law by an affirmative act, such as filing a written statement to that effect with a specified board or official and notifying his employees. In certain States the employer is presumed to have accepted the act unless he files a statement to the contrary.

New Jersey was the first State to adopt the latter method. The result there was that as very few employers notified their employees of their election not to accept the act, nearly all the employers were brought under its operation. The success of the New Jersey act in respect to its acceptance is generally attributed to this method of election. However, Massachusetts and Michigan have since been nearly, if not quite, as successful in bringing employers and employees under compensation, although to do so an affirmative act is required from the employer.

While the New Jersey method has been fruitful in establishing the proportion of employers coming under the act at a maximum, it has manifest disadvantages. The commission found among employers in Michigan and Massachusetts a more widespread interest in the principle of compensation than in New Jersey, with a corresponding stricter observance of the spirit of the law. This must be ascribed to the fact that employers in these two States came under the act with their eyes open, testifying by a voluntary act that they believed in the principle and submitted to the law, while in New Jersey employers in general are under the law automatically, many without having given it thought or attention. The spirit of cooperation existing between employer and employee in Massachusetts and Michigan is a public benefit, and in so far as that spirit may be due to the fact that the law is elective and its acceptance was voluntary the law is entitled to full credit.

In the early stages of workmen's compensation, an elective law accepted by affirmative action, while defective to the extent that it did not fairly regulate competition between employers and did not uniformly protect the workmen, was more educational in its effects than either a compulsory act or an elective act of the New Jersey type. However, other States have had, and will continue to have, the benefits of the educational advantages of the Massachusetts and Michigan acts and are now following the elective methods of the New Jersey act. Furthermore, the arguments that favor an elective as against a compulsory act do not apply at present with the same force as in the tentative period of workmen's compensation in this country.

There was found among employers considerable sentiment for compulsory compensation. It was argued that the employer voluntarily accepting compensation should not be placed at a competitive disadvantage with the neglectful or less humane employer refusing to accept it, and that hence the law should be compulsory. Naturally, in those States in which the elective act has been generally accepted, the demand for a compulsory act is not so urgent; yet employers in them not under the act are in many cases not likely to pay damages, even in case of fault, unless forced to, and they are less likely to carry insurance for the protection of their employees. In fact, employers in States where insurance is required, complained that whereas by accepting the compensation act they are required to carry insurance, the employers who refused to accept the act escape its responsibilities, including the requirements for carrying insurance

for the protection of even those employees who may be injured through their own fault.

Whatever differences of opinion were presented to the commission by employers as to the wisdom or advantage of a compulsory act, there was no difference among the workmen on this question. Their testimony was uniformly in favor of a comprehensive compulsory act, with such insurance requirements as would fully protect injured workmen and their dependents.

In its report for the year 1913, the Massachusetts Industrial Accident Board says:

It has become evident that as a matter of justice and public welfare, compensation acts should be uniform and compulsory and apply to all employees and occupations alike. For about one-quarter of the employees and their families in Massachusetts to be left practically unprotected from evils consequent upon occupational injuries is unsatisfactory as a permanent condition. The reason for making such laws elective in form, as has been done in most of the States which have adopted them, is to avoid possible constitutional objections. The elective method makes a needlessly complicated and cumbersome legal and administrative enforcement of the act.

VI. DEFENSES ABROGATED UNDER ELECTIVE ACTS.

Under an elective compensation act an employer is given his choice of accepting the act or operating under the liability law with certain long recognized defenses removed. These defenses are assumption of risk, the fellow-servant rule, and contributory negligence. Exceptions in the abrogation of defenses were made in Texas and in Wisconsin under its original compensation act; in these two States the doctrine of comparative negligence was substituted for the defense of contributory negligence, and the negligence of the injured person was to be considered by the jury only as an element in reducing the amount of damages. By the amended Wisconsin act, contributory negligence is now abrogated in that State.

The increased liability upon employers by the removal of the common law defenses would undoubtedly have been brought_about by legislation even in the absence of the alternative of an elective compensation act. The tendency of legislation being toward the ultimate elimination of these defenses, their removal can not truly be regarded as a means of compelling employers to accept the compensation act; it was the natural outcome of the revolt against the existing liability law. Not only is this evidenced by several State laws but by the Federal law covering the liability of railroad companies to interstate employees, as under the latter, without the alternative of a compensation act, the assumption of risk and the fellow-servant rule have been removed as defenses and the doctrine of comparative negligence substituted for contributory negligence.

VII. EXTENT TO WHICH COMPENSATION HAS BEEN ADOPTED.

Legislation for compensation received its real start in the United States in the creation by the New York Legislature in 1909 of a commission to study the subject of employers' liability and the causes of industrial accidents. That commission reported to the legislature two bills. One provided for compulsory compensation in certain specified hazardous employments. This act as passed did not take the place of the employers' liability law, but was an addition to it, the workman having his option after the accident either to accept

30003-S. Doc. 419, 63-2-2

compensation under the act or to assert his rights under the liability law. The second bill modified the employer's defenses by abrogating the assumption of risk, placing upon the defendant the burden of proof as to contributory negligence, and considerably modifying the fellow-servant rule, and provided for elective compensation, which became the sole remedy where it was accepted by both the employer and the employee. The first of these two acts was declared unconstitutional in the court of appeals in the Ives case. The second, or elective, act was accepted by a few employers only, owing largely to the fact that it required a separate acceptance as between the employer and each employee, with acknowledgment before a notary public. However, a great many employers in New York accepted the spirit of the act and attempted to adjust their accident cases in accordance therewith, although of course the employees in case of injury were not bound by it and could refuse to accept the compensation and assert their remedy under the liability law.

New York adopted, in December, 1913, a compulsory compensation act covering certain specified employments. As already stated, in the 22 States which have adopted the principle, all of the compensation acts in operation are elective except those of New York and Washington and the new acts of Ohio and California, which went into operation January 1, 1914. New York, California, and Ohio amended their constitutions so as to admit the adoption of their compulsory acts. The constitutionality of the Washington act, sustained by the supreme court of that State without the aid of a State constitutional amendment, is now a question before the Federal courts. Compensation acts were adopted by the following 22 States in the order named: New York, Washington, Kansas, Nevada, New Jersey, California, Wisconsin, Ohio, Massachusetts, New Hampshire, Illinois, Michigan, Maryland, Rhode Island, Arizona, West Virginia, Oregon, Texas, Iowa, Nebraska, Minnesota, and Connecticut.

Activities at present are indicated by commissions existing in the following States, where, with the exception of Maryland, no compensation legislation has been enacted: Colorado, which has issued a report; Idaho, Indiana, Louisiana, Maine, Maryland, which has reported and recommended a bill; Missouri, North Dakota, Pennsylvania, Tennessee, and Vermont, as well as Porto Rico. In Kentucky, Mississippi, and Oklahoma public officials, manufacturers' associations, or labor unions have taken the lead in agitating or preparing bills to be introduced at an early time.

In New Jersey the commission which was responsible for the present act has continued its existence to recommend amendments. Delaware and Montana had commissions which dissolved without definite results.

Lists of boards of award where laws have been enacted, and workmen's compensation commissions in States where there are no laws, will be found in Appendix No. 9.

The total number of employers and employees in these States who have accepted the compensation acts can not be definitely ascertained. In Washington the law is compulsory and covers about

1 Declared unconstitutional. Present New York law enacted December, 1913; in effect for administrative purposes Jan. 1, 1914, and for compensation payments July 1, 1914. The Montana law passed in 1909afterwards declared unconstitutional-was the first legislative act where liability to pay was based on the hazard of a particular employment. The Maryland act of 1902, also declared unconstitutional, provided only for death benefits to dependents.

7,000 employers and 160,000 employees; in Michigan 10,760 employers and 475,408 employees have accepted the act; in California 1,100 employers and 100,000 employees; in New Hampshire 21 employers and 23,000 employees; in Ohio 2,711 employers and 171,113 employees; in Massachusetts 17,000 employers and 650,000 employees; and in Rhode Island 2,018 employers and 140,000 employees. In West Virginia, the act has been accepted by 1,465 employers, covering 143,706 workmen, 73,253 of whom are engaged in coal mining. In Massachusetts a fraction over 80 per cent of the accidents occurring in industry during the year ending July 1, 1913, came under the compensation act.

In Massachusetts among those who have not accepted the act are several large employers who desire to carry their own risk, and who maintain the plan of compensation established by themselves, which they could not do if under the act. Their employees, however, while thus being given the benefit of a plan similar to that of compensation are, as a result of the employer not having accepted the act, at liberty to refuse the offered compensation and sue under the liability law with the employer's defenses removed.

The original Wisconsin act was accepted by 2,028 employers and 149,164 employees. During the year ending June 30, 1913, 44.6 per cent of the accidents reported were under the compensation act. Under the new Wisconsin act, which became effective June 30, 1913, all employers and employees are covered unless they elect to reject the act; consequently it can not be ascertained just how many employers and employees are under the act. However, it is reported by the Wisconsin Industrial Commission that in the month of December, 1913, 95.9 per cent of all accidents happening in industries of Wisconsin were under compensation.

In Kansas the compensation act has been rejected by 500 employers; in Nevada by 100; in Minnesota by 44, employing about 2,000 persons, while it is estimated by the State department of labor that. about 250,000 employees are subject to the act.

The California compulsory act is estimated as covering 600,000 additional employees since January 1, 1914; the compulsory Ohio act covered approximately 1,000,000 after January 1; while the New York act will probably cover close to 2,000,000 after July 1 next.

The Oregon act will not go into effect until July 1, 1914, its operation having been suspended by a referendum, the vote on which was taken at the last election and the act approved. The Nebraska act is suspended by a referendum, but the vote will be taken on this law during the year 1914.

REASONS FOR ACCEPTING OR REJECTING THE ELECTIVE ACTS.

Employers accepting the law gave to the commission various reasons for so doing. To many, a belief in the principle of compensation seemed sufficient, while others had convinced themselves that it makes for certainty in cost and removes litigation.

In only a few States did a large proportion of the employers reject the act. The reasons quite frequently show that the rejection was due more to a lack of interest in the subject or to a want of knowledge of the law than to any positive objection.

In States where employers gave well-defined reasons for their failure to accept the law, in general they stated that they had no opposition to the principle of workmen's compensation but, in fact, that they favored it, and their sole objections were to the form of the law. In New Hampshire and Kansas, where a large proportion of the employers refused to accept the compensation act, the main reason given was that it was "a one-sided affair" in that if the employer elected to come under it he would be bound by the act while the employee had an option after the accident of accepting the compensation or asserting his rights under the liability law. (See Section XVII, where this subject is discussed.) The employers of Ohio were very slow in accepting the act, stating as their reason that, as they would be compelled to take their insurance in the State fund, they would be deprived of any option in insuring. (See Section XXIV, where the method of insurance is discussed.)

The reasons for accepting or rejecting the law presented to the commission by many employers are shown in Appendix No. 6.

VIII. TREND OF LEGISLATION.

Important changes in the compensation acts, indicating a general trend in legislation, are, in Illinois, the creation of an industrial accident board to administer the law and broadening the scope of the law to cover practically all except casual employments; in California, change in the waiting period from one week to two weeks, increasing the benefits for total permanent disability to last through life, and making the principal contractor liable to the employees of a subcontractor; in Ohio and California, changes from an elective to a compulsory system through new acts; in New York, the enactment of a compulsory law; and in California and Wisconsin the acts made the exclusive remedy. The new California act recognizes the principle that injuries to employers who perform labor incidental to their occupations and the members of the families of such employers engaged in the same occupation are properly chargeable to the cost of operating the business and to that end provides that the State Compensation Insurance Fund may, in issuing its policies, include such employers and such members of their families. (As to suggestions made to the commission for changes in the law, see Appendix No. 7.)

IX. SATISFACTION WITH COMPENSATION ACTS AS AGAINST LIA

BILITY LAWS.

The commission found a growing satisfaction with compensation laws among both employers and workmen. All suggestions for changes related to the compensation law, no one seriously thinking of repealing it or going back to the old liability system. Persons attended the conferences who had originally opposed the compensation plan but who, after experience under it, expressed their warm approval of its principles. Among these, beside both large and small employers, were workmen. A large employer in the State of Wisconsin said:

I believe the employers of the State of Wisconsin are satisfied with the provisions of the workmen's compensation act as applicable to this State. Many of them have availed themselves of the provisions of the act from the inception thereof; and that