CHAPTER VIII

HISTORICAL DEVELOPMENT OF WORKMEN'S COMPENSATION IN THE UNITED STATES AND TERRITORIES

A complete history of workmen's compensation in the United States and its territories would require a separate account of its development in each of the jurisdictions where laws have been adopted and would involve a considerable amount of duplication as each state has passed through much the same legislative stages before abandoning the old liability doctrines. As the modification of the law of negligence has already been considered, the present chapter will be devoted to the progress of compensation legislation and will serve as an introduction to the analysis of existing laws contained in succeeding chapters.

The first evidence of interest in compensation in this country was the publication, in 1893, by the United States Bureau of Labor of a special report by Dr. John Graham Brooks on Compulsory Insurance in Germany. Since that time the Bureau has published numerous other studies dealing with this topic and in 1912 the Bureau of Labor Statistics inaugurated a Workmen's Insurance and Compensation Series of which ten numbers have already appeared. Many reports, valua

ble and otherwise, of state investigating commissions, the proceedings of various conferences, and the publications of several societies interested in the study of compensation are also available. Since the enactment of compensation laws the literature has been greatly increased by the reports of administrative bodies, some of which are exceedingly valuable contributions. Several texts have been issued dealing with the legal side of the subject, as well as a few general treatises in book form. There is now, in fact, a plethora of publications where a few years ago there was practically nothing. There is much duplication and much that is worthless in all this, but as a measure of interest in the movement and of spread of the idea, the accumulation of articles, pamphlets, and books is significant.

Compensation Schemes of Private Corporations.— Long before compensation laws were considered in the United States private corporations, particularly railroads, were making some provision for employees' relief associations. These schemes varied in scope and effectiveness as well as in methods. In many the corporations gave substantial aid by paying the expenses of administration and by granting subsidies. Some were no more than arrangements for securing hospital treatment, others granted a regular scale of compensation for disability or death.

The greatest criticisms of these plans were that they were in all cases inadequate, making provision only for immediate needs, and that they were too often much more advantageous to the corporation than to the workman. They often furnished a safe repository

for funds and the help they gave was much better than anything which had before existed but the semicompulsory nature of the membership requirements, the release from liability usually required as a condition of receiving benefits, and the payments required from workmen contrast them most unfavorably with modern compensation. They were a step forward and indicated a broadened attitude on the part of company officials who began to see the "practical" and humanitarian gains from a policy of accident prevention and compensation.

Workmen's Collective Insurance.-Another plan with some resemblance to workmen's compensation was Workmen's Collective Insurance, written under a group accident policy by the casualty companies. Premiums for this type of insurance and benefits granted were expressed as a percentage of wages, thus enabling the employer to secure for his employees the essential features of a modern compensation scheme, Premiums might be paid by the employer alone, by the workman alone, or by both. For a small increase in premium the policy might be extended to cover the entire twenty-four hours, the ordinary type covering only working hours.

The total volume of this sort of insurance has been small—it has not been featured by the insurance companies and many employers are unwilling to pay the apparently high premiums. It has no place, of course, in compensation states and is rapidly falling into dis

use.

The Maryland Act of 1902.-The first legislation embodying in any degree the compensation principle

was the act providing for the coöperative accident insurance fund of Maryland, passed in 1902. The statute applied only to mining, quarrying, steam and street railway service, and to municipal operations in connection with sewers, excavations, or physical structures. The liability of the employer was extended to embrace the negligence of a fellow-servant, and only one-half damages were to be forfeited if contributory negligence could be proved. The employer, however, was exempted from all liability for accidents on the payment of a stated annual premium, varying with the industry and payable in monthly installments, into an insurance fund to be administered by the insurance commissioner, who was to receive one per cent of the receipts in payment for the extra work involved.1 The employer was permitted, after giving notice to his employees, to deduct one-half of these premiums from their wages. Exemption might also be secured by showing to the satisfaction of the insurance commissioner that there was already in operation a plan more advantageous to the employees than that proposed by the act.

The benefits granted by the statute were meager-$1,000 was to be paid from the fund to the heirs or personal representatives of any employee fatally injured in the course of his employment. Death must occur within one year and the injury must be due to the employment. There was no provision for non-fa

1 The annual premiums were as follows: for each employee of a steam railroad, $3.00; of a mine or quarry, $1.80; of a street railway, $0.60. The insurance commissioner was authorized to set the premiums payable by municipalities,

tal injuries. The insurance commissioner was given plenary power of administration with no right of appeal to the courts.

The law remained in force a little less than two years, being declared unconstitutional by the courts on the grounds that it vested judicial powers in the insurance commissioner, deprived workmen of a right hitherto enforceable in the courts, and denied the right of trial by jury. Its operations were insignificant, only nine companies contributing to the fund, of which the receipts were $5,313.90. Of this, $5,000 was paid out in death claims and $300 for expenses.

The Massachusetts Act of 1908.-No further laws were passed until 1908, although a Massachusetts comImittee had recommended a law modeled after the English act in 1903, and an Illinois commission had suggested a voluntary act in 1905. The Massachusetts act of 1908 provided no definite plan of compensation but authorized the establishment of private plans in the following terms:

Any employer of labor may submit to the State Board of Conciliation and Arbitration a plan of compensation for employees in his employ, providing for payments to said employees in the event of injury in the course of their employment, based upon a certain percentage of the average earnings of such employees, and without reference to legal liability under the common law or the employers' liability act. After examination of such plan of compensation, and a public hearing thereon after public notice thereof, the board of conciliation and arbitration may, if it considers the same fair and just to the