Ohio History Journal

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