OHIO
Archaeological and Historical
PUBLICATIONS.
THE OHIO WORKMEN'S
COMPENSATION LAW.
BY H. R. MENGERT.
FOREWORD.
Because the Ohio Workmen's Compensation
Law has been
looked upon as the very embodiment of
what Col. Theodore
Roosevelt called "social
justice;" because it is being copied in
other states of the Union; because of
the praise bestowed upon
it by King Albert, of Belgium, who, upon
the occasion of his
visit to Ohio, pronounced it one of the
greatest pieces of legisla-
tion upon the statute books of any
country; because it has im-
mensely improved the relations between
employers and em-
ployees; because the praises of its
authors and friends have been
sung by the injured, and by the widow
and the orphan; and,
finally, because the law itself stands
as a vindication of the great
principle that the plastic instrument of
democratic institutions
can be remoulded to suit changing needs
and conditions, this
contemporary history of the Workmen's
Compensation Law in
Ohio, for the period from 191O to the end of 1919, has been
attempted.
The law is vindicated. Watchfulness over
it, however, is
doubtless yet the concern of those who
desire to see great social
and industrial questions settled in the
American spirit of fair
play. Ohioans must watch to see that it
does not fall the prey
of designing interests, akin to those
who have brought into
question a similar partial experiment in
New York. Eternal
vigilance is the price of other things
than liberty.
(1)
2 Ohio Arch. and Hist. Society Publications.
For the information of the future men
and women of
Ohio this account of the manner in which
the enactment and
operation of the workmen's compensation,
or industrial acci-
dent, law were brought about is written.
It is the aim to make
it a repository for the central facts,
which should be recorded
where the too rapidly obliterating hand
of time may spare it.
Ohioans should, in the humble judgment
of the author, pre-
serve the inward facts about the act
which the heroic King of
the Belgians, Albert I, said on his
visit to Ohio in October, 1919,
is one of the most progressive laws to
be found on the statute
books of any country, and one of those
institutions which will
make "industrial justice" a
reality. The statute marked the
definite turn of the road from the old
to the new. Directly and
indirectly it probably affects a larger
number of people than any
other piece of legislation on the
statute books.
GENESIS.
In the last years of the nineteenth
century there swept
through Ohio one of those hidden
currents of sentiment that
was sooner or later certain to be
translated into governmental
action. The discontent - for such it
clearly was -quite natur-
ally took long to express itself in
definite form, and for long
years was subordinate to agitation of
other sorts. Basically, the
discontent was present because, in a
broad way, there confronted
men the proposition that while they
lived in an age of steam
and electrical transportation and
machinery their laws were
framed on the basis of the hand loom and
the stage coach. It
is scarcely to the credit of the vision
of the statesmen and legis-
lators of a democratic state that
nations with autocratic rule
saw this discrepancy between fact
conditions and statute condi-
tions a score of years before, and that
they had set aside the
petty interests and objections of those
who directly or indirectly
profited by the continuance of this bit
of legal atavism and had
adjusted their legal principles to
existing facts. For this tardi-
ness there may be possibly several
explanations. State questions
were, in this period, entirely
subordinate to others. Again, the
forces that gave expression to
discontent centered in the agrarian
element and not in the industrial. The
city workers had passed
The Ohio Workmen's Compensation
Law. 3
through the terrors of lean, hard years
of the early nineties,
and if given a "full dinner
pail," or steady work at reasonable
wages, there was no disposition on the
part of the masses to
press claims that the laws under which
they worked reeked with
brutal and shameless injustice. That
they did operate inhumanly
no man now doubts. Cases in which there
was a legal right to
recovery dragged through the courts
interminably. It is of
record that one such case continued
through the courts of Ohio
for nearly a generation, until those for
whose interest it originally
was brought had died, and dismissal
followed because there was
no longer a party in interest. While the
instance cited was
extreme, it may be said that there were
many others in which the
evil circumstances were no less marked.*
Ohio, in common with her sister states,
had adopted, through
her courts, the basic principles of the
English common law.
Judges, as in other states, had added
modifications of the com-
mon law, which, in the judgment of
enlightened people, did
violence to the good old English
traditional principles. It is
scarcely necessary to delve deeply into
these legalisms, but it
may be set down as a foundation that
rights of mankind were
painfully sacrificed to the rights of
property, and out of society
as a whole were being squeezed those
humane principles which
must be the safety and security of the
state. Long before
definite plans for a remedy had been
discussed, thoughtful men
saw that an end must be made of the
festering injustice which
was proving itself destructive of
citizenship. Respect for the
courts decreased. In every city, and in
every county, victims
of the cruel injustices of the hard
legal formulas cried aloud.
Attacks on the courts multiplied, and
the judicial ermine lost
the respect in which it was once held.
The distrust of the
courts and the attempts to modify the
rules of law led, naturally
and logically, to the formation of plans
to confine the claimants
for justice to still more harsh rules.
It became the aim of at-
torneys, who had this sort of cases to
conduct, to exert the
*Doyle, Admx., v. B. & 0. R. R.
Co.-81 Ohio State, 184.
Accident November 8, 1888.
Final judgment, Supreme Court, November
30, 1909.
Opinion by Price, J., all concurring.
4 Ohio Arch. and Hist. Society Publications.
strongest influence over the courts by
filling the benches with
men of their own stamp. The era was one
in which the courts
sank to the lowest levels, bringing to
the bench in too many
instances the type of jurists best
described by the term "extreme
reactionaries."
It is hardly to the credit of lawyers
that not they but laymen
saw clearly the pass to which things
were drifting, and made
efforts to correct the evils.
The case-hardened legal mind clung to
the olden ways. One
of the evidences of this was the
ferocity with which, in 1913,
the improved Workmen's Compensation Law
was attacked.
One of those who was loudest chanced
himself to have been a
Supreme Court justice during the
unfavorable years of the
"nadir of the judiciary." When
attention was called to the fact
that one of the personal injury cases in
which he concurred was
in the courts for about twenty-one
years, or nearly a generation,
and was finally dismissed because all
parties in interest save
the corporation had passed into
eternity, his criticisms ceased.
FIRST STEPS.
Search of the bill books of the General
Assembly for the
late nineties and early years of the
twentieth century does not
show that the successful operation of
workmen's accident insur-
ance in Germany and Austria made as much
impression in Ohio
and other states as it did in other
countries. It was not until
England had acted in the early part of
the new century that the
American public became interested,
although ever since the
mechanical industrialization of the
nation it had seen the victims
of the heartlessness and indifference of
those times on the
streets begging charity, or dependent
upon the labor of wives,
or in charitable wards, or in
almshouses. That a remedy was in
operation was known to advanced students
of economics, but
not to the general public. The political
leaders of this same
public were indifferent to things which
the public did not know,
and in which the public had not learned
to take an interest.
The compensating idea in all of this is
the fact that when the
Ohioans set themselves in motion they
evolved a plan which
made the much-vaunted German efficiency
seem clumsy by com-
The Ohio Workmen's Compensation
Law. 5
parison. The Ohio plan might stop
business at any time and
find itself able to discharge all
obligations by reason of the fact
that it had built up surpluses, while
that of the German Empire
made annual levies to meet the needs of
past accidents. In a
word, theirs is an improvisation levy,
and the American is a
scientific actuarial plan, paying for
its accidents as it goes along.
Tinkering with the inadequate system of
employers' liability
was the first manifestation that
evidenced very profound dis-
satisfaction with the fundamentally
barbaric idea that industry
and organized society could be
indifferent to and neglectful of the
woe and misery they caused. After many futile attempts, the
General Assembly on April 23, 1904,
enacted the Williams bill,
which was "An Act qualifying the
risks to be deemed as as-
sumed by employees." It was the
first nibble into the three
common-law principles known as
"assumption of risk," by which
it was assumed that the employee, or, as
then legally and com-
monly termed, the "servant,"
took virtually all the risks of
employment, and the employer, or to use
the mediaeval term,
the "master," substantially
none; "fellow servant," by which all
injuries inflicted by the negligent act
of another employee were
not to be charged to the employer; and
"contributory negli-
gence," by which the slightest
deviation from the rules of pru-
dence, caution and safety, was held to
throw the blame and the
loss entirely on the employee.
Although the Williams measure, so named
from its author,
W. J. (Jack) Williams, was a model of
conservatism, it aroused
the fiercest opposition, which did not
cease when it had been
voted upon.
The act provided that "in any
action brought by an em-
ployee, or his legal representative,
against his employer, to
recover for personal injuries, when it
shall appear that the
injury was caused in whole or in part by
the negligent omission
of such employer to guard or protect his
machinery or appli-
ances, or the premises or place where
said employee was em-
ployed, in the manner required by any
penal statute of the state
or United States in force at the date of
the passage of this act,
the fact that such employee continued in
said employment with
the knowledge of such omission, shall
not operate as a defense;
6 Ohio Arch. and Hist. Society Publications.
and in such action, if the jury find for
the plaintiff, it may award
such damages not exceeding, for injuries
resulting in death, the
sum of five thousand dollars, and for
injuries not so resulting,
the sum of three thousand dollars, as it
may find proportioned
to the pecuniary damages resulting from
said injuries; but noth-
ing herein shall affect the provisions
of Section 6135 of the
Revised Statutes." Section 6135 was
a statute applying gener-
ally to actions for wrongful death and
limiting to ten thousand
dollars the amount that might be
recovered. It continued to
be lawful until 1912, when it was
annulled by a constitutional
amendment.
As stated, the very acme of moderation,
the bill was not
suffered to become a law without every
sort of delay. While
the bill was in the transition period,
following its enrollment by
the General Assembly and signature by
the presiding officers, it
suddenly disappeared. Stolen, say some;
but, merely lost, said
others. What the truth really is can be
recorded only in the
books unseen by human eyes, for if a
preacher-lawmaker-politi-
cian-lobbyist really did steal it, as
believed by those of his period,
it is idle to record his name since he
is no longer present to defend
himself against the charge. But, at all
events, the scheme to
lose it was foiled. Mr. Wade H. Ellis,
then attorney general
of Ohio, (and this is a bit of
unrecorded history,) is said to
have arrived at the conclusion that the
bill might be reconstructed
from the records. To the public the
information was given that
the bill had been found. Whether the
original one was really
found, or whether the presiding officers
of the two branches of
the general assembly signed a
reconstructed bill, does not matter
now. They did a patriotic duty in
foiling the supposed theft,
and with the Ohio penitentiary gates
yawning for him, the man
with the guilty property in his
possession was estopped from
complaining. At all events, the
antiquarians, musing through
the statute books, will see the names of
Warren G. Harding,
then Lieutenant Governor, now United
States Senator from Ohio,
and Hollis C. Johnson, Speaker pro tem
of the House of Repre-
sentatives, over that of Governor Myron
T. Herrick, who, as
a man of humane instincts, was glad to
give his approval. The
story of the theft is more or less a
legend in legislative circles,
The Ohio Workmen's Compensation
Law. 7
but it is positively known that quiet
trips to the capitol were made
by the presiding officers after the
legislative session.
No other headlight appears in the story
until 1910.
PROGRESS AND THE COMMISSION OF STUDY.
Through the years various attempts were
made in the
general assembly to modify the law of
employers' liability. Two
forces were at work in this direction,
with far different motives.
The first was the personal injury attorneys,
who saw a promis-
ing field of operation in the constant
addition of dangerous
machinery and the constant expansion of
industry. The second
was the labor men and charity workers,
impressed by the number
of injured men and women who had no
chance for speedy and
adequate recovery at law, save in
exceptional cases. Students
of the subject, in a broad way, saw that
there was no prospect
for cure save by a major operation, if
it may be so called; that
the danger to the institutions of the
state in the archaic liability
laws must be entirely removed, and a
modern functioning organ
chosen in their place. Each piece of
legislative patchwork ap-
plied merely emphasized the deficiencies
of a system that be-
longed to the era of the flail and the
sickle, the hand spinning-
wheel and the hand loom, and not to the
era of the steam shovel
and mechanical spinner.
Save for a few students of social
sciences, the strides that
had been made in the sciences of
acommodating government to
the changes in the social and industrial
world attracted no gen-
eral interest, and there doubtless were
present in those days the
same variety of ignorant bureaucrats as
now delight in taking
upon themselves, although in complete
darkness of everything
happening around them, the task of
passing upon the policies of
the state.
One of the laws enacted by an Ohio
legislature two decades
after scientific means had been found
for dealing with the sub-
ject in lands abroad is found in 95 Ohio
Laws, a product of
1902.
Whoever will compare this statute with
that of 1913 must
be struck by the profound nature of the
changes in our public
life.
8 Ohio Arch. and Hist. Society Publications.
The statute is a feeble attempt to
weaken one of the favorite
defenses in the causes under discussion.
The act reads:
"An employer shall be responsible
in damages for personal injury
caused to an employee, who is himself in
the exercise of due care and
diligence at the time, by reason of any
defect in the condition of the ma-
chinery or appliances connected with or
used in the business of the em-
ployer, which arose from, or had not been
discovered or remedied owing
to the negligence of the employer, or of
any person in the service of the
employer, entrusted by him with the duty
of inspection, repair or of
seeing that the machinery or appliances
were in proper condition."
After prolonged efforts, in 191O, the
Norris and Metzger
acts were made laws. The principal point
established in the
Metzger act was the fact that an
employee who had recovered
in a suit against an employer
"shall be subrogated to all the
rights of the employer under any
contract or policy of insur-
ance." In case of insolvency of an employer this was a partial
aid, of small general consequence. The
Norris act attempted to
write a sort of code of employers'
liability, with regulations
designed to cover the defects and
shortcomings previously dis-
closed.
On May 17, 191O, there was approved an
act the beginner
of larger things. It was a provision for
the appointment of a
commission of five "known to
possess knowledge and training
in the subject of employers' liability
laws and compensation of
employees for injuries received in the
course of employment."
Two of the commissioners were to be
representatives of em-
ployers of labor, two to be
representatives of labor, and one an
attorney at law. The State Commissioner
of Labor was directed
to co-operate with the commission. The
commission was in-
structed to find a means, through
appropriate legislation, of
securing to employees a "speedy
remedy" for injuries "as will
be fair, just and reasonable both to
employers and employees."
Under the provisions of this act
Governor Harmon ap-
pointed James Harrington Boyd, of
Toledo, as the attorney
member, who was subsequently made
chairman, Mr. George W.
Perks, of Springfield, and Mr. John P.
Smith, of Cleveland, as
the employer members; and Mr. William H.
Rohr, of Cincinnati,
The Ohio Workmen's Compensation
Law. 9
and Mr. William J. Winans, of Galion, as
the labor members.
Perks was made vice-chairman and Rohr
secretary.
Whether by design or accident, the
records do not disclose,
the General Assembly failed to furnish
funds, and Governor
Harmon advanced them, being subsequently
reimbursed. Being
familiar with the law, Governor Harmon
took a keen interest
in the subject-matter disclosed, and in
the details of the com-
mission's work, writing letters to aid
in its researches.
The commission was fortunate in securing
the services of
three experts who had rendered good
service in the Illinois in-
vestigation, Mr. E. E. Watson, now the
internationally famous
actuary of the Industrial Commission,
Mr. William P. Harms,
and Mr. William R. Peacock. The
principal work undertaken
was an intensive study in Cleveland of
the economic effects of
injuries in industrial accidents for the
five previous years.
With the exception of Mr. Winans the
members of the
commission agreed upon a bill, the draft
of which was made in
large part by Mr. George B. Okey, of
Columbus. It provided
among other things for the collection of
75 per cent. of the
workmen's compensation fund premiums
from the employers
and 25
per cent. from the employees.
Mr. Winans presented his own bill,
differing in some
respects from that of the majority.
It is not desirable here to enter upon
the details of the
measures. They may be found set out in
the report of the
commission, which was published in 1911
in two large volumes.
This report contains transcripts of
hearings and fairly abounds
in legalistic quotations compiled and
arranged by Mr. Boyd.
This legal framework proved essential in
later tests of the law.
There was, perhaps, a needless bit of
cruelty in the report.
It carried copies of letters written in
regard to the workmen's
compensation law by certain business,
industrial and commercial
leaders. The delver into recent history
may well be astonished
at the statements contained in the
letters, but surely no one
would be inhuman enough to drag them out
to public gaze. On
the other hand, many employers--perhaps
a majority -were
fully cognizant of the injustices of the
then existing system and
longed for the day when it should be no
more.
10
Ohio Arch. and Hist. Society Publications.
Some of the letters assailed the entire
plan as "a scheme
of politicians and labor skates,"
and one letter, from a gentle-
man of atavistic tendencies, announces
that he (in his wisdom?)
has "regarded the laws of this
state as being fair to employees
for the reason that they are predicated
on the common law rule,
which, I believe, is supposed to
represent the best sense and
judgment of past ages."
One of the complaints of the employers
was that the cost
of protecting themselves against the
Norris act liability was
excessive. This in addition to the real
evils which many pro-
fessed to perceive.
THE ELECTIVE LAW.
Helpful efforts of Governor Judson
Harmon did not stop
with the advancing, out of his own
personal pocket, money for
the commission to conduct its
investigations, which act is one of
the few recorded in Ohio where a chief
executive has so done,
and evidenced his anxiety to see Ohio
make a beginning in the
reform of the treatment of those injured
in industry.
Early in the year there had been
prepared a bill embodying
the ideas of the majority of the
commission. The measure
was largely the workmanship of Mr.
George B. Okey, of Colum-
bus, who had been retained as counsel
for the Ohio Federation of
Labor. With the labor group were working
the manufacturers,
through the Ohio Manufacturers'
Association, which had been
led to take a progressive stand on the
issue by Mr. Daniel J.
Ryan, of Columbus, whose researches had
led him to the con-
clusion that a new departure must be
undertaken if the state
was to meet the obligations imposed upon
it.
In the drafting of the tentative bill
for introduction into the
general assembly, Mr. Okey took the
various acts in effect on
the continent of Europe, adapting them
to the conditions obtain-
ing here.
It would be a labor of too much detail
to trace in detail the
intricate processes of legislation with
respect to the bill. It passed
both branches practically unanimously,
but in substantially dif-
ferent forms. This made necessary
reference to a conference
committee to adjust the differences. It
was here that Governor
Harmon was able to exert a decisive
influence.
The Ohio Workmen's Compensation
Law 11
The outstanding contributions to the
final result were made
by Governor Harmon himself, the
provisions being written in
his own hand. These sections were known
as 20-1,
21-1 and
21-2. They were counted
as typifying the legal genius of the
Governor.
While the general assembly was
considering the measure,
the New York Court of Appeals, the
highest judicial tribunal
in the Empire State, handed down the Ives
case, which declared
unconstitutional and invalid the act
passed as the result of the
work of the Wainwright Commission. The
New York act was
compulsory in character and the decision
was a blow to the
friends of the new plan. It remained for
Governor Harmon
and his associates to work out a plan to
make an elective law
effective. This was accomplished by
giving to contributors to
the fund certain advantages.
By Section 20-1 it was
provided that any employer of five
or more workmen, who had paid the
premiums required under
the law, should not, save in certain
excepted cases, "be liable to
respond in damages at common law or by
statute" for injuries
to or death of an employee, provided the
employee remained in
the service after notice of the
employer's contribution to the
fund, the continuance to serve as a
waiver.
While the section above noted gave a
large share of im-
munity to those employers who had
contributed to the fund, the
complement to this provision was found
in a penalization of
those who failed to contribute.
By Section 21-1 it was provided that employers of more
than five who had not contributed to the
fund should not in the
event of personal injury litigation on
the part of an employee
"avail himself of the following
common law defenses:
"The defense of the fellow-servant
rule, the defense of the
assumption of risk, or the defense of
contributory negligence."
The alternative to the provision was
found in Section 21-1,
and also constituted the exception noted
in Section 20-1. By
Section 21-2 it was provided that the civil
liability to damages
for injuries should not be cancelled if
the employer, or any of
such employer's officers or agents, were
guilty of any "wilful
act" or the injury resulted
"from the failure to comply with any
12 Ohio Arch. and Hist.
Society Publications.
municipal ordinance or lawful order of
any duly authorized
officer or any statute for the
protection of the life or safety of
employees."
It was a comprehensive and consistent
program which was
contemplated. To the employer was offered freedom from
vexatious litigation if he would
subscribe to the state fund, and
the threat of a penalty if he did not.
On the other hand the
injured employee was assured of an
award; or could sue, at his
option, if the employer had been guilty
of gross dereliction of
duty in failing to provide him a
reasonably safe place to work.
In general the act provided for the
creation of a State Lia-
bility Board of Awards, to be composed
of three members, with
six-year terms, to be appointed by the
Governor, to be paid
$5,000 salaries, and to devote
themselves exclusively to their
duties. Offices were to be in Columbus.
The board was to name
a secretary, actuary and other employees
as necessary. Section
8 gave it the right to make reasonable
and proper rules for pro-
cedure, and succeeding sections
conferred needful power upon
it.
Section 17 authorized classification of
employments with
reference to the degree of hazard and
required establishment of
rates sufficient to pay the awards to
injured workmen and to
the dependents of those killed, and to
create a surplus to carry
forward the fund from year to year.
Section 18 established the fund from
premiums collected,
of which the Treasurer of State was to
be the custodian. Sec-
tion 20-2 provided that the first payments should be made on or
before January 1, 1912, and
authorized the employers to take 10
per cent. of the premiums from their
employees. Section 21
authorized the board to disburse the
state insurance fund to
employees of subscribing employers
"that have been injured in
the course of their employment,
wheresoever such injury has
occurred, and which have not been
purposely self-inflicted, or
to their dependents in case death has ensued."
Section 23 also required the payment of
medical, nurse and
hospital services, not exceeding in any
one case two hundred
dollars. This provision was the cause of
some dissatisfaction
in operation, and the amount was subsequently left unrestricted
The Ohio Workmen's Compensation
Law. 13
by legislative enactment, approval of
the state administering
board being required.
Funeral expenses, in the event of death,
were limited to
one hundred and fifty dollars. Awards in
money dated from the
eighth day of disability. The monetary
award was to be two-
thirds of average weekly wage for
temporary or partial disabil-
ity, between the minimum of five dollars
a week and the maxi-
mum of twelve; in case of permanent
total disability two-thirds
of the weekly wage, between five and
twelve dollar limits, was
to be paid for life.
The death award to dependents was to be
a maximum of
three thousand four hundred dollars,
paid during a period of
six years, and a minimum of fifteen
hundred dollars.
Section 31 provided the average weekly
wage at the time of
the injury should be taken as the basis
of benefits.
The board was given continuing
jurisdiction, and was also
given authority to commute payments in a
lump sum.
Under Section 36, if the board denied
any award upon any
grounds, appeal might be had by the
plaintiff to the common
pleas court of the county in which the
injury was inflicted, the
board becoming the defendant. Final
judgments were to be
paid from the fund.
Along with other provisions the board
was directed by
Section 36-1 not to be bound by
"the usual common law or
statutory rules of evidence or formal
rules of procedure."
For the first year the board was given a
fund of one hun-
dred thousand dollars exclusive of the
salary of members. It
was allowed twenty-five thousand dollars
as a preparatory fund.
UNDER THE ELECTIVE LAW.
It was at once apparent that obstacles
would confront the
administration of the law. With great
care Governor Harmon
selected the board, naming Mr. Wallace
D. Yaple, of Chillicothe,
as chairman, Mr. Thomas J. Duffy, of
East Liverpool, and Mr.
Morris Woodhull, of Dayton. Mr. Woodhull
represented the
employers, Mr. Duffy the employees, and
Mr. Yaple the general
public interest. The board elected Mr.
William C. Archer, of
14 Ohio Arch. and Hist.
Society Publications.
Lancaster, as secretary. Mr. Herbert T.
Weston became rating
actuary and Mr. E. E. Watson actuary. Of
these men Messrs.
Duffy and Watson have continued until
this time in service.
It was soon apparent that no progress
would be possible
until the constitutionality of the law
could be established. Hence,
early in 1912 a suit was arranged by
agreement. Treasurer of
State D. S. Creamer held up a warrant,
and the board brought
an action in mandamus in the supreme
court to compel him to
honor it. Creamer pleaded the alleged
invalidity of the law.
Attorney General Timothy S. Hogan and
his able staff, assisted
by Mr. Yaple, defended it. The case was
notable, too, in that
the private liability insurance
companies, whose interests were
seen to be in jeopardy, appeared to
oppose the law. Their los-
ing battle was to continue for years.
The court, in an exhaustive
opinion, written by Justice James G.
Johnson, sustained the act.
The decision was, in effect, later
sustained by the United States
Supreme Court, thus establishing a
landmark in social legisla-
tion. Now began the efforts to secure
subscribers. It was
found that there was no accurate
information on which rates
could be predicated. It is true that the
state had industrial
accident statistics and employers were
under penalty of law to
report the number to the State
Department of Workshops and
Factories, but the law was not enforced
and the number of
accidents reported annually was less
than 40,000 as against the
150,000
average annual number now recorded.
Actuary Weston's
services were of questionable value- the
state had not yet found
the right field for its expert Watson.
It was speedily developed
that the premium rates of the private
insurance companies had
been fixed either by chance, or on the
basis of what the traffic
would bear. The tentative rates
submitted by Mr. Weston were
reduced extensively by the board, at the
suggestion of Mr.
Yaple, until they were less than those
of the private liability
insurance companies for liability
insurance. That they would
be lower was inevitable, since the state
paid the overhead
expense, which is a forty-five per cent.
factor in private insur-
ance.
Under these conditions, the contest
between the old and
the new began, to continue until the
death of the old.
The Ohio Workmen's Compensation
Law. 15
One of the early contributors to the
state fund was The
Firestone Tire & Rubber Company, of
Akron. Other progres-
sive companies followed, and, by the
time the compulsory act
succeeded the elective, the fund had
3,937 subscribers protecting
perhaps 300,000 employees, and was
attracting favorable com-
ment wherever it was impartially
discussed.
The premium receipts under the elective
law were $1,262,-
099.37, and in the first year of
operation of the fund it was
$219,544.30.
PUTTING THE IDEA INTO THE BASIC LAW.
Although the Ohio Supreme Court had
rendered a decision
sustaining the elective law of 1911,
friends of the new system
knew that it would not be possible to go
to the extent they would
wish until the principle was written
into the basic law of the
state by votes of the people themselves.
From the point of view
of federal questions involved, taking of
property without due
process of law, the state constitutional
amendment would have
only indirect effect. Still it would be
an expression, and, as
such, would have its reflex influence in
the determination of the
legal objections certain to be raised.
Notwithstanding the importance of the
measure it received
but scant consideration in the debates
of the Constitutional Con-
vention. There were two proposals
presented on the matter,
one by Delegate Harry D. Thomas, of
Cuyahoga county, and
the other by Delegate Henry Cordes, of
Hamilton county. Mr.
Thomas' proposal was considered too
far-reaching and radical
in its nature, as Mr. Thomas was an
avowed Socialist. He was
a man respected for patriotism and
integrity.
In the numerous addresses given before
the convention by
leading men and candidates for
President, the subject was men-
tioned incidentally, but stress was laid
generally on the direct
legislation reforms which were designed
to give the people,
through the ballot box, direct control
of their laws and law-
makers.
The details of the proposal for
compulsory workmen's com-
pensation were worked out in the Labor
and Judiciary Commit-
tees, and when Delegate Cordes called up
his proposal, No. 24.
there was no debate on the proposition.
Mr. Cordes explained
16 Ohio Arch. and Hist.
Society Publications.
his proposal, and the vote was unanimous
in its favor, not a voice
being raised against it.
The proposal was listed as Article II,
Section 35, reading
as follows:
"For the purpose of providing
compensation from a state fund, to
workmen and their dependents, for death,
injuries or occupational dis-
eases, occasioned in the course of such
workmen's employment, laws may
be passed establishing a fund to be
created and administered by the state
and by compulsory contribution thereto
by employers; determining the
terms and conditions upon which payment
shall be made therefrom and
taking away any and all rights of action
or defenses from employees and
employers but no right of action shall
be taken away from any employees
when injury, disease or death arises
from failure of the employer to com-
ply with any lawful requirement for the
protection of the lives, health
and safety of employees."
It will be observed that two changes
from the elective law
were clearly intended. Under the
elective law the employees
paid ten per cent. of the premiums,
while under the present con-
stitutional amendment the way was paved
for the payment by
the employers of all. It may also be
apparent that the element
of choice was to give way to that of
compulsion, the state now
frankly adopting the theory that it
could for the general welfare
take property of private individuals,
returning them compen-
satory benefits in the form of
prospective industrial peace and
contentment.
It was natural that in the special
election on the proposed
constitutional amendments, in which
forty-two propositions were
to be voted on, a single one would not
receive great attention.
Nevertheless friends of the plan
succeeded well in arousing a
certain amount of interest and bringing
out a very heavy affirm-
ative vote, so that the amendment won
favor uniformly over
the state and carried by 109,786
majority, the affirmative vote
being 321,558, and the negative 211,772.
The stage was set at
last for a larger development.
THE COMPULSORY LAW.
Now, while at the beginning of 1913
there was a constitu-
tional authority for a compulsory
workmen's compensation law,
The Ohio Workmen's Compensation
Law. 17
the greatest confusion existed as to
plans. The propaganda of
the opponents of the state insurance
fund method was insidiously
at work. The public sentiment in favor
of the plan had not, so
to speak, crystallized.
In his parting message to the General
Assembly, Governor
Judson Harmon had paid his respects to
the men seeking to gnaw
at the law, and had denounced in
unmeasured terms the private
liability insurance interests. His utterances upon the matter
follow:
STATE BOARD OF AWARDS.
"I call special attention to the
report of this Board. It has under-
taken a novel and beneficent work which,
when fully understood, must
appeal to the judgment and hearts of all
citizens.
"The law passed at the last session
after many disputes and diffi-
culties has proved to be, by general
consent of the competent and impar-
tial, the best in the country. And,
considering the delicate and difficult
task of putting it in operation, the
Board has made most commendable
progress.
"It has had to encounter from the
start shrewd and vigorous oppo-
sition from the liability insurance
companies. This was to be expected,
but not of the unscrupulous character
shown. The courts have upheld the
law. Its administration has been well
organized and employers in con-
stantly growing numbers are joining the
movement. It may safely be said
that success is now assured.
"The Board recommends some minor
changes in the law to make it
more effective without changing its
general scope, and I recommend that
no further changes be made, at least
until the light of further experience
is thrown on the subject.
"While it is now within your power
to make employers contribute
the entire fund, I think this should not
be done. The reasons which led
me to advocate joint contributions when
the bill was under consideration
have not lost but gained in weight since
the law has been in operation.
"Peace and good will between
employers and employees are by no
means the least of the objects in view.
To these mutuality in the enter-
prise is essential. The 10 per cent. of
the fund now contributed by em-
ployees is a mere trifle to each because
divided among a large number. I
have been told that in some cases it is
too small to be worth collecting.
And it is less than employees who
formerly carried insurance paid in
premiums.
"But these contributions by
employees, small as they are to each,
have a high moral value. Like the dues
paid by members of benevolent
societies, they do much to take from the
benefits, when misfortune brings
Vol. XXIX - 2.
18 Ohio Arch. and Hist. Society Publications.
them, the flavor of charity which is
always distasteful to Americans.
The benefits become well-earned
dividends on an investment.
"And when the employees have an
ownership in the fund they will
help guard it against false and inflated
claims."
Succeeding to the governorship in
January, 1913, Mr. James
M. Cox presented a clear idea of the
entire plan, but was uncer-
tain in statement as to the method to be
pursued, even discerning
some good in a competitive scheme. His
inaugural message is,
however, a landmark in the history of
the law. He said:
"It would certainly be common bad
faith not to pass a compulsory
workmen's compensation law. No subject
was discussed during the last
campaign with greater elaboration, and
it must be stated to the credit of
our citizenship generally that
regardless of the differences of opinion ex-
istent for many years, the justice of
the compulsory feature is now ad-
mitted. Much of the criticism of the
courts has been due to the trials of
personal injury cases under the
principles of practice which held the fel-
low-servant, the assumption of risk and
the contributory negligence rules
to be grounds of defense. The layman
reaches his conclusion with re-
spect to justice along the lines of
common sense, and the practice in per-
sonal injury cases has been so sharply
in conflict with the plain funda-
mentals of right that social unrest has
been much contributed to. A sec-
ond phase of this whole subject which
has been noted in the development
of the great industrialism of the day
has been the inevitable animosity
between capital and labor through the
ceaseless litigation growing out of
these cases. The individual or the
corporation that employs on a large
scale has taken insurance in liability
companies, and in too many instances
cases which admitted of little
difference of opinion have been carried into
the courts. The third injustice has been
the waste occasioned by the sys-
tem. The injured workman or the family
deprived of its support by acci-
dent is not so circumstanced that the
case can be contested with the cor-
poration to the court of last resort.
The need of funds compels compro-
mise on a base that is not always
equitable. Human nature many times
drives sharp bargains that can hardly be
endorsed by the moral scale. In
the final analysis the cost of attorney
fees is so heavy that the amount
which finally accrues in cases of
accident is seriously curtailed before it
reaches the beneficiary. These three
considerations clearly suggest the
lifting of this whole operation out of
the courts and the sphere of legal
disputation. And then there is a broader
principle which must be recog-
nized. There is no characteristic of our
civilization so marked as the
element of interdependence as between
social units. We are all dependent
upon our fellows in one way or another.
Some occupations, however,
are more hazardous than others, and the
rule of the past, in compelling
those engaged in dangerous activities to
bear unaided the burden of this
The Ohio Workmen's Compensation
Law. 19
great risk, is not right. The workmen's
compensation law in this state,
which, however, lacks the compulsory
feature, has made steady growth in
popularity. The heavy decrease in rates
clearly indicates economy and
efficiency in the administration of the
state liability board of awards. The
compulsory feature, however, should be
at once added. I respectfully but
very earnestly urge its adoption, amendatory
of the present law, with
such other changes as experience may
dictate. There is some force and
justice in the contention that the
employers should be given the option of
insuring either in the state fund under
the liability board of awards or in
liability companies which have met all
the requirements of the state de-
partment of insurance. If the state
board gives better service and lower
rates it will be perfectly apparent that
the liability companies are oper-
ating on the wrong base. If, on the
other hand, insurance concerns yield
an advantage both in service and rates,
then it would be safe to assume
that efficiency and economy of
administration are lacking with the state
board. The competitive feature may be wholesome.
The objective to be
sought is the fullest measure of
protection to those engaged in dangerous
occupations, with the least burden of
cost to society, because after all the
social organization must pay for it. The
ultimate result of this law will
be the reduction in death and accident,
because not only the humanitarian
but the commercial consideration will
suggest the necessity of installing
and maintaining with more vigilance
modern safety devices."
The question really at issue not being
settled, the conflict
of the forces began. Of those who
desired the obliteration of
private profit in the ultimate system
there were two distinct fac-
tors, those who believed that the course
of time would eliminate
the private interest and those who
believed it should be done
immediately by law.
It was largely to unite the forces on a
definite policy that
Governor Cox called a conference at his
home late in January,
1913. Among those present were Attorney
General Timothy S.
Hogan, Chairman Wallace D. Yaple and
member Thomas J.
Duffy of the State Liability Board of
Awards, Lieutenant Gov-
ernor Hugh L. Nichols, Mr. James W.
Faulkner, Columbus
correspondent of the Cincinnati
Enquirer, Senator William
Green, of Coshocton, sponsor for the
first law, Senator Carl D.
Friebolin, of Cuyahoga county, and Mr.
William L. Finley, of
Kenton, chairman of the Democratic State
Executive Com-
mittee. A dinner preceded the
discussion.
It speedily developed that Mr. Yaple was
the leader of the
opposition to a state monopoly plan. He
believed that the state
20
Ohio Arch. and Hist. Society
Publications.
fund was the best, but that it should
gain its way by disclosing
this fact under the elective law, which
he was confident it would
do. He did not favor at that time the
compulsory law.
What finally convinced him that there
was a weakness, per-
haps a fatal weakness, in his idea, was
the analogy from the
business world, typified by the Standard
Oil history. This
great corporation, in the days when
monopoly was unchecked
by any attempt to enforce the laws, had
been able to deal with
competitors one at a time by lowering
selling prices to ruinous
levels. Losses, subsequently, were
easily recouped. Mr. Yaple
accepted the decision in favor of the
compulsory law.
Governor Cox, who at all times, leaned
toward the state
fund plan, now boldly came forth to
champion a bill drawn on
the lines indicated. The bigger battle
had begun.
Great aid was rendered by men like
Daniel J. Ryan, of
Columbus, general counsel of the Ohio
Manufacturers' Asso-
ciation, and W. H. Stackhouse, of
Springfield, and others, who
might be mentioned were the list to be
prolonged. Representing
the employing interest, these men had
the good of the state and
of the people so much at heart and saw
so clearly the larger
wisdom that they did not hesitate to
work in behalf of the enact-
ment of the law.
But the liability insurance agents were
also at work, and
at work justifying the description of
Governor Harmon as to
"unscrupulous character". They preyed upon the prejudices
and fears of the employers, more
particularly the small town
employers who were made to fear that the
law would impose
such obligations on them as to drive
them "into ruin and bank-
ruptcy". Floods of protesting
letters and telegrams poured in
upon the Governor and members of the
General Assembly.
Some of the assemblymen, not inured to
these methods, became
panicky. On the Governor these methods
produced no impres-
sion.
Then special train loads of men were
sent to call in person
upon him. They were invariably met with
the question, "Have
you read the bill?" Most of them
had not.
But there was no disposition to rush it
through. On the
contrary every legitimate interest was
heard, and the Governor
The Ohio Workmen's Compensation
Law. 21
himself attended the committee sessions
in order that he might
cooperate in its decisions. An amending
section was inserted
giving financially responsible employers
the option of paying
benefits direct, which neutralized a
large part of the opposition.
But objection of the liability insurance
company sort continued.
It took the form of proposed amendments
that were hostile to
the spirit of the act, but when time for
action arrived they were
voted down. Into such shape at last was
the act brought that
on final passage it received the vote of
every member elected to
the General Assembly in both branches, a
circumstance almost
without parallel in the history of the
state.
THE LAW REVIEWED.
Notwithstanding the agitation, and the
passage, even, of
the first elective workmen's
compensation act, the lack of
knowledge of the law and its purposes
was quite general. Illus-
trative of this is the recital of the
opponents of the act, who
brought many men to Columbus to oppose
the passage of the
compulsory act in 1913. Among the
manufacturers was the late
Mr. David Tod, of Mahoning County,
himself a former State
Senator. Mr. Tod was heavily engaged in
the iron and steel
business and in other industries and
enterprises. When he was
apprised of the real purposes of the
proposed measure, he became
a very enthusiastic worker for it.
Thus, from lack of information, there
was much indiffer-
ence, which was readily crystallized
into opposition through the
work of shrewd propagandists. Students
had delved into the
European systems, but the general public
largely lacked knowl-
edge of the real purposes of the law
until it was in actual oper-
ation and its benefits could be seen.
The law, thus unanimously approved, was
a substitution for
the elective law of 1911. It was to go
into effect on January 1,
1914. New provisions were, of course,
necessary to give effect
to the legislative purpose of bringing
all employers under its
provisions. These included, in Section
4, a requirement for
filing semiannually a statement of the
number of men and
women employed and the wages paid.
22 Ohio Arch. and
Hist. Society Publications.
There were provisions for semiannual
re-adjustment of
rates, and a direction to establish a
substantial surplus and finally
maintain the rates at as low a level as
possible. In order to
secure good investments for the fund,
the board was given the
option of purchasing at par and accrued
interest bonds of local
political subdivisions of government,
the new bond issues to be
first offered to the board.
One of the comprehensive provisions of
the act was to be
found in Section 13, which said:
"The following shall constitute
employers subject to the provisions
of this act:
"1. The state and each county,
city, township, incorporated village
and school district therein.
"2. Every person, firm and private
corporation including any public
service corporation that has in service
five or more workmen or oper-
atives regularly in the same business,
or in or about the same establish-
ment under any contract of hire,
express, or implied, oral or written."
By Section 14, all publicly employed
persons, save public
officials, were classed as
"employees". Thus, the state, striving
to make other employers apply the great
principle of industrial
justice, by this stroke also became itself
subject to the same fair
law. The provisions have been criticised
at times and certain
refinements have been necessary, but
there has been no demand
for repeal.
The Contributions from the state and the
political subdi-
visions were enforced by appropriate
provisions.
Section 22 required contributions from
employers as pre-
miums to sustain the fund, with a
proviso, however, permitting
employers to give a bond to assume their
own risks. Fewer
than one thousand employers, albeit some
of the largest, have
taken advantage of this provision. The
self-insuring employers
were required to contribute to the
"catastrophe" surplus, upon
which no serious strain has ever been
laid.
An exemption-from-liability provision,
similar to that of the
original act, was included, and by
Section 24 employers of fewer
than five employees were given the
option of coming into the
fund. By Section 26 employers who failed
or refused to comply
with the law were stripped of the three
common-law defenses,
The Ohio Workmen's Compensation
Law. 23
'fellow servant", "assumption
of risk" and "contributory negli-
gence", and in addition were to be
subjected to the provisions of
Sections 27 and 28.
Under section 27 the board is authorized
to make an award
in the case of an employee injured in
the service of an employer
who has failed to comply with the law,
and, if the employer
fails to pay the award, the board sues
for the amount and a
fifty per cent penalty added. The
section proved very useful,
and many cases under it were
successfully prosecuted, until
delinquents came to have a very healthy
respect for the law.
Section 28 gave the right to sue for
delinquent premiums.
This section has rarely been invoked.
Section 29 is the so-called "open
liability" section of the
law, being quite similar in scope to the
corresponding section of
the elective law. Employers, however,
were not permitted to
plead the "assumption of risk"
defense, this being considered
too barbarous. Claiming compensation, as
under the elective
act, waives the right to sue at common
law for damages.
Section 33 provided a detailed schedule
of awards by which
the loss of a thumb called for
compensation for sixty weeks;
first finger, thirty-five weeks; second
finger, thirty weeks; third
finger, twenty weeks; fourth finger,
fifteen weeks. Loss of a
hand called for an award for one hundred
and fifty weeks, and
an eye for one hundred weeks. The other injuries set out
carry compensation in proportion. Other
provisions of the law
followed the original act with such
improvements and amend-
ments as time and experience had shown
necessary.
The signing of the act was an improvised
function in the
Governor's office.
Scarce was the act filed with the
Secretary of State, await-
ing the referendum period of ninety
days, when the attack
began. The so-called "Equity
League" was organized, with Mr.
Charles S. Gongwer, of Cleveland, as
secretary. Mr. Gongwer
set out to get signers to the petition
for a plebiscite upon it, but
the circulators were chased out of some
factories by the work-
men, and had little success in others.
It was then that many of
the unscrupulous ones, who had imposed
themselves on Mr.
Gongwer, manufactured petitions by
writing in fictitious names
24 Ohio Arch. and Hist.
Society Publications.
and by the forging of others. It was
established that Mr. Gong-
wer had not knowingly been a party to
this abuse, but had him-
self been made the victim of it.
Investigation of the petitions disclosed
the frauds, and led
to a decision by Secretary of State Charles H. Graves that the
petitions were so permeated with fraud
that the good and valid
names could not be separated from the
bad and that the entire
body of documents must be rejected. The
supreme court subse-
quently decided that he had not abused
the implied discretion
vested in him in thus finding, which
accorded with the legal
contentions of Attorney General Timothy
S. Hogan.
During the investigation many petition
circulators detected
in questionable practices were arrested
but none of them could
be prosecuted because their acts had not
been specifically defined
as crimes by the statutes of Ohio.
The investigations, however, had
collateral consequences of
interest and importance. One of them was
the enactment of
laws designed to protect the initiative
and referendum from
fraud, and these have worked so well
that no similar charges
have ever been made. A second grew out
of libel suits brought
by one of the men arrested against
newspapers which printed
the news of the arrest. The newspapers
successfully defended
themselves and thereby established the
constitutionality of the
Bader Act of 1911, making fair accounts
of public proceedings,
in the absence of actual malice,
privileged so far as bona fide
publications were concerned.
In the constitutional time after its
enactment, then, the
compulsory workmen's compensation act
became the law of Ohio.
THE FIRST YEAR'S EXPERIENCE.
One of the important measures that was
developed during
the first administration of Governor
James M. Cox was the act
creating the Industrial Commission,
which body took over the
work of the State Liability Board of
Awards and that of various
other boards and bureaus that had been
created to supervise the
relations of capial and labor and
enforce the safety laws. Mr.
Frank Davis, Jr., of the Attorney
General's office, drew the act,
modeled largely after the law in force
in Wisconsin.
The Ohio Workmen's Compensation
Law. 25
Under it Governor Cox appointed Messrs.
Yaple and Duffy,
and, as the third member, Prof. M. B.
Hammond of Ohio State
University. They took office on July 1,
1913, and made ready to
put in operation the provisions of the
new workmen's compulsory
compensation law on January 1, 1914.
Important decisions of policy had
constantly to be arrived at,
and the office force expanded to meet
the increased work. More-
over, the employers had to be educated
in the provisions of the
law, this being no small task.
In the application of the law earnest
and thoughtful help
has always been given by the Attorneys
General of Ohio, all of
whom, without exception, have sought to
give it effect and appli-
cation and have been willing to strain a
legalistic formula or two
to be able to do it. This assertion
applies to Messrs. Timothy S.
Hogan, Edward C. Turner, Joseph McGhee
and John G. Price.
Honor to them for able and conscientious
efforts!
At the very outset there was much for
employers to fear,
especially so with respect to the
so-called "open liability." The
constitutional provision and the federal
constitution forbade the
closing of this gap entirely, for not
only the amendment, but
also the bill of rights of the state,
provides that courts of the
land shall be open, and any person for
an injury done him shall
have remedy by due course of law.
Senator William Green, of
Coshocton, author of the first and
second acts, was entirely will-
ing to go the entire distance in
stopping personal injury litigation,
restrained only by his power to do so.
This, indeed, was the
view of all labor men of the best
judgment, although personal
injury attorneys, contemptuously known
as "ambulance chasers,"
would have had it appear otherwise.
When the General Assembly came back in
special session at
the beginning of 1914, a meeting between
employers' repre-
sentatives and employees'
representatives was held to determine
upon possible changes in the law of 1913.
The labor men had no special demand, but
the employers
were anxious to have "wilful
act," as used in the law, defined.
Lawyers felt there was grave doubt as to
its meaning. Accord-
ingly an act was drawn and passed,
defining the term in such a
way as virtually to make it an assault
in violation of law, or such
26 Ohio Arch. and Hist.
Society Publications.
as would lead to a verdict of
manslaughter, or a higher degree of
murder, if death should result. The
effect of the provision was
to narrow the field of liability by
making it impossible to hold an
employer for some trifling circumstance
which had escaped his
notice, and to free him from the menace
of unjustified litigation.
The provision worked well, so well that
out of 170,000 claims
fully adjusted at this time no suits
have resulted on the "wilful
act" score. It was to be regretted
that a few labor men, from
motives quite un-understandable, sought
to oppose the amend-
ment.
The year 1914 was a period of industrial
depression, not-
withstanding in that year premiums to
the amount of$2,801,162.78
were collected from 15,436 employers.
The policy of bringing together workers
and employers to
deal with needful changes in the law
became a fixed policy of the
state
THE LAW IN PERIL.
The years 1915 and 1916
proved periods of great trial for the
newly installed system. It had as stated
become effective as a
compulsory law on January 1, 1914, and a
period of only twelve
months was not sufficient to educate all
of the workmen and all
of the employers into the benefits of a
scheme, basically new and
strange to their comprehension. As their
knowledge of it grew,
there grew also their favorable
sentiment toward it, but the
months of trial were difficult and
demanded the utmost faith and
courage.
At this time the medical element was a
troublesome one.
The physicians and surgeons had been but
little consulted in the
formulation of the law. They paid but
little attention to this
great law, although their association
was busy enough with other
things of far less interest to the
general practitioner and surgeon.
The first months of its application were
full of vexatious delays
in settlements, of lack of system in
making payments for medical
and surgical services, and of those
petty annoyances which, while
they may not greatly impress the men in
charge of administration,
are nevertheless certain to be keenly
felt by individual members
of the profession.
As the members of the profession who had
extensive deal-
The Ohio Workmen's Compensation
Law. 27
ings with the commission in charge of
the system naturally re-
ceived a certain number of unfavorable
impressions, and talked
of those impressions in their county,
district and city meetings,
it was natural and inevitable that a
degree of hostility to the sys-
tem should arise among the profession.
And this symptom was
promptly seized upon by those with
special motives to serve as a
pretense for launching an attack for the
destruction of the entire
law.
The paragraphs that have gone before
must not be construed
as an attack upon the medical
profession. As the work has been
brought to a higher state of
development, errors have been cor-
rected, wrong methods have been replaced
by better ones, and
the fees have been standardized to the
improvement of the ser-
vice. Then, too, the commission has been
enabled to be slightly
more liberal in its allowances. Today
there are few physicians
and surgeons who are hostile to the
intents and purposes of the
system, although they are not unanimous
in approving the state's
policies. In a recitation of the
situation, historical accuracy de-
mands an alignment of the perils
conquered and the causes for
those perils.
But the situation with respect to
physicians and surgeons
was as nothing compared to other
attacks, legal, political and
actuarial. As all bore upon the same
general facts, it is difficult
to separate and follow the individual
threads through the tangled
skein in which the system was enmeshed.
The political diffi-
culties were a heritage of the canvass
for Governor in 1914.
The Governor under whose administration
it was passed had
naturally to bear the hostility of the
private liability insurance
companies and their agents. This
hostility Governor James M.
Cox did nothing to diminish, but on the
contrary even increased
it by stating frankly that he did not
desire their support at the
price of sacrifice of the law.
Added to this was the fact that there
was a community of
interest between certain employers and
the insurance interests
whose elimination from the business of
workmen's compensation
was sought, even though the Ohio
Manufacturers' Association
had never succumbed to this influence.
Moreover, it was clear
then to far-sighted men what has since
become very clear to all,
28 Ohio Arch. and Hist.
Society Publications.
namely, that the establishment of a
state insurance fund ulti-
mately will mean the end of private
profit from the miseries of
those who are killed or injured in
industry.
Upon the other hand, the character of
the supporters of Mr.
Cox's successful antagonist in 1914,
then Congressman Frank B.
Willis, was bound to have its influence
upon the subsequent ad-
ministration. There is no intention to
assert, that, as Governor,
Mr. Willis was intentionally hostile to
workmen's compensation;
but, on the contrary, its humane
purposes probably appealed to
his sense of justice and right. But the
public opinion of the state
never quite formed this notion, as,
indeed, it was a notion quite
difficult to form from the things that
were done or omitted to be
done during his administration.
In the light of the appeal of Mr. Cox
and the nature of things
Mr. Willis had said or failed to say in
the canvass, the victory
of Mr. Willis at the polls was
interpreted to mean a repudiation
of the state insurance fund policy. The
interests which had con-
tributed their support to the result
indicated naturally felt there
was a moral obligation, regardless of
the Governor's personal
feeling, to realize their hopes.
Scarcely was the General Assembly
convened in January,
1915, when the attack was begun from
this quarter, and it devel-
oped later in other theaters where the
question arose. In the
General Assembly it took the form of a
resolution, which, through
some agency never clearly revealed, was
presented by a labor
delegate, Representative Henry Ott, of
Hamilton County. It
was a demand for an actuarial audit of
the state fund, and,
though doubtless the fund could have
shown undoubted solvency,
was a premature effort to bring it to a
test, when by every rule of
good judgment and fair play no such
demand should have been
made. Suffice it to say that the
resolution was never passed and
that in the end Mr. Ott was glad it did
not pass. It was his
first experience in legislation and it
was not surprising that his
feet were caught in a net spread for the
unwary.
Then came the demand of Governor Willis
for the resigna-
tions of Chairman Wallace D. Yaple and
Member Thomas J.
Duffy of the Industrial Commission, and
this, too, in the face of
the well-known wish of both capital and
labor that these mem-
The Ohio Workmen's Compensation
Law. 29
bers be left undisturbed in their
tenure. In Mr. Willis's behalf
it may be stated that similar demands
were made upon the other
commissioners whom he found in office as
an inheritance from
the administration of Mr. Cox, still
there was an articulate
demand that this particular institution
be separated from the
remainder of the places because of the
important nature of its
work.
The demand for the resignations being
rejected, there arose
a demand for places under the Industrial
Commission, in recorded
instances without regard to the services
that were rendered.
Mr. Duffy, in this respect, was able to
exercise a strong influ-
ence in retaining pivotal men. There was
a quiet effort to secure
the position of Emile E. Watson, actuary
of the commission,
upon whom much of the most arduous work
in establishing the
state fund plan devolved. Whence arose
this demand can be
but the subject of conjecture. For the
most part, though, the
disruptive efforts were frustrated,
whether they originated in
mere desire for political spoils or with
other ends in view.
It was not a pleasant task that the
commissioners faced, and
the worry incident thereto has been felt
by his friends to be one
of the reasons for the breakdown in the
health of Chairman
Yaple, subsequently resulting in his
death in office in 1917. He
died a martyr to his efforts to make the
experiment of the state
a success.
But the nibbles which the policy of the
administration per-
mitted were as nothing compared to the
interpretation of the
law by Judge Frank Taggart, who became
Superintendent of
Insurance. This interpretation became
known as the "Taggart
ruling," and through various phases
occupied the attention of
the courts for a long period, a final
phase being at the time this
is written in the United States Supreme
Court for final adjudica-
tion. A recital of facts will make clear
this layman's statement
of the matter at issue.
Section 9519 of the General Code was the
section which
generally authorized insurance companies
to insure persons,
firms, companies and associations from
the hazards of life. In
this general authorization was a
provision which enabled com-
panies to "make insurance to
indemnify employers against loss
30 Ohio Arch. and Hist. Society
Publications.
or damage for personal injury or death
resulting from accidents
to employees or persons other than
employees," etc.
There was in the original Workmen's
Compensation Law a
section known as Section 54, which, in
the general structure of
the law, appeared to have been
overlooked and to have slipped
into the measure without a thorough
consideration. Its terms
were quite ambiguous, as a perusal of
its provisions here quoted
will show:
"Section 54. All contracts or
agreements entered into by any em-
ployer, the purpose of which is to
indemnify him from loss or damage on
account of the injury of such employee
by accidental means or on account
of the negligence of such employer or such
employer's officer, agent or
servant, shall be absolutely void,
unless such contract or agreement shall
specifically provide for the payment to
such injured employee of such
amounts for medical, nurse and hospital
services and medicines, and such
compensation as is provided by this act
for injured employees; and in the
event of death shall pay such amounts as
are herein provided for funeral
expenses and for compensation to the
dependents of those partially de-
pendent upon such employee; and no such
contract shall agree, or be
construed to agree, to indemnify such
employer, other than hereinbefore
designated for any civil liability for
which he may be liable on account of
the injury to his employee by the wilful
act of such employer, or any of
such employer's officers or agents, or
the failure of such employer, his
officers or agents, to observe any
lawful requirement for the safety of
employees."
It was presumed by friends of the law
that this section was
a part of the plan contemplated for the
benefit of those employers
who wished to form mutual associations
of employers for insur-
ance, a proposition at which other
sections of the law might be
said to squint, without fully regulating
and defining, as would
be necessary to put them into effect.
Nevertheless it was the
peg upon which the Taggart ruling hung.
Under this section,
taken in conjunction with Section 9510,
licenses or permits were
issued to insurance companies to write
indemnity insurance for
employers who proposed under the
authority granted in Section
22 of
the law to carry their own risks, thereby bringing back into
new form the liability insurance company
business. By further
strain of the provisions authority might
be found for actually
insuring employers against so-called
"wilful act" or against fail-
ure to observe lawful requirements.
The Ohio Workmen's Compensation Law.
31
Under the administration of Mr. Cox the
statement had
repeatedly been made from the Governor's
office that no insur-
ance company would be permitted to write
insurance that had
any connection with workmen's
compensation, the presence of
any interest seeking the element of
profit being held to be elimi-
nated by the new system.
The new ruling was not long in effect
before the insurance
companies began in deep earnest their
efforts to secure the cream
of business, leaving the state fund to
carry the poorer risks and
to make it a very travesty of a state
fund comparable to
those which at the time this is written
exist in New York,
Pennsylvania and other states. Then
arose a spirited protest
from labor, organized and unorganized.
If the state fund were
to be ignored and self-insured employers
were to be permitted
to buy indemnity policies from insurance
companies, the element
of profit once more would enter into the
equation. It would be-
come to the interest of those who made
settlements with injured
workers, and with dependents of those
killed, to beat down those
settlements to the lowest possible
level, and the old, evil story of
liability insurance settlements in the
days of legal employers'
liability would be back with only a
small change. Indeed, the
fears entertained upon this point were
realized in a few settle-
ments that were made, and it is recorded
that in a few of these
cases facts brought to the attention of
the Industrial Commis-
sion induced it to demand and receive a
readjustment in the
interest of beneficiaries.
Taking up the cudgels in behalf of those
who complained
of the interpretation of the law, Mr.
Edward C. Turner, then
Attorney General, filed suit in ouster
in the Ohio Supreme Court
against upwards of a score of companies
then engaged in this
business. Joining him were counsel of
labor organizations, Mr.
George B. Okey and Mr. Timothy S. Hogan,
former Attorney
General. The labor attack was largely
diverted into a challenge
of the constitutionality of Section 22, while the
employing inter-
ests, represented by the Ohio
Manufacturers' Association, pre-
served an attitude of neutrality, save
only to defend the right of
self-insurance.
The case was presented to the court at
great length and
32 Ohio Arch. and Hist. Society Publications.
with a wealth of argument upon every
possible phase of the
situation. To the hearing came labor
representatives from all
sections of the state, selected by local
conventions especially to
bear mute witness to the interest felt
in the outcome. The pres-
ence of the representatives of the men
most vitally affected by
the law was not displeasing to the
court, although somewhat dis-
concerting to those seeking to sustain
the assailed Taggart ruling.
The consideration of the Supreme Court
occupied weeks,
from the early spring, when the
arguments were heard, until
July 1, 1916, when an informal
announcement was made of
points upon which a decision had been
reached and points upon
which argument was still to be heard.
The court agreed, so the
statement said, that Section 22 was valid and
constitutional, that
Section 9510 was not repealed by implication, and that contracts
of indemnity might be written for
straight compensation, where
the elements of negligence or of wilful
act or of failure to ob-
serve lawful requirements were not
involved. Upon these points
it desired further enlightenment in new
arguments at the fall
term.
THE LAW SAVED.
Public sentiment, founded on facts, has
ever been a solvent
for many issues, a proper solvent, too,
as our history has come
to show.
Gradually, the general public came to
know that a proper
attitude toward a great reform was not
shown in the public
offices having to do with the workmen's
compensation system;
but too late was this impressive fact
realized in the head of
the administration in office during the
years 1915 and 1916.
Attacks on the Industrial Commission,
sorely tried during
this period, ceased in the early months
of 1916, and the con-
tinuity of the actuarial force in the
critical period was assured.
From outside Ohio originated many
efforts to deceive the Ohio
employers as to the condition of the
fund, but these efforts
mostly failed to make a deep and lasting
impression. There
was, it is true, a certain amount of
trouble created by the pub-
lication of false reports affecting the
fund in Ohio, but the Ohio
Manufacturers' Association and the Ohio
Federation of Labor
were alert in assuring the respective
interests which they rep-
The Ohio Workmen's Compensation
Law. 33
resented that the attacks were without
substantial foundation.
In disseminating this information, the
press of the state co-
operated, with the result that the
canards were destroyed as
fast as they were issued. Confidence in
Actuary Emile E.
Watson grew as results began to speak
for themselves, and his
disclosures of the immense savings of
Ohio employers and of
the true reason for the attacks, which
was the fear that other
states would follow the Ohio example,
completely discredited
them. Gradually, the people of Ohio
failed to see any other
side to the controversy than the side of
the state law.
On July 1, 1916, the Supreme Court
handed down a semi-
official statement in which it covered
some points of the con-
troversy raging about the Taggart
ruling. It held that Section
22 of the law, by virtue of which
employers were privileged to
carry their own insurance, that is, to
pay minimum awards to
injured employees and the dependents of
those who were killed,
together with a small sum into the
general reserve for catas-
trophes, was constitutional. This
section had been attacked by
the labor representatives as a short
means of arriving at the
result they sought, which was the
exclusion of any agency save
the state fund in the operation of the
law. It was likewise the
finding of the court that there was no
authorization for liability
insurance companies to write policies to
indemnify employers
against the so-called "open
liability" of the law, that is the
liability arising out of the failure to
observe lawful requirements,
prescribed by the statutes and orders of
the Industrial Com-
mission for safety of employees. The
extent of liability was
passed upon in another case which will
be mentioned in a sub-
sequent chapter.
The decision as to Section 22 eliminated the
interest of the
employers and they promptly announced
their withdrawal from
the case, since they had appeared only
to maintain their right to
operate under Section 22.
As to other points the court announced
an intention of
hearing further arguments at a later
period, fixed for some time
in the fall. The points included the
right to indemnify self-
insuring employers for awards paid to
injured employees and the
Vol. XXIX-3.
34 Ohio Arch. and Hist. Society Publications.
dependents of those killed while in the
course of their employ-
ment.
Upon the state at large this statement,
of which apparently
nothing but a newspaper clipping has
been preserved, had a far-
reaching effect. It immediately injected
the workmen's com-
pensation issue into the canvass for
Governor, and former
Governor James M. Cox, then running for
re-election, at once
announced his intention of standing for
a law that would in
every way eliminate the feature of
liability insurance company
participation.
Upon their part, the labor organizations
declared, in effect,
a position of harmony with his views,
which amounted to a sort
of alliance for the fall campaign. To
supplement this, they
immediately announced their purpose of
proposing to the Gen-
eral Assembly, by initiative petition,
as the Constitution gave
them the right to do, a bill to make the
expulsion definite and
certain. Should the General Assembly
refuse to enact the law
it would be taken by referendum petition
to the people of the
state for their approval at the
following November election.
While these facts obtained, the
rehearing before the Su-
preme Court was held. It was without
special incident, the
questions being of a very technical
nature.
The election in November, 1916, gave a
definite indication
of the popular mind, and it was assured
that a General As-
sembly would come into office which was
committed to the labor
program. The initiative petitions which
were circulated secured
tens of thousands of signatures, in
quarters far outside the
labor organizations which originated
them.
The final decision in the ouster suits
brought by Mr.
Turner was handed down by the court on
January 31, 1917, in
the form of a "per curiam"
opinion, one hundred days being
given for the carrying into effect of
the order.
It was held that Section 54 of the
Workmen's Compensation
Law did not repeal by implication
Section 9510 of the General
Code, which gave the general power to
license insurance com-
panies, but, on the contrary, "does
define, limit, and declare the
nature and extent of the contract of
indemnity that may be
written." There are then set out
three qualifications which every
The Ohio Workmen's Compensation
Law. 35
insurance contract written under it must
contain insuring to the
employees of the self-insuring employers
payment of the minimum
benefits of the law, inhibiting
indemnifying of an employer for
wilful act or failure to observe lawful
requirements, and inhibiting
generally other indemnity policies
outside of those for straight
workmen's compensation.
It was plain that the decision did not
do all that the labor
group desired, and the passage of the
initiated bill in the General
Assembly was pushed, interest being lost
in the decision of the
court. As might be anticipated the bill
carried easily and on
February 19, 1917, the Governor signed
House Bill No. 1, which
was filed in the office of the Secretary
of State and became the
law of the land in 90 days, no
referendum being filed against it.
The new section, replacing the doubtful
verbiage of Section
54, follows:
"All contracts and agreements shall
be absolutely void and
of no effect which undertake to
indemnify or insure an employer
against loss or liability for the
payment of compensation to work-
men or their dependents, for death,
injury or occupational disease
occasioned in the course of such
workmen's employment, or
which provide that the insurer shall pay
such compensation, or
which indemnify the employer against
damages when the injury,
disease or death arises from the failure
to comply with any law-
ful requirement for the protection of
the lives, health, and safety
of employees or when the same is
occasioned by the wilful act
of the employer or any of his officers
or agents, or by which it is
agreed that the insurer shall pay any
such damages. No license
or authority to enter into any such
agreements or issue any such
policies of insurance shall be granted
or issued by any public
authority."
The new section was admitted to be
"horse-high, bull-strong
and hog-tight", as its authors
intended it should be.
In effect, the long battle was over and
Governor Cox and
those who had stood by him in the trying
days of heavy struggle
rejoiced with the employers and
employees who had devoted their
efforts to make the system a success.
There remains but one issue. The claim
was made that the
new act of the General Assembly violated
the obligation of con-
36 Ohio Arch. and Hist.
Society Publications.
tracts in that it canceled existing
contracts. To test this point an
employer named Thornton was secured to
bring a suit in the
Franklin County Common Pleas Court. The
law was sustained
in that court, and the decision was
affirmed in the Court of
Appeals and in the Supreme Court. It was
then carried to the
United States Supreme Court on the
constitutional claim, and
there it is pending as this account is
written. Ohio officials have
the utmost confidence in a favorable
decision of their claims issu-
ing from this most august of
tribunals. The case originally
affected some six hundred odd contracts,
but the number has
probably dwindled since then. As the
contracts expire, even if
they are held not liable to the law,
there may be no more issued.
The beginning then of the World War
period found the
Ohio law in good operation. To the
friends of the system sad-
ness was brought by the death of Wallace
D. Yaple, of Chilli-
cothe, chairman of the commission, whose
labors in behalf of
the law had undermined his health. He
died a virtual martyr
to the success of the system which has
meant so much for the
great army of toilers. His death was
lamented on all sides.
At the same time that the referendum
petitions on the original
compulsory workmen's compensation law
were gathered, the
Equity Association sought to employ the
initiative in proposing
a modified bill. It was presented to the
General Assembly, under
the constitution, at the beginning of
the session in 1915, but no
group of members could be found willing
to champion it seriously
enough to bring it even close to
adoption. The measure proposed
the continuation of the compulsory plan
which was written into
the 1913 statute, but carried the scheme
of permitting liability
insurance companies to participate in
the carrying of the insur-
ance under a system of state regulation.
Chances for the measure were entirely
demolished at a hear-
ing before the Labor Committee, when
Member T. J. Duffy of
the Industrial Comission exposed the
bill. His arraignment of it
was scathing, upsetting all the
arguments which had been made
in its behalf. His strictures on the
measures left Mr. H. T.
Weston, former rating actuary, with
little defense for the pro-
posal. From that time forward it was
looked upon as a grave
error to support the bill. Carrying out
his later announced
The Ohio Workmen's Compensation
Law. 37
policy to "sound the alarm every
time the enemy approaches,"
Mr. Duffy kept the ears of members
buzzing with the protests
against the bill. It was, however,
forced to a vote with the
result that a bare 25 enrolled
themselves for it and 75 against it.
The number of supporters included
Majority Floor Leader Frank
E. Whittemore.
ANOTHER DANGER AVERTED.
Among the members of the legal
profession there were men
of two minds, generally speaking, with
reference to the new act.
There were some who had been profitably
engaged in litigation
growing out of accidents in industrial
establishments, and who
had been able to amass fortunes by
carefully selecting the cases
they presented and thus recovering huge
sums in special cases.
There was a very natural dislike on the
part of these attorneys
to give up this lucrative business, yet
it must be said that men
who had grown rich in this business saw
the manifest injustice
it worked. While a claimant with an
especially good case might
secure a large judgment, the result
could only be that others with
as good a moral right to claim
compensation for the casualties
in the industrial world, but with not
quite so good legal basis,
would be certain to be denied even a
pittance. The lawyers who
took the more humane view and banished
the thoughts of personal
profit were hopeful that a court
decision would be rendered which
would safeguard the law against a
complete breakdown.
On the other hand, selfish motives and
antiquated legalism
coincided to produce an intense desire
to break down the law and
to return to the old ways in personal
injury suits, even at the
expense of reviving the dangerous
tendencies that have been
touched upon in the days of the decline
of the judiciary. So the
hunt was started for the instrument that
would bring the matter
squarely before the Ohio Supreme Court.
It was found in a
case from Lucas Couny, upon which all
those who had upper-
most in their minds the breaking down of
the practical inhibitions
against personal injury litigation
united. Attorney General
Joseph McGhee represented the law.
Fred W. Schorling, an employee of the
American Wooden-
ware Company, was injured only seven
days after the law of
38 Ohio Arch. and Hist.
Society Publications.
1913 became effective. He had
been an operator of a ripsaw
and had been ordered by his foreman to
help transport a car
of lumber. His claim was that the lumber
was carelessly and
negligently stacked so that it fell on
him, inflicting serious in-
juries. Although his employer was a
contributor to the work-
men's compensation fund, and he had a
clear right to an award
without litigation, Schorling was
persuaded to bring a suit, re-
covering a judgment in the lower courts.
The wide gap which
would have been torn in the law had the
decision been permitted
to stand, caused it to be brought to the
highest tribunal for
review.
Now the Industrial Commission Act had
been enacted about
a month after the enactment of the
Compulsory Compensation
Law. It contained a number of sections
which were not intended
to be substitutes for the numerous
safety sections of the General
Code, but which were designed to give
the commission authority
to make specific orders when its
inspectors found that conditions
in particular industries required them.
Sections 15 and 16 were
particular statements of the general
direction that employers
should furnish to their employees a safe
place to work, and
furnish and use safety devices and
safeguards, and do everything
necessary to protect life, health,
safety and the welfare of
employees, and should refuse to permit
employees to enter upon
places of employment which were not
safe.
Having in mind that the constitutional
amendment upon
which the statute law was predicated
contained a statement that
"no right of action shall be taken
away from any employee when
the injury, disease or death arises from
failure of the employer
to comply with any lawful requirement
for the protection of
the lives, health and safety of
employees," the mode of attack by
the personal injury lawyers appears
simple. They had secured a
decision to their wish from the Lucas
County courts, and if only
it could be affirmed by the highest
tribunal the personal injury
cases would grow and multiply by the
thousands. The state
funds would be used to compensate those
cases in which under
the old common-law rules no judgment
could possibly be obtained,
while the attractive cases would be the
means of extracting
fantastic sums from the employers, who
on their part would
The Ohio Workmen's Compensation
Law. 39
be in the anomalous position of having
paid premiums and still
being subject to the greatest possible
number of lawsuits. It was
a game for big stakes.
Obliterating, in this review, the
subsidiary questions
raised, it was clear that the case would
turn on the central
question of whether the general
requirement to provide a safe
place to work was a "lawful
requirement." To any but minds
enmeshed in antiquated formalisms, the
issue had simply to be
carried to its logical conclusion,
excluding all considerations of
justice. If an accident occurred,
naturally the place of em-
ployment would not be safe, although the
employer had com-
plied with every statute and every order
of the Industrial Com-
mission, this being untrue only if the
injury were wilfully self-
inflicted.
When stated in these understandable
terms, the court was
not long in finding the answer, clearly
enunciated in the syllabus
of the decision, in which it is stated
that the term "lawful re-
quirement *** does not include a general
course of conduct, or
those general duties and obligations of
care and caution which
rest upon employers and employees, and
all other members of
the community, for the protection of
life, health and safety,"
but rather the state safety laws and
local municipal safety reg-
ulations and the specific orders of the
Industrial Commission.
In discussing the case, Justice James G.
Johnson, who
wrote the opinion of the court, says
that if any other construc-
tion were given the act, the place of
employment might have
been inspected and made safe, in the
view of the state's agents,
at great expense, and yet the injured
employee could assert in an
action against such employer that the
precaution ordered by
the Industrial Commission was not
reasonable and did not meet
the requirements of the law. The case
would then return to
the tangled and technical questions of
common law.
"The employer would, in such
case," says the jurist, "be
put upon his defense exactly as if the
old common-law rule
and the antiquated and unsatisfactory
methods of dealing with
accidents in industrial pursuits still
prevailed, and as if no law
had been passed and no effort made by
the state to respond to
the sentiment of the people, created by
long and harsh ex-
40 Ohio Arch. and Hist.
Society Publications.
periences, that a more humane and
satisfactory system should
be erected. On the other hand, if the
construction we have in-
dicated be correct, then, when an order
of the commission has
been made and complied with, the injured
workman will re-
ceive at once the compensation provided
by the law out of the
insurance fund. This could result only
in doing justice be-
tween the parties, because if the
employer has complied with the
orders of an impartial official
commission, after having posted
notice to the employee that he was
proceeding under the law
and subject to the commission's order,
he has done all that in
justice should be required. But if he
has failed to obey the
order or requirement of the commission,
made under these gen-
eral provisions, or has failed to comply
with the requirements
of any statute or ordinance defining
safety devices or safeguards
required to be used, he is by that act
guilty of negligence per se
and liable to the injured workman as
provided in the act."
In passing, it may be noted that a
skilful propaganda was
employed to make workmen feel that the
litigants were ap-
pearing for the laboring men.
"Surely, in vain is the net set
in the sight of any bird."
They refused to surrender their assured
awards for the
nebulous prospects of litigation, with
which their experience
had been so bitter.
To complete the recital one has only to
mention that per-
sonal injury litigation on behalf of
employees subject to the
law against their employers has been so
small as to be a neg-
ligible factor.
THE DEATH OF FALSE CLAIMS.
Upon taking the oath of office for the
third time as Gov-
ernor, Mr. Cox called for a show-down
upon the condition of
the fund. He knew it was safe. It had
stood the war stress
splendidly and the Industrial Commission
had made such ar-
rangements as to make it possible for
the fund easily to assume
to itself the added risk that arose from
the compensation of
those who, having been previously
injured either on the battle-
fields or in the workshop, might be made
into permanent total
disability cases on another injury. But
he desired a showing
by competent outside authorities. To
this end he suggested a
The Ohio Workmen's Compensation
Law. 41
committee to supervise the audit, to be
composed of Mr. Mal-
colm Jennings, the secretary of the Ohio
Manufacturers' As-
sociation, Mr. Thomas J. Donnelly, the
secretary of the Ohio
Federation of Labor, and Mr. A. V.
Donahey, Auditor of State.
The three men combined in their
personnel authorized repre-
sentatives of employers, employees and
the general public, "the
trinity of interests" kept in mind
in the entire formulation of
the law.
The addition of Mr. Donahey, especially,
was a shrewd
move, since the public confidence in him
had grown by reason
of his policy in attacking those of his
own partisan affiliations
as readily as he attacked those on the
other side of the garden
wall, if he felt it was called for, and
of tossing bouquets, re-
gardless of partisan considerations,
with equal zeal.
The committee met as soon as it was
appointed and selected
two actuaries of undoubted ability and
integrity, Mr. E. H.
Downey, special deputy in the
Pennsylvania Insurance Depart-
ment, and Mr. Miles M. Dawson, noted New
York actuary, and
one of the most eminent men in his
profession anywhere in the
world. Mr. Dawson's ability in insurance
is recognized wherever
civilized man holds sway.
As might be expected, their work was
exhaustive, thorough
and comprehensive. They not only covered
the actuarial con-
dition of the fund, but they went into
the details of its opera-
tion and made many practical suggestions
for improvement.
One of these suggestions was a
simplification in operation, a de-
tail which Mr. Robert S. Hayes, the
secretary of the commis-
sion, has been enabled to carry into
effect.
After weeks of research, the report was
made public on
July 28, 1919. It disclosed the
following condition:
ASSETS.
National, State and Municipal
Bonds... $10,891,601 00
Cash in Bank:
Time
Deposits....... $5,087,000
Demand Deposits.... 871,646
5,958,846 00
$16,850,247 00
42 Ohio Arch. and
Hist. Society Publications.
Accrued Interest
(estimated by the ex-
aminer at)
.......................
100,000 00
Premiums in course of
collection ....... $2,675,198 00
Deduct, due over 90
days.............. 96,423 00
2,578,775 00
$19,529,022 00
LIABILITIES.
Claim Reserves
....................... $12,490,535 00
Outstanding claim
warrants ............ 255,182
00
Unearned Premiums
.................. 3,000,834
00
$15,746,551 00
Catastrophe Surplus
................... $1,052,700
00
Unassigned Surplus
................... 2,729,771
00
3,782,471 00
$19,529,022 00
Without going into
detail as to what the two examiners
said, this quotation
is made from Mr. Dawson:
"The outstanding
result of this thorough investigation of the Ohio
State Insurance Fund
is to demonstrate that it is, and has at all times
been, strong and
solvent; that it has been conducted with economy un-
precedented even in
state funds the world over and at about one-twen-
tieth the expense in
insurance companies conducted for profit; that the
State Industrial
Commission has administered the Workmen's Compen-
sation Act through
this public agency with care and in a most unusually
beneficial manner, so
as to subserve the public purpose of relief where
relief is due under
the law; that the only operative defect, viz: tardy and
overformal handling of
claims will easily be removed by simplifying the
procedure; and that,
all told, the greatest and most successful demonstra-
tion in this country
of the possibilities of the largest benefits at the low-
est cost, from a
workmen's compensation law, has been achieved by the
Ohio State Industrial
Commission and the management of the Ohio State
Insurance Fund, as is
conclusively shown by the examiner's report."
The statement of Mr.
Downey as to the "excessive econ-
omy" relates to
the action of the General Assembly in following
a rather narrow
policy, resulting in giving no increases during
the war period to
employees, resulting in much dissatisfaction
during and since the
war period. His recommendation as to
distribution of a
third of the reserve has been accomplished.
The summary of his
findings follows:
The Ohio Workmen's Compensation
Law. 43
"1. The Ohio State Fund, after
deducting unearned premiums and
setting aside ample reserves to carry
all claims to maturity, had on March
1, 1919, a clear surplus of more than
$3,600,000. Owing to this highly
solvent condition, the Fund can safely
distribute about one-third of its
surplus to its subscribers in the form
of a cash dividend.
"2. Premium rates proved somewhat
redundant under the very ex-
ceptional conditions of the past two
years, but the general rate level is
no more than adequate for normal
industrial conditions. No general rate
deduction can safely be made at the
present time.
"3. The Industrial Commission
manifests every disposition to pay
the full legal benefits upon all valid
claims. There is no evidence of un-
fair compromises, "short
changing" or disallowance of claims on merely
technical grounds. But there are
instances of excessive delay in adjust-
ing claims, and the average interval
between date of accident and the
first payment thereon is too long. These
delays are due in part to an
inadequate appropriation and in part to
over-formal procedural require-
ments.
"4. The Fund has been managed with
extreme, even excessive
economy. The actual net cost of the Fund
does not exceed 21/2% of the
average annual premiums over a five-year
period. In part, this extremely
low cost has been attained by unwise and
unnecessary skimping of ser
vice."
The document was generously distributed
and aroused gen-
eral satisfaction.
Thus ended the cowardly attempts to
undermine a great
system.
May it be preserved as well as it has
been founded.
OBSERVATIONS.
In conclusion two events worthy of
record have occurred
with reference to the workmen's
compensation act.
The first was enactment of a bill
prepared by Attorney
General John G. Price and introduced by
Senator Frank E.
Whittemore, of Summit, to make more
drastic the penalty for
failure to pay the premium required from employers for the
state insurance fund. It provided for
receivership in the event
that any employer subject to the law
refuses to comply with it.
The amendment was suggested by
experience of the Attorney
General in the application of the law as
it stood prior to the
amendment, he being convinced that it
was inadequate.
44
Ohio Arch. and Hist. Society Publications.
The second was the admission from an
actuary who never
was considered friendly to the act and
its operation that the
fund is entirely solvent and a failure
to find any substantial
ground of criticism. The actuary was one
S. H. Wolfe, of New
York, who was brought on for the
examination by the Joint
Committee on Re-organization of
Administrative State Depart-
ments and Institutions. The Wolfe report
was bitterly attacked
by minority members of the committee,
Senator Howell Wright,
of Cuyahoga, and Representative J. E.
Foster, of Coshocton.
They did not criticise Wolfe's admission
that the fund is solvent,
but they did severely arraign an alleged
attempt to discredit the
work of the Industrial Commission.
At this time it cannot be said that all
of the problems of
workmen's compensation have been
settled. There are, perhaps,
four major questions, quite apart from
the mechanical and
technical details of operation, which
must be considered, and
which must in time be solved, if the
great system is to fulfill all
the hopes that have been raised for it.
Whether these hopes
and ambitions are attainable is a
question which rests in the
good conscience and unselfishness of
three factors, the body of
workmen, the employers and the public.
The public's part will come in making
suitable provision
for carrying the burden of paying for
the work to be done and
of seeing the social wisdom in bringing
the plan to its highest
development. The part of the workers
must come in being
zealous in the protection of the fund
against imposition, and
the part of employers in looking upon it
as a public duty and
not as the payment of money merely as a
means of settling for
injuries which occur to workmen and of
buying immunity from
annoying litigation and claims.
If, in the judgment of the writer,
viewing the matter as
a lay observer, and not as an expert,
the problems of the present
may be summarized, they may be
enumerated in the following
order:
I. Ample and workable provision for
rehabilitation of the
injured workman, so that impaired
working and earning power
may be restored, at least in part. This
will involve skilled advice
and skilled services of surgeons.
Naturally, there must go with
The Ohio Workmen's Compensation
Law. 45
this a service to retrain the man who
cannot again resume the
line of activity which he followed
before he was injured. Other
countries have made great strides toward
rehabilitation of the
men who were crippled in the Great War.
From allied, and
possibly from enemy countries, this
experience, covering a term
of years, will in time become available.
The present somewhat
disappointingly small results of the
American efforts for re-
training of those whose natural
efficiency and usefulness were
impaired by diseases suffered or
injuries sustained in the mili-
tary and naval army should not
discourage renewed efforts in
behalf of the maimed in the great army
of industrial workers.
The great dictum, "By the sweat of
thy brow shalt thou earn
thy bread," is the law that must
still govern, even for those
who cannot again resume the places they
once held. There is
a sublime dignity of labor that cannot
be lost without lasting
injury to the race, and the injured man
must look forward to a
new, even if humbler part, in the army
of workers toiling to
make the world go forward.
II. There must be ample safeguards
against the "raiding"
of the fund from the attacks of the
ambulance-chasing type of
attorney. There must be instilled into
the consciousness of
courts, as well as of laymen, a
conviction that the workmen's
compensation fund does not exist to be
assailed, and that the
mere fact that $20,000,000 in reserves
is piled up is no excuse
for nibbles from any quarter. This is a
great fact, which is
ever to be kept in mind, no matter how
small or how large the
threatened nibbles may be. As the matter
now stands it seems
that the principal danger comes from the
suits which are filed
against the commission after refusal of
awards. To the author
it appears that the interests which
honestly oppose rectification
of this danger stand in their own light.
There is no doubt a strong disposition
in favor of the prop-
osition that the right of trial before a
jury shall not be abridged,
but at the same time the
"right" should never protect a wrong.
The criticism now made of the present
operation of the law is
in reality a plea against the venality
and dishonesty of those
with schemes of their own to carry
through. It is held, how-
ever, that when a claimant with an
impossible case from the
46 Ohio Arch. and
Hist. Society Publications.
legal standpoint is turned down in a
hearing before the com-
mission, recourse is had to the courts,
and in the courts a case
is presented that is quite different
from the case presented before
the commission. The jury, which does not
have before it the
pleadings and testimony before the
commission, will readily
listen to arguments that a deep
injustice was done the claimant
by the commission, and will readily
consent to award a verdict
against the fund. It is even contended
that hearings before
the commission have served no other
purpose than to establish
what would be good and what would not be
good evidence to
present to a court. The verdict having
been rendered, it is ex-
tremely hard to upset in the reviewing
courts, unanimity being
required in the Court of Appeals. The
sum awarded may not
seem large, perhaps a thousand dollars
or so, but if improperly
awarded, it constitutes nevertheless a
raid upon the fund. Then,
again, it is easy for courts to err, so
runs the criticism, in favor
of liberal allowances to the successful
attorneys in the form of
fees. Instances are on record in which
the sums given to the
advocates are equal to the sums allowed
for the injured man,
although the contemplation of the law
was that all these in-
dustrial cases should be, so far as
possible, removed from the
domain of litigation. The sum given, it
may appear, may not
seem large, but the gross amount awarded
will be sure to grow
year by year until it becomes a profound
abuse, reacting un-
favorably upon the entire system of
workmen's compensation.
To the author, writing of this as a mere
layman and not
presuming an expert's knowledge, it
would seem that the pro-
posal which has been made is entirely
just and reasonable.
substantially it is that the evidence
adduced before the Industrial
Commission in the original claim shall
be the evidence adduced
before the courts, it being preferable
that it go in the form of
a written record, so that access to the
courts shall not be denied
those seeking an appeal to judicial
authority. If it be contended
that the proposed system will deny
substantial rights, that is,
appeal to a jury of one's peers, the
answer may be found in
similar proceedings with reference to
other matters involving
property rights and claims, just as
sacred in the contemplation
of justice and equity as is the claim
for damages or compensa-
The Ohio Workmen's Compensation
Law. 47
tion for injuries. Appeals from
administrative boards involving
millions of dollars of property are
vested in the courts upon
the records established when the
original case is heard, and there
is no permission to search the field for
new evidence, or state-
ments, which might place the entire case
in a different light.
III. There must come a better adjustment
of the premium
of the insured employer to the losses
sustained in his particular
industry. It is the criticism of some
employers -and they have
been charitable in not making much of
their contention- that
they pay for the losses incurred in
other factories and establish-
ments which do not exercise the same
degree of care in pro-
viding most safe places for work.
Examination of the theories
of the advocates of the system will show
that they contended
that it would be possible to give the
careful employer the benefit
of his care and to penalize the careless
and negligent for the
exorbitant and needless toll which they
took and continue to
take in life and limb. It was a common
expression of those
who presented the subject that the aim
was to penalize the in-
different man in his pocketbook and to
punish him "where it
would hurt." That lofty aim has not
yet been fully attained,
although the legislation of 1919 doubtless
will aid in that move-
ment.
Probably, also, a penurious policy of hampering the
Industrial Commission has been
responsible for the delay in
realizing the great aim of the entire
system. There probably
always will be trouble with the
lawmaker, who does not under-
stand the great reform that the law
contemplates. His largest
interest in life has been his small
farm, or store, and he has
failed to grasp the meaning of great
humane movements that
are designed to bring a fuller measure
of justice to those who
do the necessary work of the world.
Ultimately, the problem
will be solved as Mr. Watson has ably
solved others more
difficult.
IV. Hand in hand with the rehabilitation
of the injured,
and the substantial punishment of the
employer who is to blame
for injuring more men than should be
injured in any given
period, there must come a great
expansion of the highly technical
work of prevention of accidents. Here
again the state is
fortunate in the possession of the
services of men like Actuary
48 Ohio Arch. and Hist. Society Publications. Emile E. Watson, who can show the way. But there must be aid furnished them through ample funds to carry forward their tasks. So long as private employers are able to allure from his post of service every man who becomes proficient, with offers of nearly twice as much as the state pays for services, it may be impossible to secure and retain the experts needed in this great task. What has already been done in education on accident prevention gives a clue to the greater things to be attained when it is made clear that workmen's compensation came as a system to replace the wasteful, cruel, barbaric idea of legal liability, because it was demanded by sane, progressive and thoughtful men, and that its goals must be: To care for the injured until he can return to his place. To restore those whom accident has maimed. To care for the actual dependents of those killed at duty. To prevent the occurrence of needless accidents. |
|
OHIO
Archaeological and Historical
PUBLICATIONS.
THE OHIO WORKMEN'S
COMPENSATION LAW.
BY H. R. MENGERT.
FOREWORD.
Because the Ohio Workmen's Compensation
Law has been
looked upon as the very embodiment of
what Col. Theodore
Roosevelt called "social
justice;" because it is being copied in
other states of the Union; because of
the praise bestowed upon
it by King Albert, of Belgium, who, upon
the occasion of his
visit to Ohio, pronounced it one of the
greatest pieces of legisla-
tion upon the statute books of any
country; because it has im-
mensely improved the relations between
employers and em-
ployees; because the praises of its
authors and friends have been
sung by the injured, and by the widow
and the orphan; and,
finally, because the law itself stands
as a vindication of the great
principle that the plastic instrument of
democratic institutions
can be remoulded to suit changing needs
and conditions, this
contemporary history of the Workmen's
Compensation Law in
Ohio, for the period from 191O to the end of 1919, has been
attempted.
The law is vindicated. Watchfulness over
it, however, is
doubtless yet the concern of those who
desire to see great social
and industrial questions settled in the
American spirit of fair
play. Ohioans must watch to see that it
does not fall the prey
of designing interests, akin to those
who have brought into
question a similar partial experiment in
New York. Eternal
vigilance is the price of other things
than liberty.
(1)