attribute of the direct liability method applied to dangerous trades bring it within the purview of the police power? Undoubtedly factory regulations designed to conserve the safety of employees by reducing the number of injuries may be justified under the police power. Does it make any substantial difference that instead of imposing specific duties upon employers, and a civil liability or criminal penalty for violation of those duties, the legislature uses an indirect method to accomplish the same result? The language of the Supreme Court of the United States in Atchison Railroad vs. Matthews (174 U.S. 96, 102) seems very much in point. The court, in passing upon the validity of a Kansas statute which imposed upon railroad companies an absolute liability in cases of fire communicated by their engines, says: "If, in order to accomplish a given beneficial result — a result which depends on the action of a corporation, the legislature has the power to prescribe a specific duty and punish a failure to comply therewith by a penalty, either double damages or attorney's fees, has it not equal power to prescribe the same penalty for failing to accomplish the same result, leaving to the corporation the selection of the means it deems best therefor? Does the power of the legislature depend on the method it pursues to accomplish the result?"

The contrast between the opinion of the New York Court of Appeals and that of the Supreme Court of Washington is interesting, because it denotes the extreme conservatism of the one and the rather advanced views of the other. Upon the whole, it would seem that, in the aspect of constitutionality, the statute which the New York Court declared invalid is supported by weightier considerations than the one which the Washington Court sustained; and the same is true as regards its economic and political aspects. These I shall refer to only in the most general manner.

As we have observed, a direct liability law has a regulative effect, a tendency to minimize accidents, a result which cannot be predicated of a system which imposes the burden of compensation, primarily, not upon the employer himself, but upon a state fund maintained by a general taxa system which in reality subsidizes the carelessly conducted concerns at the expense of their more efficient competitors. Furthermore, the administration of relief by the public authorities is more likely, either through good nature, undue sympathy or the indisposition to antagonize the voter, to lead to imposition, frauds and to encourage malingering. Once the disabled workman has fastened himself upon the benevolence of a state insurance fund, there is more likelihood of his continuing as a beneficiary long after his disability has in reality ceased, than if he had to deal with a private individual.

As weighing against these objections it is claimed that the state

insurance system protects the individual employer against the shock of substantial casualty, and also affords security to the injured workman against the insolvency of his employer. This, however, rests upon the assumption that the private employer will not insure his liability in casualty companies an assumption which is at variance. with the modern business tendency. It has been suggested, as a means of making the direct liability law more perfect in this respect, that the law compel the employer to transfer his liability to some approved casualty company, but as this would place the employer at the mercy of the casualty company in the matter of premiums, it is suggested that the state also conduct an insurance fund to which the employer might transfer his liability upon payment of premiums fixed by the state authorities. But this means that the state must engage in the casualty business, and under more difficult circumstances than in the case of an outright insurance act; for experience in Continental countries, where that system prevails, shows that in competition with private companies these companies take only the best business, while the state gets all the bad risks.

Regarding the subject broadly, it would seem that the form of legislation possessing the greatest merit is the exclusive direct compulsory act without any incidental insurance feature. As compared with other methods, it is certainly the most logical development of our common law. It possesses what the elective system lacks — the attribute of uniformity and, unlike state insurance, it preserves the principle of individualism which underlies our institutions.

CONCLUSION

I have undertaken in this paper to outline the development of the movement toward workmen's compensation acts, and the reasons for such legislation, and to discuss the more important legal questions involved in the compulsory law. That form of enactment is, in my opinion, the only one that will be effective, the only one that will prove satisfactory, and the one which we must eventually adopt if we are to have any permanent legislation of this character. In the adoption of such a law there is a consideration of prime importance to which I have not alluded, and it is this: To what extent can the industrial concerns of a particular state stand the added burden of the cost of compensation, whether that burden take the form of insurance premiums or otherwise. At this point we find the advocates of state insurance claiming that because of the economic waste in private insurance incident to commissions, administration and adjustment expenses and overhead charges, the state insurance plan is the cheaper.

But I think that if it were to prove cheaper, it would only do so in the derogatory sense of being cheap and nasty. Apart from the laxity which might attend the administration of a state-wide insurance fund (in which the workmen themselves have no interest other than the obtention of relief), not to mention the lack of inducement to the employer under such a system to keep his operations up to a high standard of efficiency (for in private insurance the premium would be adjusted to the risk of the particular establishment), it is not a sound principle for a state to embark in private business; and particularly is this true of a business like insurance, which not only involves hazard and risk, but is essentially conducted on these principles, and depends for its success upon a much wider field of "averages than is embraced within state lines. As to whether the elective system, with its freedom of choice, is less burdensome in the matter of the cost of compensation, it may be observed that in many jurisdictions juries have become imbued with the spirit of the times, and are giving much higher verdicts than formerly; and so under some elective laws it is found that the cost of employers' liability is almost as great as the cost of compensation.

The practice of other states in the formulation of compensation laws has been to appoint a commission, with an adequate appropriation, to conduct an exhaustive examination of the subject. Much general information, both of a practical and theoretical nature, is now available in a convenient form, as a result of investigations already conducted. The question, however, in its particular application to local conditions, is by no means clear; and if Maryland is to adopt a workmen's compensation act, one of the most important considerations should be the probable effect that any act, either as to the scope of the obligation or scale of compensation, would have as an additional tax on our local industries. Pending the adoption of a real compensation act, however, we may feel reasonably assured that Chapter 837, of the Acts of 1912, will prove neither mischievous nor beneficial.

REPORT OF COMMISSION ON EMPLOYERS' LIABILITY, TOGETHER WITH THE EVIDENCE AND

TESTIMONY TAKEN

REPORT TO GOVERNOR

Many States have passed employer's liability laws, most of them based upon the reports of investigating commissions. The New Jersey commission's work is typical of the better class of these reports, and the New Jersey law is, in many respects, a model statute. - EDITOR'S NOTE.

STATE OF NEW JERSEY

EMPLOYERS' LIABILITY COMMISSION
OFFICE NEWARK BOARD OF TRADE ROOM

January 16, 1911

MY DEAR SIR - The Commission to inquire into the question of Employers' Liability, pursuant to Senate Joint Resolution No. 3, Laws of 1910, reports as follows:

Public hearings have been held. At these hearings employers and representatives of labor presented their views as set forth in the minutes, a copy of which is transmitted herewith. While the statements made at these hearings have a certain value as showing the trend of public opinion, yet, generally speaking, those advocating radical changes in the present law had little or no appreciation of the limitations imposed on legislation by the Federal and State Constitutions.

The hearings have served a useful purpose in acquainting those present in a general way with some of the constitutional difficulties, thereby making possible a more intelligent discussion, both among employers and workmen, of the problems involved in making changes. in the law.

The President and Secretary of the Commission participated in a conference of Commissioners on Compensation for Industrial Accidents from ten States, held at Chicago, November 10th, 11th and 12th, 1910, at which conclusions were reached, as shown in the attached Appendix, marked A. These conclusions were not unanimous in every case, but fairly reflected the opinion of the majority of those present.

At the conclusion of the conference a committee was appointed to draft two bills, one of which was to be a compulsory compensation act, based on the assumption that such an act would be constitutional, and the other an elective act based on the assumption that the firstnamed would be unconstitutional. . . .

The Commission has sent out to certain members of the bar a letter reading as follows:

The Employers' Liability Commission of New Jersey, recently appointed by Governor Fort under authority of a resolution of the last Legislature has held during the past summer a series of open meetings, at which a large number of employers and representative associations of workmen appeared.

As a result of these meetings and from a general study of the working of the present system of administering the law of employers' liability in this State, the Commission is convinced that, speaking generally, the present status of the law is not satisfactory either to the employer or the employee.

While convinced that some changes are desirable, we are duly impressed with the fact that if the work of the Commission is to have any practical results, any modifications of the present common or statute law must be in harmony with the requirements of the Federal and State Constitutions. Having in view the importance of the above requirement, the Commission desires to ascertain the views of prominent members of the bar of this State as to the constitutionality of certain suggested changes. The members of the Commission are serving without compensation; the small appropriation ($1300) being used exclusively for office and other incidental expenses. The Commission has no express authority nor has it means to employ counsel. We therefore seek legal assistance from such publicspirited members of the bar as are willing to give us the benefit of their views as a public duty.

The particular questions on which we wish your opinion are as follows: Are there constitutional objections to the enactment by the Legislature of this State of statutes to the following effect:

I. A statute abrogating as a defense the doctrine of "fellow servant." 2. A statute abrogating as a defense the doctrine of "assumption of risk."

3. A statute providing that contributory negligence of the employee should not bar the action, but that the damages should be assessed by the jury in proportion to the comparative negligence of the parties.

4. A statute providing that the burden of proof as to contributory negligence shall be upon the employer.

5. A statute providing that no claim for legal services or disbursements shall be a lien upon the recovery or enforceable in law unless the same be taxed and approved by a court of record.

6. A statute providing that the employer shall be directly liable to compensate the employee injured in his employment (without regard to the question of neglect or failure of duty of the employer) unless the injury was intentionally caused by the employee himself, but also providing that the compensation so paid be fixed in amount.

7. If the answer to query No. 6 is in the negative - A statute making void any agreement to forego or limit the liabilities imposed by the statute suggested in query No. 6.

8. If the answer to query No. 6 is in the affirmative, would you consider a permissive or elective act to the same effect constitutional and desirable? 9. A statute providing that every employer and employee as a part of their express or implied contract of employment shall be presumed to have accepted the provisions of the proposed workmen's compensation act, unless they give written notice to the contrary to some designated public official.

10. A statute providing that an employer who does not accept the provisions of the proposed workmen's compensation act and forces his employee to bring suit at common law, shall not escape liability by reason of (1) the fellow-servant rule; (2) the rule of assumption of risk, or (3) the contributory negligence of the employee, unless that contributory negligence be greater than the negligence of the employer; burden of proof to be on the employer.

This statute would also provide that an employee who refuses to accept