The Wisconsin Idea

UNDER the management of Mr. Halford Erickson, the labor bureau of the state of Wisconsin was developed so that it ranked with that of New York and Massachusetts. Sound laws for the protection of life and health were enacted. The child labor law was a great advance in such legislation. It remained however, for the 1911 session of the Wisconsin legislature to enact a code of labor legislation which puts the work of this body ahead of any other in the country. Besides the numerous laws for the protection of life and health and the better conditions for women in factories, there are two laws which are worthy of comment; the first of which is the workmen's compensation act, chapter 50, laws of 1911. The conflict over that act and the previous attempts upon the part of the legislature to modify the laws relating to contributory negligence, co-employment, the assumption of the risk, etc., form an interesting page in the history of Wisconsin. This state has only recently become a manufacturing state but the necessity of new conditions is sure to bring legislation in its trail. No doubt the humane spirit prevalent in the state and the whole enlightened attitude of the courts tended to stimulate activity for betterment. The inadequacy of all old remedies for personal injuries was apparent to all. The labor bureau under the direction of an expert from the university, made a scientific study of this question, which revealed such startling results that there was evidently but one course to follow, namely, to adopt some form of workmen's compensation or industrial insurance. As Chief Justice Winslow of the supreme court said in the decision recently rendered, in which the constitutionality of this law was upheld:--

"Legislate as we may in the line of stringent requirements for safety devices or the abolition of employers' common law defenses, the army of the injured will still increase, the price of our manufacturing greatness will still have to be paid in human blood and tears. To speak of the common law personal injury action as a remedy for this problem is to jest with serious subjects, to give a stone to one who asks for bread. The terrible economic waste, the overwhelming temptation to the commission of perjury and the relatively small proportion of the sums recovered which comes to the injured parties in such actions, condemn them as wholly inadequate to meet the difficulty."

The Wisconsin workmen's compensation act is an excellent example of the careful way in which the leaders in Wisconsin work. The agitation was started by the labor element. After several years of discussion a committee, headed by an able attorney, A. W. Sanborn, was appointed by the legislature of 1909. This committee did not hesitate to use the best available aid. Through expert help, the device of depriving the employer of certain of his defences, permitting him to accept certain terms by which he agreed to give compensation, was inaugurated. This was a powerful constitutional device, more powerful than it seems at first. The employer may, if he wishes, run his establishment under the employers' liability plan and take the risk of a suit for damages in the courts or elect to come under the law by which his common law defences are practically all taken from him. The point is, he is not compelled to accept the compensation plan unless he so chooses but it is obviously to his advantage to do so. New York had taken the other step and enacted a direct law for compensation which was declared unconstitutional by the courts because of its compulsory features, involving the taking of property without due process of law. Is it possible under the constitutions of the states or the United States to impose upon an employer the duty of paying to an employee so much for an arm or so much for an eye without having the case come to trial in the courts?

The Wisconsin men saw that it was not only a question of the constitutionality but also a question of the prevention of litigation. The question whether the direct or the indirect method will prove most effective in America has not yet been decided, but nine states at this writing have followed the Wisconsin indirect system. Let us consider for a minute the advantages of this plan. Suppose that the employer does not elect to come under the new law but appears before the court on a question of neglect. The courts will say to him, "Why did you not come in under the act? If you wanted the protection of the act, all you had to do was to accept its provisions." As a result the employer is going to be dealt with harshly because he did not come under the act. Suppose on the other hand, that the employer comes under the act and then tries to quibble or form a case upon a legal technicality. Immediately, the court will say to him, "You accepted the provisions of this act with your eyes open. You accepted the jurisdiction of the arbitration board which is set forth in the act and the standards which it establishes." Consequently there will be a discouragement of litigation and after all, for what is a workmen's compensation act enacted if not to decrease litigation? The legislature abolished the great body of protection, due to legal technicalities and precedents built up around the employer and based the reward upon the findings of this industrial court. The aim of the law is to prevent litigation and an indirect system accomplishes this more effectively than a direct system. The latter imposing a club over every industry, will have to be carefully construed by the courts and that means litigation in the end.

The men who formed the Wisconsin idea were first confronted in the workmen's compensation act with the problem of taking either the English act or the German system as a basis. At first they were inclined to adopt the English system but they found that if they did so there would be serious complications confronting them. Persons connected with the investigation went to England and Germany and studied the actual conditions in the great insurance departments, in the hospitals and in the factories. They also compared the conditions of England and Germany and transmitted to the committee their findings. It became apparent that in England, the entrance of a third party (the insurance companies) created a condition which was not a wholesome one. The third party did not care about the laborer or the capitalist; its interest was purely financial; its object was to conduct the business with the least cost possible and to derive the greatest dividends therefrom. A great deal of litigation as well as dissatisfaction was found in England. There the insurance companies had many hangers-on, doctors, lawyers, etc., the cost of whom had to be met in some way, while in Germany the direct relation between the manufacturer and his employee led to a mutual basis of respect. In England it was not uncommon to find that if a certain company had old men in its employ, the insurance companies would raise the rate unless the firm disposed of them.

The German system, based upon an entirely different idea of a more humane nature, led the manufacturer to keep his employees and to care for them and when they were old they were certain not to be cast out. The mutual good feeling between the manufacturer and his employee was thus greatly enhanced by the German system. Those who studied the conditions in Germany convinced the committee that it would be a wise thing for the state of Wisconsin to adopt as far as possible the German plan. The litigation was less and the courts were especially adapted for the curtailment of litigation. An adaptation of the arbitration court scheme of Germany was practically adopted in the Wisconsin law. The committee went further and recommended the adoption of some mutual basis, providing a device in the bill for carrying it out.

The manufacturers of Wisconsin, mostly of Germanic descent and the employees many of the leaders of whom were also of German descent, gave the utmost cooperation in the drafting of this bill. The men sent abroad learned that the splendid system of insurance in Germany for sickness, old age, accidents and invalidity was really an asset and not a liability. A German manufacturer in Cologne gave the writer the following as a basic idea of the new economic philosophy existing there. If in America you want to invest $200,000 in a manufacturing establishment, you put it all in the factory. It has gradually been found in this country that this is the wrong method; the right way is to put $100,000 in the plant and $100,000 in the men who run the plant. If you can promise a man who comes into your employ that he will have a clean, bright place in which to work, that he can get married and bring up children because, if he is hurt, you will provide for him; in old age that he will be cared for; that if he is sick he will receive some benefit from you and that his growing children will receive industrial education which will fit them for the work of society and not leave them drifting, masterless men, you will have no difficulty with your employees. It is not strange that this philosophy was brought into the Wisconsin law for workmen's compensation, because the idea had already been adopted that the state must protect and invest in the life and happiness of the individual in order that the greatest prosperity might come from it and that security, peace and happiness are the best foundations of good government and prosperity. Those who had been taught by John Bascom and Richard T. Ely of the University of Wisconsin understood well these doctrines and accepted them.

The manufacturers, the working men of Wisconsin and the men who understood the Wisconsin idea, went even further than this. They bethought themselves of the scheme used in the railroad commission act, in the public utility law and all other similar legislation. If you can make a standard of reasonableness to fix a rate upon railroads, and then establish a body of men to see that the rate is carried out, why can you not apply the same thing to health, life and the sanitation of our factories? So they passed the industrial commission act and gave to the industrial commission the administration of this work. This act, instead of specifying one hundred and one different kinds of belts, nuts and screws which might cause injury, requires all factories and places of employment to be reasonably safe and hygienic.

The law is considered by many the greatest piece of legislation yet put forth in Wisconsin, and one which may be a long stride toward the solution of the whole industrial accident problem in America. Many humane manufacturers willing to do much for the betterment of conditions of life and health, are irritated by legislation good in its intention but so awkward in its construction as to be practically unworkable. The fixing of standards of life and health is just as easy as the fixing of valuations for rates of the price of gas or any other utility, and it is much better for the manufacturer and the public at large that there be some scientific or expert service in the standardization. This in itself would seem to be a cure for a large part of the lobbying which is now done in the legislative halls. A new invention often makes it impossible for the manufacturer to obey some inflexible and awkward law, whereas a body of scientific men who can fix standards, and require safety devices which are workable, is much more practical. These experts can provide a museum of safety devices all of which are tested and require the employer to use such devices. Think too, of the saving in insurance. The reduction of the cost of the maimed, killed and wounded in any mutual insurance company will show whether the system is to be a success or failure. The actuarial, technical experience gained in this way will be of great use in cheapening the actual insurance in the workmen's compensation act besides providing for the prevention of accidents and more humane and better conditions.

The following excerpts from the law will indicate how it approaches the general form of the railroad commission and public utility acts. It fixes certain standards for the commission to administer, throws the burden of proof upon those who object to its decisions, and provides a very simple procedure.

"Section 2394-41. (2) The term 'employment' shall mean and include any trade, occupation or process of manufacture, or any method of carrying on such trade, occupation, or process of manufacture in which any person may be engaged, except in such private domestic service or agricultural pursuits as do not involve the use of mechanical power. . . .

"Section 2394-48. Every employer shall furnish employment which shall be safe for the employees therein and shall furnish a place of employment which shall be safe for employees therein and for frequenters thereof and shall furnish and use safety devices and safeguards, and shall adopt and use methods and processes reasonably adequate to render such employment and place of employment safe, and shall do every other thing reasonably necessary to protect the life, health, safety and welfare of such employees and frequenters.

"Section 2394-49. 1. No employer shall require, permit or suffer any employee to go or be in any employment or place of employment which is not safe, and no such employers shall fail to furnish, provide and use safety devices and safeguards, or fail to adopt and use methods and processes reasonably adequate to render such employment and place of employment safe, and no such employer shall fail or neglect to do every other thing reasonably necessary to protect the life, health, safety or welfare of such employees and frequenters; and no such employer or other person shall hereafter construct or occupy or maintain any place of employment that is not safe." . . .

The commission is empowered:--

"Section 2394-52. (3) To investigate, ascertain, declare and prescribe what safety devices, safeguards or other means or methods of protection are best adapted to render the employees of every employment and place of employment and frequenters of every place of employment safe, and to protect their welfare as required by law or lawful orders, and to establish and maintain museums of safety and hygiene in which shall be exhibited safety devices, safeguards, and other means and methods for the protection of life, health, safety, and welfare of employees.

"(4) To ascertain and fix such reasonable standards and to prescribe, modify and enforce such reasonable orders for the adoption of safety devices, safeguards and other means or methods of protection to be as nearly uniform as possible, as may be necessary to carry out all laws and lawful orders relative to the protection of the life, health, safety and welfare of employees in employments and places of employment or frequenters of places of employment.

"(5) To ascertain, fix and order such reasonable standards for the construction, repair and maintenance of places of employment as shall render them safe.

"(6) To investigate, ascertain and determine such reasonable classifications of persons, employments and places of employment as shall be necessary to carry out the purposes of sections 2394-41 to 2394-71, inclusive. . . .

"Section 2394-59. 2. Every order of the commission shall, in every prosecution for violation thereof, be conclusively presumed to be just, reasonable and lawful, unless prior to the institution of prosecution for such violation an action shall have been brought to vacate and set aside such order, as provided in section 2394-68 of the statutes."

The mutual insurance portion of the workmen's compensation is that which makes it really powerful and in the end, economical and just. Every state in this country adopting a workmen's compensation law will have to provide some such arrangement before thoroughly good results can be obtained.

The following extract from the report of the committee is given at length because of the great importance of this feature.

"Industrial insurance is the name most commonly applied to workmen's compensation acts, and conveys the meaning that there is some plan of insurance. In the first tentative bills of this committee, the plan of insurance was brought forth, but after full and mature discussion it was decided that it would be better to leave the employer free to determine for himself the best means of taking care of the liability created. The committee felt that to lay down a plan of insurance would be to put on a limitation that might handicap employers and leave them at the mercy of a certain class of insurance companies. We recognize the great benefits to employees of what are known as sick, accident and death benefit societies now in effect in many large institutions, and we much prefer to leave this whole matter open in such a way as to encourage the formation of these sick, accident and death societies. Under section 26 we have given to employers an opportunity to organize, under the laws of this state, mutual insurance companies to carry the new risk. Strong mutual insurance companies clearly have been shown to be the cheapest, safest, and most reliable method by which the risk herein created can be taken care of."

In this way it was suggested that the German system could be carried out. By modifying an old section of the statute this was easily established in the law. The provisions of the workmen's compensation act relating to this most important arrangement both for the economy and the humanity of the whole scheme, is contained in the following section:--

"Section 2394-26. Nothing in this act shall affect the organization of any mutual or other insurance company, or any existing contract for insurance of employers' liability, nor the right of the employer to insure in mutual or other companies, in whole or in part, against such liability, or against the liability for the compensation provided for by this act, or to provide by mutual or other insurance, or by arrangement with his employees, or otherwise, for the payment to such employees, their families, dependents, or representatives, of sick, accident, or death benefits in addition to the compensation provided for by this act. But liability for compensation under this act shall not be reduced or affected by any insurance, contribution or other benefit whatsoever, due to or received by the person entitled to such compensation, and the person so entitled shall, irrespective of any insurance or other contract, have the right to recover the same directly from the employer; and in addition thereto, the right to enforce in his own name, in the manner provided in this act, the liability of any insurance company which may, in whole or in part, have insured the liability for such compensation; provided, however, that payment in whole or in part of such compensation by either the employer or the insurance company, shall, to the extent thereof, be a bar to recovery against the other of the amount so paid, and provided further, that as between the employer and the insurance company, payment by either directly to the employee, or to the person entitled to compensation, shall be subject to the conditions of the insurance contract between them.

"Section 2394-27. Every contract for the insurance of the compensation herein provided for, or against liability therefor, shall be deemed to be made subject to the provisions of this act, and provisions thereof inconsistent with this act shall be void. No company shall enter into any such contract of insurance unless such company shall have been approved by the commissioner of insurance, as provided by law. For the purposes of this act, each employee shall constitute a separate risk within the meaning of section 1898d of the statutes."

It will be noticed that it was by making each employee a separate risk that the old mutual statute was applied to this act.

Under this section mutual companies are now being formed with a fair degree of rapidity.

Here then, we have two laws, the workmen's compensation act and the industrial commission act, based upon the fundamental Wisconsin idea and made practical by the devices which were used in the railroad commission and the public utility act. It will be seen that the same procedure by which the aggrieved party had his right in court under the earlier commission acts, gave the aggrieved party that same remedy under the industrial commission and the workmen's compensation act. After all, it is a court question, a matter of contract just as in the railroad and public utility acts. No matter how many rights may be given the employee under any modification of the fellow-servant or contributory negligence doctrine, the poor fellow was obliged to go into court and ask that compensation be given to him. Delay was the inevitable result of going into court. He could engage attorneys to fight the case for him but meanwhile he could starve. The result has been that by the constant appeal from court to court and the slowness of justice, the man who apparently had justice on his side, never really received it and either had to compromise or take the moiety which was thrown to him at the end of the litigation. The workmen's compensation act is a means of giving not only a certain remedy to the aggrieved party but it is another example of the state standing behind the poorer man in litigation and making smooth the path for him so that he obtains justice.

It must not be forgotten that the apprenticeship and the industrial education acts already mentioned furnish powerful allies for the above laws. A systematic attempt will be made under these acts to teach workers how to preserve life and health. Without the coöperation and intelligence of the worker himself, much will be lost in the campaign of prevention and the legislative committee on industrial education had this well in mind when they drafted the bills which to-day may be called a part of the above code.

The state has a well organized Board of health with a vital statistics division which coöperates with the school of medicine at the university through the experts and laboratories especially established for research into disease.

This combination between the university and the Board of health is leading to good results. Already a Pasteur institute has been founded in connection with the state hygienic laboratory at the university. Over two hundred patients have been treated there and all but one have been saved. More than 4250 packages of diphtheria anti-toxin have already been distributed and typhoid anti-toxin is now also being dispensed. Coöperative investigations are constantly being made by these two state organizations.

Through the efforts of the Wisconsin anti-tuberculosis association a state sanatorium for consumptives was established and at the 1911 session of the legislature a law granting state aid for a county system of sanatoriums was put upon the statute books and the Board of health is making strong efforts to effectually enforce it. A medal which was offered by the International anti-tuberculosis association to the state or country having the best law for the prevention or control of tuberculosis was awarded Wisconsin in 1908. The Board of control with its system for the care of insane and criminal and delinquent classes has been used as a model for several states and is on a high plane. Dairy and food laws have contributed to the cleanliness and quality of the dairy industry of the state and have assured state protection in the matter of food products. J. Q. Emery, the dairy and food commissioner, fortified by chemists from the university, has stood without flinching, a fire of criticism perhaps as great in a way as that directed at Dr. Wiley.

The state has expended large sums in all these lines--but it has been well used. Every cent of it is an investment which is now yearly bringing back many times its amount.