LUM P-SU M SETTLEMENTS— DISCUSSION
191
monthly, as they were to be made, do not tell me for any single
moment that I can not trust that man. He knows more about how
to take care of his money than I know how to take care of it for
him. I can depend on that type of fellow, and I do not need to
worry about him, and there is not any advantage in turning that
over to the rehabilitation department. That is not rehabilitation.
It is not anything of the sort.
We use all the agencies we are able to use? and I detest the sort
of man who does not avail himself of the things that are available
to him to teach him how best to handle the problem before him.
This morning, in this room, there was demonstrated to us the
basis of the amount of compensation to be awarded to men, and I
guarantee to demonstrate to this crowd that those estimates of dis
ability in one or two cases were three times as high as they ought to
have been. Now we set ourselves up as judges competent to deter
mine how much money a man ought to have, when we may vary
all of the way from $1,000 to $3,000, $4,000, $5,000, or $6,000.
We expect to have sufficient judgment to do a job of that sort, and
still we can not tell whether or not a family is frugal. Well, now,
I simply resent that sort of implication upon my ability, or upon
the ability of administrators generally.
Doctor H a t c h . I wish that we in New York had equal confidence
with Mr. Wilcox in our ability to judge the future probability of a
capital investment, running from $2,000, $3,000, $4,000, to $6,000,
or $7,000. We simply have not that judgment. We are very glad
to confess it.
Mr. W i l c o x . I f you put it in bonds or mortgages or something of
that kind you would have a control over it.
Doctor H a t c h . What good is that as compared with compensation
installments ? It is not any more secure.
Mr. W i l c o x . It is not a matter of security. It is a matter of
whether you are going to allow this fellow to augment his earnings
and spend his money and at the end of his period of compensation
have nothing, whereas on the other hand, I keep him within his
average and fair earnings and at the end of his disability period I
have the money left.
Doctor H a t c h . The safety of those investments is not a question
of having those bonds in a safety deposit box; it is a question of the
value of those bonds 5, 10, or 20 years hence, and any man in this
room who has ever invested any great amount of money knows that
occasionally the biggest companies go into receivership.
How do you know that the bond this man is going to buy will not
be the bond of a company in receivership five years hence, and then
where is his income coming from? That is what I am talking
about. When you talk about security it is wholly a matter of busi
ness judgment, and we believe in New York that you want to get
all the assistance you can.
Now it is not a question of turning it over to the rehabilitation
bureau. They do not determine these cases. They simply give thor
oughgoing, expert advice (because that is their kind of a job), of
what the possibilities and the probabilities are, and that comes back
192
SIXTEENTH ANNUAL MEETING OF I. A. I. A. B. 0 .
to us, and we decide, in the face of the fact and probability presented
by them, whether to do it or not.
It is a question of whether you can get the best information about
the man’s capacity, his circumstances, and his more or less specula
tive future finances.
Mr. W i l c o x . We have in this State, and we have in every State
in the Union, laws which put upon public officials the obligation
to investigate the moneys of minors, dependents, and the insane, and
they tell you the kind of bonds and securities you may invest in,
and, as far as human abilities can determine, those securities are
secure, and they are a mighty sight more secure than the money
that is being turned over to these people biweekly to spend as they
choose.
Mr. S t e w a r t . I want to ask Mr. Wilcox just one question. You
say that the workman knows more about what to do with his money
than you do. Then why do you make an investigation ?
Mr. W i l c o x . I did not say anything of the sort. Mr. Chairman,
I am answering the question. Mr. Stewart has said that I made
the statement that the workman knows more than I do about what
he should do. I did not say that. I said that when I find a man
who has gone on month by month, saving out of his inadequate earn
ings $30 or $40 or $50 to buy himself a house and has made several
payments thereon, it is presumptuous for me to say that he can not
save his money—that particular man. But I investigate them all,
surely.
Mr. Z i m m e r . I want to say what I did not say at the Baltimore
convention—I was not there. I will devote two minutes to settling
the problem of the widow in New York State so far as lump sum
is concerned.
We can grant the widow a lump sum in New York, just the same
as we can to anybody else, but we do not do it, just as in the case
of the others. There are very, very few occasions when a lump
sum is granted by this department to a widow, and there are still
fewer occasions that the insurance carrier will stand for it, and
he rarely has to stand for it.
We must prove conclusively that it is in the interest of justice,
and that is a pretty hard thing to do.
But to answer this gentleman from West Virginia on that house
proposition; now, as a matter of fact, in New York State if a widow
remarries she gets two years’ compensation in a lump sum. That
is all. So you can readily see that an insurance company will not,
unless this widow is pretty well along in years, and with very little
expectancy under the remarriage table, stand for a lump sum, even
if we were willing.
Mr. K i n g s t o n . There is one angle of the subject that I wanted
to get some light on, if I can. The representative from Utah has
asked the question as to commutation of pensions payable to for
eigners who want to return to their own country. Let me illustrate
my point: Supposing a man has an arm off, and according to New
York the present value of his pension of $25 or $30 a week—what
ever it is, for 312 weeks—is something over $6,000, and he wants to
go back to his European home. I understand you would advance
LUM P-SU M SETTLEMENTS— DISCUSSION
193
him enough money to buy his ticket. Would you, after he goes home,
advance him the full present worth of that pension? That is im
portant.
I want to say that we do not do that in Ontario. We have a num
ber of these requests, but by reason of the economic conditions in
some of those mid-European countries, the impaired value of money,
the difference in living conditions, we say that if you are going to
remain in our country you may have your pension for life, but if
you are going back to this country where conditions are so much
different we will commute your pension on a substantially lessened
present worth than its actual present worth is in terms of money
here. I would like to know if New York or any other State does
that.
Mr. Z i m m e r . New York State has identically the same proposi
tion. We must commute the compensation due an alien if he decides
to go across, and it is commuted at 50 per cent of its value. That is
in the statute. We have no say about that.
Mr. K i n g s t o n . I am glad to know that, because the practice we,
have adopted in Ontario is on that basis. I wanted to say one other
word on the general subject, and that is, under our law in Ontario
we commute all payments, all awards that are based on a disability
rating of 10 per cent or less, by lump sum. I f it is over 10 per cent
then we pay it in the form of a pension. We have applications for
lumps sums which we sometimes allow with the greatest precaution,
but we never commute a widow’s pension. That is held absolutely
sacred.
Mr. L e o n a r d . I think in the State of Ohio we have been a great
aid to widows. I think we have helped Cupid a whole lot in Ohio.
We have had a number of cases in Ohio in which just as soon as a
widow received an award she remarried. There is no provision in
the Ohio law which prevents the payment of money to a widow. She
may remarry, but she receives the money just the same.
We try to be judicial in Ohio in the matter of lump-sum awards.
We feel it is a great deal according to the person. We have two
kinds of lump-sum awards. The one is to the widow where there
are dependents, and we are very, very careful. We find there are
so many people who have things to sell. We find men who hold
second mortgages at 7 and 8 per cent. We find people who hold
first mortgages. We investigate very carefully. We allow no lump
sum to anyone where a mortgage is held by a private party. We
have found that people who hold second mortgages are never paid.
The claimant pays the interest, but pretty soon the property is
foreclosed.
We try to j>ut a restriction in the deeds so that the property can
not be sold within seven years, but that does not prevent the prop
erty from being foreclosed. We will not give a lump-sum award
unless it is in a building and loan association.
We are rather liberal with a man who is injured, who has a
permanent partial award, a man who is able to work. We look at
the man himself. We look at his earnings if he wants to buy a
little home. We have the rehabilitation department investigate and
make recommendations to us and we allow him to buy it. We try
194
SIXTEENTH ANNUAL MEETING OF I. A. I. A. B. 0 .
to throw every safeguard around a lump-sum award and it is quite
a large responsibility.
I have often felt that if I could have people up before me and
question them I could make up my mind, but you can not see them
at long range. There are too many people who are on the trail of
the widow and the orphan. We try to put the golden rule into
effect in the treatment of our cases. We try to look at things in the
terms of humanity and industrial justice.
We know that when the widow and the orphan receives the $18
or $20 or whatever it is every two weeks for a period of 416 weeks,
they are not going to lose it.
Our death award in Ohio is $150. That is the time when a widow
has debts and we are quite liberal about that. She makes applica
tion to pay off these pressing debts, to get her started, and we
advise her that we grant lump sums only under very extraordinary
circumstances. We feel that it gives them a good start in life if
they are able to pay off these pressing obligations.
Mrs. R o b l i n . T o answer further Mr. Kingston’s inquiry, the
Oklahoma law provides that we may commute the weekly payments,
if they wish to return to their homeland, into a lump sum, and in
that event they draw only 50 per cent of the amount that would be
due them if they remained in this country.
In doing that—of course, our foreign element is mostly Italian
and Mexican—we take the Mexican or Italian consul into our con
fidence, and it has resulted in the Mexican Government handling
most of the Mexican’s money when he returns to Mexico, and the
consul makes a report from the seat of the Government of Mexico
in all cases.
Mr. K e n n a r d . Perhaps it is not for me to give any advice to
this assembly, but I would like to make a suggestion: This is a
great age for research. Most of our advancement is based upon re
search. I think it would be an excellent proposition, in view of
the great doubt which seems to surround this question of lump
sum, if some of our jurisdictions would go back in their records
five years and pick out a hundred cases, impartially, and find out
where they are to-day, and have a report made on them, and then
we will be approaching them with the benefit of the experience you
have had in your jurisdiction, and you will get a lot of informa
tion, on examination, to guide you in granting lump sums in the
future. When the application comes to you in the future you will
have something exact in your mind so far as those hundred cases are
concerned, and it will probably be fairly typical of other cases. It
will be discouraging research work, but it will be illuminating and
helpful.
Mr. W o r s t e l l . Along the line of what Mr. Kennard has just
said, in Idaho we make lump-sum settlements—Commissioner
Stewart and I will have no disagreement on what the word means.
It is a final settlement of all past, present, and future liability on
the part of the employer and his surety. When the man receives
the money in the final settlement his case is closed.
We had an instance just a couple of weeks ago of a man who had
received a minor injury to a toe, and he had been paid by the State
LUM P-SU M SETTLEMENTS— DISCUSSION
195
insurance fund of the State of Idaho about $130 which was an
absolutely fair and correct settlement at that time.
He was employed about two years later by a construction com
pany in the southern part of the State and he sustained another
injury to the same toe, and his doctor at this time says that his
trouble is not due to the second injury, but to the first injury. He
has a disease and a condition which may result in the loss of part of
a foot.
Now, the situation in Idaho, in view of the lump-sum settlement
which that man received, is just this: I f the board determines that
his condition is not due to the second injury he can not receive a
cent of compensation because his case is absolutely and finally closed.
I guess that I have perhaps voted for every lump-sum settlement
that has ever been made by the Industrial Accident Board of the
State of Idaho. I used to favor lump-sum settlements, but our ex
perience (and we have made an investigation of 112 cases over a
considerable period of time to determine what became of this money
and whether or not it has been for the best interest of all parties as
the law intended) shows that in over 90 per cent of these cases the
money did the claimants absolutely no good. They lost it.
We have had men go into the pool-room business, the chicken busi
ness, into the dairy business, into the filling-station business, and into
every kind of business that you can think of—agricultural pursuits,
to buy a home, to buy a building, to travel, for businesses, to buy
tombstones, to pay for an operation, and I do not know what—and
we find that in over 90 per cent of those cases the money has not
accomplished the purpose which we expected it would accomplish.
Now, our situation out there is just this: While I have been ex
tremely liberal in the matter of voting for these lump-sum settle
ments I have almost come to the point of Commissioner Stewart,
where I feel like denying every application, but I know that would
not be fair.
I can recall a case where the commission was divided as to
whether or not the man should receive a lump-sum settlement. He
wanted to start a harness business. Well, perhaps you would think
that would not be a very good business, but he proposed to establish
in a little town called “American Falls,” out in the dry farming
country where there are a great many horses, and we found on in
vestigating his case that he has a very good paying business there
and he is doing well. So that I do not think it would be wise to
deny all these applications, but we must adopt some sort of practice
in Idaho to put a stop to the flood of lump-sum applications.
Five years ago we received about one application a month. Now
we receive about 25 a week. Every time a man has an award of
from $100 up to $3,000 on $4,000 an application for a lump-sum
settlement is received before the agreement is entered into, but later
the application comes along and the matter is up to the board to de
termine ; so that we must adopt some sort of practical rule and regu
lation to handle this situation.
We are figuring on the proposition now. Perhaps we will adopt
a blank of some kind which will contain three or four bases of in
formation, with the idea of discouraging the man from going ahead
with it, and if it is not completely filled out it will probably go back
196
SIX TE E N T H A N N U A L M EETIN G OF I. A. I. A. B. 0 .
to him to be completed, and then when we receive the application we
will scan it very carefully and check it up, and those that we think
are not worthy will be rejected and denied, and those that we feel are
worthy of investigation will be heard; testimony will be taken to
determine whether or not it is a proper case.
We feel that we have—I do not want to be charged by Mr. Wilcox,
of Wisconsin, with being incompetent and not knowing what we
should do—followed the law in a great many of these cases, and
trustees have had charge of purchasing the property, or whatever
the man said he wanted to purchase, and we have seen that the home
has been purchased, that the mortgage has been paid and all that,
but after that is done we have nothing more to do with it.
Mr. P atton. I do not think that the workmen’s compensation
bureau should be charged with the responsibility, the duty, and the
burden of making lump-sum settlements. I think any compensation
bureau has a big enough job to handle the workmen^ compensation
awards. I do think, however, that such, whatever you want to call
them, in some cases are advisable and that the experience related here
to-night by Mr. Jarnegan, and further spoken of by Doctor Little, has
demonstrated beyond any doubt that there is a method of arriving
at this result, and I take it that the experience, running over six
years, has convinced our commission that it would be advisable in
the future to relieve our compensation bureau of all responsibility in
this matter and turn it over to the rehabilitation bureau, and that,
in essence, is the contention that was made this evening in the paper
on this subject by Doctor Hatch.
I do not agree with Mr. Wilcox at all that the workmen’s com
pensation bureau ought to presume for one minue to have the finan
cial wisdom of knowing the right thing to do. Our industrial board
has toed the mark and confessed that we do not know how to do it,
and we want somebody whose specific job it is to tell us what to do
and how to do it.
Mr. C urtis. This is the whole question when you simmer down
the New York act. Is the lump sum in the interest of justice?
And no one has gotten away from that point. In New York State
we have an adjustment of a case, but that in no way completes the
case. I f there is any change in condition it may be reopened, and
so I told Mr. Stewart here to-day that he was confusing lump sums
and putting them all in the same class; there is a difference under
the New York State law as far as a nonscheduled c£se is concerned.
I f a sum of money is paid to a claimant and there is a change in the
condition, the commission always has jurisdiction over that case,
so that there is a vast distinction, and I am in accord with Doctor
Hatch’s paper.
From my experience I know there should be a thorough investiga
tion before a lump sum is granted, because there are some men who
can not handle a lump sum properly, but at the same time that
should not be any reason for our going on record here declaring
against lump sums. That is the position that labor takes on the
matter, and we believe it is a sound position. There are men who
can handle a lump sum and do well with it. There are others who
can not handle a lump sum, but we will never stand for abolishing
the lump sum from the law.
[The meeting adjourned.]
THURSDAY, OCTOBER fO— MORNING SESSION
Section A : Chairman, S. S. McDonald, Workmen's Compensation Bureau of North Dakota
PROBLEMS OF EXCLUSIVE STATE FUND JURISDICTIONS
[The meeting was called to order by Ethelbert Stewart, United
States Commissioner of Labor Statistics, who stated the reason for
dividing the Thursday morning session into three sections.]
The C hairman . Each person who is called upon or who gets up to
speak, will please give his name and the State or Province he comes
from, so that the stenographer can take it down. First on the list,
to start the discussion, is Nova Scotia.
Nova Scotia (Mr. A rmstrong). The subject for discussion this
morning is the problems of exclusive State fund jurisdictions.
Many of these are due, first, to the act as passed by the legislature
not having been given the careful study that was necessary before
becoming law, and also due to the fact that legislation of this nature
was an experiment. No two acts are the same, and for that reason
the problems in one jurisdiction would not be the problems in another
jurisdiction. Secondly, the appointment of members of the board
has not always been given the careful consideration that it deserved.
In exclusive State funds the board must act as an administrative
body as well as a judicial body and in many jurisdictions no appeal
is allowed from their decisions except in questions of law. For that
reason the board should be composed of persons of business ability
and should be appointed for a term of years. In no case should the
appointment be made for political service. I f the board is made a
political football, serious trouble will arise and political influence in
the administration of the act will follow. Efforts should be made
to keep politics away from the administration of the act. Thirdly,
the size of the jurisdiction and the nature and pay roll of industries
covered create a serious problem and it is an open question as to
whether small jurisdictions having only a limited number of indus
tries, or having one large industry and a large number of smaller
industries, should without very careful study adopt an exclusive
State fund.
In jurisdictions like Nova Scotia where half of the assessments
received come from our coal mines, and similar conditions existing in
West Virginia, it becomes a matter of special consideration as to
whether these jurisdictions adopted the proper method when they
chose the exclusive State fund. Problems which arise where risks
are covered by stock companies may not be problems where there is
an exclusive State fund. The problems of the small employer who
finds it impossible to get insurance with stock companies is not a
problem where there is an exclusive State fund, because there ap
pears to be an obligation resting upon the State fund to protect all
industries which
within
scope of the act. An innovation
come
the
197
198
SIX T E E N T H A N N U A L M EETIN G OF I. A. I. A. B. 0 .
has found its way into many of the acts creating exclusive State
funds which gives the workman the right to be paid compensation
even if the employer has not reported his industry or paid assess
ments. This, of course, could not happen where risks are carried
by private insurance companies. One of the most serious problems
which a State fund has to face is the matter of the indifference of
employers. On account of the insurance being collective, the individ
ual employer does not have the same incentive to fight cases as if it
was a case of individual liability, or a case where a private insurance
company would carry the risk. Another problem is the fact that an
exclusive State fund can not take advantage of selection of risks; it
must practically accept every risk which comes within the scope of
the act. True, in many jurisdictions provision is made that sur
charges can be put on certain industries where a special hazard has
been shown to exist; still this is rather a difficult matter. Perhaps
the best way to look upon an exclusive State fund is that it is a large
insurance company having a monopoly, that the employers in the
Province coming within the scope of the act are shareholders, and
the board is arbitrator between the employers and the employees.
In most of our jurisdictions having exclusive State funds very great
powers have been given to the board, but these must be exercised
with due caution.
The C hairman . Does anyone want to ask Mr. Armstrong any
questions ?
Mr. L eonard. What is the penalty for an employer not covering?
Mr. A rmstrong. He has to pay assessments from the time he
came within the scope of the act and he is liable for the full cost of
the accident.
Mr. L eonard. Is the pay jail sometimes?
Mr. A rmstrong. Not unless we can get a judgment against him.
Judgment does not always mean you get your money. All we have
to do is issue a certificate signed by two members of the board and
file it in the prothonotary’s office and it becomes a judgment of the
court and he is served with a writ, and if it is possible to get the
money we can get it. You do not even have to have a solicitor.
Mr. L eonard. Does that stand for years ?
Mr. A rmstrong. It becomes a note. Many times we have people
come in to us wanting release from a judgment happening seven or
eight years ago, some property that someone has picked up and finds
this judgment still stands against him and he is willing to settle up.
Mr. L eonard. Do you not find that these fellows have their
property in their wives’ names?
Mr. A rmstrong. Yes; but even with that we go very much further
perhaps than you do. We see that we can get after a man for any
property used or manufactured in the industry. For instance, a
man is running a sawmill in the lumbering industry, which he may
have borrowed or rented from some other man. We have a claim on
that mill. I do not know whether your law goes as far as that
or not.
Mr. L eonard. We can appoint a receiver for his business*
EXCLUSIVE STATE FU N D JU RISDICTIO N S
199
Mr. A rmstrong. Yes; but this is not his property. He has rented
that mill. Our law goes so far as to say we can take that mill. In
some cases we have done that. Here is a case that a member of the
board would hesitate to put in force. A man may have a pair of
horses and his neighbor says “ I am going into the lumber woods.
Now, you are feeding these horses and bedding them down. Rent
them to me and I will feed them and bed them for you.” He does
not receive any remuneration for them, but under our act if we
choose we can seize those horses and sell them as the lumberman’s
assets. We have never done it and would hestitate.
Mr. L eonard. It gives you a little leverage.
Mr. A rmstrong. Yes; we can bluff a little.
Mr. E vans. I would like to ask Mr. Armstrong whether the fund
guarantees the benefits to the injured employee where the employer
is judgment-poor, where he has no assets, and there is no apparent
chanoe of getting anything for the employee?
Mr. A rmstrong. I might say that in a case of that kind the man
does not look to the employer in any way. He looks to the State
fund for the compensation and we are bound to pay him, even if
the employer never reported his industry and never paid a cent,
or if we have assessed him and were unable to collect a cent from
him. The employee is protected in every case.
The C hairman . Any other questions to ask Mr. Armstrong? I f
not, we will call on the others. The next on the list is Nevada. I
do not believe they have a representative here. Then comes New
Brunswick, and I do not believe they have a representative here.
Ohio comes next.
Ohio— (Mr. L eonard). I feel that I am among people who talk in
my language. I have no hesitancy in going before any meeting, com
petitive or otherwise, and telling about the Ohio fund. I guess we
all have the same problems, whether we are in the same State or not.
In Ohio we insure 1,600,000 workers. We have jiearly 43,000 emloyers in the fund. The fund has been established since 1912. We
ad a very bitter fight to get this fund established. We had em
ployers who fought the organization of the State fund. I believe
their point of view is changed now. I might say I am the representa
tive of the employers of Ohio on the fund. The commission is com
posed of three men, one representing labor, one representing manage
ment, and one representing the public. The public man is a lawyer.
Fitting the big problem we have in Ohio is the matter of the sympa
thetic attitude on the part of our public officials, our legislature, our
Governor of Ohio. We have had the legislature composed of one
faith, a governor of another. It is pretty hard to get the right kind
of cooperation with that. We were housed in an old building in
Columbus, not a fireproof building. We had two million and a half
records in that building. Had we had a fire in that building, in five
minutes we would have had fifty-five million and no one to pay it to.
The representatives of industry put pressure on the legislature and
the governor for years.
Last May the Cleveland clinic disaster happened. You are all
familiar with that disaster. We had in this old building tons of
X-ray films. It would have meant a terrible catastrophe for the
E
200
SIX T E E N T H A N N U A L M EETIN G OF I. A* I. A. B. 0 .
300 employees housed in that building. That disaster in Cleveland
capped the climax. The Governor of Ohio has evinced a very
sympathetic attitude. He insisted that we get out of that building.
The legislature, of the same political faith, said “ We will go along
with you.” We are now in a fireproof building with fireproof rec
ords. That was the biggest problem we had on our hands. From
a standpoint of State fund, you are entirely dependent upon the legis
lature for proper appropriations, as you know. The correspondence
and the amount of business is tremendous. In going back to 1912,
we have old cases piled up way back in years, together with the
heavy amount of present business. It requires additional help and
aditional help at a fair wage. In Ohio, through the legislature and
the governor, being of the same political faith, we are having the
right kind of sympathetic cooperation. We are making advance
ments and I might say, in that Cleveland clinic disaster, Mr. Blake,
our industrial relations director, who is here to-day, sent our inves
tigator to Cleveland and told Doctor Crile that we were there to
lend every assistance. We put our investigators right out in the
Cleveland clinic. They want right after the death claims and those
injured and within three weeks we disposed of more than 80 death
claims. It showed that you can transact public business as effi
ciently as private business and that is one of the big things in an
exclusive State fund, to show that you can transact public business
somewhat nearly as efficiently as private business. Of course you
men know that when you are dependent upon legislature and poli
tics to get what you want it is a little difficult to demonstrate that
you can transact public business somewhat near as efficiently as
private business.
We have the same problems of lump sum. We have the same
problems of coverage and I might say that in the matter of cover
age, in the State of Ohio we have the problem of employers of three
or more men, who are not subscribers to the State fund. We have
a provision in our law which covers or provides that where a man
is injured and he was employed by a man who should be in the
fund and is not, we act on the case the same as they do in the State
fund. We make the award against the employer. We certify that
award to the attorney general for collection. The attorney general
goes after the employer and after the man and if the man is not re
sponsible he makes a report and asks that it be withdrawn from his
files. The commission pays that award to the widow or the injured
worker. It is paid out of our reserve fund. The situation that
happened in New York State, as told by Mrs. Perkins, could not
happen in Ohio. The injured worker or his dependents would be
compensated the same as any other person in the State fund. We
have the air problem in Ohio. We Know where we are on matters
of maritime employment when on a navigable river or lake. It is
where we stand on railroad trains, interstate coverage, but we do
not know where we stand in the air, but we have tried to and have
decided to do this: That where an employer takes out coverage in
the State of Ohio, we are going to cover the employees. We have the
Transcontinental Air Transport System in Columbus, part of the
system from New York to the coast. We have had a case recently
of a carrier, an air-mail plane. The company made a contract with
EXCLUSIVE STATE ttT N D J tm tS D IC T IO ttS
201
the Government for the carrying of mail. The pilot was killed near
Cincinnati. The employer was in the State fund, so we took it up
with our legal department. We had another case of an ill-fated
T. A. T. plane—a traveling man. We made an award of $6,500 to
that widow and her children. We do not like to have traveling men
take the planes but we are covering them just the same, whether on
water, air, or railroad train. Another problem in our fund is the
matter of foreign dependents.
The case came before us recently of an Italian who was cited for
examination in 1925 and that was the last time we heard of him
until two months ago, when a relative of his came into our office at
the hearing, had an attorney in fact. She wanted to draw his com
pensation. She had a statement of his physical condition from a
doctor over in Italy. We did not know a thing about this doctor.
We had no way of checking up, but finally we are going to make
an effort through the American consul to get an outstanding physi
cian and surgeon to go over this man. We lost track of this man.
Compensation, if the man’s condition warranted it, was due from
1925, amounting to several thousand dollars. I wish we had some
arrangements by which we could have men and doctors stationed
over there. I do not know whether we could do it legally. I have
taken it up with our legal department, but surely there should be
gome arrangement made so that we could have representation in
Europe to investigate these cases. We have a good many foreign
dependency cases. We have had the problem of whether or not to
give the award to the widow who has been away from her husband
20 or 25 years. Her husband living in this country is killed—
whether to give her an award or pay it on proof of dependency.
Another problem is the extraterritorial jurisdiction. We cover
traveling men in Ohio, where the contract is made in Ohio and it
goes in any other State. The court has held that it is confined to
Ohio. As a matter of good faith, we are going along with it.
Where they pay the premium and want the man covered, we cover,
no matter where they go.
We have had the situation of contractors sending men to foreign
countries and wanting coverage. We dislike to do it but the Ohio
law says there is nothing to prevent it. It seems unreasonable
that we should cover men going into other countries but, I think,
under strict legal interpretation we should do it. In Ohio, one of
our big problems is taking cases into the courts. We have final
jurisdiction in occupational diseases, and in additional award cases.
1 might say, in Ohio we have a code of specific requirements.
The Legislature of Ohio in 1924 enacted a constitutional amend
ment providing that an employer could not be sued, and further
provided that in the case of an employer who violated specific require
ments, the commission could give that employer a penalty of from
15 to 50 per cent on top of the award. It worked out very satisfac
torily. We had representatives of workers and representatives of
employers draw up these codes, which we are now revising. The
employer of Ohio makes his own rate. For instance, a man’s manual
rate may be $1. That man, by reason of good accident experience,
may pay 50 cents or 60 cents and his competitor who has a bad
94023°—30------14
202
S IX TE E N T H A N N U A L M EETIN G OF I. A. I. A. B. 0 .
accident experience may pay $2 into the fund. There was a time
when the slogan was “ Safety is better than compensation,” and we
had another, “ Safety pays dividends,” and the employer of Ohio
realizes it. By the way, the employer pays X per cent of his pay roll
into our department and we have experts who go out to advise the
employers. We have another branch inspector who places orders.
Our men are safety men.
I have said to employers who have been before me, “ You know we
have these codes? ” “ Yes.” “ Did you ever study them? ” “ No; I
got some literature from your safety department but I did not read
it.” And I said “ I f you had, you would not be here to-day. You
did not guard your machine.” Usually when a man does not conform
to the code or has made no efforts to safeguard his men, we give the
injured an award of 50 per cent from the time of his injury. A man
may have lost his arm. The total cost of that may be $3,000. He is
paid $1,500 in addition to the compensation that has been paid by the
State fund and the employer pays it out of his own pocket. I might
say, in Ohio, out of 42,000 parties, there have been just a handful of
additional awards because the employers are being sold on the idea
of safety. I f they are not sold from the humanitarian standpoint
they are sold from the dollars and cents standpoint. They realize
it is good business.
We have a catastrophe fund of about $3,000,000. It was in Ohio
that some critic of State funds said “ You will never need that
money.” This clinic disaster came along—they were in the fund.
That would have cost us $400,000 or $500,000. It was supposed to be
a fireproof building, yet you men can see what may happen and what
the advantage is of having a good strong fund.
Mr. K ingston. Those people killed in the clinic disaster, how
many employees were there?
Mr. L eonard. There were between 60 and 70.
Mr. K ingston. Employees of the hospital?
Mr. L eonard. Yes; doctors, orderlies, and stenographers. They
were in the State fund. I might say that we sent out doctors. This
is from the human side of it. We sent out doctors to Cleveland.
There they were using blood transfusions, but when the blood went
into the veins it was eaten up. They found oxygen was the only
thing to keep them alive. They chartered an airplane at $1,000 to
rush the oxygen. Our doctors saw five or six people being kept
alive with oxygen. Technicians were there administering it con
stantly. I f they turned away for a moment, it would have meant
their lives. It cost us thousands of dollars for oxygen. All hospitals
are covered, of course, in Ohio. They have to be. In Ohio we have
less than 300 self-insurers. That is, a company that puts up a bond
to satisfy us that they are in position to take care o f their workers.
From the standpoint of self-insurers, we had a self-insurer who em
ployed 300 men. They are now in the fund. When they trans
ferred they had had three accidents. One man injured his thumb and
one a finger, but the third man was a man who had both hands gone.
This press could have been guarded. The press broke and our ex
perts looked it over and said it could have been guarded. This was
a man with six children. He is 38 years old and he may have 30
more years to live and on top of that we assessed an additional
EXCLUSIVE STATE FU N D JU RISDICTIO N S
203
award for violation. That one case may cost that employer between
$30,000 and $40,000. No case is closed in Ohio as long as a man is
living. We make no settlements.
Mr. K ingston. Tell me how it could possibly cost $30,000. Is he
entitled to any more than your maximum ?
Mr. L eonard. He is entitled to the maximum and on top of the
maximum is the penalty for violation, which runs from the time of
injury until death.
Mr. K ingston. Is that 100 per cent increase, or 50 per cent ?
Mr. L eonard. In this case we gave him 25 per cent additional and
he was entitled to the maximum, which would be $900 a year, and on
top of that is the 25 per cent for additional award. The man may
live 20 or 30 years.
The C hairman . Are there any other questions of Mr. Leonard?
I f not, we will call on Ontario—Commissioner Kingston.
Ontario (Mr. K ingston). Ninety per cent of the matters that come
before us are matters that come before every board. The problems
that are incident to the exclusive State fund, Mr. Armstrong has
covered. A good many of them qover the question of coverage of an
employer who has not brought himself under the terms of the act
by sending in his pay roll or an estimated pay roll. That is, of course,
one of our biggest problems. When our law was drafted in the first
instance the old chief justice who was the prime mover for it and who
drafted the law started off with the idea that in this democratic age
we are going to protect the workmen, no matter what happens. We
depend on the employer to bring himself under the act, or the board,
by making it the business of the board to get everybody under the
act, but it does not make any difference. I f a workman is engaged
in a work which comes under the act he is going to get his compen
sation, no matter whether the employer is good, bad, or indifferent.
Very few excuses of employers are accepted for neglecting to make
provision for the protection of their employees by paying the assess
ment or getting sufficient protection in the first instance.
I f he writes us a letter saying “ 1 am going to start in such and
such a business and I would like to have you send me necessary forms
in order that I may do whatever is proper to bring myself under the
law,” that is sufficient protection if he responds within a reason
able time to the form which we immediately send out to him to give
him the information desired. We hold him protected from the
moment he has written the letter saying he is going to do this. We
have quite a number of interesting cases in which after an accident
has happened the man writes us a letter but dates it back a few days,
saying that he intends to carry on such and such a business and he
wants coverage. A very innocent letter, but we always preserve the
envelopes and it usually happens that the postmark on the envelope
and the date of the letter are quite different, but we are not often
deceived by that sort of ruse and the employer seldom gets away
with it. That is a hardship in one way. We have one case in which
we had every politician up and down the country coming to the
board seeking to get that man relieved from that particular penalty.
As a matter of fact, that accident cost the board some $f,000 by
reason of the limitation of the man’s ability to pay. We asked him to
pay only $2,000 of the accident cost but he begged everybody in the
204
SIX TE E N T H A N N U A L M EETIN G OF I. A. I. A. B. 0 .
district to appeal to the board for relief. Of course, we seldom take
all that a man is worth. I f a man comes to us and pictures ignorance
and poverty and all that sort of thing, we do not take the last cent
that the man has. We make a reasonable assessment and having re
gard to all the surrounding circumstances we make him pay hand*
somely, in addition to paying the assessment which he ought to have
paid. Sometimes I think it ]s a real problem and this is not peculiar
to an exclusive State fund. It is peculiar to jurisdictions in which
there is no appeal. I feel sometimes that we are burdened with dis
cretion. The law made it very definite that there is absolutely no
appeal from our board under any circumstances. There is no appeal
by us on question of law, but that very wide discretion given to us has
made us all the more anxious to do right by everybody so as to leave
the door wide open for claimants to come back to us for consideration.
I might say the cases are never closed.
The other day we had a case of a man who had an eye injury nine
years ago. We rated his case as a disability of 50 per cent of the
loss of one eye and paid his compensation. He came back and the
rate was 8 per cent, so that it came within the province of the act
which entitles us to pay lump sums. In all awards where the dis
ability rating is under 10 per cent we pay lump sums. We paid
that man $1,100. Nine years have elapsed, and the other day he
wrote back saying that this eye that was injured nine years ago has
gone completely blind and he asked that his case be reopened and re
considered. We did that and paid him the other half. It was a bit
of a problem whether we should pay that in a lump sum or in the
form of pension, but having paid the first in lump sum, the pension
for the other half was so small, we decided to pay the additional
award in a lump sum. Under our law we have no schedule of
awards. Our law simply says to the board, in every case of a man
injured in the course of his employment in an accident arising out
of his employment, the board shall compensate him on the basis that
the board thinks is the right thing to do. It is axiomatic that if a
man is totally disabled he is 100 per cent disabled, and everything
starts from that point. I f we see that the loss of an arm creates a
disability of 70 per cent that is all we do. What does that 70 per
cent mean. It simply means seventy one-hundredths of total dis
ability. How do you work it out? Take our limit, a man gets
compensation on the basis of $2,000 a year. That is the maximum
even though he is getting $4,000. We assess on only $2,000 because
we pay compensation on only $2,000. Then $2,000 is the equivalent
of $38.46 a week and the compensation basis of two-thirds means that
the maximum in compensation that any man can get is $25.64 a
week. Now, that represents 100 per cent disability and that is
what everybody gets during the healing period. For a man earning
$2,000 a year that is his weekly compensation until the time when
we come to consider the permanent partial disability and then we
rate his arm as it is. For an arm that we rate at 70 per cent, the
simple thing is that he get 70 per cent of $25.64 a month for life. In
all those schedule cases, 70 per cent of an arm means 70 per cent of
300 weeks. Of course, the law in effect has said that 300 weeks
represents the total loss of an arm, yet as it is said in Ohio and New
York, total disability means two-thirds of his wages for life. There
EXCLUSIVE STATE FU N D JU RISDICTIO N S
205
is a vast split between loss of the arm and total disability and yet a
man will get very much less than 70 per cent of total disability if
you are only going to give him the number of weeks mentioned in
the schedule. I don’t know whether I have made that situation clear
but in speaking in terms of percentage one has always to avoid the
confusion arising from those schedule figures mentioned in the act.
Of course, 90 per cent of the problems that come before us every day
are problems that come before you every day.
We have the frost-bite problem, the poison-ivy problem, then the
leisure-hour problem, the noon-hour problem. Those are giving
us a good deal of havoc and have been in the past, more or less. The
frost-bite problem we have put on a basis of special aspects, the same
as sunstroke. There must be something a little out of the ordinary
in the way of special exposure before any of these cases can be al
lowed. Here is another type of problem. A good many factories
have facilities for recreation during the noon lunch hour, and some
of the men go out in the yard and enjoy the facilities that are pro
vided by the employer, playing baseball and so on. It has been
quite a problem whether a man injured while engaged in play on
the employer’s property during the noon hour should be covered.
What would some of you do under such a problem?
Mr. W int S m ith . We have had various cases on that. One was a
man hit in the eye with cement in a playful mood and another, a
famous case, in which a girl was being pulled around in the factory
during the noon hour by a fellow employee. It was a habit of this
particular man-----Mr. K ingston. That is a horseplay case; just limit yourself for
the moment to the legitimate sport case where the man is engaged
in the yard outside without any horseplay, engaged in baseball dur
ing the noon hour on the employer’s premises.
Mr. W in t S m ith . I do not see any difference between playing
baseball and pulling a truck around with a bunch of girls.
Mr. K ingston. There is this difference. I f two people are en
gaged in horseplay, they let themselves out of court, but if one per
son during the noon hour is sitting on a bench awaiting the whistle
to blow and somebody comes along and, in the spirit of horse
play, jerks that person off the bench and injures him, we allow
compensation.
Mr. E ppler. The point I get from Mr. Smith is that it is a case
of riding a wagon in the noon hour in the yard or right in the
factory. Is it not the same?
Mr. K ingston. I do not know that I got the story but I thought
it was a question of horseplay.
Mr. W int S m ith . No, sir. The girls were provided a recreation
hour and this particular man was pulling a truck and giving the
girls a ride and one of the girls fell off and hurt herself.
Mr. C harles S m ith . Did the employer provide that recreation?
Mr. W int S m ith . He provided the place for it. Our supreme
court decided that since it was known to the foreman that it was
the custom of this man to do this for these girls, it was a compensable
accident.
206
SIX TE E N T H A N N U A L M EETIN G OF I. A. I. A. B. 0 .
Mr. L eonard. Y ou asked about baseball players. We had the same
thing; as a welfare proposition, the employer encouraged baseball
teams. We had a number of employers in the past who said “ We
want our men covered while they are out playing baseball. We
furnish the uniform. We encourage them.” But we did not pay
them; under the Ohio schedule we could pay only for professional
baseball players. Finally, this year we drew up a new amendment
which covered the whole proposition, and now where an employer
directly supervises or encourages the formation of athletic teams,
we will cover them. Our Mr. Evans took it up with us and said
this man is not being paid for playing baseball. He said we could
cover them by using the hourly rate in effect at the time of injury
as the basis on which to make an award. We have had employers
who said that they considered it a matter of personal welfare for
their workers. We have that same arrangement with the selfinsurers. I recall that we had a case of the McCall Publishing Co..
at Dayton, Ohio. They provided a field for their workers. One 0 1
the pressmen was off waiting to do some work. He was on an hourly
rate and he was injured playing baseball. We took care of him.
That was before we put in this new recommendation but, with a
broad attitude, our commission has put in a ruling that where an
employer pays a man for playing baseball, we will take care of him,
but he must have been in the fund.
Mr. K ingston. We do not cover a baseball player injured during
the noon hour. We say that does not arise out of the employment.
In a horseplay case, we always allow compensation to the innocent
one in the horseplay game but not to the other fellow. We would
allow compensation to a person hit by a batted baseball while stand
ing in the doorway of the factory.
Mr. A rmstrong. H ow about on the field ?
Mr. K ingston. If he is engaged in the game, we would not, but
if he is simply waiting for the whistle to blow or standing in the
doorway as a spectator in the game, we would say he was an innocent
victim of horseplay.
Mr. A rmstrong. I f he was a spectator sitting 011 the benches?
Mr. K ingston. I would say he was not participating in the game;
but a person engaged in other duties and merely passing through the
yard is a different thing.
Mr. E vans. What would you do in the case of a man who was a
semiprofessional ball player and the fact could be brought out that
he received a job with the company because of his professional
aptitude as a ball player, and he was a pitcher of the team and was
really the individual around whom the team centered, that the com
pany was using it as an advertising asset but that this man and all
of the members of the team played and practiced outside of office
hours and usually did their practice during the noon hour?
Mr. K ingston. I think my answer to that question will be this.
Of course, playing ball is not an industry under the act but in every
employer’s form we ask two questions, which are: “ Was the business
in which this man was engaged part of the business for which you
employed him.” I f the answer is yes—and it probably would be if he
was a professional ball player hired by reason of the employees’ wel
EXCLUSIVE STATE FU N D JU RISD ICTION S
207
fare—one might say that he was especially hired for the purpose of
being leader during the noon hour for the men. We have had no
such case as you speak of.
Mr. E vans. A s I understand it, if a man would be hired as a pitcher
around which to establish a baseball team and he selected one of the
employees as a catcher who was not paid for catching, the pitcher
would come under the law and the catcher would not.
Mr. K ingston. Y ou suppose a case that I have never had. I f a
man is hired by a basket factory, for example, then anything that
the manager of the basket factory directs the man to do, we consider
as part of the duties of that factory.
Mr. E vans. I did not say that facetiously, but it is a problem.
Mr. F ell. D o you not recognize a distinction between injury that
happens to one of those employees who joins a band that plays for
an evening? The band gets nothing and the company gets nothing.
It is just an advertising proposition; but some one in the band is
hurt in an accident. Then we have the case of one of our horseshoe
pitching contests in the yard and some one is hurt. I would say that
the man who plays in the band was covered, whereas the man pitching
horseshoes was not covered. Is there not a distinction?
Mr. K ingston. We have had nothing of that kind but we have had
the case where the General Motors Co. at Oshawa had their annual
picnic day and they took everybody across the lake and provided
every possible facility for a big day for the whole crowd and every
body was paid his wages for the picnic holiday but somebody was
hurt during the progress of the games. We did not allow that case.
It seems a bit harsh and at first sight I rather rebelled against the
thought that the case should be disallowed, but our board dis
allowed it.
Mr. L eonard. We have a case where the employer gives a picnic
and the employees are all requested to be there. It they are injured,
it is in the course of their employment.
Mr. K ingston. I will say there is a lot in favor of that sort of
thing.
Mr. G illert. For instance, I am on a building job and during
lunch hour a man is playing ball in the street. I am sitting outside
and having my lunch. The ball strikes me. Is that out of the juris
diction of the board?
Mr. K ingston. I think you would be entitled to compensation.
I think we have adopted the practice that a man eating his lunch on
the premises, if he is under all the circumstances acting reasonably,
not going out of his way to indulge in any horseplay, or steeple-jack
work, he would be covered. I f during the noon hour he was trying
to climb a flagpole, I don’t think I would allow it if he were hurt in
the act, but sitting on a bench or busy trying to open a window or
doing some other reasonable act, he would be covered. Here is an
engineer on a traveling crane who forgot his paper, and during the
noon hour decided to slip up and get it, and on going up something
happened and he hurt himself. We said that was the reasonable act
of a man who was on his lunch hour and we allowed his case. I do
not know whether this is proceeding along the right lines or not.
208
s ix te e n th
a n n u a l m e e t i n g OF I. a
.
I. A. b . 0 .
Mr. F ell. It seems to me that this last case was very far afield.
I f it was in the furtherance of his master’s business, I would allow
it but this lad goes up to get the paper for himself. What difference
does it make that it happened to be between 12 and 1 o’clock ? He is
on his own business. The boy in the band that I spoke of before
had some relation to the company. It seems this should be found
to be some relation to the salary and what he is doing.
Mr. K i n g s t o n . I am only bringing u p these cases to show how
we come up against these problems and sometimes to draw the line
between two problems and to justify the decision of a certain line
here and a supposed decision where the line of demarcation is rather
slender. I am not here to say that we have settled all our problems
right.
Mr. W in t S m ith . I think that in most of these cases, if under
the jurisdiction of the United States Supreme Court, that court
would hold that those cases arise out of the employment but not in
the course of employment. I do not think there are many States that
would compensate them.
Mr. K ingston. We have the word “ and ” in our phrase. Some
States have the word “ or.” Both factors must exist before we can
allow the claim. I f it is in the course of or arose out of employ
ment, you have a very different problem. This is another type of
case we occasionally come up against. A man is frightened. Should
injury arising out of a fright be considered as happening in the
course of employment or arising out of the employment? There
are two types of cases. One is where something in the course of his
work—for example, in steel work a heavy beam may fall somewhere
near by and the man is so frightened in the commotion that he
jumps unnecessarily and injures himself.
Mr. L eonard. We disallow cases of men injured through fright.
Mr. K ingston. He jumped, not because he had to jump, but
because of fright, thinking he was going to be hurt.
Mr. L eonard. I think that would be compensable.
Mr. K ingston. I think so, too; but would it be different if the
fright was caused by some such outside agency as, for example,
lightning or gunshot somewhat similar to the shell shot that some
o f the soldiers heard, a sudden explosion of an automobile tire in
the presence of one of the boys who suffered shell shock overseas.
I have heard it said that under such circumstances they have been
known to drop in their tracks in fright. Supposing a man in the
course of his work is frightened by lightning or some outside
agency—I don’t care what it is. I think that we are all of one
mind, probably; that the last type of case is not compensable, but the
first case is. Then the other problem that we all have to deal with
is the question of the man injured as a result of a fit. A man enaged in his work has an epileptic fit and falls and hurts himself,
uppose he is on a high scaffold and takes a fit and falls and is
seriously injured. I f the fit is the cause of the fall, I would allow it.
f
Mr. A rmstrong. Here is a case where a man was working on a
mast o f a ship and he took a fit and his muscles contracted and
he did not fall, but he died right there and they had to get him
down.
EXCLUSIVE STATE FU N D JU RISD ICTION S
209
Mr. K ingston. That is another angle of the same problem. You
would have to determine there whether his death was the result
of anything that you could call an accident. He probably died right
up there and the contraction of his muscles kept him from falling.
Mr. A rmstrong. It was hard luck for his wife and family that
he did not fall.
Mr. K ingston. Yes; I think it was. We had this case: A con
ductor on a radial car, no passengers on the car, just the motorman
and conductor, was going from Chatham to Wallanberg, and the
motorman looked around and there was no conductor on the car. The
motorman backed up and found him a mile or so back on the side of
the road. There was only the slightest kind of an abrasion on his
head to show a bruise, but he fell six or eight feet from the platform
of the car and was found dead. As you say, there was a fall which
I suppose by process of imagination could haVe killed the man,
although it is pretty hard to see how it could, but we held there
was sufficient to shift the burden of proof; even though the man
did have a pretty bad heart, we felt that the burden was upon the
other people to establish that that man died a natural death.
Doctor K essel. In your cases of sudden death, do you always have
autopsies performed ?
Mr. K ingston. I would not say always. I f the cause of death is
obscure, we always advise an autopsy, and sometimes we even (if the
case has gone some time and the claim is put to us) say to the family,
“ We are not going to allow that claim, but we will consider the
problem. We will consider the case if you have an autopsy and put
in a report of the coroner or the person who does the post-mortem.”
Mr. F ell. I am interested in these cases because I have to guess
on several thousand cases in a year so that the commission of Ohio
will not have to do the guessing. I would like to know what you
think about the epilepsy and the outside entries. How do you dis
tinguish between the two ? Where is the difference between the out
side entries resulting in the fall? We can hold the epilepsy case
responsible and the other not. I can not see the distinction.
Mr. K ingston. I suppose I should put it this way. I f a man on a
platform or a scaffold on a high building, for example, during a
lightning storm, is frightened and he falls irom the scaffold, I would
not like to say that I would not allow that, but if a workman is sitting
down at a desk and during a very sharp stroke of lightning and
in fright, something, I can not describe what, might happen. He is
injured. There I would feel like drawing a line. Perhaps there
is not much merit in the line you can draw, but in the first instance
I do not think there is much difference from falling from fright
and falling from epilepsy. Perhaps I am wrong in that, but we
do not allow that outside-agency case if it came into a room such as
we speak of.
Doctor K essel. Before leaving the question of autopsy, I would
like to know whether your law makes any provision that an autopsy
might be ordered by the commission.
Mr. K ingston. I think that, speaking for Ontario, the abso
lute right to have an autopsy is a function of the attorney gen
eral. I do not believe that any board as a matter of absolute right
210
SIX TE E N T H A N N U A L M EETIN G OP I. A. I. A. B. 0 .
can say we are going to have an autopsy and force it. We can say
that we are not going to allow that claim until there is an autopsy,
but you have to bear this in mind, that there is the question under the
statute of the desecration of the grave, and no grave can be opened
at will by anybody except at the instance of the attorney general.
That is our situation.
Doctor K essel. The law of West Virginia is practically the same,
but it is a question whether it would not be well to amend our law to
allow us that privilege.
Mr. K ingston. I think it is a pretty safe situation to leave that to
the attorney general, because you are always in active cooperation
with your attorney general, or you ought to be, and I fancy where
there is a case needing an autopsy there is no dilhcuity to <>e\ it.
Mr. A rmstrong. It is up to the claimants to prove their case, and
that strengthens the case.
Doctor K essel. I understand that; but as a matter of satisfaction
and a matter of knowledge in many cases, it would give the commis
sion the right information.
Mr. A rmstrong. It is up to the family.
Doctor K essel. I understand that; but it is done by consent, and
the question arose in my mind whether the law should not be strong
enough if the commission needed it.
Mr. K ingston. Have you had difficulty in getting autopsies?
Doctor K essel. Yes, sir.
Mr. K ingston. Another question is suicide. A man commits
suicide as a result of despondency following an accident. One can
imagine a number of reasons why a person of certain mentality
might do that, but have any of your jurisdictions had that as one
of your problems, to allow a claim where death results under such
circumstances ?
Mr. L eonard. A man who had a head injury commits suicide? We
have allowed a number of them as a result of head injury. We felt
that was a direct result. It was traced to the original injury but I
do not think we hare allowed a case where a man is worried about
a leg injury and committed suicide or as a result of worry over
financial conditions, etc. But, where our medical department says
that the injury has caused the suicide through some mental derange
ment, we have allowed compensation.
Mr. K ingston. Even though the mental trouble might be due to
the financial difficulties?
Mr. L eonard. No; from a head injury.
Mr. K ingston. There must be a direct trauma to the brain tissue
in some way or other?
Mr. L eonard. Yes.
Mr. K ingston. We had this case, where a man simply had a very
badly broken leg and it was quite apparent that that affected his
mind, and that either the worry or the pain or the financial embarassment that was imposed upon him and his family by reason of
his injury caused him to jump out of a window- and kill himself.
We had another case where a returned soldier had met with an
EXCLUSIVE STATE FUND JURISDICTIONS
211
accident and there was some particular problem about his case. I
did not see him personally but he came to the board in great distress
about some feature of his claim. He did not get the satisfaction
that he wanted, whether he was entitled to it or not, but he went
uptown and jumped off a bridge and committed suicide. We allowed
that claim, not because he had been to the board but because it was
so apparent that his distress of mind was due to that particular
accident. Then one of our greatest problems is that of preexisting
conditions. If we get into that, I do not know where we will end.
There are so many preexisting conditions that have their effect on
accidents that happen. This has been discussed time and again and
discussed here to some extent. It is difficult to illustrate the number
of cases; so many men up in years have osteoarthritis. That is per
haps the most prevalent preexisting condition in old men who are
injured. I just state what was shown here yesterday, that they pay
no attention at all to preexisting conditions. They take a man abso
lutely as they find him. If he is working and earning wages, I judge,
from the reports of Doctor Bell yesterday, that they will allow him
full compensation just as if he were an able-bodied man. It does
not seem to me to be right and it is a difficulty that we all have.
Where are you going to draw the line? Take the man with quite
a serious preexisting condition. Suppose he falls and is killed.
Nobody would think under those circumstances of saying whether he
had not had such a preexisting condition.
That is illustrating an exaggerated view of one side of the case,
but just imagine a man who is simply full of syphilis, we will say,
and the slightest little scratch sets everything to the bad. Is it right
that industry should be burdened with the full responsibility of the
case ? I say it is not; yet I confess that I do not know where I am
going to draw the line. A great many jurisdictions do not draw
the line at all but take every man no matter what his condition may
be and if he has met with an accident or injury in those jurisdictions
he gets full compensation. I say he is mighty lucky, if he gets it.
Then there is the other problem of smoking while at work. I f a man
during the course of his employment lights a cigarette in the factory
and happens to have his hands covered with gasoline, or greasy rags
are around and he catches fire, I don’t believe we would say that arose
out of the employment.
Mr. L eonard . What if the employer allows him to do it? That
is the whole thing.
Mr. K in g s t o n . I have the query here as to whether there is a rule
in the factory of absolutely prohibiting smoking. I do not say that
that would make any difference; but it makes a stronger case to
refuse if there is a rule prohibiting smoking. I do not think the
employer should be burdened with the cost of an accident which is
due-----Mr. A r m s tr o n g . D o you not think there is a responsibility resting upon the employer to see that the rule is enforced ?
Mr. K in g s to n . Yes; I will not say that. I f there is an employer
who tolerates that and if he goes out and does it himself in the fac
tory—but we have taken the position that injury from lighting a
match does not come within the employment.
212
SIXTEENTH ANNUAL MEETING O f t. A. 1. A. B. <3.
Mr. W i n t S m i t h . We have heard a great deal in this conference
about foreign dependency. We have in the United States several
treaties, particularly one with Italy which causes us a lot of trouble
in Kansas. Practically all our coal mines are operated by Italians.
Kansas is noted for being liberal except in one thing. Every session
of the legislature passes a law which says we can pay them only
$500 for death when the dependents are in Italy. I was wondering
if up in Canada you had any treaties like that to override? We have
been up on that several times and have been overruled.
Mr. K in g s t o n . We are not controlled by any treaties in Ontario.
We have nothing but our act to deal with and there is a provision in
our act which says that in the case of foreign dependents we shall
allow only such compensation as that country would allow if the cir
cumstances were reversed. In the practical application of that, that
does not apply to any of the American jurisdictions. There is a sub
section to that section giving the board jurisdiction to allow such sum
as it sees fit. In actual practice, if we used that first subsection, the
reciprocal section, we would give very little compensation to foreign
dependents. I think the most given a widow of a Canadian killed
in Italy would be $300. I do not know what they would get from
Bulgaria or Ukrania or Bohemia but the most we have ever given
to any European dependent is $1,500. We are not restricted by
any law and we use the second subsection of that section which gives
the board discretion. The strongest case is a widow with three or
four children. We rarely give anything where the only dependents
in Europe are the father and mother but with a widow and children
we sometimes go as high as $1,500. In the case I discussed last
night, where a man injured here wants to go across to his home, we
will commute the pension if we see he is the type of man who is no
longer of any economic value as a workman. We will commute the
pension on 50 per cent and let him go, sending the money to him
after he gets there.
Mr. L eonard . I would like to ask as to the policy of the different
States in sending the money. Do you send it to the claimants
through the consuls?
Mr. K in g s t o n . We have sometimes used the British vice consul
nearest to the home of the man but we do not use the local consul.
Mr. L eonard . We have had cases where the people ask that the
money be sent to them direct, but we feel that where the consul
is near the money is then in legal hands. Sometimes these people
say there is a considerable charge but the commission looks to the
representative of the Government to send this money. Whether
this is the right way or not, I do not know.
Mr. K in g s t o n . I suppose there is no absolutely right way or
wrong way but we have considered it the better way to use the
British vice consul nearest the home of the claimant.
Mr. C h ar les S m i t h . At this point I would like to ask you a
question. What certification do you require as to a foreign de
pendent ?
Mr. K in g s t o n . We require them to produce the certificate of
marriage and the evidence of birth of the children and, if possible,
a certificate of good faith from the mayor of the town or the head
EXCLUSIVE STATE K W D JURISDICTIONS
213
man of the village or something of that sort. We have no set form
that you absolutely must comply with but we must get such evidence
as will satisfy us as to the genuineness of the dependents and the
fact that the widow and children are the recognized widow and
children of the deceased.
Mr. C h ar les S m i t h . We are employing the same system that you
have mentioned, but should we not require a further identification or
certification? Between the States a further certification would be
required as to any record of a State. Why should we not require
a further certification, in view of the fact tnat we have no represen
tative in this foreign country?
Mr. K in g s to n . It is u p to the board to be satisfied.
Mr. C h arles S m i t h . I simply mentioned that as one of the prob
lems—that of an imperfect certification, it seems to me.
Mr. K in g s to n . We had this case the other day: A man was killed
in Sault Ste. Marie. His widow came to us and told us she was
married 30 years ago and did not know the name of the village,
and everybody connected with the marriage is gone. The witnesses
are dead. She did not have a scratch of a pen to show she was
married. We wrote to Lansing to the office of records and not a
scratch of a record of that marriage could be found, yet this man
and his wife had lived in the parish of Sault Ste. Marie, the children
were born there, the records of all the children were in the parish
church, and the record of the family in the neighborhood was
man and wife for all these years. We said to refuse that widow
her claim because of her technical inability to get an official record
of the marriage would be wrong. She had to swear to all the
necessary facts and then we got a supplementary affidavit from a
neighbor indicating the fact that these people had lived as man and
wife all these years. We accepted that as satisfactory evidence under
the circumstances. We had a case in Detroit, a woman married again
and got her $960—a lump sum payable on remarriage. Nearly two
years elapsed and she wrote to us “ This man I married I find has
already a wife living and I find myself up against it again. Can I
be restored to my pension rights ? 55 What would you do under those
circumstances ?
Mr. C h ar les S m i t h . If your law was plain, there would be no
trouble.
Mr. K in g s t o n . She married, and to all intents and purposes she
is off the books.
Mr. E v a n s . She had an illegal marriage.
Mr. C h a r l e s S m it h . H ow could you pay that to the widow, if
she was not the widow?
Mr. K in g s t o n . We, of course, restored her to her formal legal
rights. The only thing was to restore her to her rights, deducting
the $960.
Mr. L eonard . We recognize common-law marriage in Ohio and
illegitimate children.
Mr. K in g s to n . I f a man is killed and was supporting any chil
dren, I do not care if they are legitimate or illegitimate children or
adopted or grandchildren, so long as he was supporting those chil
214
SIXTEENTH ANNUAL MEETING OP I. A. I. A. B. 0 .
dren, they are dependent children. I f a man is living with a woman,
common-law marriage as you say, we are not going to give her com
pensation as a widow but if she continues to maintain the household
and support the illegitimate child, then we can treat her as a foster
mother if we find she is a proper person to carry on. This came to
us at the time of the Hallinger disaster. There arose the question
as to whether we would recognize a widow who had been married in
Finland. The marriage over there would not have been recognized
as a good marriage here but we do not care anything about that. I f
it is recognized in Finland as a good marriage, then we will not
throw stones at it here.
Mr. L eonard . Y ou spoke of your difficulty in getting records in
Michigan. Did you have any difficulty in getting records of the
colored people in the South ?
Mr. K in g s to n . N o.
Mr. L eonard . Then you haven’t seen anything yet,
Mr. W i n t S m i t h . I would like to ask you another question. I
understood you to say you are a court unto yourselves.
Mr. K in g sto n . A law unto ourselves. That must be taken with
qualifications.
Mr. W i n t S m i t h . There is nobody that is going to pass upon your
interpretation of the law ?
Mr. K in g sto n . Absolutely not, except the bar of public opinion.
There is a tendency to get away from legal procedure all down the
line. One of the things that made the English-speaking people one
has been their use of safeguards thrown around court procedure. We
have a commission that is a law unto itself.
Mr. W i n t S m it h . D o you follow the principles enunciated for
hundreds of years by the jurists of England, or do you go ahead
and make your own laws? I want to know that as a matter of
interest.
Mr. K in g s t o n . I do not know. They want to defend the position
as a matter of practical politics. It has worked out well with us.
It gives a pretty strong weapon in the hands of a boar*d and I can
quite see this, that if the board should abuse that discretion it might
easily create a bloodless revolution.
Mr. W i n t S m it h . D o you follow the rules of evidence ?
Mr. K in g s t o n . Not necessarily. We get information, mind you.
We do not haphazardly believe everything we hear but we try to get
the facts, yet we are not technical in our administration of the law.
We are not technical in the form that we receive the evidence. We
do not take sworn testimony in our cases. We send out forms in
which we ask all the necessary questions which will lead to the dis
closures of all the facts, one form to the workman, another to the
employer, and another to the doctor. Those three forms disclose the
facts. We do not ask that those forms be sworn to and in ninetynine cases out of a hundred they disclose all the necessary information
to allow a claim. We have enough confidence in human nature to
believe that three men are not going to lie about the same thing at
the same time and place. In ninety-nine cases out of a hundred we
are right in that assumption. We try to get the facts, and in very
EXCLUSIVE STATE FUND JURISDICTIONS
215
difficult cases we bring everybody around the table, witnesses are
sworn, and then we get at the facts in the old and regular way.
Mr. F itzgerald . Oregon has an exclusive State fund. It is some
times called the monopolistic type. The law in Oregon is not a
compulsory law. It is an elective law. It is presumptively compul
sory on hazardous occupations. Hazardous occupations or indus
tries are listed in the statute, which it is not necessary now to relate,
but any employer engaged m a hazardous occupation may exercise
a right to reject the benefits of the faw. He may refuse before begin
ning operation, or if he begins operation and fails to reject he still
has that right to file his rejection, which, however, does not become
effective until the beginning of the next fiscal year, which in Oregon
is the 1st of July. The law became operative on July 1, 1914, some
thing over 15 years ago. It is administered by a commission of three
appointed by the governor, who serve at his will. It all very
droitly says that this commission shall represent: One the employer,
one the workmen, and the third the whole people.
I was pretty much in accord with Mr. Armstrong’s paper this
morning, except his conclusion. In our State we are getting
stronger for the exclusive State fund all the time. I f there was ever
any doubt about it, it has been removed. We do not even have selfinsurers. They have been a little afraid of that proposition. I am
afraid that the best type of employer would become self-insurer and
we would be left out. It was never written into the law and there
has never been any great movement for it. We have the problems
of the foreign dependents. We have widows probably in every
civilized country on the globe. The commission has the right to
commute pensions to the widow and dependents. We have found
this to be a fact, that while the average widowhood in Oregon is
something less than six years, in the 15 years’ existence of the com
mission we have never known a foreign dependent to remarry.
I recently sent a letter to these widows in Europe and Asia and
Africa and elsewhere, suggesting that their award be commuted and
paid them in a lump sum of 50 per cent of the award, and not one
of these widows accepted it. They preferred to get it monthly.
Thirty dollars a month for life in Japan or Finland with the differ
ent values of money, means considerable, and the widows continue
to take it by the month. The commission has the authority to
establish the rates of contribution for the employers. We did not
always have that. In the beginning the law specified the rate of
compensation for the employer as pertaining to the occupation.
That, however, has been changed. The commission has, as is true
in most of the jurisdictions, established the rate of contribution;
that is, if the employer has a fortunate accident experience, he
can receive a reduction in rates as high as 20 per cent. It runs
20 per cent, 15 per cent, and 10 per cent. On the other hand, there
is no provision m the law at the present time by which any penalty
may be imposed on an employer if he fail to maintain safety stand
ards or to encourage safe practices. There is, however, the pro
vision that an employer who organizes a plant safety committee and
carries on the function can gain a further reduction of rates of 5 per
cent by having this safety committee onganized, meeting, preserving
a record of the minutes of the meeting, and sending it to the com
216
SIXTEENTH ANNUAL MEETING OF I. A. I. A. B. 0 .
mission. He can still retain this per cent even if his accident experi
ence is disastrous.
There is a great deal of misunderstanding in our State about the
fund. Probably the most misunderstood feature of the law is that
relating to the fund or reserve set aside for the purpose of paying
for disability already existent. It is called a segregated accident
fund. An award is made for loss of an arm. The present worth of
that award is turned over to the State treasurer and by him invested.
In 15 years this fund has grown to nearly $5,000,000. It is hard
to make people believe that this is not a surplus; even the employers
look upon that as a surplus and, of course, the workmen are more
easily deceived and they think the commission has accumulated millons of dollars, and therefore they use that as an argument for pay
ing more compensation. Of course, the schedule is in the law and
we do not have much to say about it. We have a catastrophe fund
which must be maintained at $100,000. That fund is seldom usedL
Only two or three times have we ever had a catastrophe. A catas
trophe is where two or more fatalities happen in the same accident.
We did have one where a logger carrying dynamite killed himself
and three other loggers in close proximity. We have the appeals to
the court, not only on questions of law but on questions of fact. We
have one appeal to the court on about every 2,000 claims
filed, and about 50 per cent of the appeals result in favor of the
claimant and, of course, the other half in favor of the commission.
The commission is defended in these cases by a representative of the
attorney general’s office. However, before an appeal can be made
to the court the claimant must ask for a rehearing, which is nothing
more than bringing it again before the commission. The commission
again sits and hears any proof of testimony offered by the claimant
to prove that the commission has erred in passing on the claim. Of
course, the commission sometimes revises or reverses itself and allows
the contention of the claimant.
Someone brought up a question a little while ago which, if I make
this citation, I might clear up some. In Oregon there was a logger,
a timber faller, with a partner out in the woods, so far away from
headquarters that they took their noon lunch with them. They
built a fire for warming themselves in the leisure time and for
warming their coffee or food and after eating their lunch one
of them fell into the fire. The fire was on a steep hill-side. Sitting
above the fire, he in some way fell into it. He was very badly
burned, enough to become permanently and totally disabled. That
resulted in litigation. That employer was not on the compensation
roll. He had rejected it provisionally. He had been approached by
an insurance company and said “ Why pay the rates necessary for
the State law? We will pay your workmen the same benefits as
they would under the State law and we will do it for so much less.”
The employer said “All right, if I can save three or five or six
thousand dollars, I guess I ’d better do it.” This employer rejected
the benefits of the State law and accepted provision from an injury
company. This young man fell into the fire and was the worst dis
figured man I ever saw in my life.
Mr. K in g sto n - What was the cause of the fall—liquor, or what?
EXCLUSIVE STATE FUND JURISDICTIONS
217
Mr. F itzgerald . No, no, no. Oregon is a dry State. He just
fell in in some unaccountable manner. The insurance company took
care of the man two or three months in the hospital and then sent
him a check for $1,000 in full settlement. The doctor attending him,
feeling it an outrage, called attention of the State officials to the
case and they properly advised the young man and the case got into
the equity court. I f it had been under the State fund, being a mar
ried man with three children, and he so young, it would have been
set aside at $12,058. That case went into court and the insurance
company defended on the ground that the accident did not arise
out of or in the course of employment and then it was carried
to the court of appeals and they affirmed the decision of the lower
court and it is known as the Brunson case and the claimant won.
Mr. L eonard . Y ou were talking about disfigurement. Have you a
provision in your law for facial disfigurement ?
Mr. F it z g e r a ld .
N o.
Mr. L eonard . We have a limit of $3,700 in Ohio. After they return
to work if they have a bad scar which makes them repulsive they
are paid for it.
Mr. F itzgerald . I will cite one case that was upheld by our
supreme court. A man had a fracture and was confined to the
hospital. After treatment it was found he had a well-developed case
of cancer of the stomach, and after six or seven months, died of
cancer. The injury would probably have healed in four or five weeks.
The dependents filed a claim under the compensation law, which was
denied. An appeal was taken and the Supreme Court of Oregon
held that the injury while it did not bring on the cancer, very possibly
shortened that man’s life or accelerated the disease at that time. The
Supreme Court of Oregon allowed that fatal claim.
Mr. L e o n a r d . D o you find there is a lot of trouble in determining
whether cancer is the outgrowth of an injury?
Mr. F itzgerald . Yes.
Mr. L eonard . That is a big question to-day that the doctors do not
seem to understand. Our doctors hold, when it appears at the site of
the injury, it is reasonable to suppose it is due to the injury.
Mr. S t e w a r t . There was a paper at the last convention on cancer
as a result of a single trauma, which is the principal point of conten
tion, and this paper throws a good deal of light on that. You ought
to read it.
Mr. K in g s t o n . On that question of cancer, let us mention this one
case that is before us now and not decided yet. A man working in
a sawmill had a mole on his abdomen and in handling a plank caused
a slight abrasion just directly over that mole. There is some idea
among the doctors that an abrasion on a mole is very apt to start
cancer and this man did develop cancer within one month. Our medi
cal officer has recommended allowing it.
Mr. C h a r l e s S m ]
t
11
just a word or two. First
I want to correct
Scotia who spoke of our
deficit of $5,000,000 in West Virginia. That was found by our actu
ary who used the Dutch table. Upon investigation we found we
94023°—30-----15
218
SIXTEENTH ANNUAL MEETING OF I. A. I. A. B. C.
were solvent and in the year when there was supposed to be a deficit
of $5,000,000 we actually put aside $1,000,000 in surplus and added
to the fund.
Mr. K in g s t o n . What table did you use ?
Mr. C h ar les S m i t h . We are compelled to use the table of our
own experience, all fixed by the legislature. I want to say that every
body is impressed by one thing in the discussions that we have had
to-day and that is the possible lack of knowledge of the act, although
you have a State fund and are satisfied. I want to say that we get
out for the benefit of employer and employee a little pamphlet
giving the whole compensation law. I think we need to exchange our
laws.
I want to make the offer that I will be glad to send our law to
any State, that you may become familiar with it, and I shall be glad
if you will send me yours, so that I may become familiar with your
laws. I am impressed further by this thing, that the compensation
law is a law of recent growth. Take the criminal law and the civil
law. We have been growing under them for years, so do not expect
too much in a little while under this law. We all have the same
problems; and about the problem of a proper certification, I want
to say that in the foreign countries, especially mid-European coun
tries, certification is under a rubber stamp even though done by the
mayor. The State of Poland has brought a suit against a widow
who received compensation from West Virginia and continued to
receive it, and they certified from time to time that she had not re
married. It turns out that she has remarried. I think it was the lack
of a proper certification of the records of marriage and dependents
in that case. I think we ought to have a certification by some higher
official than the mayor of a town or a couple of statisticians in the
foreign office, because that is what it means. Your problems are
ours, and I think the thing for us to do is to study each other’s laws
and get closer together. You can borrow from us and we from you.
Mr. S t e w a r t . On that West Viriginia question, I want to say that
no workman in West Virginia has lost compensation notwithstand
ing the so-called bankruptcy of that fund, and I want to raise a
question as to whether the same methods should be required of a
State fund as are required of an insurance company. An insurance
company may go broke. It can go out of business. In 24 hours it
can become insolvent. The State of West Virginia is not going to
move away, nor is it likely to go broke. The question arises in my
mind why shotfld West Virginia, why should Ohio, why should Nova
Scotia or Ontario be required to carry the same reserve that an insur
ance carrier is required to carry? British Columbia makes each year
stand on its own feet, and nobody has lost any money in British
Columbia, as far as I know. I am not in favor of weakening the re
serves in case of insurance companies for one minute but I do raise
the question for this reason: Some of the State funds have a great
deal of money. Legislators hover around a big pile of money like
yellow jackets around a honeycomb, and I am not sure that the time
is not going to come when the legislative body of Nova Scotia or of
Ohio will say, “ Here is a lot of money that we can use for something
else ” and they will appropriate your reserves for something else.
EXCLUSIVE STATE FUND JURISDICTIONS
219
It is true, if you apply the same figures, the same methods, to West
Virginia at the time the investigation was made that is required of
insurance companies for reserves, they would not have enough. I
want you to think about this question. Your reserves may become
a source of great danger and when they are appropriated for some
thing else, you may have to try British Columbia’s scheme and
let each year stand on its own feet. There is no danger to the worker
and you remove a danger from your compensation commission.
Mr. K in g sto n . On the question of too much money, we have in
our reserve for widows’ and children’s pensions something like
$19,000,000 dollars, all invested in gilt-edge securities. That fund is
valued every two or three years. Five years ago, when we did not
have an actuary, it was found we had $1,011,000 too much. We im
mediately credited that to the returns for the ensuing year. I stand
by our system. I do not say it is the best but on this particular
point I think it is sound judgment to say that each year must pay
for the accidents of that year. Our start of the act was quo terminus
with the war and we all know that a great many industries were
established to manufacture shells and they left a great many accident
cases. So we said that each year must pay for the cost of each
accident of that year and that means in the death case the pres
ent value of the pension for that year. I do not think any other
system is financially sound. We had this current cost book before
us and I must confess I was impressed with it but I am opposed to
it now. I think if you do not set aside reserve for your pension
during the year that the accident happened, you are going to be in
trouble.
Mr. S te w a r t . Ontario says, each year must take care of its own
accidents; and British Columbia says, each year must take care of its
own money. Experience has shown that in British Columbia no
workman loses anything, and the only point I make is the danger of
these large reserve funds becoming a temptation of legislators. Your
legislature makes your law and requires you to set up these reserves;
the same legislature that passed that law can pass another law and
take these reserves away from you and put them into new roads and
any other thing it pleases. I am not arguing this thing. I am
simply saying that the British Columbia method, so far as the work
man is concerned, is perfectly safe.
Mr. A rm stron g . I just want to mention to Mr. Stewart that the
British Columbia method is somewhat different from the Ontario
method or the Nova Scotia method. The British Columbia method
may be the same one used in West Virginia. I am speaking from my
information now; as I said before, it may be wrong. In British
Columbia, any awards made during the current year are taken as
part of the expenditures of that year and not counted as liabilities.
In regard to British Columbia costs, I have advocated current costs
but I would not advocate them for any individual State or Province.
I would say this, if the Dominion Government tried to pass a com
pensation act at the next legislature and decided to run on current
costs, I would say that was right. I f the United States should enact
a compensation act applicable to each State, I say that would be
very good business.
220
SIXTEENTH ANNUAL MEETING OF I. A. I. A. B. O.
Mr. E v a n s . I think that the system that Mr. Stewart talks about
has been tried in several States where they have endeavored in years
past to establish a pension system for the employees. In the city of
Cleveland, Ohio, they are falling down upon their obligation; the
cost has mounted, the present city officials do not feel the responsi
bility for obligations that were incurred in past years, and they have
at the present time a very serious problem to meet and they are not
meeting their obligations to the employees.
Mr. S te w a r t . Would that be true of a State? That might be true
of a city, it might be true of a school district, but when you come to
a State, is there any great amount of danger of that ?
Mr. L eonard . I might say in response to your question on reserves
and the attitude of the legislature in Ohio, we have $48,000,000 in
the fund. That does not belong to the legislature of Ohio nor to
the State of Ohio.
Mr. S t e w a r t . But th e le g isla tu re ca n m ake it b e lo n g to th em .
Mr. L eonard . No; it can not. It belongs to the injured worker
and wddows and orphans and the first move made to touch that fund
would result in a riot.
The C h a i r m a n . We have an exclusive State fund in North
Dakota. It started in 1919. We have now 10 years’ experience
and I differ with Mr. Armstrong from Nova Scotia. He says he is
not quite so strong for the State fund as he was. I am stronger.
I say that we should have either an exclusive State fund or a pure
stock company insurance. I do not believe in competitive insurance.
There is too much danger. One of the problems we have in North
Dakota, and it is quite a problem every two years, is for our State
fund to keep the private insurance company out of politics, trying
to do away with our exclusive State fund, and they are there not
only with their lobbyists but with their money. It is not the insur
ance companies themselves but their would-be agents who are doing
the work.
I can not agree with Mr. Stewart on the matter of reserves. The
court of our State has held that the workmen’s compensation bureau
was absolutely distinct and separate from the State, and I would
like to see any legislature take that reserve away from the Work
men’s Compensation Bureau of North Dakota. That belongs to the
cripples and the orphans and widows of North Dakota. We are a
small State. We had something over a million dollars in our re
serves. In the question of an alien, we make no difference on account
of nationality or what country he comes from. He is treated the
same as a native of the United States. We have very few aliens in
the State, but when an alien is killed in an accident we pay to his de
pendents anywhere in Europe, the portion belonging to them just
as if they were natives of the United States. Mr. Kingston,
I believe, brought up the case of suicide. We have had only
one. The doctors proved that the man committed suicide on account
of his injury, and his widow and seven little children were given an
award and have been taken care of ever since. Our cases are appealable to the court in certain cases, but not on questions of fact. We
can appeal from questions of law only. I say it is absolutely wrong
EXCLUSIVE STATE E’UND JURISDICTION'S
221
to make questions of fact appealable to the courts. The supreme
court a few years ago handed down a very peculiar decision on our
law. They did not decide the case on the question that we took
before the court, that the man was not injured in the course of his em
ployment. They evaded that and declared that the claimant had no
claim because we had paid his doctor bill for a certain injury. He
was then deputy sheriff and had tuberculosis of the hip and leg.
He slipped and fell on his side, resulting in his going to the doctor
several times, and we paid the bill. Several months afterwards he
became further crippled and the result was that he went downhill
and to-day is practically confined to bed.
We went to the supreme court with the contention that that
injury did not cause it. They handed down the decision that be
cause we paid five or six dollars on a doctor bill the case was closed
and we were then liable and the case so stands to-day. The only
appeal is when we make no award to the claimant and give him
nothing. It is possible in doubtful claims to make a small award and
shut that claimant off from appeal. Absolutely wrong, I say. Pre
existing disease is one of our problems. The court has held that if
a man with a preexisting disease and able to work receives an injury
that aggravates that disease and causes his death, or partial or total
disability, the compensation burean is liable and must pay for it.
Every occupation in North Dakota is a hazardous occupation whether
it is a stenographer in the office or a school teacher, and every
employee is covered by the workmen’s compensation, every expo
litical subdivision of the State, city, or county, whether on whole or
part time, is covered by the workmen’s compensation.
Mr. S te w a r t . D o you, Mr. McDonald, assess premiums on school
boards, etc. ?
M r. M cD o n ald . Yes; the education system of North Dakota is
one of the largest we have. It is a low assessment of five or six
cents a hundred. I believe we have the lowest minimum of any juris
diction. Four dollars writes a minimum on our office occupations
and $15 for employees of contractors. We have another amendment
to our law that I, by request, introduced last November—employers
of the State. I don’t know whether any other State does that or
not.
Mr. S te w a r t . Y ou mean working employers?
M r. M c D o n ald . Y e s.
Mr. S t e w a r t . Under corporations, they would automatically come
under, would they not ?
Mr. M cD o nald . I mean private employers. All our contractors
are small contractors working with their own men—painters, brick
layers, carpenters, and such as they. They had to pay insurance and
a premium on their employees and they had no protection themselves
and, being a workman on my own rights, I know that generally
if there is a dangerous job to be done on the building, the boss does
it nine times out of ten. They came and asked for protection and
to-day we have some one hundred employers covered by workmen’s
compensation at the same rate as that of the man working for them.
Mr. S t e w a r t . I s that compulsory or voluntary ?
M r. M cD o n ald . V o lu n ta r y .
222
SIXTEENTH ANNUAL MEETING OF I. A. I. A. B. 0 .
Mr. S te w a r t . H ow do you assess that ?
Mr. M cD o n ald . Contractors at $40 a week or other mercantile
help at $35 a week, they pay the premium on $40 or $35 a week, the
same amount per hundred as they pay for their own employees.
That brings them in the rate of $20 a week. All doctors’ bills and
hospital bills in North Dakota are unlimited. We have paid as
high as $6,000 for hospitalization and medical bills for one claimant
and if it had been $10,000 we would have paid it. We have no
trouble with our doctors. We have a schedule of fees with them
made jointly by the board and the State medical association and
95 per cent of them abide by that schedule. Any operation or cer
tain thing to be done that is not on that schedule is agreed upon be
tween the doctor and the medical adviser. We have a part-time
medical adviser who goes over each one of our claims and checks
up the pay roll. This schedule is printed on the back of the form
sent to the doctor and he knows just what he can charge. We have
had a few who abused it but we generally cut their bills in two if
they pad them by putting down visits they never make or make
unnecessary visits. We refused to pay several doctors who put down
two or three visits a day for a smashed finger. Our hospital bills
run from $18 to $25 a week. A nurse can be put on for three days
by any doctor without permission of the bureau but for longer time
there must be permission of the doctors or claimants who select their
doctors themselves. I f we are not satisfied with the doctor the
board itself can have another doctor assigned. The claimant can
change doctors after selecting his own doctor without permission
of the board. I f he has once selected his doctor, permission to
change doctors for good reasons has never been refused although
it adds to our costs. We believe the best medical doctors are the
cheapest. I f we are not satisfied with the permanent partial sched
ule given, we have the claimant examined by sometimes three neu
tral doctors.
Mr. F itzgerald . What do you do about chiropractors?
Mr. M cD onald . We pay them because they are licensed, but we
have notified them to confine their treatments to lame backs. We
discourage them all we can.
Mr. F itzgerald . They can treat the patients without permission of
the board?
Mr. M cD onald. Yes. We send patients outside of the State to
doctors who specialize. We have sent them to Mayo Brothers in
Kochester, Minn., and to Dr. Chatterton in St. Paul, a noted bone
specialist. If we are not satisfied with the progress of the man and
believe there is something wrong, we order him into our headquarters,
and we pay all expenses and abide by the decision of the specialist.
We know that the best doctors are in the larger cities. The country
doctors do not get practice enough. We have set aside a catastrophe
fund of $250,000, and we have to have a surplus^ and $300,000 is
practically our surplus. We do not care about having much surplus
outside of that. Our rates are based on actual experience. We
penalize and we claim merit. For instance, there are some coal
mines that pay 60 cents per hundred of pay roll. Some coal mines
are getting from 2 to 20 per cent claim merit. A coal mine refusing
EXCLUSIVE STATE FUND JURISDICTIONS
223
to put in safety devices or to protect their men in any way is penal
ized, some of them as high as 25 per cent. One refused to pay it.
We seized the mine and held it. The courts are against us. We
try to be very generous and give the benefit of the doubt to the
claimant. The courts go a little further than that and give it all
to the claimant, but I know time and time again that they have
ordered verdicts in favor of the claimant that are absolutely con
trary to all evidence produced. They seem to take the attitude thai
the bureau has lots of money and the claimant has nothing, therefore
he should get some money whether or not he was hurt in the course
of employment or whether or not it arises out of the employment.
As I said before, I believe in one law or the other, either exclusive
stock fund or exclusive State fund. I do not believe in competitive
insurance in any State. We have no self-insurers in our State.
It has never been asked for, and the largest employers have told me
that they are perfectly satisfied with the law we have in North
Dakota. I do not believe that any State should pass a law, a com
pulsory law, and let private insurance companies reap the benefit of
it. I do not believe there is any man or company that has a right
to make money out of the suffering or injury of our fellow man.
Section B: Chairman, Charles G. Smith, Manager New York State Insurance Fund, N«w
York City
PROBLEMS OF COMPETITIVE STATE FUNDS
JURISDICTIONS
[The meeting was called to order by Ethelbert Stewart, United
States Commissioner of Labor Statistics, who stated the reason for
dividing the Thursday morning session into three sections.]
The C h a i r m a n . The program of this meeting is to be opened by a
paper on “ Problems of competitive State fund States,” to be read by
Mr. Lawrence E. Worstell, chairman Industrial Accident Board of
Idaho.
Problems of Competitive State Fund States
By Latvrence E. Worstell, Chairman Industrial Accident Board of Idaho
At the outset this topic appeared to be capable of definite, welldefined discussion. Careful thought, however, reveals that matters
which are considered problems in one State are not problems at
all in another. State by virtue of the various provisions of the com
pensation laws.
Correspondence with several States reveals the fact that a State
insurance fund—competing with casualty companies, struggling for
business, striving for growth, and meeting sales arguments and
selling service—is the main problem. In other States the problem
of rates and various features of coverage are paramount. Quoting
Mr. Frank J. Creede, manager of the State compensation insurance
fund of California, he says—
From one viewpoint our problems are legion, but when I test them by the
yardstick of whether or not they are purely State fund problems I find that
they are in the main the usual business problems incident to any insurance
carrier in a highly competitive field.
The provisions of the compensation law should be compulsory,
while employers should be permitted to elect whether they will insure
in the State insurance fund or obtain other satisfactory coverage.
If they do not so elect, they should be automatically insured in the
State insurance fund and the fund should have a lien on all of the
employer’s property for the amount of the premium. In addition
there should be a penalty for failure to insure. It is a moral
wrong to permit any employer to suffer employees to sustain injuries
and then be unable to compensate them according to law. A suit
for damages against an employer of scanty resources is of little
value, and the provision such as we have in Idaho of enjoining
an employer from carrying on his trade or occupation is a cumber
some procedure of no value to the injured workman. The fine and
jail sentence is effective.
224
PROBLEMS
of
c o m p e t it iv e
state
fund
states
225
The principal difficulty encountered by the Industrial Accident
Board of Idaho is that of seeing that all employers subject to the
act insure their liability for compensation according to law. They
may insure with the State insurance fund or with some casualty or
surety company qualified to transact the business of surety and ad
mitted by the industrial accident board to write compensation in
surance bonds, or an employer may qualify as a self-insurer. Every
employer carrying on a trade or occupation for the sake of pecuniary
gain must insure his workmen regardless of the number of employ
ees. This broad provision of the law renders its enforcement ex
tremely difficult, for the reason that small businesses such as stores,
barber shops, cafes, garages, etc., scattered over the entire State are
required to carry compensation coverage. When an employer is
discovered who has not complied with the provisions of the act it
is essential to bring the law to his attention, and in the event that
he does not comply, it is necessary to enlist the services of the county
attorney for his action. He may ask the court to enjoin the employer
from carrying on his business or prosecute him for misdemeanor.
In the State of Idaho this is a very great problem due to the large
area of our State and to the fact that it is sometimes necessary to
travel as many as 600 miles for the purpose of appearing at a trial
of an employer who has failed to comply with the compensation law.
The matter of affording the workman a prompt hearing in the
event of a dispute is a serious problem in our State. Again, the
great distance necessary to be traveled from the State capital to the
remote sections of the State renders it impracticable in some in
stances to afford an injured workman a hearing short of 90 days.
Of course, in a death case where there is a dependent widow or minor
children, if the interests of justice seem to require it, the board would
make a special effort to hear the case as promptly as possible. In
Idaho there are no referees to take testimony, make findings, and
award. It is necessary for a member of the industrial accident board
to go, with a stenographic reporter, to the county where the accident
happened, and hear the evidence and make a record of the testimony.
The findings of the member who hears the case are subject to review
by the board, and from the decision of the board an appeal may be
taken to the district court and then to the supreme court. This
procedure results in great delay of cases coming before the court
for adjudication. In order to speed up the decision of these dis
puted cases, a law has been passed which requires the district court
to consider compensation cases immediately after the criminal calen
dar has been disposed of. Also, the board has recently adopted
the practice of having two members of the board, or a majority, hear
the case in the first instance, thereby doing away with the necessity
of a review before the board. It would not be possible to have a
case brought directly before the supreme court for determination on
certiorari because of the peculiar provisions of the constitution of
the State of Idaho which do not permit the supreme court to assunuoriginal jurisdiction in disputes of this kind.
The problem of seeing that awards made to injured workmen,
widows, and orphans are secure has been solved by our board. In
1924 the Associated Employers’ Reciprocal became insolvent. This
company was doing a considerable business in Idaho and at the time
226
SIXTEENTH ANNUAL MEETING OF I. A. I. A. B. 0 .
of its insolvency it had outstanding in our State about $100,000 in
awards. The board immediately notified the various employers
insured with this company that they must meet the payments falling
due under awards made against them and their surety. In this
respect we had splendid response from all employers who were
solvent. They willingly assumed this burden. However, there were
a number of employers who were insolvent and for a time claimants
were compelled to forego the payment of their compensation. How
ever, this concern had on deposit with the State treasurer $25,000 in
Liberty bonds which it had deposited in order to qualify and be per
mitted to issue surety bonds. This fund is now being disbursed by
the United States district attorney for Idaho under the direction of
the court to claimants where the employer is insolvent. In order to
prevent a recurrence of such a distressing situation the industrial
accident board passed a resolution requiring self-insurance and all
companies authorized to write compensation bonds to deposit with
the State treasurer securities, or with the industrial accident board a
surety bond, in an amount equal to the amount of awards made
against them. Later the law was amended to include this feature.
However, we had no difficulty in getting these companies to comply
with our resolution. Therefore, at this time we have a triple security
for all of these awards. In the first instance, the liability of the
original employer according to his ability to pay, the bond of his
surety, and the bond of an independent surety company guaranteeing
to pay the award in the event that the original surety should become
insolvent.
The question of prompt payment of compensation is handled by
keeping a statistical check upon the State insurance fund, self-insur
ers, and the various companies qualified to write compensation
business. Each quarter a statistical survey is made to determine
how many days elapse between the date of injury and the date of
first payment to the injured workman. In this connection it is
noted that the self-insurers have the best record for prompt pay
ment of compensation. The casualty companies rank second and
the State insurance fund appears to be less prompt than most of
the casualty companies. The reason for this is perhaps due to the
fact that in Idaho the State insurance fund does not have an organi
zation sufficient to guarantee prompt reports and make investigation
of claims so that they may be disposed of expeditiously. It is neces
sary for the State insurance fund to secure practically all of its
reports through correspondence by mail. The failure of the em
ployers—and oftentimes of physicians—to furnish reports delays the
payment of compensation to the injured workman.
The problem of taking care of total disability cases resulting
after a permanent partial disability has been freed from perplexing
difficulties in our State, through the enactment of a special statute,
by the creation of a special fund known as the industrial special
indemnity fund. The State treasurer is the custodian of this
fund and all disbursements therefrom are made upon orders of
the industrial accident board. The fund is created by assessing
the employee 1 per cent of the amount of every specific indemnity
award and requiring the employer to pay 1 per cent of the total
amount of the specific indemnity award. This fund is to be used
PROBLEMS OF COMPETITIVE STATE FUND STATES
227
in cases where an employee has suffered the loss of a leg, an arm,
or an eye in a previous accident and later has become totally disabled
through the loss of the other leg, arm, or eye, as the case may be.
This statute was enacted to meet a condition which arose in our State
as a result of a decision of our supreme court. A one-eyed man lost
the sight of his remaining eye and the supreme court held that the
employer was liable and should assume the liability of a total dis
ability case. This seemed to be an unfair discrimination placed
upon the employer or insurance company and made it difficult for
partially disabled men to obtain employment. The statute was
enacted to permit these unfortunate individuals to obtain employ
ment without penalizing the employer who hires them. Thus, if
an employee who has lost an eye in a previous accident should lose
the remaining eye, the last employer would be liable for only the
loss of the one member. The total disability payments would be
taken care of out of the special indemnity fund.
Bringing workers under the act where the employment was ex
cluded by law has been taken care of in Idaho in a very satisfactory
manner. The original statute required that the employer and
employee expressly agree in writing filed with the board that the
provisions of the act shall apply. Any such agreement could be ter
minated by either party upon 60 days’ notice to the other and to the
board in writing prior to any accident. Under the old statute men
operating threshing machines would employ workmen and in many
instances fail to get an agreement with their workmen or fail to fife
the same with the board although they had applied to some casualty
company for compensation insurance. An injury would occur and
the board would have no jurisdiction. We have taken care of this
situation in our State by providing that the employer may elect in
writing that the provisions of the chapter shall apply. This very
simple method o f protecting workmen makes it extremely easy for
an employer who is not subject to the provisions of the act, such as
those engaged in agricultural pursuits, to elect to comply without
taking the matter up with various employees.
The disputed subject of whether or not attorneys should be en
couraged to represent claimants or whether their services should be
discouraged is answered in our State in this way. In cases where the
only question involved is the extent of the disability or a similar
minor problem, the employment of attorneys is not encouraged and
many applicants appear before a member at the time of hearing
without counsel and the facts are elicited by the board member in
order to determine what award, if any, should be made. However,
in cases where there is a grave question as to whether or not the
accident arose out of and in the course of the employment, or where
the claimant is suffering from a disease and it is questionable as to
whether or not said disease is the result of an injury by accident, the
services of an attorney to present claimant’s case and to marshal his
evidence are of very great value. In such cases we welcome the
presence of attorneys and we find their briefs to be helpful in assist
ing the board to arrive at a proper decision.
Self-insurers in Idaho are not a serious problem. No concern is
permitted to carry its own insurance unless it has a large number of
men m ite employ and a splendid financial rating; and, further,
228
SIXTEENTH ANNUAL MEETING OF I. A. I. A. B. C.
unless it deposits with the board a bond for $15,000 plus 5 per cent
of its annual pay roll. Thus, small employers are discouraged from
applying for the privilege of self-insuring and a company, no matter
how strong it may be financially, is not permitted to carry its own
insurance without placing with the board securities or a bond guaran
teeing the payment of compensation.
A State insurance fund independent of the industrial accident
board, as in the State of Idaho, offers considerable difficulty where
there is delay in settling cases or disputes as to compensation or to
the extent and nature of the disability. The Industrial Accident
Board of Idaho can act with the State insurance fund only in the
manner and after the same formalities as in the case of a self-insurer
or surety company. It would appear that a State insurance fund
under the jurisdiction of the industrial accident board can be more
efficiently managed and the disposition of claims more expediently
handled than where the industrial accident board and State insurance
fund are independent, as in our State.
During the 11 year§ of its existence the State insurance fund of
Idaho has been unable to attract to it a single large employer of
labor in the mining or lumbering field. All risks are dumped into
the same bag—the careful employer is placed alongside the careiess
one. No provision is made for merit rating. The rates on lumber
ing and mining are so high that self-insurers can carry their own
compensation and save thousands of dollars annually. The State
fund is not organized to handle its claims expeditiously, and work
men receive their compensation in far less time from self-insurers
than they would if their employers were insured in the State insur
ance fund. Settlements made by self-insurers are more liberal than
those made through the State insurance fund or casualty companies.
Employers carrying their own insurance are not hampered by laws
or restrictions and can and do grant the injured workmen far more
liberal treatment than the State insurance fund or casualty com
panies, especially with reference to permanent injuries.
There is a marked tendency in States having an insurance fund
in competition with casualty companies to restrict the legislative
appropriation of the State insurance fund. One would naturally
think that inasmuch as the money comes from the premium income
of the State insurance fund the legislature would be willing to grant
whatever funds are necessary to carry on the business in a business
like way. The State insurance fund of Idaho has just as difficult
a time with the legislature as any purely State department. It must
be that the legislature looks with a jealous eye on any department
with plenty of money to spend.
A few years ago our State insurance fund placed a number of its
employees in the field to go about the State and solicit business and
endeavor to persuade employers to insure their liability for compen
sation in the State insurance fund. Immediately there were lodged
with the governor complaints from local insurance agents over the
State, complaining of this activity, and pressure was brought to
bear on the State insurance fund. It was contended that the State
insurance fund was created merely for the purpose of insuring those
employers who of their own free will desired to come into it; that it
was contrary to the true functions of the State to go out i n t o th,e
COMPETITIVE STATE FUNDS STATES— DISCUSSION
229
business world and seek business in competition with the insurance
companies, that its sole purpose was to establish fair rates which
would be available to employers in the event that the rates charged
by private insurance companies should be excessive or unfair. The
result was that these solicitors were recalled and at the present time
the auditors of the State insurance fund accept business when it
is offered them, but make no serious effort to prevail upon employers
to give up insurance in a casualty company and insure with the
State.
One of the great difficulties which a State insurance fund, like
the one in Idaho, encounters is that nearly all of the large, desirable
risks are picked off by the casualty companies, while the host of
small employers with meager pay rolls are gathered into the State
insurance fund. This is largely offset ih our State, however, by
the monopoly given to the State insurance fund of requiring the
State, counties, cities, school districts, road districts, etc., to insure
their liability for compensation with the State insurance fund. This
business is highly profitable, and as no dividend has ever been de
clared by the Idaho State insurance fund it must show a large
surplus in this account.
I have taken the liberty of treating with Idaho problems in the
hope and with the sole object in view of provoking discussion and
with the idea of gaining from this meeting a deeper knowledge of
your problems.
DISCUSSION
The C h a ir m a n . The first State on the list is Arizona. Is Arizona
represented ?
Arizona (Mr. H u n t e r ) . I have made a few notes here from this
gentleman’s remarks. At the outset he mentioned the problem of
competition with the private carriers. One of the ways in which we
meet that problem in Arizona is by writing a continuing polcy. It
is not automatically canceled at the expiration of a specific time.
After the deposits are made we make an adjustment and pay a
premium at the end of three or six months, and the policy auto
matically continues. In that way we avoid private carriers coming
in, say around the 1st of January or the 1st of July, to the most
desirable risks, and telling a lot 01 stories about the condition of the
State fund, or the type of commissioners, or the way they are han
dling the business, and in that way procuring many of the State
fund’s most desirable risks.
There is no difficulty in handling the problem in that way. You
are saving yourself a lot of time and money. It has been estimated
that considerable of the State fund’s expense is in the writing of new
policies. We avoid all of that.
He mentioned the small companies that are not covered by in
surance, and that laws should be passed giving a lien on their prop
erty. We have such a law in Arizona, but it is our opinion that
inasmuch as these are small companies, with few assets, it is difficult
to find sufficient assets to cover the amount of the award.
In regard to the bonding, we require a $200,000 surety bond, either
securities or a surety bond, from all casualty companies or self
230
SIXTEENTH ANNUAL MEETING OF I. A. I. A. B. O.
insurers, or, what we call self-raters. In that way we avoid the
possibility of anyone going bankrupt and not being able to meet the
payments of the awards.
The speaker referred to his inability to get money from the legis
lature. I think that the rates should always be high enough in any
competitive State, that all the costs of administration and the cost
of carrying out the purpose of the law should be borne out of the
premiums, the same as the casualty companies must put on a loading
to care for those things.
I might say that we do not have a speeial fund to care for the
second injuries as illustrated by the speaker in his reference to
the man who had lost one eye. It is unfortunate. That is one of
the things in the Arizona law that should be corrected.
Our problems are very few. We probably have the bast compen
sation law in the United States. Mr. Leslie, of the National Coun
cil, has so estimated it in his comparison table of the benefits to
workmen, and I might say that that probably is due to the fact
that we have no maximum. You are using something to measure the
amount of compensation that will be paid, and you are measuring
it by the wages that a man will earn, whereas we do not stop there.
We go right to the top and measure along those lines. I f a man
earns $300 a month he will be entitled to $200 a month compensation.
That has caused many of the insurance companies to withdraw
from our1State because of the difficulty of administering a law where
there is no top limit to what will have to be paid.
I might say that many of our cases cost about $20,000, and some
of them in excess of $30,000. I reeall about sis months ago, in a
disputed case where we had estimated the cost would be practically
$30,000. It was carried to court, and we permitted a settlement
(because we thought it was to the best interest of all parties) of
$20,000 to this widow, in a lump sum.
Now I might say that that is the only instance where we have
ever allowed a lump-sum settlement of that kind, and I do not sup
pose in over 10 eases have we ever allowed a lump-sum settlement to a
widow. We do not consider that it is to the best interest of all
concerned, but in this particular case there were many little things
to be taken into consideration, and the possibility that this woman
might lose in the appeal to the supreme court. The chances were
not so great that she would lose, but there was that possibility, and
we thought that rather than have her face that trial, we had best
permit the lump-sum settlement.
We write 75 per cent of all the business in the State of Arizona.
I don’t imagine that any other gentleman present can make such
a statement. I might also say that we are doing business with a
loading of 7 per cent. There is only one other State that equals
that, and that is Colorado, and if you have read the Colorado
law you know that that does not amount to anything, because they
really have no compensation law.
What problems we have are purely local, and I believe we will
be able to meet them. I believe that any person attending this meet
ing will get more out of it by what he gives than by what he listens
to, and that is why I mentioned that policy; you might be able to
help yourselves by writing such a policy.
COMPETITIVE
state
funds
states—
DISCUSSION
231
You might also be able to help yourselves by discontinuing the
writing of self or merit rating insurance. On tne other hand, have
your insurance rates high enough so that you can return to that
man all the money that is due him in the shape of dividends if he
conducts his business in such manner that you make a profit. In
that way you have met the competition of the private carrier, be
cause he is not going to return one dollar. The private carrier will
get much of your desirable business on that self or merit rating plan.
We do write what we call a self-rating policy for the large min
ing and lumber companies. Their assets are large, for instance, the
Phelps-Dodge, the Calumet, the Arizona, the Inspiration, the Miami
Copper Co., and such companies. They put up a sufficient bond or
money to insure the payment of their risks.
These particular companies, at the end of a six-month period,
have paid us their actual losses, plus a 7 per cent loading for our
administration, and 10 per cent loading for catastrophe, and another
small loading to take care of reinsurance for all losses that run
over $25,000. These policies are nonmedical policies. These com
panies have their own hospitals, and they call upon any experts
whom they desire to call upon to take care of any particular in
juries. In this way the relations of the men and the officers are
furthered, but on tne other hand, all these claims are adjusted by
the industrial board. The men then have a feeling that everything
is going to be fair; that we are a disinterested party; and that we
have no interest in it whatever.
We look out for the interests of both sides. We are just as quick
to sit down on a malingerer as we are to slap a company that is
trying to beat some man out of something.
Under that plan we have been able to secure all of the big com
panies, and they carry our expense of operation. Probably that is
the answer to why we have been able to keep our costs down as
low as we have.
Mr. K n e r r . I would like to ask just one question. You stated that
you settled the case for $20,000. Was the dispute there a jurisdic
tion dispute?
Mr. H u n t e r . Well, that is a long story.
Mr. K n e r r . I thought perhaps you might state it in a few words.
Mr. H u n t e r . I believe I can at that. Probably all of you have
read about the Coolidge Dam which was completed last year. It
was built on Government property by a private contractor, a con
tract let by the United States Government. We were unable to
go in there with inspectors or anything like that on that work, a
condition which was mentioned yesterday by the gentleman who
read the paper written by Senator Wagner, in which he stated that
the United States Government was not going ahead as it should
in safety measures. That is the condition that we had.
In these big Government works and projects that have been
under way in our State, we have been unable to do a thing except
make recommendations to the Government.
A man was killed in the construction of the Coolidge Dam, and
the question involved was: Did the State of Arizona have the right
to go in there and make an award on a Government project? There
were a few other issues which I do not recall just at the present
232
s ix t e e n t h
annual
m e e t in g
of
I.
a.
I.
a . b . o.
time, but there were enough things involved that we thought a
lump-sum settlement would be for the best interest of this woman,
and rather than carry the suit any further, because we might lose,
we settled for $20,000 in a lump sum. We would never have paid
that woman any such sum as that in one lump sum if it had not
been for those difficulties.
California ( L aw r e n c e E. W orstell ) . In that connection I would
like to submit a letter which I received from Mr. Will J. French, the
director in California, and also a letter from Mr. Frank J. Creede,
the manager of the State insurance fund.
I do this because of a letter which I received from Mr. French
in which he asked me to submit those documents as California’s
contribution to this matter.
L etter W
r it t e n
by
W
il l
J.
F r e n c h , D ir e c t o r
I n d u s t r ia l R
C a l if o r n ia
D epartm ent
of
e l a t io n s
Inclosed is a letter written me by Manager Frank J. Creede of the State
compensation insurance fund. I think you will agree with me that Mr. Creede
has summarized in an able manner the questions that relate to the topic
“ Problems of competitive State-fund States.” I do not think there is anything
that I can add to his presentation, at least on the insurance side.
When it comes to the matter of an industrial accident commission serving
as a board of directors for a State fund, as the California commission does,
there arise questions that are more or less acute at different times. One of
these questions is whether it is good policy for the California commission to
decide contested cases for all of the carriers, including the State compensation
insurance fund. On two or three occasions efforts have been made to take the
State fund administration away from us. The general argument is that it
is wrong for a State body to both administer and decide controversies in their
State fund’s competition with private insurance companies. This is really a
theoretical argument. It would be more expensive to the State if separate
machinery were set up to supervise the State fund. The California commission
is in intimate touch with all of the insurance problems, as well as compensa
tion matters generally. The purpose we have in mind is to have the State
compensation insurance fund serve as a model for other carriers. Cold techni
calities are not permitted to stand in the way of substantial justice. We have
fewer contested cases from the State fund to decide than we have from the
private carriers. W e can work in harmony m th the manager to promote the
purposes that are behind the spirit of workmen’s compensation. Each record
in a contested case is as carefully considered as can be, regardless of the
carrier concerned. I know, as a matter of fact, that there have been times
when the State compensation insurance fund has felt that the commission’s
decisions have been too liberal. We have gone so far as to permit the State
fund to appeal to the courts against more than one of our decisions. This
shows what I would term the right attitude, beeause it illustrates the thought
presented, that there should be no favoritism in deciding contested cases.
In California the commission does not have officially presented to it, excepting
in the accident reports, those cases that are not contested and where the medical
and surgical benefits and compensation flow automatically under the law.
The efforts before the California Legislature to take jurisdiction away from
us have been defeated with comparative ease. I think that Mr. Creede tells you
about a State fund that is second to none in the country, and whose record
is worthy of commendation.
COMPETITIVE STATE FUNDS STATES— DISCUSSION
233
One of the real questions in a competitive State-fund State is to make sure
that political machinations do not enter. This is not always easy, but ever
since 1911 in California we have been quite successful in this respect, except
ing during the administration of one governor. When the latter was defeated
there was a return to good business principles and the State fund soon resumed
its former stride.
As chairman of the industrial accident commission, my policy is to refer all
State fund questions to the manager. He in turn confers with me on matters
of policy. There is that harmony prevailing which means the best administra
tion, and no effort is made by the industrial accident commission to pass upon
technical questions that belong to experts.
Your letter of July 15 last refers to a difficulty we have in California, namely,
making sure that all employers are insured. We are paying particular attention
to this drawback. Our law in California gives an injured man the right to file
a suit for damages, with the common-law defenses removed, if insurance is
not carried, and, in addition, he can also claim compensation.
As you will note by the inclosed copy of amendments to the law passed this
year, willful failure to carry insurance enables the commission to award 10
per cent additional compensation to the injured man, up to a maximum of
$1,000. We have started court proceedings against a number o f employers who
are violating the requirement to carry insurance.
We met the problem o f seeing that there is money to pay widows and
orphans and injured workmen by a law that requires all insurance carriers
to charge the same premiums as set by the insurance commissioner, and to
have specified reserves available to meet all obligations. Even the State fund
has to charge the same rates as private carriers, but it returns excess money,
as Mr. Creede has shown, to its policyholders. The minimum rate law pre
vents price cutting in the insurance field, and this law became necessary as an
outcome of disastrous experiences during the earlier years of workmen’s
compensation in California.
We have little trouble as regards prompt payment of compensation. We have
a mobile organization and we get into touch with injured men right after they
are hurt. They are given a small pamphlet which summarizes their rights
under the law. They can write in or call at one of our offices and they are
assisted in every way. In the great majority of instances there is no occasion
to advise them how to proceed, because the medical and surgical attention
is given immediately on injury and compensation starts on the seventh day
thereafter.
There are a comparatively small number o f disputed claims in this State,
considering the total number o f accidents, and we aim all the time to improve
our service in this respect.
If I were to present our “ greatest problem,” I should hardly know just what
to name. Perhaps the difficulty of making sure that employers have policies,
or are permitted to self-insure, makes up one outstanding problem. In Cali
fornia we do not grant the right to self-insure unless satisfied o f the financial
standing of an employer, and he must deposit at least $20,000 with the State
treasurer, this sum to be used as a reserve in case of emergency. We require
larger amounts than $20,000 in some instances. Nearly all the large employers
in California are self-insurers, and we insist upon the money, or securities
equivalent thereto, from even the Southern Pacific Co., or the Santa Fe Rail
road Co., or the Standard Oil Co., or any other employer, regardless o f any
well-known financial standing.
94023°—30-----16
234
SIXTEENTH ANNUAL MEETING OF I. A. I. A. B. 0 .
AM END M EN TS
TO
THE
CALIFORNIA
W ORKM EN’ S
COMPENSATION,
INSURANCE,
AND SAFETY ACT
The following summary gives the essentials of the amendments to the Cali
fornia workmen’s compensation, insurance, and safety act, effective on and
after August 14, 1929:
The maximum compensation was increased from $20.83 a week to $25 a
week. This addition will govern both permanent and temporary injuries where
the wages earned by the injured are sufficient to increase the compensation.
The death benefit of $5,000 was not changed.
An amendment provides for a second-injury fund. An example of this is
the man who loses an eye in boyhood, and the other eye while at work many
years afterward. Under the new amendment, the industry will be charged
only for the second eye. The life pension necessary for the totally blind man will
come out of the second-injury fund, as will all other second-injury awards
which involve very serious permanent disabilities. The latter is built up as an
outcome of charging the employer, or his insurance carrier, $300 each time an
employee is killed who leaves no dependents.
The industrial accident commission was given safety jurisdiction over the
State and its policial subdivisions. This amendment was introduced simply
to prevent any question that might come up in the future, although, naturally,
the State and its political subdivisions have always cooperated with the
commission.
The industrial accident commission has power to suspend or disbar attorneys,
for good cause, from appearing before the commission, such suspension or dis
barment to be subject to appeal to the courts.
An amendment gives the commission authority to appoint not more than
two deputy commissioners, to be selected from the staff, one of whom will have
the right to sign routine documents requiring two signatures under the law.
The other signature must be that of a commissioner. The purpose of this
amendment is to prevent delay in the event one of the commissioners is away
from the main office.
An amendment provides for 10 per cent additional compensation to go to the
injured man, with a maximum of $1,000, when employers willfully fail to carry
compensation insurance.
All cases of serious and willful misconduct, whether the charge is made
by the employer or the employee, or by an insurance carrier, must be decided
by the industrial accident commission, under an amendment to the law.
Heretofore, insurance carriers, or employers, could reduce, compensation, in
some instances, on the claim that the injured man had been guilty of serious
and willful misconduct. The latter can easily be confused with carelessness
or negligence.
Two new bills were enacted that affect the safety work in California. They
provide for the inspection of steam boilers and air pressure tanks.
Several bills were passed affecting the routine work of the State com
pensation insurance fund.
A bill was passed giving to the insurance commissioner and the industrial
accident commission authority to supervise the forms of compensation policies
and endorsements used by all insurance carriers. This bill will be of great
importance to the employers and injured men of this State, as it will bring
about the standardization of policies. The insurance carriers will be required
to either issue a full coverage policy or make it very clear to the policyholder
that the policy does not fully cover the employer and his employees.
COMPETITIVE STATE FUNDS STATES— DISCUSSION
L etter W
r it t e n
by
F rank
J.
235
C reede, M a n a g e r C a l if o r n ia S t a t e C o m p e n s a
t io n
I nsurance F
und
The subject "Problem s o f competitive State fund states,” considered from
the viewpoint of the State fund as distinguished from that of the industrial
accident commission, is such a large subject that I hardly know what com
ments to make. Perhaps if I outline briefly the manner in which the fund
operates and touch on some of the problems that we meet in the operation of
the fund, it may be of some assistance.
In California the State compensation insurance fund is an integral part of
the compensation system. It is operated as an insurance carrier in active
competition with 58 other carriers writing the same line o f insurance. Most
of the fund’s competitors are stock companies, although there are two mutual
and several interinsurance exchanges writing business in this field. The com
pensation act created the fund as a legal entity, separate and distinct from
the industrial accident commission. The law provides that the fund is to be
administered by the industrial accident commission, and the commissioners
have full and complete authority over the fund, and under the law are respon
sible for its proper administration. The compensation act provides that the
manager of the fund is to be appointed by the industrial accident commission
and that he shall manage, supervise, and conduct the fund subject to the
general direction and approval of the commission. This fund was created for
several purposes, the most important of which are as follow s:
1. To create an instrumentality whereby an employer can protect himself
against the liability imposed by the law. At the time the law was passed there
was no definite assurance that private capital would fully occupy this field, and
subsequent events have demonstrated that there are thousands of employers
in the State of California who would have been unable to insure their liability
under the law if it were not for the existence of the State fund. The attitude
of the private carriers in general is that they are in business for the purpose
of making a profit, and there are some classes of business that they will not
write because they consider these classes unprofitable or too hazardous.
2. To establish an insurance instrumentality or carrier which would set the
standard for fair dealing in the adjustment of claims, and thereby force its
competitors to follow the high standard which it was hoped the fund would set.
3. To give the employers a medium through which they could obtain their
insurance at cost, as the law provides that the fund shall return to the em
ployers insured with it, by way of dividends, its excess earnings. The fund
also acts as a leveler of rates through its competition with other types of
carriers. There is no question but that on many occasions there would be a
demand for increased rates on the part of the fund’s competitors were it not
for the fear that if the rates were unduly increased many employers who do
not now insure with the fund would seek the fund in order to obtain relief
from increased rates.
Historically, the fund started business on January 1, 1914, when the first
compulsory workmen’s compensation act became effective in this State. An
appropriation of $100,000 was made by the legislature to start the fund in
business. The fund prospered, so there was no need to ask the legislature for
any further assistance. The money originally appropriated was eventually
returned to the State, and during the time the fund used this money it paid
interest to the State. Outside of this initial appropriation, the fund has always
been self-supporting, deriving its money from the premiums paid by its policy
holders. Its assets are now in excess of $7,000,000. It has, since its creation,
236
SIXTEENTH ANNUAL MEETING OF I. A. I. A. B. 0 .
returned to its policyholders by way of dividends over $16,500,000. It pays the
same taxes to the State as its private competitors, and is not subsidized in
any way.
The problems of the fund are primarily the problems of an insurance carrier
writing workmen’s compensation insurance in a limited field. In my opinion,
the biggest problem confronting any State fund is the necessity of securing
its administration by insurance men untrammeled by political considerations
of any kind. A competitive State fund can only succeed if it can convince the
employers of its State that they will receive absolute protection and better
service at a lower cost than its competitors are able to offer. The compensa
tion business is one of the most technical branches of the insurance business,
and no insurance carrier, whether State fund or private carrier, can success
fully operate unless it has the services of those trained in this field. This is
not a problem in California, although I understand that it has been a problem
in other States, as the courage, foresight, and vision of the men who were
mainly responsible for the enactment of compensation legislation in this State,
and who composed the first industrial accident commission of this State,
established the tradition that the fund would be operated as a business institu
tion. I have touched on this subject, not because it is a problem in California,
but because it is a fundamental problem of all State funds. The wisdom of
the policy of a business administration of the fund, unaffected by political con
siderations, has proved itself in California by the fact that the fund is now
the leading compensation insurance carrier in this State, having approxi
mately one-third of the premium volume in its field. In 1928 the premiums
written by the fund were slightly in excess of $7,000,000 and the total premiums
written in the State were slightly less than $22,000,000.
The industrial accident commission in California does not make the com
pensation rates, as the rates are made by the insurance commissioner. W e
have a statute known as the minimum-rating statute, and the insurance com
missioner fixes the minimum rates to be charged by all types of carriers. No
carrier can issue a policy at a rate less than the rate fixed by the insurance
commissioner. However, at the end of the policy year a carrier may, if it
desires, return to its policyholders any excess earnings by way of dividends.
The fund has followed this practice, and a few of its competitors do likewise.
The fund has many problems, but they are more in the nature of insurance
problems than purely State fund problems. In other words, we have the same
problems that all our competitors in the same field have. For instance, the
excess earnings from which dividends are paid are mainly derived from savings
in overhead expenses. The rates are based on the assumption that 40.6 per cent
of every premium dollar will be used for the payment of overhead expenses.
As the fund does not operate on the brokerage or agency system, great savings
are possible, and it is, of course, the endeavor of the fund to keep its overhead
at the lowest point possible consistent with good service to its policyholders.
However, this is merely a problem of management and is not in itself peculiar
to a State fund.
Growth is a real problem of every State fund, and no State fund can be suc
cessful unless it shows a substantial growth from time to time. The reason
for this is that the private carriers writing this business, being interested from
a profit standpoint only and not from a public-service viewpoint, endeavor to
select only such risks as they consider profitable, and if the State fund sat back
and made no aggressive effort to obtain business, it would soon find itself carry
ing only the undesirable and unprofitable risks, which would mean that even
tually the fund would be unable to operate successfully. This is a very live
COMPETITIVE STATE FUNDS STATES— DISCUSSION
237
problem, particularly at the present time, and we have been successful in meet
ing it to date by maintaining an aggressive field force for the active solicita
tion of business. Compensation policies must be sold like any other type of
insurance, and unless salesmen are maintained in the field, actively soliciting
this business, no great amount of desirable business will come to any State
fund. We also make a special endeavor on undesirable risks that can not obtain
insurance elsewhere, to work out their special problems through our engineer
ing service, and we have been successful, through this service, in making many
an undesirable risk a very desirable one by cutting down the accident frequency.
In those cases there is not only the satisfaction of saving men from the effects
of injury, but the employer has the satisfaction o f receiving a reduction in his
rate and a substantial dividend if his risk turns out to be a profitable one.
Under the experience-rating plan, which is now in effect generally throughout
the United States, the rate charged an employer of any size increases as his
loss ratio increases and decreases as his loss ratio decreases. I do not mean
to infer that we are universally successful in every case, but in the majority
of cases we have been able to accomplish our purpose. We find that when an
employer realizes that his risk is considered an undesirable risk and that he
can obtain insurance only with the State fund, his attitude changes, and he will
take an active interest and cooperate in an honest endeavor to improve his
plant and to eliminate accidents through the use of safety measures beyond that
which is required by law.
We have, of course, the usual problem of being everlastingly on our guard
to see that claims are handled expeditiously and fairly to both employer and
employee. I could refer to our statistical, medical, auditing, and underwriting
departments in like manner, but to do so would probably be of no help, as I
would only be referring to problems that are common to every insurance car
rier. It is strange that after my many years of service with the State fund
I can not set forth more distinctive problems. From one viewpoint our prob
lems are legion, but when I test them by the yardstick of whether or not they
are purely State fund problems, I find that they are in the main the usual busi
ness problems incident to any insurance carrier in a highly competitive field.
Colorado ( L aw r e n c e E. W o rstell ) . I might state that on my
way here I called on the Colorado commission, and met Mr. Annear,
the chairman, and Mr. Young, a member of the Colorado commis
sion, and they were not able to attend this meeting, but in talking
with them they did not have any definite suggestion to offer as to any
particular problems, but rather complained about the inequalities
of their law, especially with reference to average weekly wages.
I was very much surprised to learn the actual working of the
Colorado law in this respect. Mr. Annear, the chairman, told me
of an instance where two workmen were killed in the same accident,
and the widow of one workman received $12 a week compensation,
and the widow of the other workman received only $6, and he ex
plained that by the peculiar provision of their law, which provides
the manner in which the average weekly wages are to be determined.
They make an investigation of how much the workman earned dur
ing the past 52 weeks, or year, and then divide it by 52, and it
happened that one of these mem had been unable to obtain work,
and therefore, although he worked at the same occupation and at
the same rate of pay he had not earned as much as the other man,
and hence his compensation amounted to half as much* That seemed
to be their principal objection and problem.
238
SIXTEENTH ANNUAL MEETING OF I. A. I. A. B. C.
Maryland (Miss R . O . H a r r is o n ) . Maryland is a competitive
State. It has three ways of carrying insurance: The State fund, the
self-insurer, and the insurance company. It is compulsory, and if an
employer does not carry insurance by one of those three methods he
is subject to a fine of from $500 to $5,000, or imprisonment.
Maryland differs from Arizona in so far as the State accident
fund is concerned for the reason that it is not independent of the
commission but it is administered by the commission.
I am very proud of Maryland’s procedure with regard to handling
cases. We pass orders against the State accident fund, as we do
against the self-insurer5 or the insurance carrier. There must be
a claim filed by the injured person, signed by him, with an affidavit,
unless the affidavit is waived by the employer, because the affidavit
is really for the protection of the employer, in Maryland.
There must be a claim made by the employee, such a claim as I
just stated, before the commission will act on the case and then
when that claim is received we assemble the paper and give the
case a claim number, and we notify the employer and the insurer
of the filing of the claim. The notice sets forth the essential facts
as given in the claim and states that if no objection is raised by a
certain date—which is five days hence—we will pass an order in
accordance with the evidence at hand.
When they receive that notice they check up the statements of
the employee. I f there, is any difference in wage they must give us
proof that the employee has misstated the wage before we will
change it.
I f there are any issues of defense to be raised they request a
hearing, or if there is any other point that they wish to bring to
our attention which may be adjusted without a hearing they do so.
I f a hearing is requested the case is set down for a hearing just as
promptlv as we can arrange for it and all parties are present
and heard.
In those cases in which no hearing is requested, what we call the
uncontested cases, an order is passed, just the same as in the hearing
cases, and it orders the employer and insurer to pay compensation
in accordance with the law and the facts.
Anyone can come into our commission at any time and ask for
the file, no matter whether the claim was filed in the year 1914,
when our law first went into effect, or in 1929. We will be able
to produce that file and show the evidence upon which the award
was based. Our records are public records. You may always see
what Maryland is doing and on what evidence it has based its award.
Therefore, I do not see why a hearing is necessaiy in all cases,
because the employee has had his say in the record and the order has
been passed in accordance with the evidence at hand, all parties
having had an opportunity to be heard and to have their say in the
record.
We do not recognize compromises, and our law is two-thirds of
the average weekly wage. I do not think that our schedule for
permanent partial disability is as large as that of the State of New
York. I was very much surprised yesterday when I heard that
New York allows 244 weeks, I think, for a hand and 46 weeks
for the first finger. Well, Maryland has not come up to that yet,
COMPETITIVE STATE FUNDS STATES— DISCUSSION
239
but we are improving all the time and we are here to get ideas and
to profit by them, and we do profit by the sessions of these con
ventions, because I make notes as we go along and I take them back
to the chairman of the commission and we sit down and talk the
matter over.
Pennsylvania (W. H . H orner). In the State of Pennsylvania an
employer is required to cover his liability under the workmen’s com
pensation law, either by securing compensation insurance from the
State workmen’s insurance fund or from a stock or mutual company,
or by applying to the bureau of workmen’s compensation for the
privilege of carrying his own insurance.
In this respect our law is very similar to the law of New York
State, with the exception that the Pennsylvania law covers every
employer, regardless of whether 1 person or 100 persons are em
ployed. There are only three classes of employers that are excluded
from the provisions of our law, and they are agricultural workers
or farmers, domestic servants, and casual workers, that is, persons
who are employed to do certain work that is not in line with the
regular business of the employer.
The bureau of workmen’s compensation has the right to grant or
reject the application of an employer to operate as a self-insurer,
and I might say that we are rather proud of the experience of the
self-insurers in Pennsylvania. We grant that privilege only to em
ployers who we feel are able to comply fully with the provision of
the workmen’s compensation law, and since 1916, the time when our
law went into effect, there has been only one case where an employer
has defaulted any compensation payments, and in that case the
stockholders or the directors of the company raised a fund to take
care of their outstanding liability, whereas in the same period six
insurance companies failed.
I f I remember correctly there are in the neighborhood of fifty
insurance companies that have been granted the privilege of writing
compensation insurance in the State of Pennsylvania by the State
insurance department. The State fund ranks second in the volume
of business that is done by the insurance companies, and I might add
that they are performing a very valuable service in Pennsylvania,
for this reason: The stock and mutual companies do not write insur
ance covering all classes of business, and this is especially true in
the mining industry. While most of the large mining operations are
covered as self-insurers, there are nevertheless a large number who
have not and would not be granted the privilege of operating as selfinsurers, and for this reason it becomes necessary for them to carry
compensation insurance with some insurance company.
The State workmen’s insurance fund covers more mining opera
tions in the State of Pennsylvania than all the other insurance com
panies combined.
Then, again, there is a type of business which takes the minimum
premium, and many of the insurance companies do not want to
bother with that class of business, but the State fund does write that
business.
At the present time we are engaged in a campaign in Pennsylvania
to force employers to comply with the law and carry compensation
insurance.
240
SIXTEENTH ANNUAL MEETING OF I. A. I. A. B. 0 .
At the session of the legislature last winter our law was amended.
It fixes a penalty of $100 to $500 or six months in jail, or both, at
the discretion of the court, for failure to carry compensation insur
ance. We are, at the present time, conducting a campaign of educa
tion in order that every employer may be fully informed as to the
provisions of our law, and for that purpose we are cooperating with
the chambers of commerce throughout the State, and we are receiv
ing excellent cooperation from those organizations.
The purpose is that later on we propose to prosecute; in fact, in
the Pittsburgh district we have already brought a number of prose
cutions, and in some cases the violators have been turned over to
the court.
The State workmen’s insurance fund in Pennsylvania when origi
nally created by the act of the legislature received an appropriation
of $500,000 to carry on that business, and was granted a 10 per
cent differential in writing compensation insurance. That $500,000
has been turned back to the legislature and the State fund is now
self-supporting and it has created a nice surplus to take care of
its outstanding liability. The 10 per cent differential which had
originally been allowed has been eliminated, so that they are on
the same basis as any other insurance company in so far as writing
business is concerned.
I believe it was a year or so ago that we had a disaster, a mine
explosion in Pennsylvania, in the bituminous fields, and in that
explosion 197 employees were killed. That compensation liability
amounted to $850,000. Of course the State fund carried the catas
trophe insurance to the extent of $500,000 so that its actual liability
was practically $350,000.
We are at all times following up our open cases in order that
accidents may be reported promptly and that compensation pay
ments may be made with the least possible delay. Uur experience
shows that the self-insurers are more prompt in reporting their
accidents and in making compensation payments than the insurance
companies, and in so far as the State fund is concerned they rank
with the average in so far as the insurance companies are concerned.
Utah (W. M. K n e r r ) . While it is true that we have a competitive
law in the State of Utah, we have been operating un,der that law
for a period of 12 years, and of course during that time we have
gained some very valuable experience.
Now I personally believe that fundamentally there should be no
private insurance companies in writing workmen’s compensation.
I think it is wrong and I am willing to say that it is un-American.
In our State the legislature meets and enacts a compulsory law
wherein it compels the employer to pay a certain amount of money,
a liability fixed by statute. ^The very moment the legislature does
that thing it imposes a tax upon a certain group of citizens of our
State, and I am unable to understand how the legislature can rec
oncile the theory of private insurance companies writing work
men’s compensation insurance under that kind of a law. There may
be some excuse for the private insurance company in a State where
they have the election.
The private insurance companies, for every compensation tax they
collect, load it with 40 cents on the dollar. The other 60 cents
COMPETITIVE STATE FUNDS STATES— DISCUSSION
241
goes to pay the injured workman. Now I merely state that so that
you may not misunderstand me.
I am charged by law to administer a competitive law, and I have
been there now some 13 years, and I want to say that in so far as the
individual insurance representative is concerned, I have no quarrel
with him. He simply acts as he must, and perhaps some of my best
friends are the adjusters in our State, and I want you to understand
that I try, in so far as it is possible, to see that the private insurance
companies absolutely get a square deal, nevertheless, fundamentally
I think it is wrong.
In our State we have a competitive plan and the employer may
carry his own insurance, providing he has the financial ability to
do so and with certain restrictions, or he may insure with a private
insurance company, or organize mutuals, or carry it in the State
insurance fund.
The law provides that the municipalities and counties may either
pay compensation direct to their injured employees or insure in the
insurance fund. All State employees, including elected officers, and
even the members of the legislature are insured in the State insurance
fund.
When we organized our commission we made up our minds we
were going to make the State insurance fund efficient. The expenses
of the State insurance fund are paid out of the premiums collected.
The commissioner administers the fund. We are not required to
use any other method in issuing warrants for the payment of com
pensation, and when a man whose employer is insured in the State
insurance fund comes into the commission, we formally review his
case, get the facts, and then we take him over to the State insurance
fund and instruct them to pay him.
You can not do that with a private company. They insist on their
legal rights, but the State insurance fund is in a little different
position.
We pay our medical bills promptly every two weeks.
We have made a rule with the State insurance fund that in case
of death the case must be adjudicated within 10 days from the date
of death. We sometimes fail in that, for this reason: Sometimes the
man has more than one wife, and then, of course, it becomes a ques
tion of adjudication that is somewhat complicated, but I mean in the
ordinary death case where you have no matrimonial difficulties.
The State insurance fund is never represented before the com
mission by an attorney. To adjudicate our claims in the State insur
ance fund we employ a man who understands the difficulties that
ordinarily confront tne working man, and that is the kind of a man
you must have to adjudicate claims, even for the private insurance
companies. So taking it as a whole, our State fund is working and
giving efficient service.
We are not restricted, as is Idaho, because we do not have to go to
the legislature for our expenses; notwithstanding that, I would
like to see the day when we may have an exclusive State insurance
fund. It would reduce the expense. It would eliminate many
delays. It would eliminate unnecessary litigation imposed by private
insurance companies. It would enable the injured employee to
receive higher benefits at a less cost.
242
SIXTEENTH ANNUAL MEETING OF I. A. I. A. B. 0 .
We are to-day writing about 45 per cent of the business in the State,
and we are doing very nicely.
To illustrate the difficulties of the private insurance companies,
we have a case now where a painter was insured with the Hartford
Accident & Damage Co. The insurance company in writing that
policy used the phraseology that he was insured for manual work,
not painting and decorating structural steel, painting exclusively.
Now this painter ordinarily did not engage in the business of struc
tural steel painting. I f he had placed in the policy the structural
steel painting, his premium would have been $250.
However, he went to a man who was erecting a steel structure
and secured the contract to do the structural steel painting. That
.employer was insured with the United States Fidelity & Guaranty
Co., and so these two employers agreed that they would carry this
man’s employees on the original contractor’s policy in order to escape
the payment of the minimum premium.
That is all right so long as nothing happens, but the foreman
for the decorating and painting man was supervising different jobs,
and he came to this job where they were engaged in structural steel
painting, climbed up on the structural steel work, and fell off and was
killed.
His poor widow is standing right between those two companies.
The Fidelity & Guaranty Co. say they will not pay and the Hartford
Accident & Damage Co. say they will not pay, and there you are.
That is a ridiculous situation under the compensation law, but what
are you going to do? We can not force the Hartford Accident &
Damage Co. to pay, and we can not force the other company to pay.
I want to say right here, had the State insurance fund been
the carrier of that risk, that widow would be receiving her money
to-day. As it is now it will take a year before they get it through
the courts, notwithstanding the fact that we go right direct from
the commission to the supreme court.
You might be interested to know that under our procedure the
case is heard by one of the commissioners, and he makes his recom
mendation attached to the transcript submitted to the other com
missioners, and then we render the decision.
The procedure following that is this: I f either party is dissatisfied
with the decision, they have 20 days in which to apply for a re
hearing. I f the petition for a rehearing is denied, they have 30 days
from that date to go to the supreme court direct, the court of last
resort. Then the legislature told the supreme court that our cases
should be given preference, excepting over criminal cases, not
withstanding that we find that our supreme court sometimes takes
as long as 6 or 9 months to decide a case, and one case took 14
months.
Now this question comes up here under the compulsory law in
this case that I have just related to you, as to whether, because only
one type of occupation was mentioned in the policy, the United
States Fidelity & Guaranty Co. or the Hartford Accident & Damage
Co. can be held responsible for the payment of that death claim.
We find that it is usually difficult for the legal mind to grasp
the workmen’s compensation law. It is hard for them to divorce
themselves from the old procedure.
COMPETITIVE STATE FUNDS STATES— DISCUSSION
243
We had a case where we rendered a decision wherein a widow was
awarded the maximum amount of compensation, that is, $5,000—
our maximum is miserably low, too low—only $16 a week. I want to
say that I belong to the school that thinks it is absolutely ridiculous
for anyone to subscribe to any law that uses this language: “ We will
pay to the injured employee 60 per cent of his average weekly wage,
not to exceed $16 a week.” It doesn’t mean anything. Why, we have
some men in Utah who are receiving as low as 15 per cent of their
wage. That is not right. I do not believe in that, and I am mighty
glad that the State of Arizona has succeeded in grading it up; it may
help the other States. We tried to put it through at the last ses
sion of our legislature.
We awarded compensation of the actual amount to the widow, who
was represented by an attorney, as was also the insurance company.
It was a close case—divided opinion. Two of us concluded that the
widow should receive compensation.
It was a case where a man was employed as a carpenter in a build
ing, and he opened a door and bumped his nose. Now the only
evidence we had of the man dying was that a fellow workman saw
this man put his hand up to his nose, but he never said a word.
Three days later the man died; infection had caused the death.
I f we had not had a lawyer on the fence, that would not have been
such a close case, but the legal mind says it can not accept hearsay
as evidence; in any event, we awarded on a divided opinion. Then
the attorney representing the widow and three little children went to
the insurance company and said, “ This is a close case. We will
compromise this case if you will.”
The insurance company said, “ I do not believe we can compromise.”
Now, mark, for 12 years we have been going along laboring under
the impression we could not compromise a compensation claim. So
the insurance company appealed to the supreme court and the case
was continued. Whenever a case is continued we become suspicious
and begin to make inquiries as to why the supreme court permits
a continuance of the case. So we saw that the case was put on the
calendar for the next term, and three days before it came up we
learned that the attorney representing the widow and the attorney
representing the insurance company had entered into a compromise
whereby the insurance company agreed to pay, in a lump sum, to this
widow and her children $3,500—and that included medical expense.
When we learned that, we instructed the attorney general to appear
before the supreme court and to fight the compromise agreement, and
he did, but we lost. The supreme court in that case, in effect, said
that anyone of sound mind, 21 years of age, had the right to make a
settlement.
Now, our law provides that a lump-sum payment may be made
only under special circumstances and with the approval of the com
mission. The supreme court violated absolutely that part of the
law. Our law also provides that a widow shall receive not less than
$16 a week for a period of 312 weeks. It violated that section of
the law. Our law also provides that an employee may not enter
into an agreement to waive any of his rights. It put a narrow,
judicial legal interpretation on that section of the law; so we do not
244
SIXTEENTH ANNUAL MEETING O f I. A. I. A. B. 0 .
know where we are on that particular point. I want to say that we
have made up our minds that we are going to fight the decision.
To illustrate how this strikes at the very heart of the compensation
law prohibiting the negotiation and bargaining with widows who
have little children, by a shrewd, trained, private insurance company
adjuster—the insurance company never agrees to pay more than the
law provides. We have a law that fixes a very low maximum, and
any man with an ordinary amount of common sense knows that a
widow with three children can not live on less than $16 a week. Yet
we have a supreme court that declares that a settlement for less than
$16 to a widow and three children is fair, because the case is closed.
That goes into the very fundamental purpose of the law. Under
the old common law 85 per cent of those who entered suits lost, and
the 15 per cent who recovered usually recovered large amounts. Of
that 15 per cent, however, in less than nine months 85 per cent
had nothing left. The money was dissipated by reason of the fact
it was received in a lump sum. So society stepped in and enacted a
compensation law taking away from the employee and the employer
his common law rights, and it meant to say to the employee, I think,
in our State, “ Going that far we will see that you get every cent that
the law provides.”
A commission was created to administer this law that the compen
sation might not be paid in a lump sum excepting under special cir
cumstances.
Now those provisions of the law were set aside by our supreme
court. I think that where we have a competitive insurance it is
wrong in principle, and while we believe in our State that the State
insurance fund is giving service—I do not mean to infer that the
private insurance companies are not acting in good faith, many of
them are good fellows and the law has given them the right to write
that sort of business, which means they are to receive a profit—it
conforms to the national council of making workmen’s compensation
classifications. We have something more than 750 different classifica
tions. Some employers must divide their pay rolls into 12 different
classifications.
That seems ridiculous to me. I am only a layman, but I think if
these actuaries would devote more time to evolving a plan whereby
they could simplify the making of compensation rates, they would be
performing a real service; but instead of that they seem to indulge in
a lot of formulas that no one understands. It becomes very difficult
on the part of the rate-making body to determine just exactly what is
going on. We established what we believe is a very efficient statis
tical department, and we follow that and keep it up, and we check it
quite thoroughly.
If they ask tor an increase in rates they must show good cause.
Then they made us the rate-making body, that we should make the
rates and not have someone in New York make them for us, so we
try to follow that rule.
The State fund of Utah has no solicitor. We believe in giving
service, and we believe that we are giving as good, if not better
service than the private insurance company. I believe that in all
competitive States those who have charge of the administration of
COMPETITIVE STATE FUNDS STATES— DISCUSSION
245
the law ought to do their best to make the State fund go and to give
service.
Now, by reason of the interlocking relations of different em
ployers, it becomes a very difficult matter to the State insurance fund
to get business. Let me illustrate one case. The Intermountain
Electric Co., a very reliable firm in Salt Lake City, doing a very
big business, with a very large pay roll, concluded they would like
to insure with the State insurance fund; so they applied and we
wrote the policy. Mr. Hawley, the manager, came to the commission,
several days after we had written the policy, with his lease. He said,
“ I have done something I had no right to do.”
Halloran & Judge, who were the agents from whom the Intermountain Electric Co. took the lease, included in the lease one of
those little phrases which the average man does not read. It read,
“ In consideration of this lease, the Intermountain Electric Co.
agrees to write all their compensation insurance and fire insurance,
and every other kind of insurance with the Halloran & Judge Co.
That was a matter over which I thought we ought to exercise a
little common sense, so we told Mr. Hawley that, of course, we
would refund the premium to him. That private insurance company
may call that good competition, but I think it is very poor practice.
Now, regarding the private insurance agent in Utah: Some of our
big mining companies have a very large pay roll, sometimes as much
as $150,000 a year, and the agent who writes that business has
nothing to do except to go in there and deliver the policy, and he
receives 17.5 per cent of the cost of that policy, which is pretty
good pay. That means that the insured workman is charged with
just that much. It makes the law just that much more expensive.
We are considering very seriously whether or not we should classify
some of our risks and say to the national council, “ Where the indi
cated pay roll is above $50,000 or $100,000, you may not load this
premium with an acquisition of 17.5 per cent. Cut it down.”
Of course, when we do that we will have a little fight with the
private insurance company; but I do not believe it is right. In an
elective State you have an entirely different proposition—the in
surance companies must get out and solicit the business; but in our
State the employer must come through.
Now take those who do not carry insurance, we are trying to work
out this sort of a plan: To have all the State officers who travel
throughout the State make inquiries as to employers who do not
carry insurance, and report to us.
The president of the Mormon Church is an agent for one of the
insurance companies in Salt Lake City and, of course, has a good
deal of influence with churches getting them to insure with the
company he represents. In my judgment any ecclesiastical institu
tion engaging in business is un-American. That is another thing
that the State has to contend with. Of course we can not get that
business.
I f there are any questions you would like to ask on any subjects
that I have not covered, I would be more than pleased to try to an
swer them.
The C h a ir m a n . What per cent of the business do you handle?
246
SIXTEENTH ANNUAL MEETING OF I. A. I. A. B. 0 .
Mr. K nerr . We write 45 per cent of the business. I have not
covered the self-insurers. That is another problem. The self-insurance privilege is a mighty fine thing, ordinarily, but there is a
certain psychological effect with the employee who is working for a
man who is carrying his own insurance. There is no question that
the employer has a decided advantage, because he can do certain
things to lead the employee to believe that he will lose his job if he
presses his claim for compensation, and perhaps sometimes the em
ployee unconsciously believes that is true, and it is true—you can
not escape that. In that way, of course, the self-insurer many times
escapes the payment of just claims.
We have found quite a number of men who have lost certain mem
bers of their hands, who were not paid for the loss, because the
employer put the man back on the job and he was doing good
work; but he did not get paid for the loss.
Under our law if a claim is not made for compensation within
one year from the date of injury it can not be made. So if the selfinsurer wants to keep the injured man at work during this 1-year
>eriod, and the injured man does not make claim, he is simply out of
uck.
The C h a ir m a n . Can you not prosecute the employer for not re
porting the case ?
Mr. K n e rr . It is reported, but the report means merely what it
says.
Mr. H o r n e r . D o you not inform the injured workman of his right
under the law and insist on his filing his claim and bringing his case
before your commission?
Mr. K nerr . We do, but you know what a difficult problem that is.
Mr. H u n t e r . Are not the doctors required to report all cases of
injury to the commission?
Mr. K nerr . Yes.
Mr. H u n t e r . Subject to penalty for failure?
Mr. K n err . There is a $500 penalty.
Mr. H u n t e r . When that form is received do you not immediately
send the injured workman what is known as the workmen’s initial
report or request for-----Mr. K nerr . Only in the State fund cases.
Mr. H u n t e r . Only in the State fund cases? Well, it would seem
that the way to correct that would be, as soon as this report is re
ceived, to send that form to the injured man, so that he will make
application. Then you take that out of the hands of the self-insurer
to the extent that he can not come back at the employee.
Mr. K n e rr . Yes; we tried that for a while, but in about 85 per
cent of the cases they did not even pay any attention to the form.
The self-insurer has a decided advantage. ITou would be surprised.
I happen to know because I have been in this game for some time.
Mr. H u n t e r . D o you have any others than perhaps some of the
big national companies, or big interstate companies, I should say?
Mr. K n err . We have the interstate railroads, of course, and it is
rather difficult to make them take out insurance. Then there are
some mining companies and telephone companies that it is difficult
1
COMPETITIVE STATE FUNDS STATES— DISCUSSION
247
to get them to take out insurance. We try to get around that in this
way: I f we grant an employer the self-insurance privilege, he must
take out what we call reinsurance. In our coal mines we require
$51,000,000 reinsurance. That is, that takes care of catastrophes.
Everything above $75 must be paid out by the reinsurance company.
Mr. W id di. I have not prepared an address, and I had no intentions
of making any extended remarks on this subject, but I must not
permit that indictment of the self-insured employer to go answered.
Mr. K n e rr . May I ask whom you represent ?
Mr. W id di . I represent a self-insurer, Burns Bros., the coal people
with branches in the State of New York, the State of Connecticut,
the State of New Jersey, and the State of Massachusetts.
I want to say on behalf of our company and also on behalf of a
great many other self-insurers in the State of New York that em
ployers of labor to-day in the State of New York have not the
slightest desire to deprive their employees of what is justly due them.
The self-insurer in the State of New York is at a distinct dis
advantage as compared with those who insure with an insurance
company or a State fund. I f you insure in the State fund you pay
your insurance or your premium the same as you would if you were
insured by an insurance company and you are through. I f you are
a self-insurer there is not a truck that goes out of your place that you
do not examine to see that the wheels are okeh, that the brakes are
in first-class condition, and so forth. It is the intention of the
self-insured employer to see that there are as few accidents as
possible.
In the 13 years that we have been self-insurers in the State of New
York we have never appealed from one single decision of the referee
in the State of New York.
Mr. H u n t e r . I would like to subscribe to the method of handling
claims that the lady from Maryland described. Our method is ex
actly the same. We pass on all cases. It does not make any differ
ence whether they are private carriers or self-insurers or our own
claims, our method of adjudicating the cases is similar. Not over 5
per cent of them are heard; 95 per cent are merely a matter of
routine.
Mr. A l t m e y e r . I confess I have been rather disappointed in the
discussions this morning. I had hoped that the problems that would
be presented would be problems peculiar to the competitive fund,
the administration of the competitive fund, and not a discussion of
the compensation acts of the various States.
I have not heard anyone discuss the various benefit provisions and
the various methods of procedure peculiar to the competitive funds.
For example, I wanted to find out what the competitive State funds
do with undesirable risks. I wanted to hear a discussion about the
problem of collecting premiums. Idaho, for example, covers a risk
whether it collects a premium or not. Just how is that problem
handled ? In some States, for example, the fund is hooked up with
the administrative body that enters the award, and they have no
appeal. They can not contest the award. How is that problem
handled?
248
SIXTEENTH ANNUAL MEETING OF I. A. I. A. B. 0 .
Those are the kinds of problems I was hoping to get some light
on. I would like to know the methods they use in competing with the
private insurance companies. Are they allowed to go out after
business, or are they not allowed to go out after business; and if
they are allowed to go out after business, just what method do they
use to go after the business?
Mr. K n e rr . I want to say that in Utah the private insurance
company must take any risk that comes to it. They have tried to
evade taking the undesirable risk, but we have a provision in the
law whereby if an application is made to a private insurance com
pany they must write the business.
Now, as to the matter of appealing from the State fund to the
supreme court, our law permits that. In addition to that, the em
ployer signs a rider on his policy giving the men of the State insur
ance fund the right to appeal in the employee’s behalf. We do not
solicit business.
The C h a ir m a n . On what theory does the law require the private
insurance company to write the risk when you have a State fund?
Mr. K n e rr . I f we did not do that the private insurance company
would simply take the cream of the business and leave the poorest
for the State fund.
The C h a ir m a n . I s not that one o f the primary functions of the
State fund, to cover the risk that can not be covered elsewhere?
Mr. K n e rr . No; it seems to me if the private insurance company
wants to write business, it ought to be required to take all the risks
or get out of business.
Mr. W orstell. I believe the chairman, Mr. Smith, who is from
New York, can give a great deal of information which will be of
value to the gentleman who has just made the inquiries.
The C h a ir m a n . Before saying anything on behalf of New York,
I would like to ask if there is any State fund jurisdiction which has
not been called on that would like to be heard, or any other accident
board or commission that would like to be heard on this subject?
Miss H arriso n . I just want to say that all orders of the Maryland
commission are appealable, as I stated before. That is, we pass
orders against the State fund, and all of the orders are appealable.
Mr. C u r tis . Appealable by whom? The State fu n d or the
employer?
Miss H arriso n . Both: The employee, the State fund, or the selfinsured.
Mr. C u r tis . Only the employer can appeal in New York State.
Mr. K n e r r . Utah has a 20 per cent differential. We write 20
per cent less than the private carrier.
Mr. C u r t is . I would like to hear from some of the States that
have exclusive State funds.
Mr. K n e rr . That group is in the other room.
The C h a i r m a n . In attempting to discuss these problems I am
somewhat in the same position as Mr. Creede, who states that the
problems are legion, and at the same time they are largely the
problems of a competitive insurance carrier. There have been a
COMPETITIVE STATE FUNDS STATES— DISCUSSION
249
number of points touched on this morning which, perhaps, I could
comment on.
Mr. Hunter, of Arizona, brought up a matter which, strictly
speaking, is not a State fund matter. He mentioned the fact that
they have no maximum limit on weekly compensation in Arizona,
Some of the other speakers have found the maximum limit very
objectionable.
Mr. H unter . I very much object from the administrative point
of view. I might state that any company, or any State insurance
fund that is required to adopt our plan is faced with many difficul
ties, because it is very, very hard to determine the rates, and get
reinsurance, and all those things, when you have no limit. We
would like to have a limit, even if they put it at $500.
The C h a i r m a n . Naturally, your situation sets up an incentive
for employer and employee to get together and, perhaps, arbitrarily
increase the amount of the wage retroactively. That probably is
very seldom done, but at any rate there is an incentive there at the
expense of the insurance carriers. In that connection, one might
wonder whether a sort of half-way step between the two systems
would not be better than either, that is, without having a flat maxi
mum. You might have a percentage of 66%, say on the first $30
of wage, and on the next $10, that is up to $40, say for illustration,
your compensation would be 50 per cent of that excess, and 40 per
cent of the excess over $40 up to $50, and so on, after the manner
of the percentage in the income tax law. So that when you got
through you would have a limit somewhere, but it would be a much
more reasonable limit, and it would be flexible; so that when the
wage level of the State rises you would not be under the necessity
of going to the legislature every year because the maximum in effect
is not reasonable as compared with the present wage level, and that,
of course, is a situation which frequently occurs, as we all know.
That is perhaps a little bit off the subject, but the question was
raised and I think it is a subject well worth consideration.
The question of handling the undesirable risk has been brought
up. Of course, that is a problem that is potentially existent-jn all
cases where you have a State fund. I can see that there are differ
ences of opinion as to the underlying philosophy of this question.
In some States where there is no State fund there is a law or a regu
lation under which the carriers have to get together, and perhaps
they draw lots as to who shall take the particular undesirable risk
that is available at the moment. Perhaps in some other States they
have a pool which does the same thing. In Utah they have a very
interesting provision which requires the carrier to write the risk as
presented. That is very interesting, and I would like further infor
mation as to how that works out.
The gentleman from Utah objects to the number of classifications
in the manual. Of course I take it that the State fund in practically
all of the jurisdictions has the right to elect its own manual, or adopt
any manual it chooses under its own law, and I suppose that if the
classifications in the manual seem too numerous the State fund could
use its own judgment in combining or otherwise rearranging those
classifications.
94023°—30----- 17
250
SIXTEENTH ANNUAL MEETING OF I. A. I. A. B. 0 ,
As a matter of fact, however, I can say that the tendency in recent
years has been to reduce the number of classifications in tlie manual,
and I would also point out that one reason why there are so many
classifications is on account of the dissatisfaction of the employers.
I f you have a few classifications, you will have more and more cases
where an employer is assigned to a classification which he can main
tain does not describe his risk. That is obvious.
You can reduce that to an absurdity by supposing a case where
there is only one classification—that is, where all employers have the
same rate—and under those conditions everybody would have a right
to be dissatisfied. I f you had only one classification in the manual
you could not possibly describe every risk that you have to insure and
it becomes a very difficult proposition for the insurance business or
for the State fund to set up a manual of classifications which will
provide reasonable differentiation in classifications and rates among
the various risks which are presented to them.
I think that if you had sat in as often as I have in the rate-making
procedure you would realize that the actuaries are not looking for
complications in this respect, but they are trying to meet the neces
sary demands and the conditions of the business. Naturally, there
are many improvements which can be made, and improvements are
continually being made.
The gentleman from Utah also raised the question of the difficulty
of getting business under certain conditions where there were inter
ested parties concerned in outside insurance companies. I think that
will be found to be the case in every jurisdiction where there is a
competitive fund.
I am frequently reminded of that when I happen to be discussing
the State fund with some acquaintance who is not in the insurance
business, and he does not know what insurance is, and he knows even
less about compensation insurance, and frequently he never heard of
the State fund, and when I tell him something about the lump sum,
invariably his first question is, “ Why does not the State fund get all
of the business?” and, of course, one reason for that is that owing
to the ramifications of modern business almost every company or
corporation has connected with it, in some way or other, either in its
own organization, or in its officers, or in its board of directors, or
related to some of those individuals by marriage, or other ties, some
individual who is interested in writing business for some insurance
company for a commission, and that is so widespread that it sets up
a peculiar difficulty in attempting to get some of the larger risks.
In the case of banks there is another interesting situation. Many
banks, particularly the larger ones, are not especially interested in
saving money on their compensation insurance, but they use that as
a means of increasing their deposits. They will hand out their com
pensation insurance to brokers or companies that maintain accounts
m the bank, and in that way give an indirect handout to the particu
lar individual involved merely to maintain his account there, irre
spective of the fact that if the insurance were taken away from that
individual, in all probability he would still maintain his account in
the same bank, because if he did not think it was a good bank he
would not have his account there anyway.
COMPETITIVE STATE FUNDS STATES— DISCUSSIOK
251
The question of whether the agreement system or the hearing sys
tem is preferable, I think is perhaps not a State fund question, but a
question for the accident board and commission, as such is a matter
of policy. We have heard from State funds that operate under both
systems, and apparently from the standpoint of administration it is
possible to operate under both systems.
Now, in coming to some of the questions that were raised by the
gentleman from Wisconsin, how is soliciting done? Well, as you
have heard from California, New York is not the only State that
has a force of solicitors. I heartily agree with most of what Mr.
French and Mr. Creede have said. I think they have stated the
situation very well in many respects. It is quite necessary for the
State fund to maintain a reasonable rate of growth.
In California, as you have heard, they have more than 80 per
cent of the business. In New York State, with a considerably larger
amount of business in force, the New York State fund has some
where around one-sixth of the entire insurance business. That is,
of course, exclusive of the self-insurers, on which we have no figures
available.
The New Y o rk State fund has been progressing very rapidly dur
ing the last four or five years, and it is now the largest carrier of
workmen’s compensation in New York State, and so far as I know
writes more workmen’s compensation than any other carrier in any
State, with the one exception of Ohio.
In connection with solicitation, publicity is a very important prob
lem, and in New York we do a considerable amount of publicity
work under the direction of a trained publicity expert, who has been
an editor of a New York newspaper, and we issue at intervals bul
letins to the policyholders and bulletins to prospects. We frequently
get news stories m the newspapers through the press agencies like
the United Press and the Associated Press, so that the State fund is
becoming more and more favorably known throughout the State than
it ever was before, and our experience is that publicity work is very
effective. I do not know how much is being done along that line in
other States, and I would be interested to hear.
One very interesting problem which illustrates some of the ways
in which the State fund functions has been that of window cleaners,
in New York City primarily. I do not know whether the other
jurisdictions have this situation, but window cleaners, house wreck
ers, and a few other individuals engaged in a few other occupations
do not seem to find it in their nature to be straight and honest with
the insurance carrier, and the result is that they are on the prohibi
tive list of practically every carrier. It is very difficult to deal with
them, to get the proper premium, so that practically every carrier
that ever tried writing window cleaners has written them at a loss,
and has been unable to solve the problem.
The State fund has been living with this problem for several
years, and I believe we have now solved it in such a way that the
insurance can be carried, the employees protected, and at the same
time the State fund itself not be in danger of being jeopardized or
injured.
At the same time the window cleaners had a mutual company in
New York State, the Empire State Mutual Co. It is now under order
252
SIXTEENTH ANNUAL MEETING OP I. A. I. A. B. 0 .
of liquidation and will be taken over and liquidated by the New
York Insurance Department.
That is a rather interesting illustration of the way in which the
State fund can function to handle a problem which the private
insurance companies have found it impossible to handle acceptably.
I f those present are sufficiently interested I can outline it very
shortly, because that bears on the general problem of what to do
with the undesirable risk. Here is a very remarkable example of a
group of undesirable risks who will probably never be anything but
undesirable.
We have a group of these window cleaners who are insured in the
State fund under a plan whereby the individual employer has to pay
a deposit of $400 if he has one employee, and of $100 for each addi
tional employee. In other words, if he has three employees he pays
a deposit of $600. That is not premium, but it is a deposit. As soon
as he is insured with us he must pay a premium at the rate of $1.20 a
day for each man.
Now then, at the end of the week, or each day, the employer must
mail to us before 10 o’clock a statement giving the names of the
employees and the places where those employees are working that
day. At the end of the week he must send in a sworn statement,
recapitulating that information, and on the basis of that weekly
sworn statement we send him a bill stating how much premium he
owes us. That bill must be paid rather quickly or else the insurance
is canceled.
Now, then, those employers, who at the present time number about
35, are all put into a group and those deposits are merged into one
deposit, which now amounts to somewhere about $40,000, and that
deposit is kept intact, because on top of that we immediately begin to
charge the premium according to the exposure.
I f the losses at any time exceed 70 per cent of the premium which
we have received from those policyholders in that group, we can im
mediately call on the deposit to make up the difference and at the
same time, in order to keep that deposit intact, we will assess or
rather we will bill those employers for additional premium in suffi
cient amount to make up the amount of the deposit which was already
on hand.
Now, in that way the group is opening with approximately a
$40,000 cushion protecting the State fund, in addition to the pre
miums which have been received, and the two together at the present
time amount to over $60,000, and the amount is increasing regularly.
That group has been organized by itself and it regulates itself and
the organization supervises and inspects the work of the individual
members, and if this organization finds that any employer is cheat
ing by not reporting a proper number of employees, that is reported
and a hearing held, and if it is found that the employer is guilty
of cheating, a fine is assessed and turned into the fund standing to
the credit of the group, and in that way the employer who cheats is
brought to terms and is prevented from injuring the group.
I do not want to take too much time on that particular point, but
it is rather interesting and shows what the State fund can do where
the private companies are unable to cope with the problem.
COMPETITIVE STATE FUNDS STATES— DISCUSSION
253
I f this procedure of having a section on State fund is to be con
tinued in this organization I think it might be well to have some sort
of a continuous plan for setting up the questions which are to be
discussed, so that instead of starting blind, as we have this time, we
will have an orderly schedule which can be used as a basis for
discussion.
The aggregate trust fund that we have in New York will be, per
haps, of some interest to you. There is a provision in our law under
which the industrial board may order any carrier or self-insurer to
pay into the State fund, into a special fund which is a separate
accounting, the present value of any claim or set of claims, for the
purpose primarily of relieving any doubt as to whether the periodical
payments will be made in the future.
That has been done, for example, in the case of the Empire State
Mutual three or four years ago, as to all of its then outstanding
serious cases, and it may be that it will be done again. That is a
protection to the claimants and assures that these funds will not be
dissipated by a carrier which is on the rocks.
Another difference in the operation of State funds is on the ques
tion of taxes. In New York State the State fund is assessed just
the same as any other carrier or self-insurer, for the support of the
labor department, that part of it which is engaged in the administra
tion of workmen’s compensation law. I think at the present time
that results in an expense to the State fund of somewhere between
$150,000 and $200,000 a year.
With the exception of that payment, the State fund has no taxes
to pay in New York State. I think that is probably the case in
most jurisdictions, except in California and in Utah, where I under
stand the State fund is subject to the same taxes as other carriers.
Some question has been raised as to the desirability of merit rat
ing in the State fund, and if I understood correctly the suggestion
was made that it is preferable to abolish merit rating, presumably
using manual rates for all risks and then paying dividends to the
individual risks which prove to be profitable.
That, perhaps, sounds very plausible, but I do not think that it
is practical. Furthermore, particularly as you get down to the
smaller risks, it absolutely violates the principle of insurance, and
particularly insurance with any pretense to mutuality of interest.
Of course, the fundamental reason why any insurance is necessary
in any field is that you can not predict the losses, and as you take
on risks and issue a certain group of policies they are all assumed
to be, let us say, average risks, and the carrier takes them on on an
equal basis. Now, if you could demonstrate in all individual cases
that the losses were the result of actual negligence on the part of
employers, and assess those losses against the employer, there would
be some logic in the suggestion, but the difficulty is that in a great
many cases the accidents seem to be the result of chance. For ex
ample, we have thousands of policyholders who go through the year
without any accident whatever, and the following year we have
thousands more, but they are not the same thousands.
Among the small risks, necessarily, there are many that go through
several years without an accident, and it is a question of just when
the accident will occur.
254
SIXTEENTH ANNUAL MEETING OF L A. I. A. B. C.
Mr. H orner. What is the minimum premium charged by the
New York State fund?
The C hairman . The minimum charges are those set forth in the
manual, subject to our discount of 15 per cent. Of course, the
minimums are different, according to the class of business.
Mr. K nerr. Y ou have a differential?
The Chairm an. A 15 per cent differential, that is correct. Mr.
Worstell, from Idaho, stated that they were unable to get the lumber
and mining risks. I think, perhaps, they may have been fortunate
in not having been able to get those classes of risks, because exper
ience has shown that in many cases they are very difficult for the
State fund, with a thinly spread organization, to handle. Our
organization is, perhaps, as complete over the State as that of any
State fund, with the possible exception of that of California, which
bas a larger proportion of the business, but we find, for example,
that the handling of the lumber risk is extremely difficult. In New
York State the m i n i n g problem is not particularly important.
In Arizona the continuous policy was mentioned. In New York
we also have the continuing policy by law. There is a provision
that the insured, by giving notice 30 days before the anniversary of
the policy, may cancel. I do not know what the cancellation pro
visions are in other States. We have found some objection on the
part of employers to that provision, because naturally they have
been accustomed to insurance with other carriers where the policy
is rewritten every year and there are many of them insured in the
State fund who apparently do not understand that it is a continuing
policy, not that it is in small print or anything but people do not
Hve that amount of attention to their insurance, and so when they
find that they are unable to cancel as they desire, they are inclined
to object.
Personally, I do not think there is very much of a saving in the
way of expense by not rewriting your policy every year. There is
probably some saving, but not very much, because in any event we
have to recompute the rates every year and send out an indorsement
giving the new rates, and it would not be very much more trouble to
do the same thing using a policy form instead of the indorsement; so
that I do not think the question of expense is very important.
Now, one of the most difficult problems in the administration of a
State fund, which, of course, is a problem in the case of any carrier,
is that of dealing with contracting risks, particularly the small, more
or less irresponsible types of contractors, who ar^ so numerous in
New York and particularly in New York City. That question has
been touched on in some of the other sessions. The condition is con
siderably complicated by the ramifications of general contractors and
subcontractors, and as Mr. Curtis so clearly pointed out, submarine
contractors. There are many situations where it is almost impossible
for the insurance carrier to get the correct information, both from
a claim standpoint and from a pay-roll auditing standpoint, and the
New York State fund would welcome any type of cooperation that
can be received from any organization or individual, informing us as
to where jobs are being undertaken that, perhaps, are not insured or
where the pay rolls are not being correctly reported, or any other
COMPETITIVE STATE FUNDS STATES— DISCUSSION
255
information of that sort. This is a very difficult problem and is,
perhaps, more acute in New York City than anywhere else in the
country.
For the last four years I have been publishing in the form of a
pamphlet my annual reports, and those reports are quite complete
in their account of the history and activities of the New York State
fund, and I think they have had a rather wide distribution. Per
haps some of you, who have read those reports, may have some
questions in mind about them.
Now, are there any further questions which anybody would like to
ask, which I might attempt to answer on behalf of the New York
State fund?
Mr. H u n t e r . One question about your policy. Do you require one
year in advance premium ?
The C h a i r m a n . Well, not in all cases. We have the same sort of
provisions for that-----Mr. H u n t e r . Well, the ordinary, general class of insurance that
you write?
The C h a ir m a n . That would depend on the size and characteristics
of the risk. Of course, a large proportion of the business, in point
of number, is on the annual premium basis, because a large propor
tion of the business consists of very small risks where it would be
foolish to have the premium on anything but an annual basis.
Mr. H u n t e r . D o you require adjustment, say at the end of six
months, on their actually known pay roll at that time?
The C h a ir m a n . If the policy provides for a six months’ interim
audit; yes.
Mr. H u n t e r . In that way you would at all times have at least six
months’ premium?
The C h a ir m a n . No; where the audit provides for a six months’
adjustment the premium charged at the beginning, under the manual
rules, is not 100 per cent but, if I remember correctly, 60 per cent of
the premium on the annual basis, and if you have a quarterly adjust
ment it is 33y3 per cent, and on a monthly basis you charge 10 per
cent in advance.
Mr. K n e r r . D o you handle a deposit premium?
The C h a ir m a n . Yes; and then corresponding audits are made at
the appropriate times, and the earned premium for the period is
billed and collected in the same way as an annual premium.
Mr. H u n te r . That is the way we do it. In that way we always
have an advance, and if a man is careless about his bills, we have
three or six months before we would have to cancel his policy.
Where you require a six months’ advance premium, do you bill
him at the end of three months ?
The C h a ir m a n . No; we bill him at the end of six months.
Mr. H u n te r . We do that differently. Where they are on a yearly
or six months’ basis, they put up an advance premium of one year,
and then if there is a six months’ or three months’ adjustment, at the
end of three months or six months we bill them, and so on the next
three months, and in that way we either have a six months’ or one
year’s premium unearned all of the time.
256
SIXTEENTH ANNUAL MEETING OF I. A. I. A. B. C.
The C h a ir m a n . In that respect, then, you are in advance of, I
should say, most of the other jurisdictions, because you keep farther
ahead of the policyholders than we are able to do in a competitive
State like New York, where there is such keen competition for busi
ness. Of course, it amounts to this: That the State fund, naturally,
in competing for business has to satisfy the assured—that is, to give
him at least approximately the same terms as the better private in
surance companies do—and if we charged twice the advance premium,
for example, that a private insurance company did, we would prob
ably not get the desirable business in that class.
Mr. H u n te r . We haven’t found it so; that is, not seriously.
The C h a ir m a n . In New York State the question of how much
premium has to be deposited seems to have an inordinate importance
in the minds of many policyholders, perhaps because so many of
them are doing business on other people’s money and are trying to
get along with as little capital as they can or, rather, to expand as
much as they can with what little capital they may have available.
M r. K n e r r . W h e r e y o u secure a ju d g m e n t, is th a t ju d g m e n t g iv e n
p referen ce th e same as a ta x lien ?
The C h a ir m a n . No; I do not think there is any preference either
in the procedure or the judgment. There has been a suggestion, and
it has gotten to the legislature on one or two occasions, to give that
preference in the same way as a claim for payment of wages is given
preference. In other words, either to put it on the same level or to
follow after that in a bankruptcy case.
Mr. K nerr . In our State the charge is 12 per cent on delinquent
payments, provided, of course, it is not litigated. Then after judg
ment is secured it becomes the same as a tax lien.
The C h a ir m a n . We have no such provision in New York.
Mr. C u r tis . I would like to ask whether any of the State funds
represented here pay dividends to the employer?
Mr. K ne rr . Utah does. For instance, in 1917, when we were
organized, we charged a very high rate in the coal mines. For three
years the rate was $7.81. At the end of the 3-year period we re
turned 25 per cent to the coal-mining industry and after that experi
ence charged-----Mr. C u r tis . What has your experience been in paying dividends
to the employer, so far as not reporting accidents ana trying to defeat
the claimant is concerned ?
Mr. K n err . We have not detected any problem there as yet. We
have some, however, in our safety drive.
Mr. C u r tis . Do you not think, from your practical experience,
there is a danger there?
Mr. K n err . Yes; that is so in experience rating.
Mr. C u r tis . That is one of the reasons why we are advocating a
monopolistic State fund. In that way we would eliminate the divi
dend question, and the rates would be uniform and, we believe, half
what they are paying now. It has been our experience, in a competi
tive State fund there are a number of employers who may try to be
little an accident, and who will also try to defeat the claim. We have
that experience in New York. I think Mr. Smith will admit that in
COMPETITIVE STATE FUNDS STATES— DISCUSSION
257
9 out of every 10 cases when you ask the employer why he did that,
the answer will be, “ I am trying to keep down the accidents so as to
be in on the dividends.” That is the danger, and we must watch that
very closely.
Uf course, we understand that in competing with the other com
panies the State fund gives some inducements and that is the induce
ment that is given in the State of New York. Literature, and so
forth, is sent to the employer showing the dividends that have been
paid, and there are employers who misunderstand that, and I think
it is coming to the point where it is almost as dangerous as the selfinsurer whom you cited.
We have had the same experience with the self-insurer; that he
does not report accidents; that he tries to make little of accidents;
and, in fact, we have had cases of employers keeping the men at work
for over a year, until after the time has elapsed for making claim, and
that is why we amended the law last year making it two years, and
with the consent of the Industrial Board the claim can now run for
two years, if the claimant can give a justifiable reason why he did not
file his claim within a year.
The most striking case is of an employer keeping a man, who had
his leg amputated, at work for 18 months, and then, at the end of 18
months, when he knew there was no chance to make a claim, the em
ployer told him he had no use for a one-legged man, and that man
can not get more than 5 cents compensation.
So that is the danger, as we see it, so far as the dividend is con
cerned: Trying to keep down the accidents, trying to keep the man
from making his report or claim for compensation. We have the
same condition with the stock companies. I f it can be shown that the
employer has a high-rating experience of accidents, under our law
the insurance company can assess an additional premium. So if the
employer has three or four accidents in a month he tries to get at
least two of the injured men not to make reports, so that he may keep
the cost of his insurance down.
The insurance company has the same privilege under the medical
terms. I f the cost for medical aid is high, they may assess the em
ployer, and that is one of the reasons why some employers try to
cheat the injured workman out of his medical aid.
Those are some of the difficulties we have in the administration of
the New York act, and I thought this might be where we could ex
change views on that question of dividends. I think the dividend
question is a serious one.
Mr. K n e rr . It offers an inducement, no doubt, to many employers
to do that.
The C h a ir m a n . Of course, it is true that the progress of a par
ticular case, in the case of an individual employer, would have prac
tically no effect on his particular dividend. In other words, the
cost of that case is spread over all before the dividend is declared. I
think that what Mr. Curtis has in mind is more in connection with
merit rating than in the case of dividends.
Mr. C u r tis . We are not well educated in New York as yet; espe
cially our employers need more education than the workmen do, as
far as the compensation law is concerned; and if they receive circu*
258
SIXTEENTH ANNUAL MEETING OF I. A. I. A. B. 0 .
lars telling about so much dividend, they do not know what merit
rating is. Eighty per cent of the employers in New York do not
know that there is such a thing as merit rating. All they see
is the circular that states that they have a right to receive some divi
dends back—at least they think tney have, whether they are in on it
or not—and that is why they try to defeat the case or to induce the
man not to make a report of the accident. Of course, if they knew
about merit rating they would not have any idea of doing what they
are doing. They think they are entitled to receive something back
out of what they are paying in. The average man who is insured
to-day thinks that way.
Mr. S u l l iv a n . A s a member of organized labor, my experience is
that the greatest objection to the insurance company carrying the
risk is the unfair tactics adopted by those insurance companies in
bringing unscrupulous doctors to testify against the injured man,
so as to reduce the amount of the compensation he will receive. We
have had many experiences in New York of the tactics of those
doctors, and that is about the most serious objection, whereas with
a state-wide insurance fund there would be no competition and the
injured workman would receive his just claim.
There are doctors in New York City who are willing to be hired
by insurance companies to do anything. They will even testify that
a man who has been brought in on a stretcher is able to work, and
when such things as that occur something should be done to correct
the situation, and that is why organized labor has fought and has
gone before the legislature time and time again to try to get the
state-wide insurance. We know we are up against a solid rock
because of the influence of the insurance companies, especially in
the building industry. They control the fund. They put up the
buildings. They loan the money to those contractors, and that is
one of the reasons why you can not get your state-wide insurance
bill through in the State of New York.
[The meeting adjourned.]
Section C: Chairman, Mrs. P. L. Roblin, Member Oklahoma Industrial Commission
PROBLEMS OF PRIVATE INSURANCE STATES
Oklahoma (Mrs. F. L. K o b l in ) . I do not know that our problems
are any greater than those of the States which have exclusive State
funds and those which have competitive funds. Nevertheless, I
think this meeting is well arranged so that we can discuss our indi
vidual problems. I do not agree that everything is wrong because
we have State funds. In attending these conventions and in dis
cussing the compensation laws and how they can improve the benefits
to the injured man I have received a great deal of information. In
Oklahoma we have several very serious problems, however, even
with the insurance companies. One of them in particular is the
centralization of medical service. I am not an advocate of the
claimant being in all cases allowed to furnish his own physician. In
New York it is a simple matter to pick a man up and bring him in
from Tonawanda or Lockport to Buffalo for treatment, but in Okla
homa we are faced with this problem of how to centralize medical
service.
We have found that the tendency is growing each year to snatch
these men up from their own community and bring them into Tulsa
or Oklahoma City. They take them from their homes and bring
them where their standard of living is changed, and the reaction
in this way is most serious. The man is brought in for treatment for
his accident and disability; he has become dissatisfied by reason
of having been taken away from his friends and his home, and he
is suspicious of the company doctor, of the company, of the com
mission, and of the compensation law, which makes him a very hayd
person to satisfy. He may be getting a perfectly fair deal as far as
the adjudication of his claim is concerned, but yet he is dissatisfied
in his own mind by seeing these doctors treating a number of em
ployees of the same insurance carrier, and he is questioning. We
have not been able to meet that condition yet. We know there are
some cases where a doctor would not be found in an industrial com
munity. There are hundreds and hundreds of such cases brought in
immediately following the most casual treatment. We are not re
ferring to those cases.
We will be enlightened by Mr. Kennard, of Massachusetts, who is
taking the place of Mr. Charles Stiller on this program.
Massachusetts ( W il l ia m W. K e n n a r d ) . In view of the program,
I assume that every one in this particular gathering comes from a
State where the insurance company, either in whole or part, carries
the compensation burden and pays the benefits through the medium
of the administration of the industrial accident board. Coming from
Massachusetts, I do not know that I can say very much which is
common to all of the States. We have no other carriers of insur
ance in Massachusetts than the insurance companies. We have no
259
260
SIXTEENTH ANNUAL MEETING OF I. A. I. A. B. C.
State fund, no self-insurers, and therefore the situation focuses itself
on the insurance companies solely on the one proposition, and that
is to see that they pay compensation in accordance with the re
quirements of the compensation law. We have nothing to do with
the making of rates. We have nothing to do with the statutory
supervision of the insurance companies. I say statutory, because we
do have a good deal to say as to how they should do their compensa
tion business outside of the statute. In the performance of the duties
of our board in that respect, we who are members of the board are
actively engaged in only one portion of the work and that is to see,
in disputed cases, that the parties are heard and adjudication made
with reference to the particular point at issue. That takes care of,
roughly putting it, about 10 per cent of the cases in which there
is a question. In the other 90 per cent the parties enter into an
agreement between themselves, the insurer and the employee,
is to see that they pay compensation in accordance with the re
quirements of the compensation law. We have nothing to do with
I know you are asking in your own mind how that is done satis
factorily. We have this statutory provision in Massachusetts, that
every employer of labor who has an accident shall make upon a
blank which the board supplies a report containing information with
reference to the employee who has been hurt—his name, address,
family situation, whether married or single, his age, his average
weekly wage (a very important factor in the matter), a brief state
ment of what caused his injury, and the nature of the injury. The
employer gives accurate information, because he has no reason to do
anything else. When the insurance company receives from its
assured under its policy agreement a copy of the report which is
sent to our board, it makes an investigation of the case, sending a
man to find out whether the injured man was hurt under circum
stances which makes it liable, and with reference to his wage, and
so forth. A written agreement is made with the employee to pay
him compensation at a weekly rate based on his weekly wages. A
copy of the agreement is sent to our board and turned over to the
clerical or record force of the office. The report of injury, which
has come in from an independent source in the person of the em
ployer, is compared with the agreement from the insurer, and under
all ordinary conditions they will coincide, the principal factor being
the weekly wage. I f they coincide, the agreement is approved and
the insurance company starts to pay compensation.
Ordinarily the insurance companies start within two, three, or four
weeks. They know they must pay and they pay without waiting,
without any formal action by the board. Ninety per cent of the
cases are taken care of in that way. In the other 10 per cent there
arises some difference of opinion with reference to material factors
on which compensation is based. These cases are handled through
our routine service, although certain cases may be called to the atten
tion of the members of the board. I f they can not agree without a
hearing, then we have a hearing. There are seven members on the
board and we are busy every day of the week except Thursday
holding hearings. Those hearings are conducted along the lines of
court procedure. The insurance company is always represented by
a lawyer and the employee will be represented in 60 per cent of the
PRIVATE INSURANCE STATES— DISCUSSION
261
cases, and in the others the commissioner takes hold of the situation
and cross-examines the insurance counsel and resolves himself into a
judge to decide the case. It is not so difficult as it sounds if you can
get into the frame of mind of being impartial. We do not have a
great deal of difficulty in rendering decisions and it is our desire to
have the employee’s case presented in full and with the most favorable
aspect toward him.
Once an insurance company enters into an agreement with an em
ployee to pay compensation, speaking broadly, it can not stop that
employee’s compensation on a weekly basis until the employee him
self is willing. That sounds like a drastic proposition. So far as I
know no other State has that provision. They can not stop it unless
(1) the employee agrees in writing that his compensation may be
stopped or discontinued, or (2) he returns to work, or (3) the board
gives the insurance company, after consideration of the particular
case, the right to stop compensation in that case. Thus it will be
seen that we are not disturbed over the amounts of settlements.
There is no question about the insurance company making settlements
with the employee which may be detrimental to the employee’s legal
rights. The legal rights remain until some such action as I have in
dicated takes place. We have been working under that system now
since 1912, but there have been some problems. We have managed,
so far as I can see, to iron most of them out. Now and then we have
some difficulty with a particular representative of a company, but
it has never reached the point where we felt that we needed to take
any action beyond bringing the case to the attention of responsible
people in the company.
When that is done we have invariably found that the insurance
company approaches us with the attitude and willingness to make it
right. Massachusetts is fortunately situated for that type of thing,
because the State is geographically small. The companies doing
business with us practically all have offices in Boston. We can reach
the responsible person in an insurance company very quickly. Ordi
narily we can get them on the telephone and if it can not be handled
on the telephone we ask somebody to come to the office to see us and
they will send a man to our office. We never had but one case where
we took drastic steps. Your territory is far more extensive. We
can go from the east to the west of Massachusetts in six hours in a
train and in less time in an automobile, so we can get to the point
where a situation has developed in a very short time.
The members give all their time to the work of the board. We per
sonally see the people involved. We have no referee system. We
have no method of deciding cases upon records submitted by other
people. We see the people involved and have an opportunity to form
an opinion of the truth of their story and question them at length.
One of the problems that we had in the first instance was that the
insurance companies would stop a man’s compensation of their own
volition and without supervision of any kind. That they would ordi
narily do because they received a report from their doctor to the
effect that this man had recovered and was able to go to work. The
investigation of those cases led the board to believe that injustice was
being done to the employees by that method, and now, when a man
262
SIXTEENTH ANNUAL MEETING OF I. A. I. A. B. 0 .
starts compensation, he can not be discontinued except by permis
sion from the board and himself.
Where we have had trouble with insurance companies, we are
satisfied it was ordinarily due to the attitude of the agent of that
company in that particular locality. We have on more than one
occasion, when a situation got acute, taken it up with the repre
sentatives of the company and in several instances the agent in that
particular place was transferred. We have our headquarters in
Boston. We have no branch office. Any business to be done with
the insurance companies is done personally and they send us respon
sible representatives. I do not know what power we have in the
matter, but I know that in all probability the insurance companies,
working as they do under the insurance commission, would probably
be refused the privilege of doing any further business in Massa
chusetts if they were unfair.
The other leverage we have over the insurance companies, which
is not talked about much and seldom mentioned, is that the insur
ance companies are the only people doing business under Massa
chusetts compensation law. Not a year goes by in which the question
of State fund is not agitated in Massachusetts. The insurance com
panies, of course, are disturbed over the prospect of a State fund
coming into Massachusetts. The members of the board are all per
sonally opposed to the introduction in Massachusetts of a State fund.
The insurance companies know we are trying to treat them fairly,
and with that idea in mind they try to treat us fairly. They know
that if they do not treat us fairly it is quite within the realms
of possibility, if not probability, that the members of the industrial
accident board would consider the question of a State fund. In all
probability a State fund would appear in Massachusetts within the
next two years if the members of the board asked the legislative
committee for it.
Mr. S t e w a r t . May I ask two questions. You say you have no selfinsurers. How about the shipyards there that were purchased by
the Bethlehem S t e e l Corporation? They are self-insurers. Do you
not let them self-insure in that plant ?
Mr. K e n n a r d . Let me make a little explanation, Mr. Stewart.
Our law provides for the establishment and creation of mutual in
surance companies. I have forgotten the number—I think it is 12—
who could get together and form an insurance company. That is
mutual companies formed by the voluntary act of the policyholders.
The Bethlehem Steel Co. and a number of other big industries in
Massachusetts—the Boston Elevated, for instance—have formed
within the confines of their own business a mutual insurance com
pany. In effect they are self-insurers, but subject to the rules and
laws of the insurance commissioner. They have to maintain their
reserves and do their business exactly as the Liberty Mutual Insur
ance Co. They are self-insurers only that they are policyholders.
We call them self-insurers. It amounts to it in the long run.
Mr. S t e w a r t . In Massachusetts have you the problem which they
have in many other States—that the insurance companies will not
take a small plant? In other words, they will not take business
which occasionally does not pay and they can not be compelled to
PRIVATE INSURANCE STATES— DISCUSSION
263
take business which does not pay. How do you handle that in
Massachusetts ?
Mr. K e n n a r d . The rates are established by the insurance commis
sioner. He establishes those by the report made by the insurance
companies on their experience. They have their own rating bureau,
in which a representative of the insurance department sits, and the
rates are made high enough to take care of that industry.
Mr. S t e w a r t . Suppose a small man can not pay it, do you make
him go in ?
Mr. K e n n a r d . N o ; we do not try to make them do anything. We
have over 90 per cent of the employees in Massachusetts under com
pensation insurance. It is not compulsory but is taken care of by
a provision in our lay by which if an employer does not see fit to
take out compensation insurance he finds himself subjected to a
further law. He can not set up the defense that the employee
caused the injury by his own neglect or that it was caused by the
neglect of a fellow servant, or that he assumed the risk. I f you are
familiar with the old employers’ liability act, you know that many
eases brought against the employer under that law were disposed
of under one or more of those definitions. In other words, a solvent
employer does not dare to stay away from compensation insurance.
Mr. S t e w a r t . Suppose he is not solvent. We have no end of cases
where employees of these small concerns are hurt and where it
states that if a man is not insured the old law applies and the em
ployee sues a beggar. The fellow is not worth a nickel with a hole
punched in it. You can not get any damages under the old law, with
the result that in most States a rapidly increasing number of work
men are not really covered at all.
Mr. K e n n a r d . I should suggest if there is any State represented
in this convention where they have succeeded in getting a compulsory
or any other kind of law to work to the extent of covering 90 per
cent of the employees in that State, they have done well. I will
say as far as not being able to get any money to purchase industrial
workmen’s compensation insurance or any other method of coverage,
you will find it hard to make something grow where there is no dirt
in which to plant. Here is a man running a little business, hiring two
men, and the two men are earning more than he is himself. Most
of them carry insurance if they are solvent at all. The ones who do
not carry insurance in our State are those who are not in a financial
condition to do so, where the profits are very small and they are not
paying bills to anybody. There are one or two examples; for in
stance, the New England Telephone Co. It does not carry com
pensation insurance at all. It is not sued. In 10 years it only had
three or four suits. The reason is it takes care of its employees
better than the insurance companies. It pays a little better benefits
and gives medical attention and above all finds a place for them to
work when they get better. It finds a job they can do with the inca
pacity which they have.
Delaware ( W alter O . S t a c k ) . Mr. Kennard, your board is for
tunate in having your work located so close to reliable and depend
able insurance companies. In Delaware we are not so fortunate.
Frequently insurance is written in the State from an office located
264
SIXTEENTH ANNUAL MEETING OF I. A. I. A. B. C*
in Philadelphia. Adjustments are made by adjusters living in
Philadelphia and unfortunately those adjusters do sometimes come
down into the State and stop compensation without notifying the
board. Later the injured worker appears with probably a drawn
hand. These are actual facts. He has a hand with probably 75
per cent loss when his case is closed out by an adjuster from some
other State on 15 or 16 weeks’ compensation. Then the board is put
to a great deal of trouble and expense in getting the case reopened
and on the calendar and disposed of in accordance with our act.
As you said a few minutes ago, Delaware, like Massachusetts, per
mits employees and employers to reach an agreement if in accordance
with our act. Unfortunately, we have found some carriers decep
tive in entering agreements and it is this fact which has prompted
this paper which I shall read:
The subject matter of this meeting is of vital interest to every
State whose employers therein must depend solely on insurance com
panies for their workmen’s compensation insurance. That such com
panies were organized for the purpose of making money for their
stockholders should not discredit them. Personally, I believe those
who invest their money in any legitimate business are entitled to
make a profit, or dividends, ir you please, and to legal protection
from State and Nation. Both are essential or the servitors can not
properly serve their communities. Certainly no industrial accident
board or commission charged with the responsibility of deciding
whether insurance companies writing compensation insurance are
able financially to meet their obligations to employers and em
ployees should personally criticize, or directly or indirectly encour
age others to criticize, such companies unless there is justification.
On the other hand, when we are convinced that a single one of these
companies is not playing the game fairly, we in turn fail to prop
erly serve our communities if we do not give every phase of the busi
ness serious thought and consideration.
I know from personal contact that many of our greatest bene
factors are individuals and corporations of great wealth. In my
own State is located the home office of a great business organization,
with ramifications reaching out into every corner of the world. It
is controled by a family unique in history, in not having in it a
single drone. It is a generous, most humane family, lovable, and
personally interested in every employee carried on its pay roll,
whether employed in Wilmington or China. I refer to the Du Pont
family. The Du Pont Co., like many others of the large corpora
tions, are self-insurers. Premiums on their workmen's compensation
insurance amount to very large sums in the course of a year. Such
sums are, however, insignificant when compared with the vast
amounts paid out yearly in compensation to the injured and the
maimed, and to the dependents of killed employees; and yet, gentle
men, I am sure you have found, as we have found it, a real pleasure
to do business with companies of this type. They do not quibble
over minor technicalities for the purpose of defeating the sound
fundamental principles upon which workmen’s compensation laws
have been enacted. They accept those principles with the same
liberality the framers of the law would have us give them. What
I have just said relative to self-insurers, you will agree, can be truth-
PRIVATE INSURANCE STATES— DISCUSSION
265
fully said of many of our insurance companies. Unfortunately,
however, for those charged with administering the workmen^ com
pensation laws, and for certain employers and employees, there are
a few insurance companies evidently more interested in dividends
than in their moral and legal obligations. They would render unto
Caesar more than his share.
Veiled interpretations of the exact meaning of the law, partial and
confused investigations; contested awards made solely on questions
of facts, and made in States where the courts have repeatedly held
they will not disturb the findings of the board in such cases; any
thing and everything to delay payments of compensation, and often
putting injured workers to the unnecessary expense of employing
counsel to prosecute their claims before industrial accident boards,
commissions, and courts—it is companies of this class that we are
justified not only in criticizing, but in driving out of the State we
have sworn to serve. So noticeable have become these practices with
such companies, I believe we of this sectional meeting should recom
mend to the present convention that it authorize its president to
appoint a special committee to make a thorough investigation, and
when that investigation is completed—and I believe it can be done
during the next six months—that the committee meet at some con
venient place, there write its findings and formulate its recommenda
tions, mailing a copy of such findings and recommendations to each
member of the association so that all may have full opportunity to
study every angle of the matter before our next annual meeting.
It seems to me these companies should be dealt with in the same
manner that bad lawyers are dealt with—denied the right to do
business. Their practices are not only unfair, but an imposition
on employees, employers, industrial accident boards, commissions,
and the courts, for I understand every dollar spent by these com
panies in such cases is charged to their underwriting expenses in
States where such contests and delays occur. Furthermore, it tends
to break down the morale of the employees, therbey creating among
employers, employees, and society at large friction that might ulti
mately lead to serious conditions prevalent in other decades.
As an illustration: A year or so ago I received a letter as presi
dent of the industrial accident board, from an official of a company
with headquarters in another State, stating that his company was
arranging to do business in Delaware and would like to talk over
the matter of carrying their own insurance. He submitted a report
of their liabilities and assets which we found very satisfactory;
but, as they would for a time have a small pay roll of 40 or 50
people, I suggested it might be to their advantage to insure with
an insurance company. He evidently believed that I felt, because of
the character of their business, they might not be able in case of
serious loss to pay their claims, for he instantly said “ We will re
insure our risk in any company you suggest. I know such a plan
will cost considerably more, but it would enable us to control the
adjustments of accidents directly with our men, a privilege worth
more to us than the extra occasioned by double insurance, so to
speak.” He went on to say, using his own words, he had known of
a $30 claim to almost stop the works.
94023°—30----- 18
266
SIXTEENTH ANNUAL MEETING OP I. A. 1. A. B. C.
So grievously painful and annoying lias the situation become to
employers, employees, industrial accident boards, commissions, and
the courts, that I believe we should seek remedial legislation—a law
that would give our boards and commissions authority to cancel
the right of insurance companies to continue business where incon
trovertible evidence discloses unethical practice. And I would in
this connection suggest another law, one requiring insurance com
panies writing compensation insurance to furnish the industrial
accident board and commission with a sworn annual statement
showing the amount of business written in the State during the
preceding year, the amount of premiums collected under each classi
fication, and the total of cost incurred, with specific items entering
into such costs that the board may better determine what are ade
quate rates. A qualified recommendation of this body to that end
would, in my opinion, materially aid us back home in obtaining
necessary enabling acts. Fair insurance companies and self-insurers
should not have to accept statements of operating costs furnished by
companies such as I complain of, as an equitable basis upon which
to fix compensation insurance rates. I take it no one desires an
inquiry into the affairs of the workmen’s compensation insurance
as the country saw in the Hughes investigation of life insurance
companies; and yet such an investigation is bound to come unless
certain delinquencies are corrected. We must take cognizance of
these abuses or we must fail in our official duties.
The C h a i r m a n . The Chair will now recognize Mr. Wilcox for the
question of discussion.
Mr. W il c o x . I had in mind to ask Mr. Kennard whether the Postal
Telegraph Co. and the Western Union are subject to compensation
in Massachusetts.
Mr. K e n n a r d . I do not know, but I rather think so. I have no
recollection of having a case from either of those companies. They
are subjected, of course, to common lawsuit. They can carry insur
ance if they want, but they are big enough and feel that they can take
care of their cases.
Mr. W il c o x . Perhaps in view of Mr. Kennard’s answer it is per
tinent to say that in taking away all defenses which are sufficient
to bring the Postal Telegraph and Western Union under the com
pensation law they will immediately elect to stay outside because
common-law liability means nothing to those companies except with
a few of their employees. Their liability is usually to their mes
senger service.
Mr. K e n n a r d . The New England Telephone stays out. They want
to be out.
Mr. W il c o x . They will not take that for their messenger service
for injuries occurring on the streets, and I made the mention solely
for the purpose of pointing out that there are some types of indus
tries where the taking away of defenses is not sufficient and there
has to be some other way of reaching the situation or it is not
reached.
Mr. S te w a r t . In the States where the law is compulsory, are they
able to force the companies?
PRIVATE INSURANCE STATES----DISCUSSION
267
Mr. W ilco x . There is no reason why you can not compel the tele
phone and telegraph companies to come under the compensation act
by a compulsory law. Interstate commerce has no interest in it
whatsoever.
Mr. K e n n a r d . Massachusetts is not constitutional as to a compul
sory compensation act.
Mr. S te w a r t . Y ou have compulsory insurance on automobiles.
Mr. K en n a r d . That got by. The United States Supreme Court
held that compulsory acts are unconstitutional.
Mr. R o bin so n . Virginia has a compulsory act. The Western
Union and Postal Telegraph are operating under the privileges of
self-insurers. They do this, however: They have a sort of em
ployees’ pension or benefit fund which provides for benefits in excess
of the compensation act. They submit an agreement under the com
pensation act with a provision that they will pay a stipulated num
ber of weeks in accordance with the benefit fund and if disability still
exists that they fall back on the amount allowed under the com
pensation act.
Mr. W il c o x . In the State of Wisconsin we grant the privilege to
carry their own risk to the Western Union and Postal Telegraph
and to any other concern financially in good standing, but I am
making the point that certain types of industry are so provoked
by the taking away of defenses that they do not come under the
compensation act if they have a chance to elect.
In Wisconsin we issue permits for children to work up to 17 years
of age, and I know the messengers working for these companies are
under 17 years of age for the most part, and we simply say that any
concern that remains outside of the compensation act may not have
any child working for them under a permit because their staying
out denies children the opportunity to receive compensation in case
they are injured. I did not mean to say that the Western Union was
forced to come under the Wisconsin compensation act. T think it
voluntarily elected to come under, but I think the Postal Telegraph
was compelled by taking away their opportunity to hire children.
Mr. D u x b u r y . I s not the election presumed ?
Mr. W il c o x . Yes. They nonelect. They serve notice that they
do not want to operate under the compensation law.
Mr. D u x b u r y . It was a wise administration of the laws that
brought them under.
Connecticut (F, M. W il l ia m s ) . As far as the Western Union
people are concerned, they are not a common carrier by law, and there
is nobody but common carriers by law that are exempt from the com
pensation act. Nobody need have any trouble with the Western
Union. They have a plan under which they operate in all the
States, and in Maine it is a pretty fair plan, but the insurance
department never approved of it. They are self-insurers there. I
remember a little messenger boy got hit on his bicycle, and we I)ad
no trouble getting his lost time and a bicycle. They are pretty
decent people. We have a provision in the Connecticut statute that in
case any insurance company does not do as it ought to do we can
bring judgment against it by the insurance department, and their
268
SIXTEENTH ANNUAL MEETING OF I. A. I. A. B. C.
license is rejected. We do not have to do anything but write the in
surance department and call their attention to the fact. We have had
but one instance where there was an agreement submitted, and the
carrier agreed to pay from some office in St. Louis, and the money did
not come as it should have come. I wrote the insurance company and
suggested they should have an office in Connecticut, and I received
word from them that they thought the same thing, so they established
an agency in Connecticut, with adjusters. You can not get much
blood out of a turnip, and if anybody has nothing it is most difficult
to collect anything from him.
Mr. S ta c k What is your interpretation of the word adjuster?
Mr. W il l ia m s . I do not know. He may try to adjust in the old
first method of a general release and produce a $10 bill, but he
does not get far. Our supreme court held that the jurisdiction of
the commissioner to approve an agreement depended entirely upon
its being in accordance with the facts.
Mr. S t a c k . Has your board authority to examine an adjuster
to find his knowledge of the law, etc. ?
Mr. W il l ia m s . No; if he does not know anything about it he does
not last very long. One of our early cases went to this extent. An
adjuster, in order to induce one of the commissioners to approve an
agreement, made some statements which he said were facts and the
supreme court said those statements were not evidential and findings
could not be based on them. They do not try that any more.
Georgia (H. M. S t a n l e y ) . Our problems in Georgia come from
the failure of small industries to get insurance. We have felt that
perhaps the law ought to be changed, compelling the insurance car
riers to take everything offered. We have this question but we have
not got to it yet. The insurance commissioner in Georgia had ample
authority to make any investigation he cared to make with reference
to the adequacy of rates but he does not have any machinery with
which to do it. Therefore, there are many complaints that the
insurance rates are high. The legislature can authorize us to create
a full enough statistical department so that they can make investi
gations and furnish to the insurance commissioner all the figures he
needs to make rates.
With reference to the various telegraph companies, the Western
Union has very promptly complied with our act. The Postal
Telegraph objected. It remained out for two years and then
voluntarily elected to come under. 1 do not know why but it
is back under the act. Both express companies and the telephone
company and nearly all the public utilities are self-insurers and they
are the best we have. We have no trouble with any of them. We
had to collect under only one bond but we had no trouble with any
of our self-insurers. In fact, they go very much beyond the law.
We have one of our largest, the Georgia Power Co. They not only
pay the medical expenses, but in one case paid $19,802, the medical
costs and extra thousands in rehabilitating this chap and giving him
a job in the ordering department. This concern also pays full
funeral benefits; and when a man is killed sometimes pays four and
five hundred dollars.
PRIVATE INSURANCE STATES— DISCUSSION
269
Mr. S t e w a r t . Can you give us any idea of the number of small
companies that are not insured and some idea of the percentage of
workmen in Georgia, because of that fact, who are not insured. We
are not interested particularly in the great things great companies
do. That is not your problem. What we want to know is something
about the real problems—one of which is the small plant.
Mr. S t a n l e y . I do not know how that runs but it is very largely
in the lumber industries—the fly-by-night sawmill. They are the
folks for the most part unable to get insurance. I could not give
that to you.
Mr. S h a r p e . I was interested the other day in the address of
Mrs. Perkins, in which she said that New York has a law requiring
that employers must be insured, and they prosecute noninsurers by
the hundreds. In the Province of Quebec the delinquents are many
and you will appreciate the expense of any State that has compulsory
insurance laws, as to whether they do prosecute delinquent em
ployers or not. Are they interfered with or do they do ahead like
the State of New York and prosecute them right and left without
any interference whatever? I would appreciate something on that.
We know they are not insured but the difficulty of prosecuting them
is a real problem.
Kansas (G. C l a y B a k e r ) . I am rather new in administering the
workmen’s compensation and I did not realize I had so many prob
lems confronting me until I came here. I will go home with
that in mind. The thing that confronted me is this: Compensation
does not amount to anything unless it is secure. In Kansas we have
a requirement that the employer coming within the act must carry
insurance unless he requests to be qualified as a self-insurer and makes
a proper showing to us for that purpose. That does not answer the
purpose because it was shown here that there are a number of
employers who do not carry insurance for various reasons. In some
instances they can not purchase it at any price. In the second place,
some of these corporations can not pay the rates, and in the third
place we have those employers who do not care to comply with the
law.
We have wanted to correct this situation in our legal way and we
set about trying to give some satisfaction to those employers who
wanted to comply with the law and who can not purchase insurance
or can not pay the rates and so we have resorted to the means of per
mitting those corporations to make application to become self-in
surers and take out accident insurance and set that up as part of their
assets and let them qualify for the balance. We are merely per
mitting it as a necessity. What to do with it we really do not know.
That is one of the things we came here for and are very much
interested in. In some of our coal mines it is impossible to take
care of the situation. We have had employers and employees
come to us and say they want some sort of security for this compensa
tion and the employer either can not get the insurance or can not
pay the rate, whichever the case may be. In some of these cases
we have endeavored to get the employers to get up an organization
among the men and create a reserve of 5 cents a ton, say, and let
them pool their assets. In some instances the employer who can not
270
SIXTEENTH ANNUAL MEETING OF I. A. L A. B. 0 .
get insurance is financially irresponsible and the thing breaks down.
In my brief experience, I make this observation: Regardless of the
complaint which is made in our State against the insurance company,
it can not be said, generally speaking, that they have not entered into
the purposes of workmen’s compensation. We are much dissatisfied
with that form of adjuster who causes us annoyance. On the part
of the self-insurers, I want to say our experience is much more grati
fying and I think it is due to the fact that the self-insurer is brought
in direct contact with the employee, with the result that he gets
more sympahetic understanding of his difficulty. We had one case
where a party was injured and they set light work aside for him and
kept him at work. We have a number of such instances. I think
there is a lot to be said in the encouragement of self-insurers.
Mr. S t e w a r t . Kansas, as far as I know, is the only State that
tried to handle intelligently this small employer question. Some
thing like two years ago the coal miners in the Osage district formed
this mutual group, putting in 5 cents a ton to pay liabilities. Is that
arrangement still in existence and how has it worked out and why
could it not be applied to the sawmills in Georgia and to the cream
eries, even though the group covered two or three different States?
Mr. B a k e r . There are two instances where we undertook it in the
Osage district about two years ago. One organization is still in
operation as far as we understand. As a matter of fact, last fall we
found they had adequate reserves and there has been no difficulty.
However, in the other instance immediately upon the setting up of
that organization there was a death case before a reserve was built
up and everybody got scared and they quit and fell down. We are
not working to get that organization unde£ way. In the other case,
where they did not meet with any loss, the mutual group is under
operation and is working satisfactorily.
Mr. D orsett . In the State of North Carolina there is no such thing
as uninsurable risks. Our insurance commission told the insurance
carriers if they selected the cream they had to select the rest. Why
can not Kansas do that?
Mr. B a k e r . I do not know why that can not be done although
there is a question as to whether or not we would have any compensa
tion insurance written in the State.
The C h a ir m a n . Mr. Baker, this fund you say these operators use.
is that administered by a designated person or kept in one place?
Mr. B a k e r . It is set aside in one place. The officers are elected t o
administer it.
The C h a ir m a n . By whom are the adjustments made?
Mr. B a k e r . They have an association that handles the adjustments.
Mr. R ussell . Our experience in Maine so far as relation with the
insurance companies is concerned is very much like that in Massa
chusetts. Our chief problem has to do with rates over which the
compensation commission has no authority.
Minnesota (F. A. D u x b u r y ) . I find myself not wholly in accord
with some things said, especially with reference to experience with
self-insurers. I appreciate and agree that many of the self-insurers,
such as Mr. Stack has in Delaware and the larger type who have a
p r iv a t e
in s u r a n c e
states—
DISCUSSION
271
policy with reference to their employees are commendable. There is
no question about that; but there are some things about some particu
lar self-insurers that cause us trouble. With reference to whether or
not there ought to be such a thing as self-insurer, I was delighted to
hear that the creature does not exist in some States, because there are
positive instances where the relationship is not a happy one. I have
a particular self-insurer in mind in our State who can qualify as to
prominence of business and financial status and all that but has
this peculiarity. When one of its old employees who has no other
job and whose job is part of his existence has a compensation claim
in which he differs from his employer or the adjuster, it is rather
more than you would expect of human nature for him to say he will
stand and fight it out; because whether or not it is just the employee
has a feeling that if he does not submit to what is given him he will
not be in as good favor with his employer as he otherwise might
be. That is a relationship in which they do not deal at arm’s length,
and the adjuster for the employer, unless he is a rare individual who
can measure up to all the ideals that are not common in human
nature, will come to this conclusion: You are entitled to so much,
sign on this dotted line.
There is this other instance: We have granted self-insurance to
certain companies that are not properly equipped to perform the
service which they ought to perform in determining what their
liability is and in taking care of it. They are disposed to let the
matter drift along until the industrial commission gets the informa
tion on it and follows it up and performs the service which it is
their duty to perform. That is, investigate and find out what their
liabilities are and pay compensation as promptly as they should. I
know of one instance where the thing went to a hearing before a
referee. It was a company that had a quarter of a million business
in this city where we are now and they did business all over the
States. That drifted along until a complaint got to the commission
and finally got to a hearing before a referee and that hearing was, in
its essence, the investigation which that company ought to have made
months before, because they did not offer any evidence whatever
to raise any question with reference to what their duty was. That
shows our experience. It is all right for Dupont and other com
panies having high ideals with reference to their dealings with
their employees, but not all the employers belong in that class;
and many ot them realize, when they are self-insurers, so called, there
is no such animal. They are really authorized noninsurers. When
they assume that position it is their duty to perform the service
which an insurance carrier would perform, to investigate and to take
action under the provisions of their policy and the terms of the law.
They seem to recognize that, and somebody else has to do it.
There are many companies which take care of their claims as well
as any insurance company and do as well by them as any consti
tuted insurance company, but there are so many that do not do that
that I think the relation is a doubtful one and I always try to find
an excuse to deny it and always feel better when I think they have
to get an insurance company, which knows something about perform
ing the service which is necessary. This other question that disturbs
us —having every employer covered with insurance—is a great ideal
272
SIXTEENTH ANNUAL MEETING OF I. A. I. A. B. 0 .
but it is absolutely, humanly impossible. We might as well realize
it. In the State of Minnesota we have some wild and woolly places.
We have all the extremes from a metropolitan city to the woods. We
have employers out there, and some of you have them in your States,
who do not get a new suit of clothes when they ought to have it.
They go around shabby and can not appear in church in fairly decent
apparel because they do not have the money to buy it, and for the
same reason they con not pay for compensation insurance. What are
you going to do with them? Some people would put them in jail.
I have not gone quite that far yet. I can not get myself to see that is
the right thing to do with those fellows who are struggling along,
with determination to do something and take a chance. That is a
risk, of course. I do not think they ought to be put in jail. They are
not that type of people. They are good, willing people. I do not
think we have so many of them and I really believe some of you
think you have none of them. If you will follow it up you will nnd
you have a good many.
It is the duty of every one of our factory inspectors to go around
and find employers and find out whether or not they are carrying
compensation insurance and we follow those cases up and use every
reasonable effort to get them to carry compensation insurance; but
the fellow who can not buy a new suit of clothes can not buy compen
sation insurance. You can not collect the severe penalty but he can
comply with the law. He can elect not to be bound and that situa
tion is no worse, in fact it is a little better, than the situation exist
ing between employer and employee before the compensation law
was passed. He has a right to comply with the law by electing not
to be bound. This has not discouraged us because the number of em
ployers carrying insurance in Minnesota has increased more than
50 per cent since 1922.
We have the problem of insurance carriers not desiring to take
certain risks. In our State there is largely logging and lumber,
an industry in which there is a sort of irresponsible employer
running a portable sawmill located in a part of the State remote
from towns, where the amount of the premium would not be suffi
cient to run the risk as a business proposition and they do not want
it. That was almost exactly like Mr. Wilcox’s problem. We have
^ome resemblances to Wisconsin which nature gave us. They are
wiser than we are and have advanced further than we have, but
natural conditions are quite similar. At the last session of the legis
lature a bill was introduced to compel a sort of pooling of those
risks among the insurance carriers of the State but the bill did not
go so far as to compel them to furnish insurance to this fellow I
referred to as not being able to buy a suit of clothes. They had to
pay the initial premium, which is in most cases the minimum, and
when that is done they are to be issued a policy by the manager of
the rating bureau and the losses, or profits if such an unexpected
thing should happen, are to be distributed among the carriers ac
cording to their basis of coverage in the State. It had an effect in
this way, that every man who can buy a suit of clothes or pay the
initial premium gets coverage.
Some companies got together and made a definite agreement
among the ten carriers that the manager of the rating bureau should
PRIVATE INSURANCE STATES— DISCUSSION
273
assign these risks to this group in some sort of order and they should
take that risk as a private risk and take the chances on it and every
fellow who has the credit or the money gets insurance, but it does
not take care of the other fellow who can not buy a suit of clothes
or pay the initial premium, and the only thing I know of for him to
do is to elect not to be bound and to do business like he did before
the law was passed except that his common law defense was taken
away from him. We know there is a notion among some people that
the exclusive State fund would take care of those fellows and issue
insurance to them and distribute it over the whole body and they
would not notice it much. Any State fund that does business on
that plan will find they have an awful lot of fellows who can not pay
the initial premium and they have to run along and maybe never
get it and there will be more of them because we have some peculiar
people in Minnesota that never have any money to do anything and
they are always poor and hard up, but when they die they have larger
estates than the fellows who do have money to buy those things.
Mr. S t e w a r t . For the purpose of the record, I think in a meeting
of compensation commissioners it ought to be made perfectly clear
that there is a very essential difference between a man paying for
a suit of clothes for himself and having his workmen covered by
insurance. A compensation law was enacted as a social legislation.
It is none of society’s business whether a man buys a suit of clothes
or not. It is nobody’s business so long as he has clothes to comply
with police regulations, but it is society’s business whether workmen
are going to be hurt by irresponsible people or people who are not
coming under the law provided for their protection; and I want
to say that the fellow who can not or will not pay an insurance
premium and does not protect his workmen is an entirely different
proposition from the fellow who does not buy a suit of clothes. I do
not care whether he buys a suit of clothes or not; the law was enacted
to protect society from taking care of people injured, as a public
charge. Now, then, if we are going to say that society has to take
care of them, the compensation law is not what it was intended to be.
The C h a ir m a n . I can appreciate what Senator Duxbury meant in
our duty toward these people during the time they are without
funds. Our inspector called on a trucking contractor and gave
him until Saturday noon to get his insurance. The trucking con
tractor just started in business. We have a new oil field and he
spent his last dime for the initial payment on a truck. He did
not have the money and did not have the credit but he did have a
contract to go out the next week and he could get considerable
jobs the next day. We tried to get him to accept it on a contract
but he just had the promise from a superintendent. Therefore, we
could not get a company to take it over but we had to let him
operate the next week and we all held our breath for fear he was
going to have an accident. Was it our duty to deprive that man of
working the next week? It was, but we didn’t have the nerve to do it.
Mr. S te w a r t . I am rather inclined to believe that the Federal
compensation law requires everybody to insure under it. That has
been made applicable to the District of Columbia in all occupations.
How far they have gone with getting in the small employer, I
274
SIXTEENTH ANNUAL MEETING OF I. A. I. A. B. 0 ,
do not know. Of course, the Federal compensation law as far as
the United States is concerned has no problems of that sort. They
are not up against the question of small employers. The District
of Columbia has only been operating now something like a year
and I doubt if they had any experience before.
Mr. K e n n a r d . I would like to ask Mr. Stewart a question. He
spoke about the duty which rests upon us to take care of men in
jured in industry. Have you given any thought to what Massachu
setts has done ? Society figured it their duty to take care of people
injured on the way to work and on the way home by compelling
them to take insurance.
Mr. S te w a r t . Mr. Kennard, to begin with, you said a compulsory
law in Massachusetts would be better as far as compensation insur
ance is concerned, but that it would be, and had been, held unconsti
tutional. You have a compulsory automobile law up there. I do
not know whether that was passed upon by the Supreme Court or
not. My impression is it was. Just how “A ” is constitutional and
‘kB ” under the same circumstances is not, I do not know. There
was a bill introduced in Congress at the last session to make auto
mobile insurance in the District of Columbia compulsory. It did
not get very far. It will be introduced in the next session. I do not
know whether it will be passed or not. Now, what the United States
does is no criterion as to what the States ought to do. I f you think
the United States Government is a model employer along compensa
tion lines you are greatly mistaken. As we learned in Senator
Wagner’s paper yesterday, the War Department has an accident rate
more than 20 times as high as that of the United States Steel Corpo
ration. It never spent a dollar, as far as I know, on accident pre
vention. The Navy Department did, during the war, spend some
money on accident prevention and it has a rate of about half of that
of the War Department. Along these lines, if you think there is an
excuse for not doing things because the United States does not do it,
you had better go back to the Middle Ages.
North Carolina (M a t t H. A l l e n ) . If I were to attempt to discuss
the problems we have had and are now having, it would take me
three hours instead of three minutes. I will tell you our commission
went into operation July 1st. However, it is an elective law. We
will have to amend the North Carolina constitution to make it com
pulsory. Our first problem was, the legislature appropriated $42,000
to administer our act and we saw it would take $142,000, so we have
supplemented our appropriation from the emergency fund. We are
required to approve every doctor’s bill and lawyer’s fee. It is a
misdemeanor for a doctor to receive a fee or a lawyer to accept a fee
unless it is approved by our commission, and that presented a diffi
cult problem to us so we set out to have meetings with the medical
association and reached an agreement on a tentative square for medi
cal fees and likewise with the lawyers. So far we have had qualified
in North Carolina between eighteen and nineteen thousand em
ployers. We have about 125 self-insurers in North Carolina. We
have had about 350 employers to reject our act. Most of those who
have rejected it are the small sawmills and chain stores. Under our
act we have the authority to pass any rules and regulations we see
PRIVATE INSURANCE STATES— DISCUSSION
275
fit, and with reference to the self-insurers we passed a rule that we
would require a minimum deposit of $10,000 on all self-insurers. We
have required that of the Standard Oil Co. and such concerns as that.
We made no exceptions. In others we require larger deposits but in
every instance we have a deposit from the self-insurer of at least
$10,000 in Government securities. So far the self-insurer has been the
larger institution such as the telephone and telegraph, Standard Oil
Co., and concerns of that type. We have been very busy and will
continue to be so until we get additional help. Our act requires that
every hearing shall be held in the city in which the accident occurs
and it makes it necessary for the three of us to be continually on the
road. We have learned a great deal from attending these meetings
and feel we have been benefited and that we can go back home and
render a better service to our State.
Mr. S t a c k . One of your associates a moment ago referred to the
fact that your act requires an insurance company to write every
thing that is offered. Under our law, the insurance commissioner
has absolute authority to withdraw permits or licenses from any
company doing business in the State. Fortunately for us, the in
surance commissioner has been my lifelong friend and associate.
We served together and understand one another and he has said
to the insurance carriers upon our request that “ I f you refuse to
take any risk in this State I will cancel your license.” If a man
writes us and says he has applied for insurance and says they
would not write the risk, we immediately report it to the insurance
commissioner and within a few hours the company is in the office
begging us not to cancel their license.
The C h a i r m a n . Has that been tested in your supreme court?
Mr. S t a c k . Not that particular question but the insurance com
missioner has always been upheld in every case in which he has
withdrawn a license from an insurance carrier.
Virginia (W. L. R o b in so n ) . Virginia seems to have covered
most of the problems in its act. First, we relieve the operator hav
ing less than 11 employees from operating under our act. It gets
away from the small lumber operator and the coal mining operator
and a number of irresponsible employers. We have also provided
in the act, as it was originally passed, for a State insurance fund.
We never had any agitation for a State insurance fund. I think
that is solved by the privilege of granting self-insurance. I f an
application is filed for the privilege of carrying their own insur
ance, they must file their financial statement and the permit is
granted for the period of one year or it may be revoked by the
commission within that time. Before the privilege is granted,
however, a particular person must be designated to handle the
claims and that person must come to the commission and be shown
exactly what the commission expects. We find the self-insurer is
most cooperative and goes beyond the requirements of the compen
sation act every time and attempts to rehabilitate and gives benefits
to injured employees. The result is the self-insurers give Virginia
no trouble and I may say the insurance companies give us no
trouble. We have no hesitancy in calling into the office the resident
276
SIXTEENTH ANNUAL MEETING OF I. A, t, A. B. C,
manager or the head of a claims department of an insurance com
pany and putting our trouble before him. He must do what we
want him to do.
We have a situation in Virginia whereby an insurance adjuster in
a particular case will bring a man in for medical attention or ob
servation by the commission. The record of the case also is put before
the commission for examination. A State insurance fund has never
been run in Virginia, so that we have to accept Mr. Kennard’s state
ments, made sometime ago, about the payment of compensation. The
self-insurer or insurance company can not terminate compensation
under any condition even though our act does not specifically provide
that. We have a formulated rule which I will read: “ Petitions for
review of outstanding awards on the ground of a change in condition
must in all cases be filed on the form provided by the commission for
that purpose. No application for a hearing by an employer or
insurance carrier under this section will be considered by the com
mission until all compensation under the outstanding award has
I)3en paid to the date oil such application.” We further require
that a copy of that application must be mailed to the injured em
ployee. In this way compensation is paid promptly and paid to the
date the notice is given the commission and the injured employee
that compensation may be terminated.
Wisconsin ( F red M. W il c o x ) . There are many problems in every
compensation State where they operate under one or another system
of carrying the liability or security for the payments. I tried to
think that on this question of the self-insured and whether we
should have them and how to regulate it, we ought to thank the
provision in our laws for compelling employers to insure their
risk. I had only the one purpose in mind and that was to make cer
tain the injured man got his benefits. I f we start with that, our pur
pose is to see that those people who can insure do so and not to make
it burdensome for those who can not. Our problem is the small
risks. Senator Duxbury has done something that is commendable.
Years ago I endeavored to get our insurance companies to build up
an approved plan, my reason being that our chief problem is involved
in the fact that we have too many insurance companies doing busi
ness in the State without a license to do business. There are 53 doing
business in the State of Wisconsin. Only 16 of them have $100,000
earned premium. Twenty out of the 53 have less than $25,000 earned
premium. Can anybody tell me how an insurance company can give
service and audit pay rolls and do all the things necessary when they
get less than $25,000 earned premiums? It is an absolute impossi
bility. The thing we should direct ourselves to do is to make the
insurance commissioners in the States understand that those com
panies which have not a volume of business ought not to do business
there and I have said to the insurance companies in our State that
they must either take care of these risks, give service, audit the pay
rolls, and take care of their safety work or withdraw from this State.
If the insurance companies can not do that, then there is nothing left
for any State to do but come to the State fund plan; some kind of
a State-wide system.
PRIVATE IN SU RAN CE STATES— DISCUSSION
277
Now we have a hook up in our State between the compensation
department and the insurance department. I am a member of the
compensation insurance board in our State. The compensation
insurance board is made up of the insurance commissioner and the
chairman of the industrial commission and we establish the rates and
the classifications and control the rates, but they have to have more
money if they are going to take care of the small risks. I agree
with Senator Duxbury that you have to be hard boiled with the
people who say they can not pay the premium. I believe the State
should see that the amount of premium exacted from them is legiti
mate but when you have gone that far, then your duty is to the
employee and you have to stand by him and compel the employers to
take out insurance. We can send them to jail, but we do not send
many there. We call them in and tell them they must carry insurance
or get out of that business. We can exact penalties of so much a day.
but we do not do that often. There is another group of people, the
carnival people traveling all over your State and mine, employing
a large number of people in hazardous occupations and not paying
any attention to the insurance coverage. We had one in Kenosha
and he got out and we told him when he came back he would have
to take insurance before he operated. He started again and we closed
him up in the middle of his performance and got plenty of newspaper
publicity, then he sat up and took notice.
We have another problem in our law and that is this: Any em
ployer subject to the compensation act in our State is obligated to
take care of the compensation liability of the employees of any con
tractor or subcontractor under him. As an illustration: There is a
subcontractor in Wisconsin doing stunt flights to advertise an auto
mobile concern. He got a contract to do a parachute drop and to
drop literature. One of these parachute droppers broke his leg and
was taken to the hospital and operated on and died under the opera
tion. This automobile concern now finds that it is obligated to take
care of the liability to the employees of this fellow operating the
parachute droppers. Now a lot of these fellows and certain sub
stantial employers inquire as to whether or not the man he is letting
out the job to is protecting his risk.
[Meeting adjourned.]
THURSDAY, OCTOBER 10— AFTERNOON SESSION
Section C (continued): Chairman, W. H. Fitzgerald, o f the State Industrial Accident Com-'
mission o f Oregon
The C h a i r m a n . The early part of this session seems to be devoted
to coal mining problems. We will proceed with the program by first
introducing a commissioner from a State that has a coal industry,
and a man who has had considerable experience in the administration
of the workmen’s compensation law. We will now hear from Mr.
Parke P. Deans, of the Industrial Commission of Virginia.
Coal Mining and Workmen’s Compensation
B y Parke P. Deans, Industrial Commission of Virginia
In opening the discussion of the subject of this hour, I am mindful
of the fact that there are States with larger output in the coaHndustry than that from which I come, and also that there are in this
conference representatives from States not particularly interested
in the subject assigned. To the latter class, may I say, you have a
problem in your State with some other industry similar to that which
we of the former class have.
This association for years has discussed often the many phases of
extrahazardous industries. Whatever problem confronts one of this
class may readily be admitted to be a problem for the other. We
shall admit that the coal industry belongs to this group.
Roughly estimating the situation, the coal-mming industry in
cludes some 7,400 mines, employs three-quarters of a million men in 30
States, and produces in excess of a half billion tons of coal per year.
The business, as we know, is a hazardous one from the standpoint
of the worker, although there are numberless employees who have
spent their entire lives within the coal mines without a single, injury.
The industry as a whole, during the past few years, has been in a
very unsatisfactory condition, due to overdevelopment and expansion
cpused by the World War, to increased power per ton of coal, to
the development of the water-power industry, to freight rates, and
to other causes. These unsatisfactory conditions are naturally re
flected in the selling price of coal, which, in turn, necessitates a very
close watch on every item of expense.
In discussing coal mining and workmen’s compensation, I assume
that the greatest problems we have in mind revolve around the
rate question and the difficulty to secure coverage by the coal
operator at a figure commensurate with the output of the industry.
As I understand the situation, the unsatisfactory rate from the
carriers’ viewpoint has caused the mutual companies practically to
discontinue the writing of coal-mine risks. Further, in States where
self-insurance is permitted the larger and stronger coal companies
279
280
S IX TE E N T H A N N U A L M EETIN G OF 1. A . I. A. B. O,
are becoming self-insurers in increased numbers, thereby leaving the
smaller companies to carry their own burdens.
A glance at the program, which gives a list of those to follow in
this discussion, leads me to presume that it was intended for me to
discuss the subject largely from the Virginia situation and the
lessons learned from our experience. I feel that our problems and
experiences are similar to those of many States. Virginia, be it
remembered, is a private insurance State. Back in the summer oi
1926 we were faced with a critical situation regarding compensa
tion insurance for coal mines, due to the fact that a part of the
insurance carriers had already withdrawn from our coal field on
the alleged ground of the loss of money resulting from inadequate
rates. In June of that year the Associated Companies, composed at
that time (as I remember it) of four of the large stock carriers,
notified our insurance commissioner that they had passed the follow
ing resolution.
Resolved: That General Manager Butterfield, in conjunction with the under
writers of the members of the Associated Companies, is directed immediately
to prepare adequate and reasonable rates on the basis of our experience;
these rates to be immediately submitted to each State where this is required
by law with the statement showing the underwriting loss in such State in
dollars and cents during the past four years, with advices that if the rates are
not approved within 15 days, the* Associated Companies, because of their heavy
losses, will be compelled to cease writing coal-mine business in such State; and
that the rate if approved is not only to apply to new risks and renewals but
also to outstanding policies.
The Associated Companies further stated that during the four
years previous their net loss had been around a quarter of a million
dollars. In January, 1926, the base rate in Virginia, the records in
dicate, was $4.73. The Associated Companies asked for the approval
of a rate beginning July 1, 1926, of $9.20 with the further stipulation
that unless approved they would find it necessary to withdraw from
the field as to future writings and cancel such risks as then appeared
on their books. This gives us an idea of the carrier attitude. On
the other hand, early in the same year the operators contended for
a base rate of less than $4 on the ground that it was adequate.
Finally, the present general arrangement was worked out, effective,
if I remember aright, October 1, 1926. One company took the busi
ness of the insured group at a base rate for experience-rated com
panies of $5.75. The rate after these three years remains the same.
The scheme seems to be working fairly well. Our soft-coal produc
tion is confined to five counties situated in the southwestern corner of
the State. On account of this and having all the business the carrier
maintains claims, engineer, and inspection department headquarters in
the center of the field. The results are an economical administration,
as well as an efficient one. The investigation and settlement of claims
can be handled expeditiously and the mine-inspection work and
safety-work requirements can be more closely checked at a minimum
of overhead cost. By the constant contact of the carrier representa
tives with the plant management and employees a better feeling
exists and safety work has a better chance to be properly advanced.
Right here I will say that in this matter of accident prevention or
safety work there is a common problem in which we should all be
interested and which if properly followed up by the State, the
operator, and the worker will in my opinion come nearer to solving
COAI, M IN IN G AND W O R K M E N ^ COM PENSATIO N
281
our problem than every other means we might employ. For several
years my State, through the statistical division ox our department,
has kept very close to this question. We issue about twelve reports
a year to the employers of the coal industry, showing the frequency
of lost-time accidents to the tons of coal produced and include in the
reports individual mine comparisons. Also, every year we promul
gate reports showing the cause, nature, extent, and cost of accidents.
A coal operators’ association, which is thoroughly cooperative with
our commission, has been organized by the operators for the advance
ment of the industry, and for this association we prepare a detailed
report of the coal-mine accident experience. We take some pride
in the fact that the association considers such report of sufficient
value to be used a$ a basis of a yearly study, comprising 13 tables and
covering 15 or more pages. This is distributed to the association
members and to others interested. It is not only distributed but is
used as a basis for certain phases of safety instruction by the com
panies. I can not overestimate the importance of this work. I f
this phase of the subject could be successfully solved, there would
probably be no problem.
In Virginia, from the standpoint of loss costs, the matter of medical
expense in coal mine cases forms approximately 20 per cent of the loss
under the compensation act, whereas in the other than coal groups it
is approximately 40 per cent. In Virginia, the coal group, I am
informed has a carrier’s overhead item of approximately 32 per cent
of their rate, whereas in other than coal it is 41y2 per cent. Due
to the satisfactory arrangement in Virginia of having the claims,
inspection, and engineering departments at the seat of operation, as
I have heretofore mentioned, as well as a saving in the acquisition
cost of obtaining business (as there is no competition), money is
saved in the carrier’s overhead item.
I presume we all understand that the usual method employed for
rate making is to use the experience of a certain number of past years
as a gauge for what might be expected in the immediate future. To
get this rate let me illustrate: Assume that the period used is five
years and that the pay roll for that time was $50,000,000; we will
also assume that the compensation and medical expense paid or out
standing on account of injuries occurring within that period was
$1,750,000. The resulting pure premium (I believe it is so called)
will be obtained by dividing the $1,750,000 by the $50,000,000, which
gives $3.50 per hundred dollars of pay roll. We then add the car
rier’s overhead expense, which we assume to be 35 per cent of the
premium, or in other words the $3.50 mentioned above is 65 per cent
of the rate. These two items would make a rate of $5.38; then add
ing an additional amount for catastrophes, would finally constitute
what is called the base rate. The amount for catastrophe experience
is added because such experience is not taken into consideration in
arriving at the pure premium. This, of course, is a very brief ex
planation of the process and does not include explanation of certain
refinements used in rate making. It must be borne in mind that this
base rate does not necessarily mean the rate actually applied to the
individual risk, since the rate is modified by the loss experience of
the particular operator. In Virginia, for instance, as I understand it,
one mine may be paying a rate of $4 and another mine a rate of $7,
94033°— 30-------19
282
SIX TE E N T H A N N U A L M EETIN G OF I. A . I. A. B. C.
So in considering the question of rates the question of a proper ex
perience rating plan is a most serious problem. The application of
experience rating, it will be noted, produces wide variation in the
individual policy rates, but it is claimed for it that it comes nearer
to doing justice to individual policy operations and also tends to
stimulate accident prevention.
In rate making the Virginia field “ stands on its own feet.” That
is, in making our rate only the Virginia loss experience is used. The
experience of our self-insurers is not considered in rate-making proc
esses. Our self-insurers are mostly the larger companies and their
average accident experience is better than that of the insured group.
The self-insured companies are at present producing over threefourths of our coal tonnage. I will state here that. Virginia now re
quires individual annual policy reports from the carriers of the
insured group. Compensation cases are listed individually m these
policy reports and checked against the records of the industrial
commission so there can be no question of the amounts which make
up the pure premiums in rate processes. Whether an improved
method of rate making is feasible which will give the carrier the
reasonable profit he has a right to expect and at the same time result
in a lower base rate, I am unable to say.
I might say that the Virginia Coal Operators’ Association not only
is decidedly interested in safety work and in an advanced safety
program but also that it has, since 1925 and even before, given a
great deal of attention to the coal-rate question. The association
maintains an office in the same city in our coal field in which is
located the claims, inspection, and engineering office of the carrier
company. The operator’s’ association and this local headquarters
of the carrier work together in a cooperative way on mutual questions
of interest and the association is also in close touch with the home
office of the carrier regarding the question of a possible improved
method of rate making. It is possible that this cooperation between
the two interests may result in a changed method in Virginia at a
comparatively early date.
Thus, you see, if there be a lessening of the acquisition cost and
a centralization of functions making up the carriers’ cost, together
with the efficient safety program put into effect by employers, thereby
decreasing the resulting pure premium, we shall solve the problem
in a great measure.
DISCUSSION
The C h a i r m a n . Is there any discussion on Mr. Deans’ paper? Is
there anyone here from Alabama, Illinois, Iowa, Kansas, or Nova
Scotia?
Mr. A r m str o n g . I see the discussion is to take the lines that will
bring out the cost of carrying coal mining companies in exclusive
State fund jurisdictions. I regret that I did not get this published
so everybody could have a copy, but it covers the pay rolls of our
coal mines in Nova Scotia from the year 1917 to the year 1928. [See
table following this talk.] In that time the amount of the pay roll
exposure was $202,957,975, and in the year 1918 an explosion occurred
in which 88 men lost their lives, which cost us $420,000. Since that
time no disasters of this kind have taken place in the coal mines of
Nova Scotia*
COAL M IN IN G AND COM PENSATIO N— DISCUSSION
283
A disaster may be anything you choose to call a disaster. In some
jurisdictions it is where only two or three men lose their lives.
There has never been more than two or three men killed at one time
in Nova Scotia, and we do not call that a disaster.
I might mention that the administration expenses for our coal
mines in that period of 12 years amounted to $509,243.23. This,
added to the losses, makes the total losses $6,114,452.47. Our assess
ment amounted to $5,795,322.57, and there is another item that
should be included in the assessments, namely interest, as we set
aside a reserve on a basis of 3.5 per cent, and we are able to invest
our money in bonds or gilt-edged securities.
We are limited by the trustee act in our Province, and the bonds
must be the Provincial bonds, or municipal, or bonds of the Dominion
of Canada, or bonds guaranteed by the Dominion of Canada, and
in that way we are able to get our average interest up to 4.78 per
cent at the present time, and it is only necessary for us to set
aside 3.5 per cent. We have in that time added $658,797.92 interest
to our coal mining receipts.
Also during the period we collected in the way of penalties, in
terest charges on balances not paid at the time they should have
been paid, $51,031.06, making the total receipts $6,505,150.55,
against a loss (including administration expenses) of $6,114,452.47,
leaving us with a surplus of $390,698.08 in our coal mining classi
fication.
Now, I am not going to start any argument with you that the
$390,698.08 is enough surplus to accumulate over a period of 12
years to take care of any probable disaster that might happen in
our coal mining industry. I f you should ask me the question, I
should reply, No, it should be far more, but like everything else,
we are able to make both ends meet, and we find it very difficult
to increase our rate. Last year we managed to increase our rate
about 30 cents.
One thing I would like to mention is that in the later years,
since 1924, our loss rate each year has been 2.97, 3.34, 4.00, 3.23, and
3.15, showing that in those years the experience has not been so
good, and that is one of the reasons why we felt that the rate should
be increased above the $3 rate which we charged in 1928.
Pure premium cost for coal mining in Nova Scotia, 1917 to 1928
Year
191
191
191
192
192
192
192
192
192
192
192
192
7
8
9
0
1
2
3
4
5
6
7
8
Pay roll
Rate
rate
.
.
.
.
.
.
.
$11,440,153.00
14.941.387.00
16.625.690.00
21,607,394. 00
19.767.129.00
15.806.323.00
20.376.817.00
16.703.834.00
11.260.882.00
17.156.257.00
18.739.852.00
18.532.257.00
$3.50
4.40
3.00
2.20
2.00
2.40
2.70
2.80
3.01
3.00
3.00
3.00
$400,405.36
657,421.04
498,770.70
475,362.68
395,342.59
379,351.76
550,174.12
467,627.39
339,615.88
514,433.00
561,638.63
555,179.42
$380,775.17
628.815.65
289.439.29
358,249.78
427,425.74
316.681.46
455,263.31
495.969.46
376.422.66
686,892.91
604.917.30
584,356.51
$3.3}
4.21
1.70
1.66
2.11
Total and average.
202,957,975.00
2.85
5,795,322.57
5,605,209.24
2.76
2.00
2.23
2.97
3.34
4.00
3.23
3.15
N ote.—In the year 1917 we had an explosion in which 65 men lost their lives, which cost $120,000, and in
the year 1918 an explosion in which 88 men lost their lives, which cost $420,000. From that time no disas
ters of this kind have taken place in the coal mines of Nova Sootia.
284
SIXTEENTH ANNUAL MEETING OP I. A. I. A. B. C.
Summary
$5,795,322. 57
658, 796.92
51, 031.06
Assessments
Interest___
Penalties__
Total receipts____
Losses__________________
Administration expenses.
Total.
Surplus.
6, 505,150. 55
$5, 605,209. 24
509, 243. 23
6,114,452. 47
390, 698. 08
Mr. S t e w a r t . Why that $ 4 rate in 1 9 2 6 ? Was there anything
special there?
Mr. A rm stron g . Yes; I ’ll tell you just what it was. - It will rather
surprise you. For five or six months there was a strike, and the
only explanation I can give you is that persons who were injured
did not seem to recover as rapidly as when work was available for
them. That is really the only explanation I can give you.
Mr. S te w a r t . Was there any element of inexperienced workmen to
break the strike ?
Mr. A rm stron g . No ; there were no workmen working in the mines
at all, but that is the impression I got in looking over our records;
that the period of disability seemed to be prolonged on account of no
work being available for the injured men.
As far as the rate-making is concerned, the question of rating in
Nova Scotia is a matter that devolves entirely upon the board, and
they are supposed to make a rate based on the experience. Now
I am rather under the impression that notwithstanding the figures I
quoted you, we should be charging a higher rate in our coal mines
than we are at the present time. We still have nearly $400,000 to the
good, but an explosion similar to what happened in 1918 would
likely wipe that out.
In regard to the small companies, they are like lots of other
problems we have in connection with workmen’s compensation. As
I said before to-day, we feel bound to accept any employer, no mat
ter how few men he employs, if he applies for insurance; in fact we
even go further than that. I f an employer starts an operation and
he has more than four men employed, he automatically comes under
the workmen’s compensation act. Even if he never reports to the
board, nor ever pays a cent in premium, and we are never able to
collect a cent from him, the workmen still receive the compensation.
Mr. K n e r r . Have you many employers who do n ot pay their
premiums ?
Mr. A rm stron g . Yes.
Mr. K n err . In the coal mines?
Mr. A rm stron g . Yes.
Mr. K n e rr . Who do not pay a cent o f premium?
Mr. A rm stron g . They will not have paid their premium at the
time the man is hurt, they will not have reported to us that they are
operating, and we find it difficult in very small operations to get our
assessments from the coal-mine operators. When I say “ small ” I
COAL MINING AND COMPENSATION— DISCUSSION
285
mean an operator who might not have more than a half dozen men
working for him.
The coal mines there are not the property of the owner of the soil,
as they are in the United States. They are the property of the
Province, and they lease them, and the persons to whom they are
leased may have no visible assets, but that is a mere bagatelle.
I do not know whether I have covered the subject fully, but I
would be glad to answer any question.
The C h a ir m a n . We will now hear from Ohio on this question.
Mr. E v a n s . I am sorry I have no figures with me, but we have
a $4.50 coal mining rate in Ohio. It has been $4.50 for the last
two years, and it has been at that point while we have been going
through an unsettled condition in the Ohio mines. The rate a few
years ago was down to around $2.94.
We must cover all coal mines unless the employer is authorized
to pay his compensation direct. The rate of $4.50 that I have quoted
is the basic rate, but we have, we feel, what is a very strong experi
ence rating system. We have coal mines in the State of Ohio to-day
that pay rates around $8, while on the other hand we have coal
mines that are paying rates as low as $2. The $4.50 rate is the
average rate that we are collecting from the coal mining industry.
As to catastrophes in the coal mining industry, we have been
very fortunate. It so happens that the worst catastrophe we have
had in the coal mining industry occurred to a self-insuring employer,
in which there were some twenty-five employees killed. Of course,
in that case the employer was able, and was required, to meet the
cost of that catastrophe.
Mr. S t e w a r t . Are you making any money, breaking even, or
losing money on that average $4.50 rate ?
Mr. E v a n s . We aim neither to make money nor to lose money.
Last year we lost a little money. The year before we lost more money
which caused us to increase the rate to $4.50, but before we had
the mining trouble we went through a period of a few years dur
ing which we made considerable money, and we had to bring down
sharply the rate in the coal mining industry.
Mr. S t e w a r t . What do you mean by “ mining trouble ” ?
Mr. E v a n s . I mean the wage scale question that practically tied
up a number of our mines for a period.
Mrs. R o b l i n . May I inquire if, with this $4.50 rate, you are setting
up any reserve?
Mr. E v a n s . We are setting up a reserve on all claims that will
require further compensation.
Mr. D e a n s . Are you segregating your coal fund from the other?
Are you confining your loss now to the entire loss of your depart
ment, or solely to the question of loss in coal mines ?
Mr. E v a n s . We have 750 separate and distinct classifications, and
the coal mining industry is one of those 750. I was speaking only
of the coal mining.
Mr. A rm stron g . What is your surplus fund at the present time?
Mr. E v a n s . Our surplus fund at the present time for the whole
fund is approximately $4,000,000.
286
SIXTEENTH ANNUAL MEETING OF 1. A.
I.
A.
B. CL
Mr. S te w a r t . I s that covering coal?
Mr. E v a n s . That is for everything.
Mr. A rm stron g . What proportion of that is for coal? Just an
estimate.
Mr. E v a n s . At the present time the coal mine has practically
none of that. Of that $4,000,000, I might say that practically
$2,500,000 is a catastrophe fund, that is a statutory fund required
to meet catastrophe and special types of cases that can not be justi
fiably charged to any particular classification, or to any particular
employer, such as the two accident cases.
Mr. A rm stron g . Has any of that $2,500,000 been contributed by
the coal mines?
Mr. E v a n s . The $2,500,000 has been built up by taking 2 per cent
of all premiums paid by employers who are subscribers to the fund.
Mr. S te w a r t . Including coal ?
Mr. E v a n s . Including coal, and also including the self-insuring
employers; that is, all employers of the State of Ohio contribute
to this fund. The self-insurer instead of paying the 100 per cent
premium, pays the 2 per cent, which is his proportion, into this fund.
Oklahoma (Mrs. F. L. R o b l in ) . I am afraid I haven’t anything
to offer in the way of suggestions, but if you will permit me to tell
you about a very serious situation which is confronting Oklahoma,
perhaps you may be able to give me some helpful suggestions.
Oklahoma does not have a State fund. The insurance companies
have withdrawn from underwriting coal mines. There are only
about three mines in the State of Oklahoma that have finally been
able to put up sufficient securities to be permitted to carry their own
risk. We have a penalty for failure to comply with the compensa
tion law, of $1 per day per employee.
We can not enforce that penalty because when we do we are told
by the companies that they are willing to carry insurance, but that
they are unable to find anyone to write it for them. So the com
mission made an attempt to arrange a meeting of insurance com
panies, and finally succeeded in getting one company to enter the
State, but the commission, not being empowered with the right to
fix rates, had to accept the rate that the insurance company and the
insurance board fixed, which was $9.38. The coal contracts had all
been let for this year, and that rate was prohibitive.
Now, we are to-day faced with this problem: Shall we permit
these coal companies to go on without any coverage, or are we re
quired to close them down when they are willing to take out in
surance at a reasonable rate if they can secure it. I have spent most
of my time at this convention getting ideas from the commissioners
from the coal States, to try to help us solve this problem for the
coming year.
We are gathering the statistics of the actual experience in the
department, but we have not had money enough to do that long
enough to get the insurance company even to listen to our experience,
and we are faced with that problem right now.
Kansas (G. C l a y B a k e r ) . Our problem is a good deal the same
as Oklahoma’s, so that it might be in order for me to state it right
now.
COAL MINING AND COMPENSATION— DISCUSSION
287
We have only one or two companies in Kansas that are writing
insurance, and they will not write it for the small mines. The insur
ance office tells me that the arrangement they now have makes the
rate range from $9 to $12, which is prohibitive and, the companies
being very selective in their writing, this results in a situation very
similar to Oklahoma’s.
The fact that we have very few mines that are covered by insur
ance, and the others are not covered, left us with one of our most
hazardous industries, if not the most hazardous industry in the State,
without any protection, simply doing away with the compensation
law entirely as far as any true application is concerned, because if
there is no securing of compensation, there just is not compensation.
This problem has worried us a great deal, and in the case of our
small mines, which are in Osage County, where companies will not
write insurance, we endeavored to correct that situation by associat
ing the members together, the members making an assessment of
5 cents a ton for the coal that is mined, setting that aside in a reserve
fund and having officers to administer that as a trust fund for the
purpose of taking care of compensation claims. We permitted a
tiling of that contractual relationship. Then each member of that
association files with us an application to become a self-insurer, set
ting forth its financial assets, and we use that, together with this
contractual relationship, for qualifying that person as a self-insurer.
It is one of the ways out that, ox course, has its fallacy; but here
was the situation: Last fall when we met in that field with a number
of the operators and a number of the miners, the miners broached
this question, and here is the way they broached it to us: They said,
“ We would like to have some sort of an arrangement for protec
tion here, but we realize that our employers can not pay the rate, and
we do not ask them to pay the rate.” They realized that in lots of
cases they could not get the insurance, and so this was one of the
means that was used.
Our experience in Kansas has been very short. The commission
has been formed only since July 1, 1927, and I, personally, have only
had charge of the administration since March 20 of this year. On
inquiring last fall about one of these associations that were set up in
1927,1 was informed that it was still in operation, and that it had a
very good reserve. Just what it was I do not recall, but we never
have had any trouble with reference to compensation in that field. Of
course, it is a small mine, and I understand that there is not quite the
risk that we have in our Pittsburg field, where our real difficulty exists.
In the case of one of these other associations that were set up, they
had no more than got started when they had quite a loss. They
became frightened and went to pieces, but we are endeavoring to get
that association together.
In regard to the rate question: We did endeavor to get some
information along that line. The only information we got was
with reference to one company that is operating a number of mines
in the State, and which is a self-insurer, and I am informed that
their medical &id costs were $2.53 a hundred, or 5.4 cents a ton, and
the administrative costs were 62 cents a hundred, or 1.3 cents per
ton, and together with the excess insurance they were carrying, it
was costing them in all $3.41 per hundred, or 7.2 cents per ton,
whereas the insurance rates range from $9 to $12.
288
SIXTEENTH ANNUAL MEETING OF I. A. I. A. B. 0.
Pennsylvania (W . H . H o rner ) . One of the most hazardous indus
tries in the State of Pennsylvania is the mining industry, and as Mr.
Deans indicated in his paper, the larger concerns in our State are
operating as self-insurers, by privilege granted by the bureau of
workmen’s compensation. As I stated in the sectional meeting this
morning, many of the insurance companies that have been authorized
to write compensation insurance in our State do not cover the mining
industry, so that the bulk of that business naturally goes to the State
fund, which does not refuse to write any business. In fact, the
State fund covers more insurance risks than all of the other insur
ance companies combined in our State.
We have in Pennsylvania what is known as the Pennsylvania
Compensation Rating and Inspection Bureau. This bureau is made
up of representatives from the different insurance companies, and
while the State does not control that body, the insurance department
does have a representative on that board.
When the rates are fixed they are submitted to the State insurance
department, and before they can become effective they must be ap
proved by the State insurance department. I can not give you the
exact figures on mining, but my impression is that they run between
$4 and $5 per hundred dollars of pay roll.
A little more than a year ago we had a disastrous explosion in
Pennsylvania, as no doubt many of you recall, in the mines of the
Pickands Mather Co., in southwestern Pennsylvania, in which 197
miners were killed. The State fund was the carrier, and the com
pensation liability amounted to $850,000. The State fund, however,
was protected by the fact that catastrophe insurance to the extent of
$500,000 was carried, so that the actual loss because of that disaster
was $350,000.
Mr. B a k e r . In Kansas we have permitted some of our self-insurers
or people who make application to become self-insurers, knowing
that they could not get insurance, to take out a form of accident
insurance and set that up as a part of their assets, submitting with it
a financial statement. I f we thought this would suffice to take care of
the difference, we have permitted them to be qualified as self-insurers.
Of course, this has its fallacy as you will note right away, due to
the fact that we are permitting a person to come in there and take
care of this self-insurer over whom we have no jurisdiction in acci
dent insurance.
Utah (W. M. K n e r r ) . In our State the law provides that the
private insurance company must take any risk that is offered to them,
that is, they must write the insurance. Most of our big coal com
panies are self-insured.
I have collected figures to show the premium charged. In 1918,
1919, and 1920 we had a premium of $7.81, and at the end of that
period we found that we were collecting too much money. At that
time the coal mines that were insured in the State insurance fund
received a flat 25 per cent dividend; in addition to that, after we
had set up our proper reserves we returned to them another 20 per
cent dividend; so that in those three years we returned 45 per cent
to the employers insured in the State fund. Those that were in
sured in the private insurance companies, of course, received no
dividend.
COAL MINING AND COMPENSATION— DISCUSSION
289
In 1921 the rate was decreased to $5.34, and in 1922 it was $5.34.
In 1923 we made a further decrease to $3.90, and in the years 1924,
1925, 1926, 1927, and 1928 we had a rate of $3.90, and at the latter
part of 1928 we increased the rate to $4.50.
In 1927 the premium collected by the stock companies, including
the State insurance fund, was $103,832, at a rate of $3.90; and the
losses amounted to $120,134. The self-insurers, if they had the pre
mium, would have paid the sum of $134,143. They sustained losses
amounting to $112,511; so that the combined premium of the selfinsurers and the private stock companies would have amounted to
$237,975, with losses of $232,645.
In 1928 the stock companies, including the State fund, collected
premiums amounting to $103,851, with losses of $190,670. The .selfinsurers would have paid a premium of $145,472, and sustained
a loss of $101,236. So the total premium collected would have been
$249,323, whereas the total loss amounted to $291,906.
Now, of course, the true cost of compensation should be projected
to the cost of unit production. It is comparatively easy for the
employer to say that it is costing $30,000 for his premium, but the
real test is, how much does it cost on the product produced.
In Utah, if you eliminate the catastrophe, you find that the cost
per ton production amounts to 3 cents per ton, which is not very
much for society to pay. I f you include the catastrophe it is 4
cents per ton, plus.
Of course the private insurance companies do not solicit the
mining companies, and the State fund is carrying the burden at the
present time. We are carrying all of the mines with the exception
of one.
The State fund is losing money, there is no question about that,
and we have raised the rate to $5.50. That Castle Gate disaster in
creases the rate considerably.
Now, we grant the self-insurance privilege to the coal mines, but
we require them to take on a reinsurance policy for $1,000,000 to
cover losses over $75,000. In addition to that tney put up a bond.
But the self-insured premium, of course, in any event is not satis
factory.
[Mr. Knerr submitted the table following.]
Amount of premium and of losses and premium rate for coal mining in Utah,
1918 to 1928
Year
Premi Premi
um rate
um
191 8
.......... $555,795
424,778
191 9
669,989
192 0
1921
517,945
1922 ........................... 391,576
374,215
1923
357,277
192 4
252,206
192 5
192...............................6 310,073
1927:
Stock companies. 103,832
Self-insurers......... a 134,143
Total_________
237,975
Losses
$7.81
7.81
7.81
5.34
5.34
3.90
3.90
3.90
3.90
$83,211
114,556
139,721
209,174
152,783
150,168
1765,163
252.868
155.091
3.90
*3.12
120,134
112,511
Year
Premi Premi
um rate
um
1928:
Stock companies. 103.851
Self-insurers_____ 2145,472
3.90
*3.12
Losses
190,670
101,236
249,323
291,906
Grand total___ 4,341,152
2,547,286
Total................
232,645
* Including Castle Gate disaster.
1The premium listed for self-insurers is what would have been collected at State fund rate.
290
SIXTEENTH ANNUAL MEETING OF I. A. I. A. B. O.
W est Virginia ( C h ar les D. S m i t h ) . I am not prepared to give
the figures for our State. I know that there is a new rate pro
mulgated each year, and I know that the rate this year will be lower
than the rate last year. I f the secretary would like those figures,
I would be very glad to furnish them to him. We have not comleted the rate tor this year. It may be finished by the time I return
ome.
Mr. S t e w a r t . My recollection of the West Virginia rate is that
it is $2.60. Do you mean to say that you are reducing that rate?
Mr. S m i t h . I f that is what the rate was last year, we are reducing
that rate.
The C h a i r m a n . Is there any general discussion on this subject of
the coal mining rate?
Mr. S t e w a r t . In making this program we selected coal because
it covered a very large number of States, because we felt that the situ
ation in coal would be representative of the situation in lumbering
and dairying, and that possibly if we could get the experience of
that Osage County situation into our records it would at least give
us a ray of hope as to how to settle a number of these small plant
difficulties in other industries in which the difficulty occurred.
Now, it does seem to me that it is possible to adopt the Osage
County, Kans., scheme, not only in lumber mills but in creameries,
and I do not see why it would not work in any industry, in small
plants. An area need not be confined to a county, it could cover a
whole State. I do not see why, so far as the association is concerned,
it could not cover several States. In other words, practically make
mutual insurance companies out of these small concerns.
I grant it is not an ideal thing, but we must get some sort of cover
age for people who are working in the unprotected industries.
M r. M c D o n a l d . We have coal mines in North Dakota, and it
probably will be of interest to the Pennsylvania representative to know
that we have more coal in North Dakota than Pennsylvania has, not
the same quality but good enough.
Our rate in North Dakota is $6.50 per hundred dollars of pay
roll, and we are losing money. We are $100,000 in the red, and
we must raise the rate.
We have mines there that employ during the winter months from
300 to 400 men. We have the large open mines—very big ones; and
we have strip mines there that use the largest steam shovels there are
in America. Our rate is $6.50 a hundred, and we must raise it.
We find that it is the small mines that are creating the trouble,
not the large mines. The large mines are paying the premium. The
little mines are costing money.
Mr. S t e w a r t . Is your large accident rate there in the mining of
the coal, or in stripping the mine ?
Mr. M cD o n ald . Our worst experience is in underground mines.
Mr. H u n t e r . I think there is one factor that the gentleman from
North Dakota should mention, and that is, that the benefits under
the North Dakota law are so much higher than in all of these other
States mentioned, which is a very important factor when you are
figuring rates.
E
COMPENSATION FOR PERMANENT DISABILITY
291
M r. M c D o n ald . In answer to that remark, I wish to say that our
benefits are not higher than some of the other States.
Mr. H u n t e r . It so figures.
M r. M cD onald . I know, but sometimes figures are not correct.
Ohio has practically the same benefits that we have, with the excep
tion of the death claim. As far as weekly benefits and death benefits
go, they are practically the same as in North Dakota. Our maxi
mum weekly benefit is $20 a week, and I believe Ohio’s is $18.75.
We have unlimited doctor and hospital service, which I believe Ohio
also has, with a maximum of $15,000 on both permanent total and
death claims.
Mr. H u n t e r . That was raised. Mr. Leslie, up to 1928, placed
you ahead even of New York; but its last amendment in 1928 places
it ahead of you. You were in the very favorable position of being
ahead of New York, when you consider all of the benefits paid, that
is, hospital and death, and total disability, and every other thing
from which a man may derive some benefit, not just the weekly
schedule.
M r. M cD o nald . Prior to July, 1927, a death claim to a widow was
not limited, nor was a permanent total disability case limited. In
1927 this was altered, and a maximum of $15,000 set, which I say
is not correct, especially on permanent total disability.
Mr. S t e w a r t . I would like to suggest, since Mr. French is not here,
that his paper be filed for the record, without being read.
The C h a ir m a n . I f there is no objection, the paper which should
have been read at this time by Mr. Will J. French, Commissioner of
California, will become a part of the records.
The Age Factor in the Computation of Compensation for
Permanent Disability
B y Will J. French, Chairman California Industrial Accident Commission
Usually there are two sides to a question. The application of the
age factor to permanent disabilities gives students of compensation
two lines of thought: (1) That a younger man should receive a
higher benefit because he will have to carry his handicap through
more years; (2) that an older man should be awarded more because
he has less resiliency, has age discrimination to face, and is less
likely to adapt himself to the new condition, or, if willing to do so,
has fewer opportunities.
California bases her ratings for permanent disabilities on the
second of the two views presented in the preceding paragraph.
This seems to us more accurately to meet our underlying theory
of loss of earning power, as set forth in our schedule for rating per
manent disabilities.
The writer will admit that he has but little patience with a com
pensation law which gives all permanently injured men exactly the
same amount for the same kind of an accident. Of course, the
method is easy. There is no calculation required. The quick glance
may conclude that all charges of discrimination will be removed by
the uniformity. But society has some claim in the matter, and the
injured themselves are interested. Men vary in their accomplish
292
SIXTEENTH ANNUAL MEETING OF I. A. I. A. B. 0 .
ments in the industrial world. They use different parts of the
physical structure to do their respective tasks. Given a certain
amount of money to be distributed, it is better to divide it so that
the injured thrown out of their jobs will receive more than those
whose earning power remains practically the same, or who can be
reassigned in the industry.
There is far less chance for a middle-aged worker or one along in
later life who is permanently hurt to receive consideration from the
average employer. The latter is sympathetic, but he is likely to
think of the approaching age dead line and he prefers younger and
faster men. The antisocial policy of age discrimination is affecting
our compensation problems more and more. When injury occurs
and it is complicated with what industry terms advancing years,
there is far more need to help the older worker than the younger
one. The latter has only the one handicap of permanent disability,
as compared to the two handicaps of the former.
If compensation were paid for life for permanent injuries, the
problem would not be so acute. Few States provide life pensions,
and very severe injuries must necessarily come within the pension
systems. It is right to capitalize all the earning power possible.
Inasmuch as usually there are limitations in payments, there should
be taken into consideration the age factor in all its angles.
The European method, broadly speaking, provides for life pen
sions and reductions when rehabilitation proves successful, and
does not have to consider minutely the percentages with which we in
the United States are more or less familiar.
Dr. I. M. Rubinow enumerated some of the various factors influ
encing the “ normal wage curve ” throughout a workman’s life :
Influence of advancing age; the acquisition of experience; the loss
of speed or dexterity; the effect of general health; the effect of the
season; of general trade conditions; of possible changes in the spe
cific trade; substantial differences in individuals of the power of
adjustment, differences temperamental, physical, and moral. To
this may be added others. Wages in the United States are not stand
ardized; they are constantly changing. Industrial processes are
being greatly modified, eliminating the skilled workman and sub
stituting the machine. What is practical in a homogeneous Euro
pean nation, with little migration beyond national boundary lines,
would not be practical in the United States, which is a federation
of 48 sovereign States whose citizens freely move from one State to
another.
Compensation should not be considered as damages for a personal
injury; compensation should be considered as financial aid to help
an injured man to regain his earning capacity and put himself back
into the working population on as nearly an equal plane as his
fellow workmen. This means that he must be rehabilitated, if not
in the same occupation or employment in which he was injured, then
in some other employment for which he must be trained, or finan
cially aided. For that reason, compensation is paid to the man
during the period of his acute disability and for the period imme
diately following. Here is where the decreasing of compensation
due to increased age fails to accomplish the result intended.
As the human anatomy ages, the recuperative powers decrease,
and the power of adaptation and the learning of new methods
COMPENSATION FOR PERMANENT DISABILITY
293
lessens. In most States the permanent disability is not added to the
period of temporary disability, but what compensation is paid
during the healing period is credited against the final permanent
disability rating. It is well known that the older man will on the
average have a much longer healing period than the young man,
where the disability factors are the same. For example, a man
suffers the loss of a leg, and he is under medical treatment for some
time before there is an amputation. Assume that the rating for
the loss of the leg is 180 weeks. Assume that the young man shows
quick recuperation and is under treatment for only 20 weeks. The
amount he will receive for permanent loss of the leg will be 160
weeks. Again, assume that the older man, due to his age, is under
medical treatment for 50 weeks. The amount that he will receive
for his amputated leg is only 130 weeks, and as far as need goes the
older man has greater need than the younger man. Now, if the
law decreases the number of weeks on account of increasing age, the
injustice becomes more apparent.
During the last few years the prejudice against elderly men in
industry has increased, and it is becoming more difficult for the aged
workman to remain employed, much less to find work. How much
more difficult is it when that injured man is a permanent cripple?
Even the young crippled man has difficulty competing with other
young and unmaimed workmen.
The age variation in the California schedule was based upon a
simple assumption made by Prof. A. W. Whitney. This assump
tion was that a 10 per cent disability at age 15 was equivalent to
a 17% per cent disability at age 75, and that the percentages for
intermediate ages lay on a straight line between 10 per cent and
I7y2 per cent. This assumption has been largely criticized, because
there was no actuarial basis for such assumption, but was based on
pure judgment. The basis of such judgment was actually based
upon the judgments of about 25 recognized experts and authorities
throughout the United States.
Another criticism that has been made of the California schedule
is the assumption that the age factor varies from age 15 to age 75 in
a straight line; that is, that the power of rehabilitation decreases
inversely in the same ratio that the age increases. Of course, there
is no actuarial basis for this assumption; it, too, is based upon
judgment, but there is no actuarial basis for any other assumption
and the straight-line theory is probably as correct as any other
theory. Mr. Alrov S. Phillips, until recently chairman of the Mis
souri Workmen’s Compensation Commission, some years ago worked
out an elaborate theory, with the necessary tables, based upon the
assumption that the power of rehabilitation varied inversely with
the average increase in blood pressure.
The report of the Committee on Statistics and Compensation
Insurance Cost of the International Association of Industrial Acci
dent Boards and Commissions recommended that age be considered
as a factor in determining the degree of physical impairment from
permanent injury. The following sentences are quoted from that
report:
The ability of a permanently disabled workman to rehabilitate himself and
to adapt himself to a changed environment varies with age and occupation.
Obviously, the loss of an arm will be a greater handicap to a man 60 years
294
SIXTEENTH ANNUAL MEETING OF I. A. I, A. B. O.
of age than it will be to a man 25 years o f age. Not only will it be more
difficult for the older man to learn a new trade, but his very age will be an
effective bar to reemployment. Industry gives little encouragement to old
men.
The foregoing gives some of the reasons for the conclusion
reached by me, after a long experience in the administration of a
workmen’s compensation law, that the age factor is important and
should be considered when permanent injury ratings are made.
Sound judgment is necessary and too pronounced a variance is not
advisable, but a few more weeks or months of compensation pay
ments for the older man will give a better chance to prepare for the
dark days ahead, for age discrimination and the leaving of estab
lished industrial paths add their difficulties to the future of the
handicapped man. And yet intelligent rehabilitation, under expert
uidance, followed by equally intelligent placement in a job or in
usiness, will do more than all else to lighten the gloom.
The C h a i r m a n . That brings us to the subject to be discussed by
the commissioner from Minnesota, the subject being, “ Is it desirable
that all applicants be represented, and if so, should applicants who
have not retained attorneys be represented by attorneys in the em
ploy of the State ? ”
g
Is It Desirable That All Applicants Be Represented,
and if So, Should Applicants Who Have Not Re
tained Attorneys Be Represented by Attorneys in the
Employ o f the State?
By F. A. Duwbury, Industrial Commission o f Minnesota
I have no hesitancy in answering the question as stated in the
program, in the negative. 44Is it desirable that all applicants be
represented, and if so, should applicants who have not retained at
torneys be represented by attorneys in the employ of the State ? ” I
think we all admit, without question, that it is not desirable that all
applicants or all claimants be represented by counsel. I f that were
so, then there was a decided misrepresentation in selling the com
pensation laws, if I may use that term, because one of the chief
representations made when the compensation laws were recom
mended and adopted was that they would afford a certain and
definite rule of liability which would be easily understood and not
result in contentious litigation.
I personally believe that that ideal has been realized to a consid
erable extent. We all know that where there is no dispute of facts
upon which liability depends—and which is true in many cases—if
a man has lost his arm he has lost his arm, and if he lost his arm
while he was working there is no question about it arising out of
bis employment—there is no issue that needs somebody to represent
one side or the other. All that is necessary is to get facts, and the
rights of both parties are easily determined.
However, as everyone knows, there are cases that are not so sim
ple, and the question of liability is one that is involved probably
m a complication of facts, and sometimes, although very rarely, in
a question of law. In such cases it is helpful and probably nec
REPRESENTATION OP APPLICANTS BY ATTORNEY
295
essary that the interests of the claimant be taken care of by someone
who knows how to present the facts, and who knows how to in
vestigate and gather the information and furnish the evidence upon
which the comeback may be based.
Of course these commissions, so far as I have been able to deter
mine, are composed of ordinary human beings who have the falli
bility of humanity, and there are lots of things that they do not
know with reference to the primary facts and with reference to the
effect of certain things in causing disability and many things of
that kind which result in complications. So I must answer the ques
tion, “ Is it desirable that all applicants be represented, and if so,
should applicants who have not retained attorneys be represented by
attorneys in the employ of the State? ” in the negative—probably
not one in 10. In our experience I think it is much less than that,
but there are some who seem to think that the appearance of counsel
will promote justice, just as it would in any other human dispute
before any other human tribunal, assuming, of course, as we must
assume, that they are represented by faithful and competent men.
However, I think this subject was intended more particularly to
draw out the question which I understand is somewhat peculiar to
the State of Minnesota, because of the words, “And if so, should ap
plicants who have not retained attorneys be represented by attorneys
in the employ of the State ? 55
I will tell you what we dp in Minnesota and you can determine for
yourself whether that is right or wrong.
A legislature of the State of Minnesota, wisely or unwisely, pro
vided that the department of labor or industrial board should assign
an employee of the department to visit employers or employees with
reference to their compensation rights, upon their request. Now that
was carried over into the revision of the compensation law, and the
law organizing the commission in 1921. Acting under that law
the industrial commissioner at the present time regularly employs
six men who have been admitted to the bar, to act m that capacity
upon an expressed request; and if the situation arises where there is
anj delay or a dispute in relation to the compensation claim, or what
is likely to be a claim, the matter is given to one of these compensa
tion adjusters for the purpose of trying to settle it by mediation.
I f one of the parties can not understand his rights the adjuster
gets the two together and informs them as to their rights and lia
bility, and very frequently that service does result in the adjustment
of the claim without a hearing or contest.
However, if we fail in that and the parties are still unable to agree,
or the insured employer does not admit what the adjuster thinks his
obligation is, the matter may be put on for a hearing. These ad
justers conduct these hearings like a lawyer conducting an ordinary
lawsuit, in that they prepare for it in advance, accepting the wit
nesses, having the man examined by the doctor whom he wants to
use as an expert, and all those other things that are necessary in his
judgment to establish the right of the claimant.
Now that has proven to be a very effective service in our activity,
for the reason that these men become experts, especially in the sub
ject of compensation; and in the hearings which they conduct, in
which the insurance companies are represented by specialists, the
296
SIXTEENTH ANNUAL MEETING OF I. A. I. A. B. 0.
evidence is directed toward the real issue. Personally I think it is
a very good service.
Those who are trying to make their living practicing law do say
that it is not fair for the State to perform that service; but we have
very little complaint along that line for the reason that there is no
jnoney in compensation law cases. Any man who is capable of doing
the work will find his time more profitably employed in some other
lines than compensation cases. I f he must take his pay out of a
meager recovery of compensation the ordinary fellow would feel
that he was robbing the babies, or at least beggars, and he could not
make a remunerative charge.
So, as long as the compensation cases are not remunerative to the
general practitioner, they do not want to have anything to do with
them, and the truth is, unfortunately, a large number, although they
may be very capable lawyers and men of intelligence and well read
in their profession, know very little about the peculiarities of the
compensation law.
Nearly every one of the best practitioners in our State, when some
one comes to them with a compensation case, will tell that person
to go to the commissioner or to write to the commission and have
some one of their adjusters represent him. That is done very
frequently.
Of course, that does not mean that there are not some cases, and
some cases of considerable importance, that are represented by out
side attorneys, and in some instances the attorneys represent the
claimants very creditably, probably better than our our adjusters
might represent certain classes of cases, because there are lawyers,
who have an aptitude for that sort of thing. I do not mean that
none of them are fit to try compensation cases, but there are many
lawyers admitted to the bar who rather pride themselves on how
little they know about the compensation law.
Minnesota’s origiAal compensation law was passed in 1913, but
the administration of the law at that time was a contest—that term
is a little strong—because the adjudication of disputes was vested
in the courts to determine. There was no administration except
that the labor department was authorized to help and assist any
claimant who might make application for assistance. “ To assign
to him one of their employees ” were the words used—not “ lawyers,”
or “ attorneys,” or anything of that kind. They were to be assigned
to advise either the claimant or the employer with reference to his
rights under the compensation law.
That is the first thing that got into the law, and the old labor de
partment used to do that sometimes, but it did not have any special
person to do it, just anyone in the office, even to the bookkeeper, I
presume. Fairly good service was given, in view of their equipment,
but it was that idea that was carried over into the law when the
commission was established, and acting under that law we have
gradually built up this system. We have six employees for whom
that is their principal work.
They try the cases before the referee, and if they are not satisfac
torily settled they are appealed to the commission. In many cases we
have followed up an appeal to the supreme court.
BEFRESENTATION OF APPLICANTS BY ATTORN EY— DISCUSSION 2 9 7
Whenever there is a dispute or delay it is turned over to one of
these adjusters by the chief of the division, for expediting and to see
if the matter can not be fixed up, and the adjuster brings the parties
together and by his advice and conciliatory action is often able to
adjust the dispute immediately. That service is the most valuable
service which could possibly be performed, because the sooner you
kill the controversy the better it is, and the fellow who can kill
it in the beginning is a valuable fellow.
Of course, they frequently come in contact with the representatives
of the insurance companies in fixing up these disputes. They some
times have to send the claimant to the doctor to be examined in
order to determine the extent of the disability and in such cases we
frequently appoint a neutral physician to make the examination.
There are all sorts of arts and devices which those fellows think
of which would never occur to me.
DISCUSSION
Mr. Z im m e r . A few years ago we met with the commissioner of
this State, who then was a lawyer and now is a judge, in this hotel,
and discussed that very proposition with him—of appointing a
representative for the claimants, under a staff appointment. The
judge said to me, “I think that is a good idea, but I would much
prefer somebody else have the responsibility of selecting that man.”
The judge, being a lawyer, perhaps had a little inside knowledge
of what the difficulties would be, but our own knowledge in this
State would be that the governor would be deluged with complaints
that a lawyer had sold out the claimant. Now, it seems to me that
if we had an attorney connected with the department—the same as
the referee, except that he would sit on the other side of the table—
we would have altogether too much of that criticism and suspicion,
and in addition to that the carrier would object. He would say,
“ Here is the official prosecutor for the labor department, and on
the other side of the table sits the judge. They get their heads
together, and where does the carrier get off?” That would be their
reaction.
In this district there is a much happier arrangement. There is an
organization here in Buffalo, known as the American Fellowship
Society, which did not start out as a compensation adjunct. It
started out to make a survey of the alien population and of methods
for helping them, but the woman in charge of that survey became
interested m compensation, because a great many of her social cases
claimed to have benefits due them. At present 95 per cent of the
work of the American Fellowship Society consists of representing
claimants before the commission. This organization is supported in
part by Erie County and in part by the city of Buffalo. It has
entree to our files, and yet is no part of the department. It is not
responsible to us, nor are we responsible for anything it does, and
it is criticized often, despite the great work it does for the claimant.
It has shown the board of supervisors in Erie County and the city
fathers here in Buffalo that it is mighty good business for them
to retain it.
©4028°— 30-------20
298
SIXTEENTH ANNUAL MEETING 6F I. A. I. A. B. O.
It has saved the county the expense of taking care of a great many
of these people in public institutions, when through its efforts that
was properly charged against industrial accident injury.
Now our experience is that attorneys in the State of New York
are of no great benefit in compensation cases, in going before the
commission or the referee of the industrial board, in arguing, in
making gestures, or in writing briefs. The referees and the in
dustrial commission are fully conversant with the law. The way
in which they can help these claimants is to take the claimant by the
hand and lead him to a doctor, as you said a few moments ago,
take him out to several doctors or to specialists, because compensa
tion cases are 95 per cent a medical fact, and that is where the
help comes in, and somebody must pay these doctors.
This woman who is at the head of the American Fellowship
Society has personally advanced $25, $50, or $100 to doctors, and
if the claimant is given an award she gets her money back but, be
ing a philanthropist, sometimes she does not get her money back,
but the doctor gets his money. She pays it out or her own
pocketbook.
In my opinion, that is a system which could be extended safely
into every compensation district in New York State at least, and
with great benefit to the claimant.
Mr. D uxbury . In some instances it might be preferable to our
plan, but it is very rarely that the representatives of the commis
sion are criticized and complaints made that they have betrayed
the person whom they were representing. Of course every lawyer
practicing law is sometimes so charged, because there are all kinds
of people.
However, the insurance carriers feel that these adjusters are
trying to do the right thing, and my instructions to them are that
they are to try to learn the truth, the same as the referee does, and
that we do not want them to conceal any information that should
be brought to light. We do not want them to try to cover up any
thing that should be disclosed. We do not want that kind of
service.
There is a possibility of the small, uninsured employer feeling
that he has no show, that the cards are stacked against him. About
the only case I ever tried was some years ago when all the referees
were busy. This was in Dawson, Minn., which is the home town
of the present governor of the State of Minnesota, and he was at
that time chairman of the committee of appropriations in the house.
He represented the employer in that case, and we had an adjuster,
a reporter, and myself to appeal the case, and we won. He has
always felt that he was up against a comDination that it was not
possible to beat, and I am aware of the fact that in some instances
there may be that feeling.
The truth of it is—and of course he knows it—I did not win the
case because there was any combination against him, but because I
really thought his employer was liable in that case. There was a
question of the fact of employment, whether the claimant was em
ployed or not, and I considered that he was employed. It was a
question oyer which reasonable men might differ. There are many
questions involved in compensation rights over which reasonable
REPRESENTATION OF APPLICANTS BY ATTORNEY— DISCUSSION 2 9 9
men will differ, and if you have a case over which reasonable men
might differ you are quite apt to have a contest, in a compensation
case as well as in any other kind of a case.
However, our system works very successfully, and the thing that
has surprised me is that there has not been any more resentment and
criticism on the part of the bar generally.
Mr. K n e i ^
1
ience of attorneys making
certain retainer for their
agreements
services ?
Mr. D u x b u r y . Oh yes.
Mr. K n e r r . H o w do you handle that?
Mr. D u x b u r y . Our law provides that any agreement of that kind
with reference to compensation shall be of no effect and that they are
not entitled to anything unless the commission fixes and determines
the amount which they shall have. When they come to us with their
agreements we are blind—we can not see. Some time ago a fellow
wanted three hundred and some odd dollars and I gave him $30.
Perhaps he was nearer right than I, but in view of the circumstances
and the character of the service I think I was rather liberal.
Mr. M cD onald. D o the claimants have to bear any of the expense
of those hearings?
Mr. D u x b u r y . N o , except that we do not pay the claimant’s
personal expenses or anything of that kind. We will even appoint a
neutral physician if the case involves a medical question, and that
avoids much trouble, because if the claimant had to pay doctors to
examine him and to give medical testimony he would probably not
be in a position to do that.
Mr. K i n g s t o n . Would a law which made no provision whatsoever
for representation of the claimant by attorneys, and in which the
experts in your own office took care of all of the necessary legal
formulas, as little as there may be, appeal to you?
Mr. D u x b u r y . And bar all others from appearing?
Mr. K i n g s t o n . I would not bar anybody, but a law in which—from
a practical point of view—there was no cost allowed, and no possi
bility of the claimant assigning any portion of the compensation
for legal advice.
Mr. D u x b u r y . He can not assign any portion of the compensation
for legal fees. The claimants may sometimes make agreements about
which we know nothing and they may abide by the agreements and
we never hear anything about them.
Mr. K i n g s t o n . We have been going along for 15 years practically
without having had any legal practice before us, and it costs the
claimants absolutely nothing to collect their compensations.
Mr. S t e w a r t . I think that now we should revert to the unfinished
program of yesterday afternoon, or rather last night, and at the
suggestion of Mr. Knerr and with his consent, I suggest that his
paper be filed for the record—that it be omitted from the program.
The C h a i r m a n . I f there is no objection, Mr. Knerr’s paper will
be made a part of the record.
300
SIXTEENTH ANNUAL MEETING OF I. A. 1. A. B. O.
Second Injuries Fund
B y William M. Knerr, chairman Utah Industrial Commission
You have requested me to prepare a paper on the subject of our
second injuries fund. The Utah compensation law was enacted in
1917. At that time no provision was made as to the question whether
or not the employer or insurance carrier should be made to pay
employees who had previously incurred permanent partial disabili
ties and who subsequently sustained a permanent partial disability.
That is to say, if an employee was employed by one employer,
who had previously, for instance, lost an eye, and subsequently while
in the employ of either the same employer or another employer
lost the other eye, under our law the employee who loses both eyes is
entitled to be paid compensation during his lifetime. ,The commis
sion held that in such cases we should require the employer in whose
employ the employee sustained the subsequent injury to pay for
the combined injuries.
The employers—particularly those who enjoyed the self-insurance
privilege—in certain instances refused to give employment to men
who had either lost a limb or an eye for the reason that they felt
that under the law they would be required to pay for life in the
case of a subsequent injury where an eye or limb would be lost.
When this was brought to the attention of our legislature in 1919
they amended the law to read as follows:
I f any employee who has previously incurred permanent partial disability
incurs a subsequent permanent partial disability such that the compensation
payable for the disability resulting from the combined injuries is greater
than the compensation which except for the preexisting disability would have
been payable for the latter injury, the employee shall receive compensation
on the basis of the combined injuries, but the liability of his employer shall be
for the latter injury only and the remainder shall be paid out of the special
fund provided for in subdivision 1 of this section.
The law provided up to this time that in case of accidental injury
causing death, where there were no dependents left surviving the
deceased, that the employer or the insurance carrier pay into the
State insurance fund the sum of $750. The private insurance com
panies did not like this provision and succeeded in evading the pay
ment of any amount into the State insurance fund in death cases
where there were no surviving dependents, through a technicality,
so in 1921 the provision requiring this sum of money to be paid into
the State fund was amended by the legislature to read as follows;
The employer or insurance carrier shall pay the burial expenses of the
deceased as provided herein, and if there are no dependents, shall pay into
the State treasury a sum equal to 20 per cent of the amount provided in sub
section 2 of this section. Any claim for compensation must be filed with the
commission within one year from the date of the death of the deceased; and if
at the end of one year from the date of the death of the deceased, no claim
for compensation shall have been filed with the commission, the payment of
the sum equal to 20 per cent of the amount provided in subsection 2 of this
section shall be paid at that time into the State treasury by the employer or the
insurance carrier. Such payment shall be held in a special fund for the pur
poses provided in subsections 6 and 7 o f this section; the State treasurer shall
be the custodian of this special fund, and the commission shall direct the
distribution thereof.
SECOND INJURIES FUND
301
In 1921 the legislature further amended the law to read as follows:
I f any wholly dependent persons, who have been receiving the benefits of this
act, and who, at the termination of such benefits are yet in a dependent con
dition, and under all reasonable circumstances, should be entitled to additional
benefits, the industrial commission may, at its discretion, extend indefinitely
the benefits; but the liability of the employer or insurance carrier involved shall
not be extended, but the additional benefits allowed shall be paid out of the
special fund provided for in subdivision 1 of this section.
Thus you will note that the special fund was created: First, for
the purpose of taking care of combined injuries, and later to include
wholly dependent persons who had been paid compensation during
the 6-year period and who at the end of said period were still de
pendent. We have to date paid the following amounts on account
of combined injury benefits:
Six permanent totals, five who have lost the sight of both eyes, and
one who lost one eye and one arm—total amount paid to date to these
permanent totals, $14,482.20.
We have paid to date on permanent partial cases the sum of
$4,284.14.
The total amount paid to widows and orphans amounts to the
sum of $57,809.21.
There has been paid into this account the sum of $159,705.89, and
we have collected interest on investments, $22,396.81, making the total
sum of money paid into this fund $182,102.70.
We believe tnat this is a good provision in the law for the reason
that it gives the employer absolutely no excuse not to provide suitable
employment in cases where employees have previously sustained the
loss of a limb or an eye.
You might be interested to know that one of our self-insurers made
claim that one of their employees be paid out of the combined injury
fund in a case where the employee had arthritis in the back previous
to an accidental injury, which was aggravated by the injury, causing
a considerable disability period and resulting in permanent partial
disability, entitling the injured employee to 200 weeks in addition
to temporary total compensation. The commission held that this was
not a case that could properly be paid out of the employees’ combined
injury fund; that it was an aggravation of a preexisting condition,
which of course should be paid by the employer. In this we were
sustained by our State supreme court.
We believe that looking at the matter as a whole, based upon our
experience, that the second injuries fund legislation is sound. There
are some who are trying to amend the law so that the employee be
required to contribute to this fund. Personally, I would be op
posed to such a provision. It seems to me that when industry kills
one of its employees and there are no surviving dependents, that to
require the employer to simply pay 20 per cent (or a maximum of
$1000) of the amount that he would be required to pay in case
there were any wholly dependent survivors, is rather a small amount
and does not work a hardship on industry.
As to the provision in our law requiring benefits to be paid to
widows and orphans out of this fund, I think this is a mistake. I
believe that every compensation law should provide a liberal amount
to be paid to widows and orphans and that the widow should be
paid until remarriage or dunng her lifetime; that minor children
302
SIXTEENTH ANNUAL MEETING OP I. A. I. A. B. 0 ,
should be paid up to the age of 18 years on a graduated scale;
that the amount of 20 per cent provided to be paid under our law
into this combined injury fund should be increased to a flat sum of
$2,000; and that the amount not needed to pay in combined injury
cases should be used for safety organization work and possibly voca
tional training.
The C h a i r m a n . We will now hear from Mr. Y. A. Zimmer on the
subject, “ Should hearings be held in all cases when disability ex
tends beyond one week?”
Should Hearings Be Held in All Cases When Disability
Extends Beyond One Week
By V. A. Zimmer, New York Department of Labor
I have a little quarrel with the subject that was assigned to me.
It is not applicable in New York State because it says, “ Should
hearings be held in all cases when disability extends beyond one
week?” In New York State we hold thousands of hearings each
year in which there is apparently no disability at all, at least no
temporary disability.
I think I had better explain that situation, because I think that
very few of the States represented here hold hearings of all cases.
We receive in New York State every year upwards of 500,000 reports
of accidents sent into the department by the employers. The com
pensation bureau sends every one of those injured workmen a claim
form; and we make up a case folder and index it, even though we
have no claim, if the paper indicates a possible or probable prima
facie disfigurement or anything of any serious nature on the face of
it, even though the disability is indicated as being less than seven
days. Then, on every single claim that comes in, even though the
claimant may allege disability of only twTo days and no perma
nent disability, we automatically make up claims on hat form, and
they are all indexed, numbered, and listed for calendar hearing.
This procedure may seem just a little too cautious to some of you
who are from other States. It certainly does involve a tremendous
amount of routine and judicial work, but there is a pretty good rea
son for New York State being extremely cautious in this respect.
There was a time a few years back when New York State permitted
the direct settlements which many, or perhaps most, of the States
now permit. There gradually arose a considerable protest through
out the States—as our friend, Mr. Curtis, who is a labor representa
tive, could tell you—to the effect that all was not exactly well with
these direct settlemens; so the then governor of the State ordered
an investigation.
He appointed a commissioner to investigate, who drew out, so he
tells me, almost haphazardly several hundred of the cases that had
been closed under the direct settlement plan. He restored those
cases to the calendar, caused investigation to be made, and there re
sulted awards amounting to many thousands of dollars to the claim
ants. Claimants who had received a scheduled award of 10 per cent
of an arm were brought in, examined by a physician, and given
awards of 20 and 25 and even 50 per cent of an arm.
DISABILITY EXTENDING BEYOND ONE WEEK
303
Following that rather disastrous experience, the legislature wrote
into our laws a provision that 110 compensation claim could be closed
without giving the claimant an opportunity to be heard, and that
was construed to mean that we should hold a hearing on every case
in order to safeguard the interest of the claimants.
As I have said, the experience in this State has indicated, up to
this time, the advisability of a system whereby all claimants may
be given an opportunity to come in and be heard. They are formally
notified when to come in to be examined by our impartial physicians
connected with the department and to be heard by referees who are
supposed to be impartial. Within the past few months, however, a
number of employers, even large insurance carriers, have furnished to
the industrial commissioner a series of facts and records which would
indicate at least the possible advisability of curtailing the number
of hearings. It was represented to the commissioner that substan
tially 80 per cent of the cases on our calendars were of the uncontroverted, undisputed type, and involved disability of less than four
weeks. I think perhaps the figures were just a bit high. They based
that percentage on the total reported number of accidents, and while
we have a half million reports submitted to us, we only have, substan
tially, 350,000 compensation claims made up in a year.
However, we know it to be true that necessarily we call in a great
number of claimants who respond to the notice of the hearing with
the feeling that perhaps they are going to get something more than
what has already been given to them by the insurance carrier.
In the New York office—this does not apply in all of the offices,
because up-State here we have only one form of calendar—we
segregate that type of case. It is what we term a C6 case, that
is, a start case, and the C8 cases are cases on which we have started
payments and stopped voluntarily, and the cases that we have made
up in which disability is less than seven days, we segregate on what
we call a “ conference calendar.” It is just the same as any other
calendar, in that the notices are sent out, the cases are assigned to
regular referees, and so forth, but we list on that conference calendar
many more cases than we would ordinarily.
On one of the September conference calendars we had 120 such
cases. I have not the figures with me, but I think I can remember
them. Out of the 120 cases, 26 claimants appeared, and we did not
make a single award on that conference calendar. Sixty-seven of the
cases were closed because there was no indicated disability. In 11
of the 67 cases the claimants were present, and they were told that
there was nothing coming to them. Now, obviously, the 11 men
having been back to work and on the pay roll, lost, we will say, $5
apiece, because they came to those crowded hearing rooms and they
could not get back on the job the same day.
Substantially one-third of the cases were adjourned, because the
claimants did not appear and the referee thought possibly there
might be something there, and so he did not dare close them. Inci
dentally, the rules of the industrial board to-day require that we give
these nonpresent claimants a second opportunity to come in before we
close the case automatically. We used to give them four or five
opportunities. In some of the offices there would be a whole string
of hearings noted on the synopsis sheets, and no one showing up.
304
SIXTEENTH ANNUAL MEETING OF I. A. I. A. B. 0 .
As I said, the fact was shown that this type of case increases our
calendar, so that the referee does not have time to give proper con
sideration to the more important cases. For instance, in the city of
New York our referees average 100 cases a day, perhaps a few more
than that, on the conference calendar, and 25 to 30 on a trial calendar.
Now a referee faced with a large stack of folders like that never
knows what he is going to get into and, of course, he will hurry.
Perhaps he will hurry too much, shut off some of the debate that
might well be heard. I f we could reduce those calendars 30 or 40
per cent by some form of nonhearing closures, obviously it would be
of some advantage. It would be of considerable advantage to the
insurance carriers, because they would not have to attend and check
so many cases.
It seems to me that the greatest advantage of any change, if it
comes about, would be in the saving of the claimant’s wages in at
tending these nonproductive hearings.
At the request of the commissioner, last spring we attempted to
try out or test a nonhearing closure scheme. The commissioner
appointed a committee representing labor, a couple of insurance ad
justers, an assistant director, and myself, and this is what we did in
the month of May. On the 14th of May we took one week’s receipts
of cases of that type, the stopped-payment cases. We put those on a
table and the five of us sat down and examined those folders, which
contain cases that are indexed, or they are supposed to contain a
C2, or an employer’s report of the injury (perhaps the claimant’s
report and perhaps not), but it should of course contain the medical
report.
The first day we had 420 cases to handle. We examined them all,
putting them in three different piles. In one pile we put the cases
which we knew must have a hearing and which we would not
attempt to close in the absence of the claimant. Those were the
cases in which a fracture was indicated, facial disfigurements,
hernias, and so forth. We did not attempt to close any eye injuries—
we found those particularly dangerous in New York State; so those
were put to one side. In a second pile we put the cases in which the
forms were lacking, the forms which were necessary to pass judgment,
particularly the medical reports. In the third pile we placed those
cases which we felt we might safely close without calling for the
appearance of the claimant, and they were scrutinized very closely,
especially by our friend, Mr. Cuctrs, because he had had experience
under the old regime.
Here is substantially what happened. We were able to close 32
per cent of the cases. We held 30 per cent for more forms, and the
remainder, nearly 38 per cent, were held for hearings.
We agreed that we would try out this scheme: We would take the
137 cases that we closed, put the closing form in, and mail it out to
the claimant. We would take those and assign investigators to cover
every third case indiscriminately, right down the list. Well, they
overdid it. They made contacts with 57 out of the 137. Of the
57 whom they interviewed, 42 were perfectly satisfied. There was
no permanency, but 15 either had complaints to make themselves
and insisted upon hearings because their disabilities were greater
than indicated on the employers’ reports, or on the physicians’
DISABILITY EXTENDING BEYOND ONE WEEK
305
reports; or the investigators, all of whom were experienced, of their
own volition advised that they be put on for a hearing. So we
put the 15 cases on for a hearing, with this result: Five of them
did not show up, five additional awards were made. One of those
additional awards was for four and one-half weeks5 compensation of
$25 a week—more than $100. Another was for more than $100;
another was for only a couple of days; another a minor one. There
was one case out ox the remaining five held for permanency, obvi
ously a schedule. There were four other cases in which the claimants
did not appear, so we have no check on them.
The four members on this committee were most experienced in
compensation and were accustomed to reviewing these records.
They were entirely familiar with the intricacies of the medical
reports, and sometimes they do need interpretation. Better still,
they had a pretty good general knowledge of doctors doing indus
trial surgery in New York City. They knew those whom they had to
view with suspicion. So on the whole we had in that test a better
and closer piece of work than you would get normally with the ordi
nary office force, and yet it disclosed what we already knew—that
we can not depend entirely upon this medical report, whether sworn
to or not; we can not depend entirely upon the employer’s report;
nor can we depend entirely upon the claimant’s claim. Obviously
each of those three persons will evade or make miscalculations or
misstatements.
One of the things that we attempted to do in connection with this
investigation was to devise a closing form, a notice of denial of
award, or a notice of award, as the case might be—two types, of
course. We could thus convey to the claimant exactly what we
meant by terms such as “ permanent partial disability,” such as
facial disfigurement.
The New York law states that a claimant shall receive two-thirds
of his wages, not to exceed $25, and we tried to explain to them
that a man receiving $30, for instance, does not actually receive $20,
but that he will receive $19.23. We tried to explain to them that
it is based on a yearly average instead of two-thirds of the actual
wage per week.
You men, with your practical experience, know that you would
have to explain a considerable number of things quite carefully
to the claimant, many of whom can neither read nor write the
English language, and we certainly could not devise a form large
enough to carry all the languages spoken in New York City.
Now the problem and the thing that we are still disturbed about—
because the industrial board of this State has this matter under
consideration and it is for them to make a decision—is whether or
not our procedure should be changed; but one of the things the
industrial board at this time is doubtful about is whether we can
convey to the claimant sufficient information, with sufficient clarity,
so that we can reasonably expect him to advise us if something has
gone wrong.
In these cases I have mentioned that we tested—and subsequently
we examined and worked upon 1,200 cases with substantially the same
results—we were able to close one-third of them, or did close onethird of them, but we had a considerable number of kick backs,
306
SIX T E E N T H A N N U A L M EETIN G OF 1. A . I. A. B. C.
Whether we got all of the kicks or not, we do not konw. We never
would know, I suppose, unless we actually called them in and inter-,
viewed them.
Now, my own opinion is that if we can assure ourselves to a
reasonable extent that a notice sent out to the claimant, with the
proper instructions, and so forth, will be understandable to him, an
inclosure scheme such as this could be used. And it is not a direct
settlement proposition by any means. We approve nothing. We
look over the record and make the award, exactly the same as though
the man wTere present, except that we do not require his presence at a
hearing. I f the industrial board could be assured of that, I think
they would consider the advantage of reducing our present calendars
in the State, and put some plan such as this in force.
DISCUSSION
Mr. C urtis. I believe that the members present should know more
about the reason why labor made a demand that hearings be held
in every case. The first investigation that was conducted by Governor
Smith was under the direct settlement plan. I happened to be a
commissioner at that time.
We heard considerable about the self-insured this morning. It
was found that a great number of the cases that were not up to the
standard were self-insurers. I remember one company who, two
days prior to the investigator’s starting out, came to me and made a
request that we conduct a hearing in scheduled losses. In one day
they brought in 57 employees who had been working and whose
cases had been closed, and we found all of the way from half an
arm to seven-eighths of an arm in a number of those men, that had
been closed on the direct settlement plan, with one and two weeks’
compensation, and some of the men had received no compensation
at all. It was a clear demonstration that that company, or the selfinsurer, would never have brought those men in and they never would
have gotten another dollar, had not this investigation come up.
The cases were called in and testimony taken just as Mr. Zimmer
stated, at random; the men were examined by an impartial doctor,
and in almost every case compensation was increased—for legs and
eyes and feet, all tne way up to half of a foot, or half an eye. Yet
every one of those reports showed that there was no permanency.
We have a situation in New York City that has no equal in any
other compensation law in the world, because wTe have a medical
system that stands alone. Once you pass New York and get as far
as Yonkers it is not the same law at all. There is as much difference
as between day and night in the administration of the same act in
Buffalo and in New York. That seems peculiar, but it is a fact,
and any person who has had any experience will tell you the same
thing.
You get more cooperation from the physician in the country town.
He knows the claimant and he dare not go wrong, because if he
does he is done for in that community. But the “ birds ” in New
York can be hired to do anything you will pay them for, even to
hanging around the halls of the commission; and if you are short a
doctor and you have from $5 to $25 they are with you. They can be
DISABILITY EXTENDING BEYOND ONE W EEK
DISCUSSION
307
hired to testify one way or the other—the carrier can hire him if he
is short a physician or the claimant can have the same doctor—they
will testify any way you want them to testify.
That is the system we have in New York, and it is the system that
has been built up on account of the medical evidence. The carriers
have built up a system in New York City that it is almost a physical
impossibility for the claimant to meet, because he must pay for
his medical testimony. For a neurosis case it costs up to $100 for a
claimant to get a physician to come in and testify, and if he hasn’t
the $100, he has no neurosis as far as the physician is concerned.
That is the way the controverted cases are working in the city of
New York, and that is the reason why there is so much controversy.
We are constantly up against that situation and it is becoming more
acute all of the time; it is getting where we are beginning to call it
not a compensation law, but a medical law.
We also have the healing period system. There are companies
which feel that it will be at least a month before the commission
can give a man a hearing, and they will discharge him four weeks
before they should, and take a chance on beating him out of those
four weeks when the hearing is called, because he has no medical
evidence, and you must have medical evidence if you want to prove
even a day’s compensation.
The referee’s hands are tied. The industrial board’s hands are
tied unless they have medical evidence, and that is the reason why
we have those nonscheduled final adjustment cases. I f it were not
for that, the claimant would not get anything at all, because it is
a physical impossibility to prove disabilities of even two and three
months, when a man has waited sometimes six or eight weeks for
a hearing due to the crowded calendars, and when his case comes
on he has no medical evidence, although the commission doctors
will find that he is able to do some work. From the time the com
panies stop treating him to the time the commission’s doctor says
he is able to do some work, there is no evidence at all of the man’s
disability. He is not able to go back to his regular occupation, and
he must go out and try to find medical evidence to prove that there
was some condition there.
The labor unions of New York City have established a depart
ment for that very purpose. We have our own doctor, to whom we
pay a salary, and there is no expense at all to the injured workman,
and we are in a position to get the men justice under the law.
I am speaking now of the man who has no one to take care of
him—it is his condition with which we are confronted, and that is
why we are suspicious and, as Mr. Zimmer said, we scrutinized
those cases very closely, but we made some mistakes, notwithstand
ing that close scrutiny, in taking the doctors’ reports because there
was one doctor whom we did not know, and one of the men from
my own union whom we passed up because the case looked all right,
but when brought in was given a half of a finger.
Those are the conditions with which we are confronted in New
York City, and we are never sure that the physician has not misrep
resented the case.
Doctor H atch . Mr. Zimmer has indicated that this study has now
reached the stage where the industrial board is considering what
308
SIX TE E N T H A N N U A L M EETIN G OF I. A . I. A. B. C.
we are going to do, whether we are going to go further or not, and,
if we are going further, how much further. Mr. Zimmer remarked
in his talk that as far as he knew no systematic check-up or actual
investigation of just what was happening in cases closed without
hearings had been made.
Now, I would like to recall that and ask, if in any State such
a careiul check-up is made generally, or has been made in any
particular sample cases, just what did they find? We want all the
information we can get about the proposition. Has any State
actually investigated, in closing cases on the record without hear
ings, to see that all that the law intended really reached the claim
ant? That is the root of the whole matter. I f any State has that
experience, if they have looked into that question, I would be
very glad to hear from them now.
The C hairman . Does anyone want to respond to Doctor Hatch’s
inquiry? I can say for Oregon that we have no check-up system.
We have never adopted or devised one. The claims are ordinarily
closed on the doctors’s report, or on the injured workman’s report.
I f the commission is too hasty in closing the case, it is not long
before we hear about it. The man comes to the board and tells us
that he was not able to work until a later date than shown on the
report, and he is sent to the doctor for a further report, and some
times further compensation benefits are extended.
Mr. H orner. In Pennsylvania we have the agreement system. We
also have the plan which was outlined by Senator Duxbury in
his remarks. We have a chief adjuster, who is assistant director
of the bureau of compensation at Harrisburg, where all the accident
reports are filed. The chief adjuster, at regular intervals goes
through all of our open accident cases where we have no definite
information of duration of disability, and any cases that seem to
need some further investigation as to whether or not compensation is
payable or not are assigned to our men in the field and they make
investigations.
I f the case is found compensable, it is taken up with the employer,
if he is a self-insurer, or the insurance carrier, in an effort to secure
for that man the compensation to which he is entitled. I f there is
any dispute as to length of disability, the adjuster assists the claimant
in filing his case, and in filing his claim for the workmen’s compen
sation board if necessary.
Every fatal accident that is reported to our bureau is investigated
in order to determine whether there are any dependents who are
entitled to compensation benefits. We have found in many cases
where the employers or the carriers have reported no dependents
that dependents’ claims have been filed, and the cases carried before
the referees and awards made.
In every accident case which indicates a finger injury we have a
chart of the hand, and that chart is mailed to the injured person,
with an addressed, stamped envelope, with the request that he mark
on that chart the point of amputation of the finger or the thumb
and return it to the bureau, and then we check that chart with the
record to determine whether the man is receiving the compensation
to which he is entitled.
D ISAB ILITY EXTENDING BEYOND ONE W E E K — DISCUSSION
309
I f it is an eye injury, we refer the case to our adjusters in the
field for the purpose of making an investigation to determine whether
the man is entitled to compensation for the loss of the eye, or the loss
of the use of the eye.
We do not pay compensation under the Pennsylvania law for per
centages of disabilities; it must be the loss of the member or the
loss of the use of the member. We follow up all the cases where
we feel that probably the injured person has not received the full
benefit of the compensation law. Furthermore, when we receive a
final receipt which indicates that a man has returned to work on a
certain date, we require that that final receipt indicate at what wage
the injured person returned to work? in order to determine whether
or not he is entitled to partial disability, and we also investigate to
see whether the benefits paid the man were correct. I f they were
not correct the case is taken up with the employer and the insurance
carrier, and if we can not get any reaction that way we send that
case to the adjusters.
So that our experience in Pennsylvania has been that the adjus
ters—the emergency men, we might call them—are doing a very
satisfactory work. Many cases are settled or adjusted that otherwise
would probably go before the referee.
I believe that one of the things we must do in order that our com
pensation laws may be properly administered is to follow up our
cases. I believe that the most important work we have to do is to
follow up our cases to see that the injured workman receives the
benefits of the law. I sometimes think we overlook too many of
those cases, and I think it pays to have men in the field to whom you
can refer cases wherein there is any doubt. Of course, it is a physical
impossibility to follow up every case.
In every case where there is any question as to the length of disa
bility, .before the statutory period expires in which a workman can
file a claim we notify that man of his rights under the compensation
law and say to him, “ I f your injury resulted in a time loss of more
than seven days and you have not received compensation benefits,
we suggest that you file claim,” and we send the necessary blanks to
him. That is the policy we follow in Pennsylvania. Every case does
not give the length of disability, and if an accident report comes to
the bureau and we have no supplemental report indicating the time
lost, and we do not get any response from the insurance company or
the self-insurer, we mail the injured workman a compensation peti
tion, with an explanatory letter telling him what he must do in
order to protect his rights.
Mr. S tewart. Approximately what percentage of your agreements
which you follow up are found to have been unfair or irregular in
any way?
Mr. H orner. I do not know as I could give you a percentage, but
I can say th is: W e have one man in the department whose entire time
is taken up on cases o f that character, follow ing them up.
Mr. Z immer . H ow many investigators do you have connected with
your Pittsburgh office, for instance?
Mr. H orner. We have three men in Pittsburgh.
310
SIX TE E N T H
A N N U A L M EETING OP I. A. I. A. B, O*
Mr. Z immer . Approximately how many cases will you have a
month from Pittsburgh?
Mr. H orner. We assign to the adjusters in the field on an average
about 300 cases per month.
Mr. Z immer . And you have how many total cases ?
Mr. H orn er. D o you mean the number of accidents reported?
Our compensation cases run between 6,000 and 7,000 each month.
Mr. Z immer . They investigate 300 out o f 6,000?
Mr. H orner. Yes.
Mr. Z immer . That is all they are physically able to take care of ?
Mr. H orn er. No.
Mr. Zimmer. D o they determine percentage losses?
Mr. H orner. When there is a question about that the investigator
assists the claimant in filing his claim and in bringing his case before
the referee, and if there is any medical question involved the ad
juster assists the injured workman in filing his claim and in bring
ing his case before the referee.
Now, in addition, the workmen’s compensation board has three
full-time physicians, who are at the service of the injured workmen.
I submit that it is a physical impossibility to cover all of the cases,
but we are covering a large percentage of the cases as I have already
stated. Notices are sent to the workmen where it is a physical im
possibility for the adjuster to follow them up and make a personal
investigation.
Mr. Z immer . A s a matter of practice, will your investigators
bother with the percentage of loss as, for example, 20 per cent of
the hand? You provide for compensation only if amputation
occurs ?
Mr. H orner. Yes, either amputation or the loss of the use of the
member.
Mr. Z immer . Restriction of the joint would not get the man
anything ?
Mr. H orn er. N o.
The C hairman . The next topic for discussion as carried on the
program is, “ Should the compensation board have in its employ
a staff physician or physicians?” That subject is to be discussed
by Mr. H. M. Stanley, chairman Industrial Commission of Georgia.
Should the Compensation Board Have in Its Employ a Staff
Physician or Physicians?
B y H. M. Stanley, Chairman Industrial Commission of Georgia
I have been asked to talk upon the subject, Should the Compensa
tion Board have in its Employ a Staff Physician or Physicians?
Our experience in Georgia convinces us beyond question that dis
interested medical advice and examination is essential to a commis
sioner passing upon a compensation claim. Therefore, we have estab
lished in connection with the industrial commission the best medical
advice we could obtain in Georgia. It is our judgment that it is
E M P L O Y M E N T OF PH Y SIC IA N S BY BOABT)
311
absolutely necessary in administering the compensation act to have
either a full-time physician in a permanent organization or a physi
cian who is subject to call at any time that he may be needed by
the commission. This matter was thrashed out very thoroughly by
the industrial commission and we decided that we needed at all times
the advice of a disinterested physician. Very carefully the situation
was canvassed and we unanimously came to the conclusion that we
knew just the man for the job and the place was tendered to Dr.
Charles W. Roberts, an eminent young physician and surgeon. Just
how well we succeeded can be attested by those of you who attended
the Atlanta convention and heard not only Doctor Roberts’ address,
but also those of the various skilled specialists whom he selected to
address the medical section. So eminent is Doctor Roberts in his
profession that many physicians over the State accept unquestioned
his medical reports. As a witness, he is clear, lucid, positive, and
unwavering.
All of you have had the experience of hearing evidence in which
medical testimony on one side was to the effect that there was not
much disability and on the other that the disability was consider
able. It is very seldom indeed that doctors agree as to the extent
of disability, even if they are agreed that there actually is disability.
There is frequent argument as to whether the particular disability
from which an employee is suffering is the result of an accident or
if the accident is in any way connected with the disability. In a
notable case before the Georgia commission, in which some of the
most eminent physicians in Atlanta testified, one side, was positive
that the employee had no disability whatever, and the other side
was equally as positive that he had a disability, which was permanent
and total. More representative or more reputable physicians than
these could not have been obtained anywhere in the State, or, for
that matter, in the United States. How is the layman able to pass
intelligently upon a case when the leading members of the medical
profession are in startling disagreement? He is lost unless he can
get a disinterested expert to sift for him the possibilities and prob
abilities of technical evidence.
It has been my experience in most cases where a percentage of dis
ability to a specific member is involved, that there is a material differ
ence between the estimate made by the physician for the employer or
insurance carrier and that of the physician for the employee. The
natural inclination on the one hand is to give the employer the benefit
of any doubt, and on the other hand to give the employee the benefit,
Sometimes these estimates are so far apart as to be absurd! It then
becomes necessary to have an examination by a disinterested physi
cian to get at the approximate truth.
A disinterested physician is essential to compensation authorities
to make examinations and give advice when there «s conflicting medi
cal evidence that can not be reconciled. The Georgia commission
has reached the conclusion that an active practitioner answers the
need in our own particular case better than a physician employed
for full time. Our medical director is subject to our call at any
time, but is free to engage in any work that he may have in carry
ing on a general medical and surgical practice, except, cf course,
cases in which compensation is involved. His profession forces him
312
SIX TE E N T H
A N N U A L M EETIN G OF I. A. I. A. B. 0 .
to keep abreast of the times and to be familiar with modern advances
in medicine and surgery. There is little danger of his getting into
a rut. He is active at all times in his profession and in touch with
the medical leaders in various parts of the State? which enables
him to recommend suitable physicians for examinations, etc., when
ever it is impractical to have the examination in the city where the
commission is located. Any medical examiner or director, regard
less of how employed, should be furnished with every facility in his
work and should be authorized to have any special examinations
made which he is unable to perform himself. A short resume of
our experience in Georgia may illustrate this point,
When the compensation act first went into effect we did not have
sufficient funds to operate and could have examinations made only
in each individual case, with a maximum fee of $10 per examination.
If, after examination, the examining physician for the commission
found that X rays, special tests, or examinations were required and
he recommended them, the commission could only refer the recom
mendation to the employer or insurance carrier without any certainty
that it would be acted upon. Because of lack of funds the commis
sion could not order tnese things done. The result was that in
many cases the injuries were incorrectly diagnosed and the injured
employees suffered.
Perhaps the most glaring case of this kind was that of an em
ployee who received a burn on his neck by escaping steam, followed
in a short time by a peculiar boil or carbuncle. The disability re
sulting from the accident was for nine weeks, for which compensa
tion was paid. The man was examined by the commission’s physi
cian, who recommended that a microscopic test be made of the
diseased tissues. This recommendation was referred to the insur
ance carrier but was not acted upon. Some time after the accident
the employee began showing signs of mental disturbance and was
finally confined in a charitable hospital almost a mental and physical
wreck. This case was diagnosed by various physicians as being a
half dozen different things. Several physicians diagnosed the case
as that of a syphilitic infection. Another physician made a diag
nosis of tuberculosis, and prepared to amputate the arm. He was,
however, called suddenly away and asked a brother physician to
complete the work. This physician was confronted with these diag
noses. He did not have time to verify either of them, because the
amputation had to be quickly made to save the man’s life. After
the amputation he sought to verify the diagnoses and easily proved
that the man was not suffering from syphilis or tuberculosis. Finally
he learned that an Atlanta specialist had diagnosed the case as
blastomycosis—a very rare disease in the South of the buddingfungus family, and even then it is confined largely to cattle. He had
never before seen a case of this kind. However, he knew how to test
for that disease, and it was easily seen that the man was suffer
ing from blastomycosis, a disease which works its way into the sys
tem through an abrasion or sore. It is differentiated from actinomy
cosis, produced by the ray fungus, which enters the system through
the intestinal tract and works its way back to the surface.
An award was given the injured man. The case was hard fought
through all the courts. The court of appeals reversed the judg
E M P L O Y M E N T OF P H Y S IC IA N S B Y BOARD---- DISCUSSION
313
ment of the commission, but, upon application for a rehearing, re
versed itself and affirmed the award. The case was then certioraried
to the supreme court, which affirmed the award. The associate jus
tice of the supreme court who wrote the decision told me it was the
most difficult case he had ever seen before this court of last resort,
and that he read at least 500 court decisions from various States
before he became convinced that the award was in keeping with
the law and the facts. It was the judgment of the industrial com
mission that the blastomycosis germs entered the sores on the back
of his neck, and that, therefore, the disease arose naturally and un
avoidably from the accident. I f the examination of the tissues had
been made as recommended by Doctor Roberts, the true nature of
this disease could have been determined at a small cost and prob
ably its ravages checked before it had an opportunity to spread
throughout the man’s entire system; besides, he might have been
saved untold suffering and the loss of a major member.
We have been able gradually to build up our medical department
and to furnish our director with all necessary facilities so that a case
of this kind would not be likely to occur again. Our director is
authorized to have made all special examinations for which he him
self does not have the facilities, and the commission has sufficient
funds to take care of all necessary expenses of this kind. Many
cases have been properly diagnosed under his careful examination
that otherwise would have been impossible. In my judgment an
industrial commission can not properly function without a medical
department or director, employed either at full time or on whom
the commission is free to call at a moment’s notice for examina
tion and advice. I presume that all of the commissions have more
or less access to disinterested medical advice. The better the medical
department can be built up the sounder and more satisfactory will
be the awards of an industrial commission. Above all, the medical
director must be able to maintain his position, notwithstanding the
most searching inquiries by counsel and the differing opinions of
other eminent physicians.
DISCUSSION
Mr. D eans. Does your physician testify at your hearings?
Mr. S tanley . Yes; in all cases in which his testimony is essen
tial. Frequently his reports are accepted as evidence, and it is not
necessary for him to testify in all cases, but if it is an important
case he comes over and testifies. We have the hearings of the cases
in which he is involved in the afternoon, so that it is not necessary
for him to be away from his office during the morning hours.
•Mr. D eans . The reason why I asked the question is, Virginia has
a full-time physician and we do not permit our doctor be a witness
in cases. We use him as our medical advisor.
Mr. S ta n le y . Doctor Roberts is our advisor, and he also testifies.
We do not see any reason why he should not. Of course, we pay
Doctor Roberts a salary. We pay him $4,800. In addititon to that
he performs all the autopsies of the State where we are requested
94023°—30----- 21
314
SIX TE E N T H A N N U A L M EETIN G OF I. A. I. A. B. O.
to appoint a physician, and we pay him extra for X rays, and things
of that kind.
Mr. S tack . On what classes of cases do you request post-mortems?
Mr. S tanley . We do not make any request at all. It is where
one side or the other asks for an autopsy and of course they have
to pay for that. In Georgia the person making the request must
pay xor the autopsy, and I imagine that there are perhaps eight
made a year. We have about 10 or 12 fatal cases a year.
The Chairm an. I s there any discussion of Mr. Stanley’s paper?
I f there are no remarks, we will pass on to the subject to be dis
cussed by Mr. Duxbury, the title being, “ Who should be consid
ered compensation dependents, and what, if any, should be the
Limitation of compensation dependents? ”
Who Should Be Considered Compensation Dependents,
and What, if Any, Should Be the Limitation o f Com
pensation Dependents
By F. A. Duxbury, Industrial Commission of Minnesota
I have said before that instead of wasting much time in extolling
the virtues of the compensation laws, especially of our own laws,
I think we should devote ourselves more particularly to studying
ways of perfecting them or of improving them. I preface my
remarks with that statement, because I am going to criticize Minne
sota’s compensation law in one particular and I do not want you to
infer from that that I think it is bad all the way through, because
I do not.
In that table of comparative benefit costs which was circulated
around here the first day of the meeting it appears—in the last
column, average law of all benefits—that Minnesota stands pretty
high, Arizona being the highest, New York the next, and longshore
men’s act the third, Wisconsin the fourth, North Dakota fifth, and
Minnesota sixth, but those are quite close together, because here is
Minnesota sixth on the list with a standing of 905 out of a possible
1,000, and Wisconsin 958, and North Dakota 957.
As I understand it that is a computation of the amount of benefits,
made by the actuaries, and that no credit is given for these other
provisions of the law which might be entitled to some merit, but
which are not reflected in money benefits. I f they did take into con
sideration the other provisions, there might be some rearrangement
and Minnesota might be higher on the list, because there are many
commendable features in the Minnesota law.
I have made just a rough note of a few of these benefits. We
have a high maximum, $20; unlimited medical aid, either in length
of time or amount; 66% per cent of the wage instead of 50, 55, or
60 per cent. We have a special healing period in addition to the
schedule of permanent partial disability, and all employers are in
cluded without limitation as to number of employees, the exclusions
being merely farm laborers, domestic servants, and women em
ployees of steam railroads.
W H O SH OU LD BE CONSIDERED DEPENDENTS
315
In our State an employer of a single employee is subject to the
compensation law unless he takes himself out of that class by express
election. So we have a very full coverage. Farmers may elect to
come under the law, so that even farm laborers may be covered by
our law. We have a special fund for total permanent disability
by a second injury; and we have effective control of acts and settle
ments, and power to vacate awards and all those features.
We have a provision which, because of some defects, I have come
to think is not what it should be. That is our dependents’ pro
vision, or death benefits provision, and I have come to some con
clusions with reference to its vices, because I think it has few virtues,
if any. Now, my conclusions are based upon some experience with
the matter, and also upon the conception which I have learned to
have of the primary purpose of compensation laws and which was in
creased considerably by listening to the discussions which took place
here yesterday with reference to rehabilitation with the compensa
tion law. It quite confirmed my belief that the compensation laws
themselves are really in their essential nature rehabilitation laws,
that their real purpose is rehabilitation, readjustment, and reestab
lishment of the injured workmen.
I am of the opinion that indemnity and the reason for indemnity,
as it existed in former systems of laws, are wholly out of the com
pensation law. Who would undertake tor a moment to say that the ,
monetary benefits accruing to an employee by virtue of the com
pensation law had any relation to indemnity for damages for
injuries which he suffers? It seems to me that they have no such
purpose, and that their real purpose is rehabilitation or reestablish
ing the man into useful activity, making it possible for him to
become a useful member of society, self-sustained, and independent.
The compensation law, of course, had to be in general terms, and
in some instances probably its monetary provisions were more than
were required to accomplish that primary objective—not to make
the injured workman as fit as he was before, because that is not
possible. Any amount of money you can pay a man with a leg off
for that permanent partial disability is a joke when you consider
it as an indemnity or any other payment of that kind. It has no
relation to indemnity, but it is an arbitrary amount of money which
will probably be needed to rehabilitate or to readjust him into a
useful occupation.
Experience has shown, as everyone knows, that there are cases that
need something in addition to that, which may be applied in a way
so that they become readjusted within the period in which the
money is paid, into self-sustaining, useful members of society and
industry. The rehabilitation laws were merely a system of laws
to supplement the compensation law in some particulars where it
would be effective, and it has had a wonderful effect.
That our law is so related to the rehabilitation law is indicated
by the fact that if a person injured in industry is rehabilitated by
the rehabilitation section or division, we may order 25 weeks’ addi
tional compensation. That is rehabilitation compensation; we go
a little further in that respect.
That primary purpose and object of the compensation law as
applied to dependents is another feature of our law. Of course,
316
SIX TE E N T H A N N U A L M EETIN G OF I. A. I. A. B. C.
rehabilitation involves physical rehabilitation as well as the economic
rehabilitation, and a law that does not provide for unlimited medical
expenses is defective, because the physical rehabilitation, as far as it
is possible to rehabilitate, is the primary and important essential
to that rehabilitation. But in these compensation beneficiaries in
dependency there is none of that physical rehabilitation, and I
do not know that you could say that there was an object of
rehabilitation.
Probably there is no such thing as rehabilitation, because these
minor children and this widow are not being rehabilitated, and the
word is probably superfluous there. They are being habilitated or
adjusted. Their means of support has been taken away from them,
and it is the duty of society to do something to help them to readjust
themselves so that they can support themselves and become self-sus
taining and independent in their support. The law ought to have
that in view, and with that object clearly in view, if you tested out
your law as I have tested out our law, you would probably find that
it was not very well conceived to accomplish that purpose. My
study and experience has convinced me that there is one thing that
ought never to be in a dependency law.
In most of these laws the dependency section or death benefits
provisions seem to have been drawn by men who borrowed expres
sions from statutes relating to descent, to deaths by wrongful acts,
or to others of a like kind, which bore no relation to the purpose
of workmen’s compensation legislation. We have that vexations
provision in the Minnesota law.
A death case or dependency case has a limitation of $7,500—the
highest amount that may be paid in any case. It works out in
this way: We have the case of the widow of a working man, who has
no children. It is rather fair to assume that she would be a work
ing woman—she should be unless he had gone somewhat outside of
his station. Because she was married she had been supported by
her husband, but that support is gone, and she must readjust her
means of support. She has neither chick nor child—not a single
handicap to employment opportunities. She is probably able to
obtain work at a fairly good wage, and she receives compensation
equal to 40 per cent of her deceased husband’s wages with a limita
tion of $20 a week. Perhaps in six months or less time than that
she has reestablished herself, after which time we ought not to have
to pay her any indemnity or anything of that kind. However, for
quite a long time—represented by dividing the $7,500 by the weekly
rate—she will receive her compensation.
But, in another case, we have a woman of about the same age with
five or six or even more children—the youngest perhaps a baby of
6 months and the oldest not over 12 or 14 years of age. She gets
a higher weekly rate of compensation, consequently the $7,500 is
consumed in a shorter period of time. Not only must she care for
these children, but she must reestablish her means of support for
herself and family. Yet, she is within the same limitation of
amount—$7,500.
That, I think, is a fatal thing in any compensation law. It
defeats the very purposes for which compensation laws are enacted.
W HO SHOULD BE CONSIDERED DEPENDENTS
317
In our law it is provided that the wife shall be conclusively pre
sumed to be dependent, and that children shall be conclusively pre
sumed to be dependent until they are 16 years of age, and from 16
years of age to 18 years they are prima facie dependent, and after
that if they are physically and mentally unable to earn. We ought
not to assume the burdens that belong to some other branch of society,
and they ought to be able to find some means of taking care of those
who are physically and mentally handicapped other than at the
expense of industry.
We can not, in Minnesota, without some miraculous influences that
I know nothing about, get anything in the compensation law that
is going to increase the cost, because we have Iowa on the south, and
also South Dakota, where the rates are much less. Of course we can
not complain about North Dakota or Wisconsin, but the employers
in our State regard the employers in those other States as their
competitors, and they claim they can not be paying so much for
compensation as compared with their competitors, and if you talk
about modifying these things or increasing the benefits in any way
you get the stony stare and nothing can be done.
Those are some of the things that are perplexing us. We had
a boy about 17 years of age—the son of a farmer, the owner of
240 acres of good Minnesota land, well stocked with cattle and
hogs, etc., and he had a gross income of some $4,000 on that farm.
This boy hired out to work for the town. He worked about a week
and he was killed. He had never made any contribution to his
father from his wages, which is a requirement of the dependency
law, but the supreme court of the State of Minnesota, in their wis
dom, held that the value of his services to his father on the farm
when he was working in the relation of parent and child, and not
in the relation of master and servant or anything of that kind, were
wages within the meaning of the compensation law, and that the
father was dependent to that amount, and he was granted compensa
tion, overruling the commission, which it had the right and the
power to do.
I have been perplexed over that for some time, and I can not
see the point, which is not strange, but it does seem to me that all
that was a common-law right of action for loss of services by
death owing to wrongful act. That is all I can see in that, and
I thought all of those things were abolished in the relation of master
and servant.
We have had one or two other decisions that were almost as bad.
I do not want to appear in the light of criticizing the courts, be
cause I always resent the tendency of some people to imply that
the courts are incompetent and that they are always vile and evil.
I have no sympathy with that. I believe the highest instrumental
ity of civilization is the court, but unfortunately I recall a remark
which was made by Mr. McKay, who is now mayor of the city of
Philadelphia, at the Baltimore convention. At that time he was
chairman of the compensation board in the State of Pennsylvania.
Our good friend from Virginia had reported a plan that they had
for trying to inform people with reference to the provisions and
remedies of the compensation law. They had adopted the system
of questions and answers, sort of a catechism which they circulated
318
SIXTEENTH ANNUAL MEETING OF I. A. I. A. B. 0 .
among the schools, and there was some discussion going on with
reference to the merits and demerits of that system, with different
views, as there always are in this body. Finally Mr. McKay rose
and said that he had been trying for several years to inform about
9,000,000 people with reference to the nature and character of the
compensation laws, without any very great success. He said the
employees do not know much about the compensation laws because
it is only when they happen to have an accident that they have any
interest in the matter, and the employers were ordinarily entirely
ignorant of any practical knowledge of the law. Then he said that
in spite of that the persons most ignorant as regards the compensa
tion laws were the judges on the benches, and that was almost
startling to me.
He went on to explain that he did not mean to be understood
that they were not men of learning and ability and integrity and all
that, but that they were schooled and grounded in a system of laws
which was entirely conflicting with the principles and purposes of
compensation laws; that when they were called upon to interpret
the compensation law those principles and ideals of a system had
been so grounded into them that they were handicapped and blinded,
and they interpreted the compensation law incorrectly; and that if
they had been men of equal ability and general learning, without
the special training in the rights and rules of liability which existed
in former laws, perhaps they would make fewer mistakes.
I have thought about that many times when some compensation
law has been misconstrued by the court. I think you probably have
had similar experience. I have been trying to think that this case
with reference to this farmer’s boy was probably based upon some
such reasoning as that.
Now, in my perplexity with reference to our provisions for de
pendency and my dissatisfaction with them, I thought the right
thing to do was to examine the laws in the other States to see if I
could not find something that was better, which I did. I found
some that were better, but I also found some that were worse. I
found quite a number that did not assume the burdens of society, of
taking care of people who were physically and mentally handicapped
and who can not be rehabilitated. They did not take that burden
from society at large and put it on industry. A few of them have
had nerve enough to abolish that sentimental thing. Among those
are the laws relating to longshoremen and harbor workers.
I f my memory serves me right, the great State of New York has
some very commendable features in their dependency law.
DISCUSSION
Doctor H atch. The presumed dependents in death c
@FedFRASER